By Randy Shaw.
There is a quiet war raging in San Francisco’s housing community. It concerns Supervisor Jane Kim’s proposal for ahousing balance, a strategy designed to ensure that market-rate housing does not exceed 70% of the total housing built.
Proponents argue that San Francisco Mayor 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 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 likely headed for November, voters will soon get their chance to weigh in on the issue. Here is what’s at stake.
The “Pro” Argument
Proponents argue that the housing balance is necessary to ensure that Mayor Lee’s goal of building 30% affordable units out of 30,000 is met. While some doubt the mayor’s commitment, Supervisor Kim and others trust the mayor but believe that good intentions are not enough to ensure the goal is achieved.
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, than city political leaders will make sure it is met. Supervisor 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.
For the first time, the balance penalizes for-profit developers for the city’s lack of affordable housing creation.
Supervisor Kim’s original proposal was for District 6 only. This made no sense to me because it would funnel even more affordable units into the district that has the most, while 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 goes to the ballot or is voted on by the Board it will likely be citywide.
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 October 14, 2013 argument (“The San Francisco Exodus” 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 (Dean Preston responded to Metcalf’s argument in our pages, “Trickle Down Housing Approach is Wrong for San Francisco.”
Proponents of new market rate housing see skyrocketing rents starting in 2010 as a case study for the negative consequences of stopping housing construction.
Good Timing or Bad?
Mayor 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 2/3 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 this time to promote their measure. 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 to do the right thing.
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. If San Francisco makes a strong public statement on a 70-30 market rate/affordability split, they believe it will concerns about future affordability in the city.
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.
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 directly impacted by the election outcome. 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 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’s designed to maintain 30% affordability many not be used for some time.
The lack of clear, real life affordable housing benefits from the balance is why the best solution for proponents is avoiding a divisive housing civil war over this issue.
Why alienate housing developer allies over a measure that brings few or no tangible benefits to low-income people when developer support is needed to pass increased inclusionary requirements and for a winning affordable housing bond in 2015?
The “triggers” impacting market rate development when the affordable side goes under 30% would appear to offer room for compromise. And considering the downsides of a divisive ballot fight, I would certainly hope that both sides do their best to avoid this potential housing civil war.
Originally posted at Beyond Chron.