Answering Noah's Three Questions

On the Nov 13th episode of Econ 102, Erik and Noah discussed election results and what they mean for both the country and cities like San Francisco. Noah emphasized that blue cities need to improve governance and listed three general areas where that needs to happen but wasn't sure exactly how it should be done. Below is one (hasty, incomplete) attempt at answering his questions with respect to San Francisco.

How do you control fiscal costs?

tl;dr: The City should prioritize the efficient provision of public goods and over an "everything bagel" approach that often includes ineffective services that mostly serve to provide well-paid jobs and largess to the "City Family" (employees, contractors, and local groups of various kinds).

What should the City do?

• Audit services and service providers from value-for-money perspective, and hold providers and agencies accountable for not meeting goals. San Francisco spends billions on services like creative writing programs, mental health counseling, rental assistance, drug sobering centers, etc. Nearly all of these programs have plans and goals (like this), but there is often no data about whether they're achieving the goals or doing so efficiently, and no accountability if they don't or are wasteful. The City should assess all its services based on whether they're achieving stated goals and cut services or providers that aren't.

• More carefully distribute services to San Franciscans, especially very costly ones. The Department of Public Health spends $639 million annually on behavioral health programs, like mental health care and substance abuse treatment. The Department of Homelessness and Supportive Housing spends $719M, mostly on rental subsidies and expanding permanent supportive housing. These programs are exceptionally expensive (i.e. 10s-100s of thousands of dollars per person, per year) and often have minimal formal restrictions on eligibility. SF should prioritize providing them to the people who have a strong, demonstrable connection to the City.

• Encourage (or allow) the City to use "off-the-shelf" components, especially in public works. 833 Bryant was built for about half the typical cost because the project used prefabricated, modular construction. The infamous Noe Valley toilet included nearly $300k in design fees paid to Public Works because of how much time city architects thought they'd need for revisions based on Commission and public feedback. DPW also spent $500k designing a new trash can for the city because none of the off-the-shelf versions were sufficiently aesthetically pleasing. Building "tiny home" homeless shelters fully by hand cost twice what it would to get them prefabricated.

• Allow bureaucrats to prioritize function over aesthetics, meaning, and process. The initial Noe Valley toilet cost was so high because DPW architects thought they needed $300k worth of time to handle all the design revisions that would come from Commissions and the public. The manager of the Folsom-Howard streetscape project told me it took 3 years to design 1 mile of bike and bus lane because they "iterated on designs until no stakeholders had objections." The garbage can, again, had to be aesthetically pleasing. Allowing our (often well-trained) bureaucrats to focus on finding efficient, functional solutions without having to bake in huge amounts of time and money for outreach, design iteration, stakeholder-relevant aesthetics, etc. would save the City huge amounts, especially on housing and streets projects.

What are the barriers?

Legally, a lot of money for behavioral health and homelessness comes from Proposition C, so any changes to things like how funds can be allocated, would require another proposition. Program eligibility is (as far as I can tell) most-often a policy decision, and can be modified by agencies. Better managing access to these services would require an increase in HSH and other agencies abilities' to collect data and coordinate, but that could be done with good management. Service provider contracts are approved by the Board of Supervisors, and they can create legislation mandating high-quality reporting. The Board of Supervisors can also pass ordinances to limit the number of commissions that have say over public works. Much of the time spent on community outreach and design iteration can be eliminated if the agencies have enough political cover from leaders to handle push-back.

Politically, the "City Family" is influential both within City Hall and without and will not like a lot of these changes. Public employee unions poured millions into the Supervisors races in D1 and D11 and will continue to fight against changes seen to harm union interests. Many of the other nonprofits and service-providing organizations make up key parts of the progressive coalition (see TODCO, for example), and would likely target Supervisors who supported changes that cut against their core interests.

How do you deregulate to get housing?

tl;dr: The City needs to follow through on Mayor Breed's Housing for All plan that reforms and streamlines zoning and permitting, and makes it significantly easier to build housing and meet our RHNA goals.

What should the city do?

• Follow through on an ambitious rezoning that urbanizes the westside. The state is forcing SF to rezone to meet RHNA goals and Mayor Breed has admirably worked with planners and developers to instruct the Planning Department to come up with a rezoning plan that will make development on the west side viable, and bring needed density to that area. The question is whether Mayor-elect Lurie will pursue that plan given the opposition from neighborhood groups.

• Streamline and reduce discretion and community input from the permitting process. Mayor Breed and Supervisor Engardio have also put forward legislation to change a number of different codes and streamline the permitting and housing approval process. Again, we just need to pass the legislation.

• Reduce fees associated with development. SF currently requires up to 20% of units in new developments be dedicated to lower-income residents. It also has a large number of "impact" fees. These requirements significantly increase the cost of development and make it so only very high-end, very high average rent buildings "pencil." The city should cut these requirements, which Mayor Breed has done to some extent. The next Mayor should do more of this.

What are the barriers?

Legally, the changes above require primarily ordinances that set fees, and code changes to the zoning, building, and fire codes. That means passing ordinances through the Board of Supervisors.

Politically, the main barrier to making these changes is the Left-NIMBY alliance. The left-NIMBY alliance is the alignment of interests between left-leaning activist groups and the anti-housing residents of the more suburban neighborhoods in San Francisco, predominantly on the west and south sides. Most of the upzoning is concentrated on the west side and that's where most of the pushback has come from. Mayor-elect Lurie got an unexpected amount of support from the west side, so he'll feel pressure from there to change Mayor Breeds Planning directives to an upzoning plan with less of an impact on current community character. More positively, the new Supervisors in D5 and D3 are more pro-housing, so there's now a slight pro-housing majority on the Board which can pass this legislation.

How do you crack down on crime?

tl;dr: The City needs to re-establish deterrence by consistently apprehending and punishing people who violate the law and improve the quality of policing in SF through technology and by developing a home-grown, professional police force.

What should the city do?

• Apprehend and punish people who break the law. This one sounds obvious, but SF hasn't really been doing this for certain classes of crime, especially since 2020. Basically in the last 10 years SF made an implicit deal to significantly reform policing and increase police accountability, and then look the other way when police stopped doing their jobs because of these reforms. We need police to police, and reliably catch people who commit property and drug crimes to re-establish deterrence.

• Move policy-making away from the Police Commission. Move policy-making authority away from the police commission and to the Police Department. The department should follow generally-accepted best practices and use its expertise in policing to set police policy for the department. The current police commission has become a locus of activism, which turns what should otherwise be an apolitical body into a political one, reducing the effectiveness.

• Heavily leverage technology. The department should heavily leverage technology to 1) enhance policing effectiveness, increase safety, and reduce the amount of time spent on non-policing activities. This includes using "Drones First Responders," increasing the use of surveillance cameras around known problematic areas like public drug markets, and new AI tech to facilitate the analysis for footage, paperwork, and administrivia.

• Develop a fully staffed, professional police force from within the City. Less than 20% of the police force lives in San Francisco (and many live far outside). This means they have weaker connections to the community, are less trusted, and are less available for night shifts (to, for example, break up nighttime public drug markets). We need enough police to respond to requests for service and police that have strong connections to SF so they'll be trusted by the community and not abuse overtime and sick policies.

What are the barriers?

Legally, a Charter Amendment would be needed to move policy authority from the Police Commission to the Police Department. To access technology, the department has to send an application to the Board of Supervisors. Until Nov 2024, we had a predominantly police-hostile board that was not interested in supporting these kinds of requests. March '24's Prop E changed some of this, but only in specific ways. Hopefully the new Board of Supervisors will be more supportive of the use of technology, and that'll open opportunities for the Police department that they haven't had for the last ~10 years.

Politically, the police have been enjoying more political support since the Boudin recall in 2022. There is a strong sense that the electorate is demanding more policing, but it's still TBD whether that's strong enough to actually change some of the ordinances and legal policies that have hamstrung the police (like the technology ordinance).

Operationally/managerially, there are big challenges around motivating the police to do good work. A culture has set in that thinks the City is anti-cop and soft on crime, and that'll take leadership from the Chief and the Mayor to change. It also means firing bad cops that we hired due to more lax standards given the staffing crisis, which will be difficult too given the power of the police union.