Don’t Believe the Hype: Affordable Housing Does NOT Depend on Market Rate Development

22 06 2015

Our affordable housing op-ed series continues in The Examiner!  Click here for the original article.  And be sure to check out Tim Redmond’s follow-up article in 48 Hills here.

48hills no-monster-mission-demonstration

 

Market-rate developers and some of their cheerleaders at City Hall have started a new myth to justify the continuing tsunami of luxury housing development: that affordable housing is dependent upon market-rate development. The argument goes that the fees paid by market-rate developers are an essential “revenue source” for affordable housing and without them our affordable-housing supply pipeline might come to a standstill. Nonsense.

That myth conveniently ignores the fact that inclusionary fees on residential development are not even at the level of the “nexus” to simply mitigate the demand for new affordable housing that is generated by the market rate housing. The City’s Residential Nexus sets the mitigation level at between 25 percent and 30 percent if the affordable units are provided on-site, or between 33 percent and 43 percent if those units are provided off-site, allowing the primary project to be fully built out as luxury housing. So, the 17 percent to 20 percent in inclusionary fees, which the developers are touting, DON’T EVEN PAY FOR THE MITIGATION of market-rate housing impacts, let alone “produce” any net new affordable housing.

And the fee structure set by The City is remarkably low, compared to the actual cost to provide those units. This is because The City actually set those fees based on a lower construction cost than the typical luxury tower, and then capped our ability to raise those fees in the city charter with the 2012 Prop C measure. How much can a market-rate project actually pay to mitigate the impact of its development? For proof, we can look at what a developer negotiated earlier this year in the Transbay Redevelopment Area, where the fee cap does not apply. That developer agreed to pay nearly four times the inclusionary fee that developers pay elsewhere in The City, much more in line with real costs and the actual nexus.

Moreover, The City’s housing production data shows how false the argument is that somehow affordable housing is dependent upon market-rate development. In 2011, at the low-point of market-rate housing production, The City produced (i.e. paid for) 207 affordable housing units, which was 59 percent of all housing built that year! While market-rate development was stalled because of a lack of finance capital from investors (who seem to refuse to finance any construction unless they can be guaranteed at least 25 percent returns on their investment), The City with its public funding sources continued to invest in affordable housing production. By contrast, there were 3,454 housing units built in 2014 of which 490 were affordable housing units, a mere 14 percent of total production. In other words, the “housing balance” was terrible. Affordable housing on balance got worse, not better, as the real estate market boomed. With market-rate housing not even paying its way to mitigate the affordable housing demand it creates, this outcome is not a surprise.

Where does that funding for affordable housing really come from? By its very nature, affordable housing means that tenants pay low rents. Bank loans, paid back by that monthly rental income, are a much smaller part of financing affordable housing than in market-rate projects. Instead, affordable developments depend on higher equity investment (think of it as a much higher “down-payment” portion), most of it being from private investors receiving federal tax credits. These federal investments, however, have to be leveraged by our local city investments, of which the market-rate developer fees are only a small part, one that varies greatly depending on the booms and busts of the economy — the bulk comes from property tax increment, hotel and business taxes (the Prop C Housing Trust Fund), and jobs-housing linkage fees on commercial development.

Another flaw in the myth is the argument that market-rate developers are part of an affordable housing solution by “feeing out” on their inclusionary housing requirement. At the same time, those same City Hall and development boosters contradict themselves by making a big deal out of “mixed-income” development. And yet that is precisely what the inclusionary housing program does and why below-market-rate (BMR) units are essentially aimed at moderate income households: people making salaries from clerks to teachers who are also priced out of “the market.” That was the vision of the inclusionary housing requirement, not a simple “in lieu” fee payment program, and yet there are some who celebrate the fees that come from developers when they DON’T build BMRs for moderate income households. The contradiction is profound.

This myth about affordable housing being dependent on fees from market-rate development is a clever but inaccurate distraction. If these same mythmakers really cared about the connection between market-rate development and affordable housing production, they would be promoting an enforceable housing balance requirement (linking the amount of market-rate housing to the amount of affordable housing), and they would be working hard to increase the percent of inclusionary housing, and the in-lieu fees, to accurately reflect the true nexus of impacts created by market-rate development. But that’s not really what they are interested in, is it?

Photo credit: 48 Hills.





Thanks for coming to the 4th Annual CCHO Party!

18 05 2015

CCHOMay2AmandaHarris-15

Thanks to all of you Friends of CCHO for coming out and making our 2015 CCHO Party a success!  It was great to see you all there, and to be reminded of how many friends and allies we have in this important moment of struggle to make affordable housing a reality in the San Francisco Bay Area.

And congratulations once again to this year’s incredible honorees: Sue Hestor and the Anti-Eviction Mapping Project!

Want to see more photos from the party?  Check out the album
(And if you‘re feeling nostalgic, there are also photos of the 20122013, & 2014 CCHO Parties!)

CCHOMay2AmandaHarris-221

CCHOMay2AmandaHarris-151 CCHOMay2AmandaHarris-173 CCHOMay2AmandaHarris-197 CCHOMay2AmandaHarris-43 CCHOMay2AmandaHarris-103 CCHOMay2AmandaHarris-224 CCHOMay2AmandaHarris-124 CCHOMay2AmandaHarris-81 CCHOMay2AmandaHarris-57CCHOMay2AmandaHarris-100 CCHOMay2AmandaHarris-138CCHOMay2AmandaHarris-106CCHOMay2AmandaHarris-9





The Giants Are Playing a Numbers Game with Affordable Housing

14 05 2015

And another one!  Our latest op-ed in 48 Hills.  Read the original article here.48hillsgiantsnewplan-e1431473441372

We love our baseball team, but we don’t like the way the Giants are playing games with last November’s Proposition K, the Housing Balance Measure.

Last week, the Giants publicly announced plans for developing a set of highrise luxury towers on a parking lot across from AT&T Park, on land that is leased from the Port of San Francisco.  The plan is evidently queued up to go to the ballot in November for voter approval of a height increase from its current open space designation to allow development up to 280 feet in height, making the argument that it will result in affordable housing.

On the surface it looks to “match Mayor Ed Lee’s affordable housing goals,” according to the Chronicle, as a third of the 1,500 new units built will reportedly be “affordable housing.”

That may sound good – but in reality the Giants are changing up the goalposts (or more apropos, they’re moving the baselines) on the housing standards of Proposition K’s 33% affordable goals.

Prop. K sets specific goals for achieving an “affordable housing balance” of low income, moderate income and middle income housing and market-rate housing production:

  1. The measure calls for a minimum 33% affordable housing defined for low-income households up to 60% of the City’s median income (or $58,000 annual income for a family of three) and moderate/middle income households up to 120% of the median (about $110,000 annual income).
  2. On top of this 33%, Prop K calls for an additional 17%of housing affordable for middle income households above $110,000 and up to $150,000 annual income.

Together that’s a 50% affordable housing goal.  It’s a sensible one-to-one ratio of price-restricted housing units to match the number of market-rate (aka “unaffordable” units) produced by private development. And importantly, it’s a “both/and” outcome that addresses affordable housing needs for a wide range of low, moderate, and middle-income households, rather than the divisive tactic of pitting the classes against each other over a fixed-size pie.

The mandates of Prop. K have come to set a standard for responsible development in the city, with big developments like Pier 70 committing to providing 30% affordable housing consistent with Prop K’s low- and moderate-income definitions.

The Giants are positioning their project in the public eye as following suit, but unfortunately are using Prop K’s 33% like it’s a numbers game, trading out low- and moderate-income housing and replacing it with housing targeted at higher incomes. We hear rumors that a big chunk of their “third affordable housing” will be geared above 120% of the median income — in other words above Prop K’s 33% goal.  Rather than a both/and proposal consistent with the full 50% affordability range of Prop K, the Giants appear to have put up an either/or scenario.

Though middle-income San Franciscans are clearly being affected by this affordability crisis, pitting lower-income and higher-income San Franciscans against each other along class lines is wrong. That’s why Prop K. took a both/and approach, calling for 50% of the units to include middle-class as well as low- and moderate-income units.

We welcome, for example, the Giants’ proposal to add teacher housing to the mix – it’s high time we heard a developer say this.  Teachers in San Francisco, even tenured teachers, earn below 90% of the City’s median income – exactly in Prop K’s moderate-income bracket, and what the City’s inclusionary housing program asks developers to provide.

But above that, the real estate development “market” has not been building any new family-sized units for what Prop K calls middle-income households with, for example, two teacher incomes.

So adding that layer of affordable housing to the Giants housing proposal is a helpful move. But we are confident the teachers union sees this is as additive to low- and moderate-income housing, not as an alternative, and it would be crass for the Giants or city hall to use the educator community as a wedge on this issue.

Let’s not forget that all of this development is happening on public land leased from the Port.  If we can’t expect even the modest low-, moderate-, and middle-income housing goals of Prop K (which are significantly lower than the optimal City Housing Element targets for affordable housing) to be implemented on publicly-owned land, how can we expect the city to make real the voter’s mandate anywhere?

The income targeting for affordable housing is not a game—low- and moderate-income housing up to 120% of the median income is not interchangeable with “middle-income” housing priced above that level.  If the city is to truly address this crisis, we must demand that developers, including our beloved Giants if they are going to enter the development game, build housing for both/and the low-income, moderate-income and middle-income workers of San Francisco as Prop K calls for.  The Giants can – and should – do better for their city.

 

Photo Courtesy of 48 Hills.





On Both Sides of SF Bay, Public Lands Should Go to Below-Market-Rate Housing

14 05 2015

Our latest op-ed in The Examiner.  Read the original article here.

From Oakland to San Francisco, the message to city officials is clear: Publicly owned land should be used to provide desperately needed affordable housing, not to support more luxury development.

Activists in San Francisco and Oakland took over their respective City Halls last week, demanding housing justice.

These are not just protests about unfair evictions or the misuse of public resources. They are a response to the explosive growth of income inequality in the Bay Area — the fastest growing in the nation. They are standing in direct opposition to the ideology, heard from city administrations on both sides of the Bay, that unchecked market-rate development will somehow address this affordable-housing crisis.

On May 5, housing activists occupied the Oakland City Council chambers for three hours, chaining themselves in front of the council members and unfurling a banner reading, “The People’s City Council.” Their action prevented a vote to sell a parcel of public land on East 12th Street for $5 million to a market-rate developer, in violation of the city’s own goals for expanding affordable housing. The developer planned to build a 24-story, 300-unit luxury tower.

“If we don’t build affordable housing on public lands, where will it be built?” asked the activists.

Three days later in San Francisco, housing activists converged at City Hall, occupying the rotunda to capacity, dropping banners from the galleries, and delivering their demands to Mayor Ed Lee.

The activists called on the mayor to declare a state of emergency due to the housing crisis, with a temporary moratorium on evictions and on luxury development in the Mission. Activists demanded city officials use the moratorium to buy time to expand tenant protections and make the necessary budget allocations to purchase sites and build 3,000 new affordable homes over the next five years. The chants of “Mayor Lee, we don’t need no luxury!” from outside the closed door of Room 200 echoed throughout the building.

But the message, it seems, still hasn’t sunk in. On Monday, in echoes of Oakland’s proposed sale of public property, the San Francisco Board of Supervisors heard about a new proposed sale of city-owned property at 30 Van Ness Ave. for, you guessed it, a luxury high-rise! This was the first public discussion on the matter, though apparently it has been quietly in the works at City Hall for a year, with nary a mention of The City’s 2002 Surplus Properties Ordinance that requires surplus city properties to be used for and/or to fund affordable housing. Nor does the request for proposals to developers for the 30 Van Ness site even mention the minimum 33 percent low- and moderate-income housing goals enshrined in Proposition K that was adopted by the voters in November (or the additional 17 percent of middle-income units on top of that). There’s also no mention of the recently adopted Surplus Lands Act at the state level that requires, at minimum, 25 percent affordable housing on public sites sold for private development.

Our publicly owned land is an invaluable resource for building new affordable housing. In a city with increasingly limited open space, the land itself is far more valuable for affordable housing than fees we could get from its sale. Setting a high bar for affordable housing included within the 30 Van Ness property disposition terms should not be seen as “getting less money” for the site — a public property is not a cash cow — but rather as an investment in affordable housing to maximize the value of this public site. We can no longer afford to sell off these sites to the highest bidder, supporting more luxury development while our low- and moderate-income workers struggle to find suitable housing within city limits. In the spirit of last week’s housing demonstrations, The City should at minimum honor the Prop. K standards and use the property to leverage a significant inclusion of affordable housing.

To its credit, The City, after several years of no new affordable-housing sites, just this month published requests for proposals for building 100 percent affordable housing on two underutilized publicly owned sites: a former school and a San Francisco Public Utilities Commission parking lot in the Mission, for housing for low-income tenants. A sure sign that action gets the goods! It’s a good start, and a model that shows what we can accomplish with our other publicly owned sites. The site at 30 Van Ness should not be exempt from that conversation.

In the end, the message is simple: public lands in community hands.





Housing Our City’s Workforce

7 04 2015

Martí and Cohen at it again! Below is our latest op-ed in The Examiner. Read the original article here.

One of the bitter ironies of this boom economy is that a widening range of our city’s workforce is shut out by the real estate market.

This isn’t because the pace of market-rate production hasn’t kept up with demand. It is simply that, in the city with the highest growth in income inequality in the nation, housing prices chase the highest dollar, leaving working people of many types fending for themselves.

Right now, there is a lot of rhetoric around middle-income housing with little in the way of concrete proposals. Some are trying to curry favor with voters by pitting the need for middle-class housing against support for low-income families. Others claim that The City has done enough for affordable housing. However, the City’s own numbers belie such assertions. The Third Quarter-2014 Residential Pipeline Summary shows that only 55 percent of needed low-income housing has been produced over the last six years. By contrast 103 percent of market-rate housing need has been built.

Nor is our city’s workforce being helped by turning housing units into pied-a-terres for wealthy nonresidents, or by dedicating apartments for corporate suites and vacation rentals, or by unscrupulous speculation on rental apartments to flip them to tenancy-in-common units and condos. The reality of evictions (1,977 evictions reported by the Rent Board for 2014) is a stark contrast to pronouncements about how well The City’s affordable-housing production is keeping up with the crisis of displacement.

The housing crisis is relative, of course. Far more low-income workers face serious rent burdens and threats of displacement — and many upper-middle-class professionals can still afford to rent or buy in certain neighborhoods. But if we are to truly address this crisis, we must resist attempts to pit San Francisco residents against each other along class lines, and instead acknowledge what lies at the heart of both low- and middle-income workers’ struggle for housing: that real estate development is currently serving only the needs of the very top.

No attempt to further incentivize the market will change this. Instead, if we are to ensure housing for the majority of our city’s workforce we must both increase public funding for affordable housing and more aggressively harness private capital and real estate development to produce moderate and middle income housing.

Who is the middle?

Proposition K, the housing balance measure passed by voters in November, mandates The City to build not only at least 33 percent affordable housing, but also another 17 percent affordable to the middle class. This is a sensible 1:1 ratio of price-restricted housing to match the number of unaffordable units produced by the market.

The Mayor’s Office of Housing defines middle income as households making between 50 and 150 percent of the area median income — in dollars and cents that is roughly from $35,000 to $100,000 annual income for a one-person household, and from $50,000 to $150,000 for a family of three. For comparison, construction laborers, postal service clerks, and school paraprofessionals and entry-level teachers are all under 100 percent of the median income for one-person households, while families composed of two credentialed teachers could be earning up to 140 percent of the AMI.

We can look at the income distribution in one San Francisco neighborhood to understand how this squeeze on the low to middle-income spectrum plays out over time. Since 2000, the Mission lost roughly 3,000 households that earned under $75,000, while households earning between $75,000 and $100,000 stayed roughly the same, and the neighborhood gained roughly 6,000 households earning over $100,000.

Market-Rate Development

As the market isn’t currently providing the housing San Franciscans need, the City must aggressively harness private development and investment to address the widening affordability gap that the real estate market is creating. Four ways this can be done:

Downpayment assistance: The City has a very successful revolving-loan fund that has helped hundreds of first-time homebuyers — with almost zero defaults. In 2012, the Proposition C Housing Trust Fund added an additional $15 million to that program. While venture capitalists are busy playing the tech casino game, we need to find prudent investors, whether from technology or pension funds, willing to put their money into a stable investment that will support our moderate- and middle-income workers. This would seem like the least that the technology sector could do after the open arms and tax breaks they have been given.

Increasing inclusionary housing: Currently, most of our new moderate-income housing has come from The City’s inclusionary housing ordinance, which requires developers to offer a portion of their new units at below-market rates. This program could clearly be expanded to do more. We know from 13 years of the program’s existence that it is more than feasible for market-rate developers to provide below-market units on-site — some have built 20 percent on-site units at current zoning. The challenge however is that many developers simply choose to pay a relatively modest fee (compared to their sales prices) instead of including affordable units with their projects. We need to ensure that more developers actually build units.

The current fixed pricing for BMRs works well for many smaller households, but leaves out households with, for example, two teachers who together earn too much to qualify for the two and three bedroom units. Allowing a dial that adjusts the number of below-market-rate units provided based on the income levels served, especially for larger units, would maintain the intent of the program while benefiting a wider range of residents.

Trading density for more affordable units: If we are going to allow developers to build higher-density buildings, with greater profits, it should be in exchange for producing a greater percentage of below-market units. Already new microunit projects and group housing tech dorms that greatly increase density are moving forward with no additional affordability. Here again, the idea of the private investment sector stepping up to the plate by creating a privately funded buy-up program to subsidize additional price-restricted units above the inclusionary level is worth exploring. The City should proceed with caution, however, carefully crafting decisions to change densities or heights by neighborhood, with attention to maintaining a human scale and to affordable construction methods. All these ideas need to be additive to our existing rules, rather than chipping away at our current inclusionary policy.

Housing for families: Today’s real estate market incentivizes the construction of studios and microunits, allowing developers to cram more units (and profit) onto each floor. But there is an acute demand for family-sized units which the market is not providing. To provide more family units, The City could require inclusionary units to be measured as a percent of total floor area of a market-rate development (rather than a set number of units) and require developers to provide a mix of modest-sized one-bedroom, two-bedroom and three-bedroom apartments, along with family-friendly amenities in larger buildings, such as ground floor childcare and playground open space.

By focusing on concrete solutions that address the failures of the current development market to provide housing for all, rather than resorting to divisive political rhetoric about the middle class, we can house our City’s workforce.





Public Land Ideal for Affordable Housing

10 03 2015

Our latest Op-Ed in the SF Examiner.  Read the original article here.

The 17-acre Balboa Reservoir site, which is owned by The City, would be an ideal location for housing, as long as the development is sensitive to its community surroundings, which includes City College of San Francisco and Riordan High School. - COURTESY PLANNING DEPARTMENT

The 17-acre Balboa Reservoir site, which is owned by The City, would be an ideal location for housing, as long as the development is sensitive to its community surroundings, which includes City College of San Francisco and Riordan High School. Photo Credit: Planning Department.

 

There’s been a lot of talk lately about using our publicly controlled lands for housing development. This would be an important step in city policy. However, we need to go one step further and be clear to reserve public lands for affordable housing if The City is to meet its affordable housing goals for all residents of San Francisco.

Despite a 2002 Surplus Property Ordinance that resulted in two properties for affordable housing, The City has not aggressively pursued securing a portfolio of public sites for this purpose.

As new discussions get under way about the potential development of the San Francisco Public Utilities Commission’s Balboa Reservoir and City College of San Francisco seems poised to sell its property at 33 Gough St. to market-rate developers, it is more important than ever to establish a firm policy that underutilized publicly owned lands — a scarce and precious public resource — go to achieving The City’s critical affordable-housing needs. The City needs to be very clear that there is a priority for low-income housing on every suitable public site.

This is not just our recommendation, but The City’s obligation, as set out in the housing element of the general plan and last year’s Proposition K. Updated every five years, the housing element is a legally required plan for housing all of San Francisco’s current and projected residents, including the amount of housing The City needs to build at each level of affordability.

According to the current housing element, 60 percent of housing built in The City should be affordable to moderate- and low-income residents. Furthermore, voters passed Prop. K last fall, mandating The City to achieve a minimum 33 percent balance of affordable to market-rate housing, as a step toward reaching the housing element goals.

We aren’t currently meeting either of these goals. In order to start working toward them, it is critical that we secure land for affordable housing — and even more critical that we do not give away land we already have. Publicly owned sites create a unique opportunity for The City to get closer to meeting its housing obligations.

Steps have already been taken at the state level to pressure cities to reserve public lands for affordable housing. Just this past fall, Assemblyman Phil Ting, D-San Francisco, helped get bill Assembly Bill 2135 passed that compels land-owning public agencies to give a first right of refusal for affordable-housing development, and even encourages public agencies to sell their lands below market value to make affordable-housing development as viable as possible. It is unclear if San Francisco’s public agencies are taking either the intent or the letter of that new law seriously.

But even with the added push of AB 2135 coming from the state level, there is always temptation for the particular agency that owns a piece of land to sell it to the highest bidder, whether for high-end offices or luxury housing. Thus, The City needs to firmly state a priority to dedicate any suitable site to 100 percent low-income housing. Suitable sites for this type of housing would have a development capacity of 50 to 200 units.

Who would these new homes serve? Affordable-housing communities typically rent to families making up to about half of the median income. That would be, for example, three-person households earning $50,000: retail, restaurant and hotel workers, childcare providers, home-care workers, students and artists. Some of these affordable-housing sites could also be combined with new parks and open space, as is planned for the former SFPUC site at 17th and Folsom streets.

There are also a few very large sites, such as the Balboa Reservoir, that can accommodate mixed-income master-planned developments with far more than a single 50- to 200-unit project. These would be the perfect case-studies to implement our city’s housing element goals, making at least 60 percent of housing on those sites affordable to low- and moderate-income households, with the remainder for market-rate development that would cross-subsidize the moderate-income units.

Furthermore, if we are to truly meet the intention of Prop. K and prevent the displacement of our communities, we must strategically dedicate sites neighborhood by neighborhood, paying particular attention to communities where new market-rate development vastly outstrips affordable housing.

Even with a public-sites policy, our communities will have to fight hard to make that happen. But a clear policy priority for affordable housing will be an important starting point. While The City is still developing a comprehensive list of potential short-term opportunity sites, there are at least three sites that would make excellent models of public lands for public good: The San Francisco Municipal Transportation Agency-owned site above the new Central Subway station at Fourth and Folsom streets, the Port of San Francisco’s seawall lot at Broadway and Front Street just steps from Chinatown, and the 17 acres of the Balboa Reservoir, potentially adding several thousand new units of critically needed housing to The City.

Let’s fight to make sure public land really is used for the public good.





The Math Behind the Monster Doesn’t Make Sense

4 02 2015

Read the full article in the San Francisco Business Times by reporter Cory Weinberg here.

Image Credit: Skidmore Owings & Merill

Image Credit: Skidmore Owings & Merill

In an insightful article published recently, The San Francisco Business Times shows how the percentage of affordable housing proposed for the 16th and Mission project, and currently in the pipeline for the Mission as a whole, falls dramatically short:

7.1 percent: That’s the percentage of affordable housing units that have received approvals in the Mission compared to market-rate units – and it’s pretty dismal. Nearly 500 units are entitled and waiting to finish in total, but only 34 affordable units built as a result of projects’ inclusionary housing requirements have been entitled. This broader neighborhood picture is out of Maximus’ control, but still contributes to some of the venom surrounding its proposal.

The Council of Community Housing Organizations crunched that percentage from the city’s housing pipeline report, helping to underscore why advocates want to reject new housing units at 16th and Mission that would cost $5,000 a month to rent.

‘People in the Mission don’t even want to talk about new market rate until we get to a better balance,’ said Fernando Marti, co-director of CCHO. ‘We can’t have a serious conversation about 16th and Mission until we talk about what’s the right balance for the Mission and how is the city going to make sure it gets there. Otherwise it’s a site-by-site fight.'”





Meeting the City’s Housing Balance Mandate Takes Real Money!

3 02 2015

Our latest op ed in The Examiner (see original article here).

Photo Credit: Mike Koozmin, S.F. Examiner

Photo Credit: Mike Koozmin, S.F. Examiner

If San Francisco is to maintain its essential character and diversity as it continues to evolve, our city needs a housing agenda that genuinely prioritizes housing for the everyday people who make up over 65 percent of The City ­— the low and moderate income. As mandated by the voters in last November’s Proposition K, we must achieve an appropriate balance between market-rate and below-market-rate housing, both preserving and creating homes for The City’s current and new residents at a range of income levels. To do this, we need an ambitious commitment to dedicated revenue, and an aggressive resolve to protect residents from displacement and speculation.

But don’t we already give enough to below-market-rate housing? Unfortunately, no. The City is still feeling the impacts of the state’s dissolution of redevelopment agencies, which in San Francisco was the primary source of housing funds.

Moreover, the Housing Trust Fund, passed by voters in 2012, was repurposed by The City almost immediately to make critical improvements to public housing, and this will consume much of those resources for many years.

And aren’t private developers already paying their fair share? Again, no. It is clear, by any economist’s measure, that simply adding incentives to increase supply will never create market-rate units affordable to any low- or moderate-income household. Even though developers contribute to The City’s Housing Fund, helping to offset the need for new low- and moderate-income homes created by expanding development, they are playing by outdated rules that cover only a small portion of their impacts.

There is no “silver bullet” to deal with the current imbalance in affordable and market-rate housing. In order to fully meet Prop. K’s commitment to minimum 33 percent below-market-rate housing, as well as our commitment to rebuilding public housing and preserving vulnerable rent-controlled apartments, The City needs a comprehensive package of revenue measures in 2015 and 2016, with a housing bond being just one part.

A bond could be an important boost to fund The City’s public housing and HOPESF goals, and free up the Housing Trust Fund, and the 2016 presidential election year may be our best chance. The last housing bond that passed in San Francisco was in the 1996, Presidential election. A second attempt in 2002, with dismal voter turnout, lost even with support of the mayor and Board of Supervisors. The two-thirds threshold is a real challenge.

A more immediate focus for 2015 should be on reinstituting the suspended Redevelopment Agency revenue previously dedicated to meeting The City’s obligation to rebuild 6,000 homes destroyed by urban renewal in the Western Addition, South of Market area and elsewhere.

This funding loss was another casualty of the state’s dissolution of redevelopment agencies. This could be put before local voters this year, requiring only a 50 percent threshold, immediately raising as much as $20 million annually to finance replacement housing throughout The City.

Four other measures could be implemented immediately, in order to spread the prosperity we are currently experiencing. These include:

1. Measures to recapture a portion of the value gained by private development built on public land like the Balboa Reservoir, or receiving significant upzonings, such as the Chronicle Building 5M project, the Mission Rock development and the Central SoMa Plan;

2. Updating The City’s 1996 Jobs-Housing Linkage Fees on office development to reflect changes in workplaces;

3. Tiering the inclusionary fees so highrise developments pay their fair share; and

4. Dedicating revenues from the hotel tax on short term rentals, including back taxes collected, to address the impact of the loss of rental units to vacation uses.

Finally, we have to emphasize that just as important as new revenue is the immediate need to preserve The City’s existing rent-controlled housing. Unless serious policies are put in place this year, The City is at real risk of losing more “naturally affordable” housing to real estate speculation and hotelization than it could possibly build as new below-market-rate housing. We face as much a crisis of gentrification and displacement as a housing crisis.

We welcome a real dialogue between The City, the below-market-rate housing community and our city’s residents, around a comprehensive plan for the preservation of our communities, new housing, and the necessary revenue to make it happen. The future of our city hangs in the balance.





Low-Income Housing in SF, 2013-2020

15 12 2014

Our map of low income housing developments in San Francisco, recently completed, under construction, or scheduled to commence by 2020. This list includes only “net new affordable units,” new construction and acquisition/rehabs, and does not include the city’s public housing portfolio scheduled to begin rehab in the next few years.

SF AH Pipeline Map

 

AFFORDABLE HOUSING BY NEIGHBORHOOD
New and Acq/Rehab Units, 2013-2020, recently completed, in construction or estimated completion by 2020
Project/Site # units
CHINATOWN 188
Broadway/Sansome (CCDC) 74
Broadway/Front (Seawall 322-1) 114
TENDERLOIN 155
Vera Haile / St. Anthony’s (Mercy) 89
Eddy & Taylor / 168-186 Eddy (TNDC) 66
SOMA 285
474 Natoma (Bridge) 59
Hugo (Mercy) 66
1036 Mission & Sixth (TNDC) 88
Howard & Fifth (TNDC) 72
TRANSBAY 758
Rene Cazenave (CHP+BRIDGE) 120
Transbay 6 (Golub/Mercy) 69
Transbay 7 (Mercy) 85
Transbay 8 (Related/TNDC) 176
Transbay 9 (BRIDGE/Avant) 109
Transbay 1 116
Transbay 4 83
MISSION BAY 580
1180 4th Street (Mercy) 149
Mission Bay South 7W (Related/CCDC) 198
Mission Bay South 3E 99
Mission Bay South 6E 134
HAYES, FILLMORE, MARINA 392
Edward II (CHP) 25
Rosa Parks II (TNDC/Bethel) 97
Booker T Washington (JSCo) 48
55 Laguna Senior (Mercy/Open House) 69
55 Laguna Rehab 39
Parcel O 79
Parcel U, Octavia & Haight 35
MISSION DISTRICT 247
Casa Mission (MNC / Mercy) 34
1950 Mission & 16th 114
17th and Folsom 59
1294-8 Shotwell 40
EXCELSIOR / OMI 157
Balboa Upper Yard 87
Phelan Loop (Mercy / BHNC) 70
HUNTERS POINT SHIPYARD
225
Alice Griffith I-IV New Units 113
Hunters Point Shipyard 54 (Hilltop) 52
Hunters Point Shipyard 49 60
BAYVIEW 495
Hunters View Phase2-3 New Units 109
1075 Le Conte / 6600 Third St (Mercy) 72
5800 Third, Carrol Ave. (MBS) 120
New Jamestown (L&M) 194
TOTAL 3,395




The Annual CCHO Advance

15 12 2014

Whose City? Our City!

Happy Holidays from our year-end “Advance!” CCHO’s 23 housing and tenant organizations came together last week at Mercy Housing’s Notre Dame Apartments, to reflect on the past year and plot out our work for the next two years. As the housing crisis continues unabated, with soaring rents, evictions, and a continuing lack of Federal resources, we are gearing up with renewed energy to hit the ground running with the next phase of our local and regional anti-displacement and housing production agenda for 2015 and 2016…

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Photo credit: people.power.media





Hacking San Francisco’s Housing Crisis: A Response to the Supply Siders’ “Solution”

4 11 2014

By Fernando Martí

alan

 

Synopsis: The success of design or social innovation “solutions” to San Francisco’s housing crisis will depend on a framework for housing affordability that addresses fundamental issues underpinning the practical realities of achieving Housing for All. That housing framework should address four fundamental questions: 1) the BALANCE of housing affordability that the City should be compelled to maintain; 2) ways to take housing out of the speculative market and under the OWNERSHIP and control of tenants and communities; 3) dedication of surplus public LAND for deeply affordable housing, and market incentives linking any value added through zoning changes to increased affordability; and 4) new private and public financing mechanisms, including dedicated private CAPITAL, pension funds, and the creation of a municipal community development bank. We face a choice: do we let the market continue to lead us down a path toward a segregated urban region, or do we prioritize public investment and market regulations to build out our dense, mixed-income, human-scaled, and transit-oriented neighborhoods? If we can’t move beyond the ingrained ideologies that lead us down paths of false solutions, all our creative innovations will be reduced to simple marketing or consumer niches trapped within the same market dependencies rather than systematic changes that result in meaningful public policy solutions.

Read the full text here.

 





Developers Aren’t Going to Solve the Housing Crisis in San Francisco

4 11 2014

In a recently released report, [people.power.media] takes on and debunks several of the “supply-side” arguments made about the housing crisis, and offers an alternative list of practical and immediate solutions, including preserving existing rental stock (YES ON G!).  Read the full report here.

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(Photo credit: Joseph Smooke)

Excerpt:

Affordability for working class people in San Francisco isn’t going to come from letting profit-driven developers have their way. After months of research and interviews by a journalist who has worked as a developer and on housing policy, this feature dismantles the arguments driving housing policy in the City and offers real solutions instead of “trickle-down” approaches.

San Francisco is the epicenter for America’s changing economy. The gap between rich and poor in the US is growing as the middle class and manufacturing sector are being squeezed out. A recent study equates San Francisco’s income gap with Rwanda’s. City living is ideal for young professionals and, increasingly, the suburban elite. American cities need to look at smarter ways to thrive and not simply rely on the invisible hand to provide housing for working class America.

“It’s a complicated issue and you just can’t quote Adam Smith in your Economics 101 textbook to say that’s going to solve the problem,” says Venture Capitalist and original member of the Pacific Stock Exchange, Doug Engmann. He’s referring to laws of supply and demand, which dictate that price equilibrium will be reached when quantity demanded by consumers matches the quantity produced by suppliers. “You have to understand how they work in special situations and you have to look at the situation that we’re in,” says Engmann during an interview in his financial district office.

This feature debunks supply-side arguments myth by myth and gives recommendations for solutions. Upzoning won’t solve the housing crisis. Luxury demand by techies is the most dominant factor driving up prices. No matter how low building costs dip or how streamlined the process becomes, as long as that luxury demand dominates, developers won’t prioritize the housing needs of working class people.





Why Props G and K Matter for Smart Growth

31 10 2014

Our op ed in Streetsblog, in collaboration with Tom Radulovich of Livable City and Bob Allen of Urban Habitat.

Photo: David McSpadden/Flickr

Photo: David McSpadden/Flickr

Smart Growth at a Crossroads: It’s time to stand up for our true values, vote YES on Propositions G & K

We have known for a long time that urban development is at a crossroads. By all ecological and social measures, the car-oriented model of suburban expansion is no longer tenable. We know that we must re-orient regional development toward compact, diverse, human-scaled urban neighborhoods built around robust public transit: we must return to the City and its neighborhoods as the model of future sustainable development.

Cities like San Francisco are at the heart of this model, as we build out abandoned train yards and shipyards, as we “infill” old gas stations and parking lots, build up along one-story commercial corridors, and rebuild our public realm of transit, streets, sidewalks, parks and recreation spaces. We call this “Smart Growth.”

The beauty of this model is that it does not pave over our greenbelts and farmlands, but rather protects them, by reinvesting in urban centers that our economic development models ignored for over half a century, and reinvigorating them as vibrant neighborhoods that can, as the charter of the Congress for New Urbanism states, “bring people of diverse ages, races, and incomes into daily interaction, strengthening the personal and civic bonds essential to an authentic community.”

But we also know that this path is fraught with dangers: the gentrification of hip urban neighborhoods, the displacement of long-term renters, seniors, neighborhood-serving businesses, and blue collar jobs, and the struggles over who can claim and occupy “the public realm.” The vision of a diverse and vibrant City, the ideal of “City air makes you free,” as they used to say in the European Renaissance, is threatened by the very same market forces that are once again reinvesting in the City.

As our movement has matured over the last two decades and we’ve been able to reflect on the results, studies have shown the link between public investment in transportation and the influx of luxury developments and high-income newcomers that push out the working-class and immigrant communities who have called these neighborhoods home for generations. This is a troubling unintended consequence of the Smart Growth vision we all aspire to.

Ironically, the failure to maintain and expand genuine mixed-income developments and prevent displacement undermines the very environmental sustainability and climate change goals so often championed by Smart Growth advocates. The attraction of San Francisco and other cities as centers of innovation, and the excitement that comes with moving to an urban scene, also come with the costs of real estate speculation that drives up housing costs and drives out existing communities.

It is not “smart growth” to have other people’s lives as collateral damage of the real estate industry capitalizing on our desire to live and work in the City. Jane Jacobs’ The Death and Life of American Cities, a major source of inspiration for the Smart Growth movement, envisioned ideal city environments as exciting, diverse, affordable, and equitable places. She also emphasized the need for affordable housing, and warned against the loss of diversity and the erosive effects of ‘cataclysmic money’.

If we are to do this right, if we are to continue to infill, densify, and invest in our cities without displacing those who already live there or making it unaffordable for any but the wealthiest, we must put in place protections for those who live here and the means for developing a housing balance that is truly affordable to all. This November, we have a chance to vote for two measures that are critical steps toward that: Proposition G, the anti-speculation tax, and Proposition K, the housing balance.

As advocates for compact, livable urban communities, we believe that the principal means of developing transit-oriented communities is to build mixed-income infill housing, not to cannibalize our existing housing by evicting residents and replacing them with higher income residents. But in San Francisco (and in “hot” urban places around the world), that is exactly what is happening, and will continue to happen unless we implement strong anti-displacement controls.

Currently, most evictions in San Francisco happen within the first few years of a new owner buying a small apartment building, with the intention of evicting the tenants and selling off the individual units at a huge profit. This speculation on apartment buildings, evicting and flipping units, is one of the factors at the heart of San Francisco’s current housing crisis, driving up rents and sales prices. Proposition G aims to discourage this behavior by imposing a purposely stiff graduated transfer tax on all sales of multi-family apartment buildings, starting at 24% of the sales price for resales within the first year, and stepping down to zero at year five. It is narrowly crafted to stop the evictions due to rental building flipping, so it does not apply to single-family homes, condominiums, or any unit that is actually owner-occupied, or even to in-law units, only to the two-to-thirty unit buildings where these evictions are prevalent. Proposition G is key to saving the diversity of our neighborhoods and the urban vitality that is critical to the urban renaissance our Smart Growth movement wants.

Proposition K is another side of the same coin. If we are to build new housing and infrastructure for a livable and sustainable City, we must take into account the needs of future generations, at all income levels. In California, our regions and cities are required to assess population needs by growth in jobs at different income levels, and plan for housing adequate for everyone. Our cities routinely fail to meet these housing diversity goals. While the Bay Area has recently seen an enormous growth in high paying jobs, particularly in the technology sector, we also know that for every high paying job, another five jobs are created at all other income levels, from restaurant workers and house cleaners to accountants and school teachers.

At its simplest, if the median income represents a point where half the people earn less than the median, then it follows that we should be building half of our housing affordable to those earning below the median. And we also know that “the market” cannot deliver housing that is affordable at those levels – if we are to provide it, it must be built as a combination of housing provided by the public and nonprofit sectors, and as inclusionary requirements built into market-rate housing. So it is imperative for a sustainable future that we build a housing balance into every new development and every neighborhood. Proposition K is a good start, that compels the City to build at least 33% of new housing affordable up to the median income. It is not where we ultimately need to be—in a truly livable and sustainable future, the City will fully meet its Housing Element goals for 62% of housing production to be below market rate—but it is an achievable incremental step toward getting there.

Without a firm grasp on combating displacement, preserving and enhancing what is best about our existing neighborhoods, and a strong linkage between Transit-Oriented Development and an affordable housing balance, we risk having our dreams of smart, sustainable development, and a vision for a new urban America, becoming an exclusive dream for the very few. And where would those evicted—the poor, the immigrants, the seniors, and the students—live in that kind of future? In the Bay Area, that means in far flung suburbs like Antioch and Tracy, many commuting into the City on clunky (non-hybrid!) cars, to work the service jobs that will continue to be needed here. That is not sustainable, and that is not the dream we want.

The wave of newcomers moving to San Francisco, and we, their allies in the environmental, transportation, and planning worlds throughout the Bay Area, have an obligation to promote a vision of Smart Growth that’s consistent with our stated principles of diversity. One that protects people from being displaced, and ensures that everyone benefits from an economically prosperous city. But we all can only do this by standing strong and speaking out in support of public policies such as Propositions G and K before the election, and asking our supporters to VOTE YES.

Bob Allen is Urban Habitat’s policy and advocacy campaign director. Peter Cohen and Fernando Martí are the co-directors of the Council of Community Housing Organizations. Tom Radulovich is the executive director of Livable City.





S.F. Mayor’s housing task force pushes new affordable housing policies

29 10 2014

By Cory Weinberg, SF Business Times, full story here.

Excerpt:

sf-city-hall 600xx3264-2176-0-136San Francisco has the least affordable housing market in the country. The number of rental housing units available in the city meets the needs of just half the 86,000 very- and extremely-low income households in San Francisco, according to a report this fall from the California Housing Partnership Corp. As of last spring, about 1,500 affordable units under the inclusionary housing law were in the pipeline to get built. The city already has about 16,000 affordable units. The real difficulty in delivering affordable units is the exorbitant cost of building any housing in San Francisco — affordable or market-rate — which clocks in at approximately $500,000 minimum per unit.

Under current law, developers who build market-rate residences in San Francisco have to help pay for or build housing that low- and middle-income residents can actually afford. Those developers have three options: build 12 percent of the below-market rate units on the same site as their market-rate project, build 20 percent of the units on a separate piece of land or pay a fee equivalent to 20 percent to the Mayor’s Office of Housing. More and more, developers are opting to pay the fee, slowing the pace of affordable housing construction.

“Part of the objective here is to find new avenues for developers to actually build units rather than just pay their fees,” Council of Community Housing Organizations co-director Peter Cohen said, a member of the mayor’s working group.





SF Chronicle Backs Real Estate Speculators

27 10 2014

By Peter Cohen, in BeyondChron, October 27, 2014, here.

Wow, the San Francisco Chronicle is really showing its colors with escalating rhetoric about the City’s gentrification and displacement crisis.

First, the editors took a position opposing Proposition G — the anti-speculation tax—with the rationale that it “could have the unintended effect of aggravating the housing shortage” while Prop G is in fact about stopping housing “flipping” and tenant evictions, not increasing housing supply.  Simultaneously the editors took a position opposing Proposition K — the affordable housing goals — which is about increasing housing supply and affordability.

That’s a strange contradiction to the Chronicle’s supply-side rationale in opposing Prop G.  Hmmm.

Then last week the Chronicle opined there is no evictions crisis in San Francisco, since 2,000 evictions in 12 months (about 5,000 evicted residents) is not enough to be considered a “crisis.”  The editors paired that with a manifesto about the “City on the Edge” which essentially said that gentrification and evictions are simply “side effects of prosperity” and that “the city shouldn’t fear the success it’s encountering.”

In other words, a few thousand displaced residents is acceptable collateral damage from the gains of economic progress.

Like the realtors and other vested business interests opposing Proposition G, the Chronicle has taken the position that denying there is a crisis of gentrification and displacement and unaffordability is easier than actually trying to do something about it.

Finally, in an opinion piece two days ago the editors took it up one more notch, with a statement that Proposition G is a “landlord shakedown measure.”  The one upshot is the Chronicle finally tells the truth that Prop G is aimed at rental property landlords/investors and not about homeowners, as realtors have been attempting to mislead voters.

But for the Chronicle editors to characterize Prop G as a “shakedown” is a stunning defense of real estate speculation.  Wow.

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The CCHO Affordable City Voter Guide

16 10 2014

This November offers voters the chance to set the course for a progressive future of San Francisco and make great strides in addressing the housing crisis and income equality. The way you vote on November 4th will have direct impact on the affordability of our city.  We hope you take a few moments to read our voter guide, and more importantly, place your vote on November 4th!

CCHO Slate IICCHO Slate II2

 





YES on G to stabilize our neighborhoods!

16 10 2014

CCHO’s op-ed in today’s SF Examiner, counters the lies of the “No on G” campaign.

 

Evictions and soaring housing costs are rapidly changing and destabilizing our neighborhoods and communities. In the last three years, Ellis Act evictions are up 170 percent, and we have already lost 3,610 units of rent-controlled housing due to the Ellis Act. Families like those of seniors Gum Gee Lee, her husband, Poon Heung Lee, and their disabled daughter, Shiu Man Lee, driven out of their apartment of 34 years last year by an Ellis Act eviction, are bearing the brunt of this speculator-driven market.

The majority of these evictions (and many unreported buyouts) occur within the first few years of a real estate speculator buying an apartment building in order to make a killing by displacing our long-term residents. Their actions drive up housing costs for everyone and have made The City one of the most expensive places to live in the county.

We must protect our long-term and most-vulnerable residents and bring some sanity back to the housing market. As Mrs. Lee said at a recent rally, “It is up to us to stand up against displacement.”

Community

Proposition G, the anti-speculation tax, offers a real solution, and is our best shot to stop these unfair evictions. The measure will stop speculators while protecting homeowners and tenants.

Prop. G will impose a surtax ONLY on the resale of multiunit apartment buildings that are bought and sold in less than five years. But it also protects homeowners by excluding ALL single-family homes, condominiums, owner-occupied tenancies-in-common, new housing such as legalized in-law units, and small-property owners who are in the long-term rental business. Only speculators will pay the tax.

Today, the speculator-driven market is in part responsible for soaring housing costs and making it so hard for average families to buy or rent a home in The City. The opponents of Prop. G have amassed a $1.5 million war chest to try to defeat Prop. G, most of which is from the National Realtors and the California Realtors, as well as the San Francisco Realtors, the Apartment Association, the Small Property Owners and the Coalition for Better Housing (“a coalition of the leaders of San Francisco’s largest rental properties”).

The misinformation campaign has been flooding voters nonstop, spreading lies to cause confusion and fear among homeowners, who of course are exempt from Prop. G and will never pay the anti-speculation tax at all. The No on G campaign lies when it says the tax will hurt homeowners.

Real homeowners are not subject to the tax in any way — all owner-occupied housing units are exempt — if you live in your home then your home is exempt. And single-family homes and condominiums are completely exempt, whether they are owner-occupied or not.

The proposed tax on speculation only applies to speculators who buy and resell certain multiunit buildings.

Prop. G is actually very simple — you will never pay the tax unless you are buying and flipping multiunit apartment buildings. City Controller Ben Rosenfield’s statement in the ballot handbook shows how narrowly targeted Prop. G really is: He estimates that in a typical year over the last eight-year period, approximately 60 properties would have been subject to the anti-speculator tax had it been in effect.

That makes it quite clear that what Sen. Mark Leno is talking about: “Prop. G is drafted very narrowly to go after a specific problem — speculators.”

Neighborhood leaders, housing- and tenant-rights groups, labor, and social-justice organizations are joining forces to promote three historic ballot measures in November, part of an agenda to maintain San Francisco’s historic diversity — the YES on G, Stop the Evictions, Yes on J, Raise Up SF and Yes on K, Keep an Affordable Housing Balance — that will help keep The City livable for working families (the three measures are endorsed by the San Francisco Democratic Party and the San Francisco Labor Council). The three propositions directly address the crisis of affordability and economic inequality facing San Francisco.

Says Dan Nguyen-Tan, a Western Addition homeowner: “The most interesting neighborhoods in The City reflect tenants and homeowners of various economic means. Prop. G and these other propositions will encourage economic diversity, detract speculators, and help residents who want to invest in San Francisco to stay in The City.”

 

Peter Cohen and Fernando Marti are co-directors of the Council of Community Housing Organizations, a coalition of 23 nonprofit housing developers and tenant advocates that works to support resident leadership and to craft policy for a vision of San Francisco where all can afford to live, work and thrive.

 





SF Examiner endorses Propositions G & K!

14 10 2014

From the SF Examiner, by Joshua Sabatini, October 12, 2014:

As rents and evictions have increased in San Francisco, housing has become the top political issue of the year. And voters have a chance to weigh in on measures to address the challenges with a proposal intended to curb real estate speculation and another to encourage below-market-rate construction.

The anti-speculation tax, Proposition G, would tax the sale of multiunit properties bought and then sold within five years. The hope by supporters is that it would curb the practice of developers buying buildings, clearing out tenants and reselling at a profit, or flipping them. The effort comes as evictions are on the rise. Between March 2013 and February, there were 1,977 evictions reported to the Rent Board, a 13 percent increase from the previous year’s 1,757. That includes 216 Ellis Act evictions, up from last year’s 116.

Also on the ballot is Proposition K, which addresses below-market-rate housing. It’s on the ballot as a result of a dispute over whether to mandate that at least 30 percent of all new construction of housing units hit the market as below market rate. It comes as the mayor has established a goal of rehabilitating and constructing 30,000 housing units by 2020. The policy goal is to have more than 50 percent of the units affordable for middle-income households and at least 33 percent affordable for low- and moderate-income households.

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Prop K Offers Housing Balance for SF

13 10 2014

No one needs to be convinced of the current housing affordability and displacement crisis – San Francisco now has the largest income gap in the country, rents are three times higher than the national average, with median rents at nearly $4,000 a month for a two-bedroom apartment, and median home prices hitting the $1 million mark. The City has lost more than 5,000 children and youth over the last decade, with evictions up 170% over this latest “hot market” cycle. The housing market is in truth a hot mess.

There is no single “silver bullet” solution to this crisis, nor simple quick fixes. But we can set out a comprehensive plan of immediate actions to turn that tide. And that is what Proposition K—what we call the Housing Balance measure—is intended to do.

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For CCHO, as one of the originators of Prop K along with base organizations in the South of Market, including groups such as SOMCAN and TODCO that have been fighting gentrification and displacement for decades, this measure is part of a working class electoral agenda for San Francisco. We are supporting Propositions G, J, and K on this November ballot: for tenants and neighborhoods, for jobs with dignity, and for affordable housing.

As one part of that vision the Prop K Housing Balance policy and work plan will make City Hall accountable to a number of commitments:

1) Achieve a minimum one-third citywide balance between affordable housing and market rate housing production and establish a quarterly housing balance report and require annual public hearings to hold the City accountable to its affordable housing commitment.

2) Develop a comprehensive funding, site acquisition and land use strategy sufficient to sustain the minimum one-third housing balance.

3) Set a minimum one third affordability target whenever the City creates new “plan areas” and rezonings for increasing development, beginning with the Central SoMa Plan to be adopted next year.

4) Make market rate developments pay their fair share of affordable housing obligations, and explore new fees on luxury housing and pied-a-terres.

5) Establish a funded Neighborhood Stabilization Trust to begin to decommodify housing, acquiring small to large apartment buildings to take them out of the speculative market, preserving them as permanent affordable housing for the tenants who live there.

6) Create immediate Interim Controls to protect arts uses and light-industry in SOMA from displacement.

Since 1990, San Francisco has had a fairly impressive track record of building close to 30% affordable housing– but that ratio is quickly slipping away as new market-rate approvals far outstrip funding for affordable housing. In many parts of our city, this imbalance in housing affordability is opening the door for displacement and gentrification at an unprecedented level, as long-term residents find they can no longer afford to live in their own neighborhoods. The Housing Balance measure, originally developed as legislation for the Central City neighborhoods, was intended to link market-rate development to affordable housing production by setting a goal of at least 30% affordable housing and establishing stricter conditions on approvals of market-rate housing whenever the city fell below this minimum balance. In June, Supervisor Kim seized the moment to extend the reach of the housing balance measure across the entire city, and to consider taking the measure to voters. That provoked an exciting summer of extensive negotiations between the Mayor’s office and Supervisor Kim’s office, resulting in Prop K, which CCHO supported as a pathway to more immediate and substantive outcomes.

Though “compromise” is often considered a dirty word in politics, this measure represents a real win for affordable housing. The new ballot measure and the workplan terms establishes a package of policies and funding to be developed over the next eight months that will set the conditions to reach the 33% minimum housing balance goal.

While an SF Chronicle article last week derided the significance of Proposition K, the critique hinged mostly on the fact that this is a policy measure coming out of negotiations rather than a showdown with the Mayor, and therefore “it doesn’t mean much,” according to the academics interviewed for the article.

That’s an unfortunately over-simplistic conclusion, and fails to appreciate that sometimes less dramatic tactics can be just as useful leverage. Getting the one third Housing Balance commitment memorialized by the San Francisco voters will give the city electorate and the housing advocacy community a mandate to hold the Mayor, and the Board of Supervisors, accountable to those commitments. Supervisor Kim said as much in the Chronicle piece. Sure, it will require persistence and struggle over the next year to turn policy statements into substantive outcomes. It is a clear road map for actions to be taken over the coming year, including potential measures for the 2015 and 2016 ballot, and sets up the conditions for a future Housing Balance. The goal is the same—a minimum one-third citywide affordable/market-rate balance as a permanent standard—it is simply a less politically dramatic pathway to get there.

No silver bullets, no quick fixes. But a vision, a set of voter-backed commitments, and a lot of hard work in the trenches. We see the Proposition K Housing Balance as a measure that constitutes a step towards addressing San Francisco’s ongoing affordability crisis and stabilizing neighborhoods facing rapid gentrification, and we call on progressives of all stripes to support it, win it and own it.

 

Originally published on BeyondChron, September 29, 2014.





Regulate short-term rentals, protect SF’s housing stock!

24 09 2014

CCHO commends the Board of Supervisors for attempting to find a pathway to legalize and regulate a popular but currently illegal activity—the ability for owner-occupants and tenants to rent their units or extra bedrooms for a limited time during the year. However, as currently written, affordable housing advocates cannot support this proposal.

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At its most basic level, the proposed system lacks transparency and enforceability to prevent abuses of “the rules.” The profitable industry of short-term rentals presents the very real risk of continuing to erode the City’s housing stock for permanent residents and continuing to drive up housing prices. It would appear that the only supporters of the ordinance are companies in the home-sharing industry such as Air BnB and their front group, Homesharers of SF, which represent the interests of those who would presumably profit by this legislation. Most of the Planning Commission’s own recommendations have not been adopted, including two critical issues:

  • Tracking and enforcement, such as tracking the number of nights STRs are rented to the enforcing agencies, identify units in the City’s Property Information Map, making listing on a hosting platform without registration a violation, and providing adequate funding for enforcement by Planning
  • Maximum annual limit on “hosted” rentals

Following is a set of recommendations set forth by affordable housing advocates, that would begin to make this a workable piece of legislation:

  1. Enforceability. The crux of it all is the question of enforceability. We recommend that, in alignment with Planning Department’s own recommendations, the legislation should AT A MINIMUM, require monthly or quarterly reporting the number of nights STRs are rented to the enforcing agency, identify on the City’s Property Information Map units registered as STRs, make listing on a hosting platform without registration a violation, provide adequate funding for enforcement, and allow “private right of action” so third parties can sue violators to enforce the laws.
  2. Three-Year Sunset Provision. It is impossible to assess the unintended consequences of the blanket change to zoning definitions created by this legislation. Barring a more thorough review of these changes by land use category or geography, we recommend either a maximum cap on STRs by neighborhood and/or zoning district, AND/OR limiting the length of this legislation to a 3-year pilot, with a “hard sunset” provision, and requiring a thorough study of the impacts and unintended consequences before reauthorizing for more years.
  3. Maximum Annual Limit. Presumably, the primary reason people use “home-sharing” hosting platforms in the first place is to rent out an apartment or room while the permanent resident is away on vacation – and it seems far-fetched that many people in this city can take more than three or four weeks of vacation per year. Allowing up to 90 days of “short-term” rentals and unlimited year-round “hosted” room rentals creates a “market” temptation to profit from STRs, adding another incentive to raise rents, raise sales prices, and hold housemate bedroom rentals off the market. We recommend reducing the total duration of allowance for STRs to something more reasonably aligned with typical vacations, say a total 30 days per year, and no more than 90 days for “hosted” rentals.
  4. Prohibition on Subsidized Housing and New In-Law Units. The legislation as currently written, seems to allow anyone receiving the benefit of subsidies for permanent affordable housing, public housing, master-lease subsidies, or subsidized first-time homebuyer loans, to potentially cash in on these benefits for their own profit. We recommend adding a clear prohibition to exclude any units receiving City subsidies, in whatever form, from taking advantage of these public subsidies. Additionally, legislation recently passed by the Board of Supervisors to legalize in-laws and promote construction of new in-laws was meant to address the critical need to provide more housing supply for City residents, not to create small hotel units. We recommend that in-law units should also be prohibited entirely from use as STRs.
  5. Finally, tenant advocates have raised critical issues to protect tenants from possible eviction and to provide a “private right of action” without undue bureaucratic hurdles to ensure enforceability.