The city can borrow money cheaper than private individuals and pass those savings on, but the mortgage payments would ultimately cover the city's costs. If you want to speculate in real estate as an investment, go somewhere else. There's a big added advantage to the city buying up existing residential property and taking it out of the private market. We can create new affordable housing without a huge increase in density. This is a tricky issue.
Density is the hottest thing in urban environmentalism, the mantra of the sustainable city movement.
Public transit doesn't work well in the suburbs, because there aren't enough people per square mile to support it. San Francisco doesn't need more density to support transit or to create street life. I don't think cities should be suburbs, but I don't think every part of San Francisco should be as dense as the Haight, either. You need to look at the long-term, at how people are going to live here if they put down roots and stay a while. My dog can chase flies and bark at birds without going to the park on a leash.