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Is SF Heading for a Housing Civil War?

With Supervisor Jane Kim's affordable housing measure, it may be. 

Supervisor Jane Kim's affordable housing proposal could steer the city into crisis—or save its middle class.

 

Reprinted with permission from Beyond Chron.

There is a quiet war raging in San Francisco’s housing community. It concerns Supervisor Jane Kim’s proposal for a housing balance, which would require that market-rate housing does not exceed 70% of the total housing built.

Proponents argue that San Francisco Mayor Ed Lee has regularly talked about how 30% of his planned 30,000 units would be affordable. They say all their measure does is put “teeth” in the mayor’s plan by requiring conditional-use approval for market rate projects exceeding the 70% limit. Opponents see it differently. They say that imposing strict limits on market-rate housing does nothing to increase affordable units, and will worsen the city’s housing shortage.

With the housing balance proposal likely headed for the November ballot, voters may get their chance to weigh in. Here is what’s at stake.

The “Pro” Argument

Proponents argue that the housing balance would ensure that Lee’s goal of building 30% affordable units out of 30,000 is met. Kim and others say that they trust the mayor—but believe that good intentions are not enough. The idea is that if private developers know their projects will be delayed—or even halted—by the city’s failure to meet the 30% threshold, then city political leaders will make sure it is met. Kim argues that it"creates an incentive for developers to work on the same side as community advocates, to make sure affordable housing is built and rent-controlled units aren’t lost."

Kim’s original proposal was for District 6 only. This made no sense, because it would have funnelled even more affordable units into the district that already has the most—bypassing the Mission, Castro, and North Beach, where Ellis Act evictions make adding affordable units a much higher priority. I have since learned that if the housing balance proposal goes to the ballot or is voted on by the Board, it will likely be citywide.

The "Anti" Argument

Opponents argue that mandating a housing balance penalizes private developers for circumstances beyond their control. The balance does not add to public affordable housing funding, and could actually reduce affordable units via lost inclusionary units in market rate projects that could be blocked by the new conditional use requirement.

The balance also strikes at the heart of the supply-and-demand argument most powerfully advanced by Gabe Metcalf of SPUR. Metcalf’s argument is that a lack of supply worsens San Francisco’s housing affordability crisis, and that the city must build tens of thousands of new units to increase affordability (Here is one response to that argument, by Dean Preston.)

Proponents of new market-rate housing see the skyrocketing rents we've experienced since 2010 as a case study for the negative consequences of stopping housing construction.

Good Timing or Bad?

Lee has shown a remarkable ability to unify long-disagreeing factions around housing issues. This led to passage of the Housing Trust Fund in 2012, and to ongoing negotiations in the mayor’s Housing Work Group on increasing affordable units and housing density. The mayor knows he cannot expect new federal housing dollars, and is considering an affordable housing bond for November 2015. Such a bond requires a two-thirds vote, and needs all housing groups on board (or at least not in public opposition) to pass. No San Francisco housing bond has passed since 1996, due to this lack of unity.

With a future bond on the horizon and the mayor’s public commitment to increasing inclusionary requirements, housing balance opponents ask why nonprofit advocates are choosing to wage this battle right now. Given prior unity around housing development, they also wonder why nonprofits are acting as if private developers and the mayor have to be put in a straitjacket.

Proponents respond that this has nothing to do with trust, but that in the midst of the current affordability crisis the public needs to see concrete action. To be clear, some supporters of the mandate believe that building market-rate housing is the problem. They’ll support anything that moves toward this goal, and the housing balance measure goes further in this direction than any San Francisco law ever has passed.

What's the Upside?

In light of the development community’s plan to wage a full-scale war against the housing balance, what is the great upside that makes this divisive struggle worth waging? This is not a fight over rent controls or just-cause evictions, when thousands of people are impacted by the election. Nor is it the type of anti-development fight waged over 8 Washington or the recent Prop B, both of which had specific, identifiable outcomes.

In contrast, if the balance measure wins in November, its connection to producing more affordable housing is unclear. And given controversy over what is included in the “count” determining the 70-30% balance, the trigger designed to maintain 30% affordability many not be used for some time. The lack of clear, real-life affordable housing benefits gives proponents ample reason to avoid a civil war.

Why alienate development allies over a measure that brings few or no tangible benefits to low-income people? Developer support is needed for increased inclusionary requirements and for an affordable housing bond in 2015—so why tick them off now? Considering the downsides of a ballot fight, here's hoping that both sides do their best to avoid this housing civil war.

 

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