San Francisco’s housing bond is a big down payment for affordable housing
Today, the Board of Supervisors will discuss the uses for a November 2019 housing bond at the Budget and Finance Committee. This bond is a critical down-payment on filling the affordable housing funding gap, now at $600 million, which is double the size when initially proposed by Mayor London Breed in April. The Board of Supervisors and the city controller worked arduously with the mayor to maximize this opportunity without increasing current taxes.
With over half a billion dollars in financing, the bond attempts to address many critical affordable housing funding needs, including for one of San Francisco’s most vulnerable populations: low-income seniors.
Almost a quarter of seniors in San Francisco are living under the poverty line. The housing bond proposes to dedicate a significant portion of funds to housing for The City’s elders. In addition, Board of Supervisors President Norman Yee has proposed a rental subsidy program to help lower-income seniors afford to live in below-market rate housing developments without over-stressing their very limited finances.
The bond provides critical gap funding to move forward shovel-ready pipeline projects. It could also contribute to the pre-development of homeless supportive and transitional youth projects in advance of funds from the Our City Our Home measure passed by voters last November, which is awaiting legal resolution.
Now that the bond has increased in size by $100 million, there is an opportunity to acquire new development sites in some of the neighborhoods which have had little or no affordable housing investments, and prepare them for development in the coming years. This will advance another important goal: geographic balance of investments.
The bond will also help complete the rehabilitation of the city’s public housing, a critical task given the federal abandonment of public housing. Funds would go towards 1-for-1 replacement units and a full right to return for existing residents.
As important as these new production strategies are, addressing the displacement crisis that has undermined The City’s working class neighborhoods is urgent. More than 4,000 housing units were permanently removed from rent control over the last ten years through Ellis Act evictions, owner move-ins, demolitions and condo conversions. The City’s housing balance report finds that districts 1, 2, 4, 8 and 11 have all lost over 10 percent more rent-stabilized housing than was built as new affordable housing. San Francisco’s outer neighborhoods are increasingly where residents are at risk of displacement.
A proven strategy to stabilize neighborhoods for the long-term is to acquire buildings and preserve them as permanently affordable for the residents who live there. There is widespread support from the board and mayor in funding this preservation work, especially in the outer neighborhoods.
We know that the affordability crisis affects not just people on fixed incomes and lower-wage workers, but increasingly the broader middle-income workforce (i.e. teachers, nurses and service workers). The bond could also fund innovative solutions such as a loan program to help homeowners finance in-law units.
Addressing the Funding Gap
Clearly, there are a lot of needs to be funded. This bond is no silver bullet to solve the affordability crisis. Like the national conversation around reconfiguring the economy around a “Green New Deal” to address climate change, the housing crisis demands a level of public investment that truly rises to the challenge.
The bond is a critical piece of a comprehensive strategy toward garnering new sources of funding. Supervisor Matt Haney recently announced an update to San Francisco’s policy requiring commercial developers to offset the cost of housing new workers, a fee that hasn’t been increased since the 1990s. Supervisor Sandra Fewer, along with nine cosponsors, announced a plan to dedicate 50 percent of future years’ surplus ERAF funds to affordable housing, split between housing preservation and new production.
At the state level, the City can leverage its influence to re-authorize its use of redevelopment funds to replace the 6,000 homes destroyed by urban renewal in the 1960s and 70s. Another transformative opportunity on the horizon is the potential of Prop 13 split-roll reform on the November 2020 ballot. If the measure passes, it would bring in at least $700 million annually to San Francisco, a portion of which could be set aside for affordable housing.
This is a critical time for San Francisco’s housing future. The investment with this November’s affordable housing bond is not only an opening for a long-term strategy to protect our existing residents and house our future generations, but a critical down-payment, and a big one, toward tackling this affordability crisis.