BY JOHN WALLACE

As seen in the San Francisco Examiner, September 19, 1999

A LOT MORE than housing at stake in San Francisco's neighborhood battles over evictions, live-work lofts and gentrification.

The City has lost touch with simple laws of supply and demand. It ignores its own history. For those of us who were born and spent much of our lives in San Francisco, this loss of urban memory seems particularly sad.

San Francisco faces a straightforward dilemma: either stop job growth or build more housing.

Instead of debating what to do about too many jobs and too little housing, The City has become distracted by frictions among its residents. This focus is unproductive -- and historically shortsighted.

Throughout this century, groups have moved into neigh-borhoods, sparking ethnic tensions, class envy and economic resentments.

I have seen Irish leave the Mission District for the suburbs in the 1950s as Hispanic Americans moved in. A decade later, when hippies in bangles and bands appeared along Haight Street, many locals scorned them.

Meanwhile, as gays were finding a home in the Castro, some families with deep roots moved away, and other families were priced out.

Soon, Chinese Americans and immigrants began displacing a generations-old Italian com-munity in North Beach.

In the late '70s, tensions erupted in the Tenderloin as refugees arrived from Southeast Asia. More recently, many Hong Kong Chinese moved into the Richmond changing the neigh-borhood.

Over the decades, such neighborhood upheavals often have been marked by evictions, loss of community and some rancor. The City's latest housing and population shift echoes its predecessors in every significant way.

The difference is one of perception and political focus. In the past no one paid much attention to the pain and dis-location of urban flux. The City has often grumbled at change, then accepted it, and finally, rejoiced in its own transformation.

In time, most of our urban struggles have happy endings. Now, we recall, the hippies re-occupied derelict buildings in the Haight. Gays independently did more to preserve the City's Victorian architectural heritage than any organized effort. Artists resurrected South of Market and other abandoned areas.

Some of these people of modest income bought homes and property decades ago, often in forgotten neighborhoods -- and today they are profiting.

Market forces may be an imperfect way to allocate housing, but we have yet to find a better force for building and rejuvenating cities. After a decade of tinkering with the free market, San Francisco has lost rental units and gained 75,000 residents, a sad fact underlying the bitter, desperate political war over housing.

To move forward, the factions in this war must establish a reasonable dialogue that includes developers.

The good intentions of rent control have produced bad results; city zoning hails from an industrial era; some densities must increase and in-law units must go legit. Change always brings wins and losses, but it has generally brought a net profit to San Francisco in terms of quality of life, diversity and vibrancy.

The current development battle pits housing needs against care for the elderly, support for artists and incentives for home-grown businesses. It suggests that the development and transformation of neighborhoods are wholly pernicious, a zero-sum game.

Worse, it provides no real strategy for coping with San Francisco's enduring popularity in the midst of the Bay Area's job explosion.

Oddly, in trying to preserve the past, neighborhood housing advocates ignore San Francisco's guiding myth of transformation: from dusty hamlet to port city, from ashes to metropolis.