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SF Draws Line On Industrial Area Gentrification

Planning is Janus-faced, looking backward to the past as well as forward to the day after tomorrow. We do city planning in anticipation of some golden moment in the future when all our goals blossom in a coordinated way, just as we intended, like that last big blast of multiple fireworks on the Fourth of July. In reality, as most of us know, we build the foundations of the future on the messiness of the past. For every firework in the future, there is a trash can from the past waiting to be emptied.

A principal kind of "messiness" in the Eastern Neighborhoods of San Francisco – comprising East SOMA, the Mission, Potrero Hill and the Central Waterfront – has been conversion of industrial property into market-rate housing. This activity raged in the early part of the decade during the tech bubble, followed by the housing bubble. The people known as the Knowledge Sector – the Planning Department's euphemism for middle-class professionals with high-paying jobs – are consuming the industrial land as quickly as a San Francisco resident with the munchies would devour a flourless chocolate cake, topped with a dollop of crème fraiche, at a chi-chi new restaurant in the Mission District.

Large-scale industrial conversions, of course, displace the small businesses in the "PRD" category, meaning production, repair and distribution. These small businesses represent 95% of local businesses and provide one-third of local jobs. Since 1990, nearly half the industrial sites in the Eastern Neighborhoods have disappeared. It is dispiriting to watch a city with a jobs deficit stand by as its places of commerce are destroyed by a poison cocktail of zoning and real estate economics.

The South-of-Market gentrification wave did create much-needed new housing in San Francisco, which must build at least 2,700 units, of which 40% must be affordable, to meet its annual housing quota. Unfortunately, much of the new housing in the Eastern Neighborhoods was market rate, except in areas where zoning specifically banned market-rate units. Most of that newer housing is out of reach for many existing residents in the Eastern Neighborhoods, who fall in the low- and moderate-income demographic.

All this is prelude to the predicament that the San Francisco Planning Department calls its "twin dilemmas": How best to preserve local industrial jobs, while finding affordable housing opportunities amid the crowded streets of East San Francisco?

Although the four general plan amendments that compose the Eastern Neighborhoods Community Plans are complex, comprehensive documents, it appears that the basic strategy has been to safeguard the surviving industrial sites for business, while providing both incentives and requirements for new housing. In many cases, new housing must contain at least some low- and moderate-rate units. The new zoning designation MU-R requires residential units to be included in all new projects. For the Sixth Street Neighborhood Commuter Transit District in East SOMA, planners envision neighborhood-serving businesses at street level with housing above.

Map

Although the four Eastern Neighborhood plans do not say it in an inflammatory way, the long-awaited planning documents essentially are declaring, "Gentrification stops here." Market-rate housing must be accompanied by low- and moderate-income units in most cases; only affordable projects can use new zoning incentives, such as parking forgiveness. Improvements in local bus and Muni streetcar service, ideally, will make life without cars, and housing without parking, even more tenable. As they exist today, neighborhoods like the Mission seem models of pedestrian-oriented urbanism, with parks, access to mass transit and many neighborhood businesses, such as  neighborhood markets, that stay open at night.  

But can planning fix after the fact the mess made by a runaway housing market? More to the point, perhaps, has the City hit upon the best possible compromise between homebuilding and preserving industry? I'm not smart enough to know. And even though there are many people who understand these admirable new amendments to the San Francisco general plan, I suspect nobody else does, either.  I suspect it will be nearly impossible to undo the damage; the proverbial horses of industrial land conversion are already out of the barn.

As planners, we do the best we can with the conditions at hand. The plan's nonresidential recommendations, for example, include city assistance to new and existing businesses in the area and business training for workers. But the damage has already been done.

I don't understand how the City can reasonably expect to sustain industry after allowing so much of its industrial inventory to be removed. The best thing to do, at least, is to change the zoning so no more industrial land can be converted to residential. Industrial zoning would have the effect of lowering the land values, making the property affordable to industrial users while removing landowners' irresistible temptation to sell out to developers. The Eastern Neighborhoods plans do not, and perhaps cannot, draw an absolute line against conversion, however. And without such a line, real estate market forces rather than public policy will have the last word.  

Conversions map

San Francisco's Eastern Neighborhoods provide most of the city's industrial lands (above). Based on recent trends and new land use plans, San Francisco will lose about 46% of it's industrial land base.

 

It is axiomatic that real estate speculation moves quickly, while planning moves slowly. The East San Francisco plans, which the City Council approved in January, would have ideally been enacted 10 or 20 years ago. As with many other issues in life, we don't pay attention to problems until they become acute, by which time our options are limited.

The Eastern Neighborhoods Community Plans are excellent examples of multi-disciplinary planning, and I predict they will yield some good results. Communities that need affordable housing will get more of those units. The situation, though, looks somewhat less sanguine for industrial job growth in these same neighborhoods. The San Francisco Planning Department has lost the advantage of timing. The doctor has identified the disease and the cure, but the patient may be too sick to recover.

The future is built on the foundations of the past, however, and this is probably the best that public policy can do.