When big real estate projects in San Francisco encounter resistance from nearby residents, developers traditionally respond by making concessions. Frequently, that means scaling a project back, leading to the creation of less housing than originally envisioned. But one project recently took a different turn—one that reveals a lot about the state of California housing policy.
Last year, DM Development announced plans to build a 290-unit building in the Potrero Hill neighborhood. The project was within walking distance of tech giants like Airbnb and Uber and featured dorm-style units that could be perfect for young, single tech workers.
Potrero Hill residents demanded that the project be scaled back—perhaps reduced from seven stories to six. But DM Development didn’t give an inch.
"Instead of bending to the neighbors’ wishes and dropping the height of the project, DM Development went in the opposite direction, increasing the proposed 80-foot building to 120 feet, and raising the original 290 units to 450 units," the San Francisco Chronicle’s J.K. Dineen writes.
DM Development CEO Mark MacDonald said he submitted the bigger plan after “it was abundantly clear to us the neighbors were not supportive of the lower scale project.” He added that "if we had gotten support for the original plan we would have kept going down that path."
Some residents were furious. “What has gone terribly wrong with 300 DeHaro has been the lack of response to community input,” one told the Chronicle. “I have yet to meet a neighbor who thinks this is a good idea. The language I’m hearing is ‘monstrosity.’ ”
A collective action problem
I found out about this story from California Sen. Scott Wiener, who retweeted a tweet about the project by one of his former staffers, Annie Fryman. Fryman worked for Wiener while the latter was crafting California’s SB 35. That legislation sought to boost housing construction in the state by limiting the authority of local governments over development projects.
The legislation ultimately became law, which is why DM Development was able to ignore community opposition in Potrero Hill. Fryman is downright gleeful about the way it has stripped local residents of input into some (though by no means all) real estate projects.
Democratic participation is ordinarily considered sacrosanct in American politics—especially at the local level. Yet Wiener not only passed legislation limiting activist influence over local projects, he retweeted a staffer who has been gloating about that fact.
The reason, of course, is that a growing number of people think excessive local influence over housing projects is a big economic problem. In recent decades, California’s thriving economy has generated rising demand for housing. But legal restrictions on housing—including laws that give local activists outsized influence—have prevented real estate developers from keeping up with that demand. As a result, rents and home prices in San Francisco have soared far above the national average.
This isn’t a new argument, of course. A decade ago, writers like Matt Yglesias, Ryan Avent, and Ed Glaeser warned that excessive regulation of the housing market was creating an affordability crisis. But at the time these books came out, the prospects for addressing the problem seemed remote.
The people who live right near a proposed development care a lot about it, and more often than not they oppose projects that increase housing density. And because every project in a modern city is located near somebody, almost every effort to increase housing supply attracts opposition.
Meanwhile, while lots of voters might favor construction of more housing in general, few of them care enough to go to the planning meetings for any specific project. So elected officials get a skewed impression of public opinion, believing that every project is less popular than it really is. As a result, even though more development would be good for almost everyone, we don’t get very much of it.
Rage against the NIMBY
But in the last decade, pro-development advocates have found ways to effectively organize for more housing. A big part of the solution was to give activists a shared enemy: the NIMBY.
The term NIMBY, short for “Not in My Back Yard,” has been around since at least the 1980s. But its meaning has shifted subtly in the last decade. Before the turn of the century, it was mostly used in an environmental context. If a developer proposed building a nuclear waste facility in a particular town, for example, residents in that town would say “not in my backyard” and organize to prevent it.
Naturally, people writing about housing issues started using the same term to describe opposition to garden-variety real estate projects. But over time, the term shifted from describing an attitude that anyone might hold (no one wants nuclear waste stored near their home) to a recognizable character in housing debates.
NIMBYs are homeowners who tend to be affluent and eligible for AARP membership. They are parochial and obsessed with potential shortages of parking. And they have a lot of free time to attend community meetings. I saw a lot of NIMBYs when I attended a meeting about a development project in south San Francisco back in 2015.
"Dozens of neighborhood residents packed the large classroom, writing their views on enormous Post-it notes city officials had posted around the room," I wrote. "People could endorse another person's view by placing a colored sticker next to it."
A lot of people thought it would be better not build any new housing; the option "100% open space" wound up with dozens of brightly colored stickers next to it. Many others wanted buildings to be no more than two stories tall, believing that taller buildings would destroy the "character" of the neighborhood.
NIMBYs like this make perfect foils for the self-styled “YIMBY” movement: grassroots activists dedicated to liberalizing zoning rules so that cities like San Francisco can build more housing.
“It is completely their fault”
For better or worse, a recognizable villain is an effective way to overcome the collective action problem inherent in political organizing. NIMBY activists have been hampering housing development—and driving up housing prices—for long enough that a lot of people are getting fed up. So when YIMBY-minded people read about the Potrero Hill Project, they don’t see a “monstrosity.” They see an opportunity to gloat.
“This is dope as hell” one California resident responded after I tweeted the SF Chronicle article about the Potrero Hill project. “I love how the developer saw there was no community support and was like, fine, we'll go bigger.”
“NIMBYs have been preventing housing being built for years so now instead of thoughtful gentle density we’re going to have to use the fire hose approach,” another person tweeted. “It is completely their fault.”
“This developer is like ‘Keep talking, the building just got 10 feet higher,’” a YIMBY-minded person gloated. Another person jokingly tweeted a “leaked video of the developer”—a bodybuilder flexing his biceps.
This kind of Twitter dunking isn't pretty, but it may be helping to build solidarity among pro-development voters. And those voters provide a political base for politicians like Scott Wiener, whose reforms are starting to strip NIMBYs of their outsized influence over development decisions.