http://48hills.org/2017/05/1memo4/agenda-may-15-21-can-afford-affordable-housing/

Tim RedmondMay 14, 2017

Two competing affordable housing bills – and another bill that could override both of them to give developers more density – are headed for the Board of Supes this week.

And the discussion comes as the Budget and Legislative Analyst just released a report that looks at median rents and income levels by neighborhood.

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It’s not surprising, but still important to note: The residents of the ten neighborhoods with the lowest median income earned only 33 percent of the money that that the residents of the ten highest-income areas took home.

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Think about that in terms of economic inequality, which everyone in San Francisco, including the conservative Democrats, seems to admit is a problem: In the Presidio area, where Sen. Dianne Feinstein and Rep. Nancy Pelosi live, median household income is $164,000. In Chinatown, it’s $21,000.

More: Median household income for White people is $103,000. For Black people, it’s $29,800.

The report shows one of the key problems with the affordable housing bill that Sups. London Breed and Ahsha Safai are promoting: In a lot of neighborhoods, the “middle class” housing that developers would be allowed to build is far too expensive for the residents.

There’s a lot of misinformation going around about the two proposals; the Chron today noted: “One intends to keep middle-class families in a city that’s become increasingly white collar. The other seeks to build more affordable housing for the poor.”

Actually, both include housing for the middle class. The measure by Sups. Aaron Peskin and Jane Kim mandates more affordable housing at all levels: It demands that developers set aside 24 percent of rental units and 27 percent of condos for people who can’t afford market rate. That proposal keeps the current level of housing for lower income people at 15 percent, and adds more on top for the middle class.

Safai and Breed want a lower the total level of affordable housing — 18 percent for rentals and 20 percent for condos – and they add “middle class” housing by taking housing away from people who earn less. They would drop the rate for lower-income people to six percent.

So the real choice is: Do we create middle-class housing by demanding more from developers – or by taking housing away from working-class people?

Let me say this again: Both measures create middle-class housing. One takes the money from developers; one takes the money from low-income housing.

Safai and Breed argue that if you set the mandate too high, then market-rate developers won’t build anything at all – the projects won’t “pencil out” – and we won’t get any new housing.

There are two problems with that argument. One is that we never ask developers to show us their books; as Jennifer Fieber of the SF Tenants Union noted in a recent hearing:

Tenants who live in below-market-rate units have to report their income every year “and pay the maximum amount they can afford.” On the other hand, developers who get city favors don’t have to disclose anything: “When they say it doesn’t pencil out, we just believe them.”

The other problem is that we have clear, convincing, real-time evidence that developers can provide more than 18 percent affordable housing. In the past couple of months, Sup. Hillary Ronen has negotiated two deals in the Mission that require developers to provide 25 and 27 percent below-market-rate housing.

In fact, Kim has worked out numerous other arrangements with developers that require them to comply with higher affordability levels. If the Safai-Breed bill goes through, it would undermine those neighborhood and community-level talks and allow developers to continue making, in the words of Peskin, “a shit-ton of money” without paying their share to the community.

That, of course, is another issue altogether: Building market-rate housing puts a lot of pressure on existing neighborhoods. It’s pretty clear that moving a bunch of rich people into a working-class neighborhood raises rents for everyone, especially for local community-serving businesses.

Which brings us to the total madness of this discussion.

The way the Safai-Breed bill works, developers could build “affordable” housing in parts of town where the below-market units are actually around market rate, meaning they won’t be subsidizing much of anything. The measure is a huge developer giveaway.

And it means, of course, that the residents of those neighborhoods – already suffering from the evictions that are driven in part by market-rate housing and in part by the mayor’s tech boom – will never be able to afford the “affordable” units.

Housing advocates are starting to ask whether the price point for below-market units ought to be based on median income in neighborhoods – which would mean that a unit aimed at “middle-class” people in Chinatown would be priced at a lower level, so that people who currently live in Chinatown might be able to qualify.

The other approach is to leave it as a citywide program, which would allow higher-income people to move into lower-income neighborhoods. That’s already happening, and it’s causing a mess.

But of course, we have the folks who want to build everything, everywhere. From the Chron:

“If we say that one neighborhood is only for one income level or another — whether it’s high or low — then we will create homogenous socioeconomic enclaves,” said Todd David, the executive director of the San Francisco Housing Action Coalition.

Read that sentence a few times, and think about it.

“Homogeneous socioeconomic enclaves.” Isn’t that what we’re creating now, with rich people moving into working-class neighborhoods and driving out the current residents? Is there really any danger that Pacific Heights and the Marina will become less homogeneous? No: The danger is that the Mission and Bayview will lose their working-class residents as richer people move in.

I am all for building affordable housing in wealthy areas. That’s good for everyone (except the rich folks who don’t want poor people living near them, who have in many cases succeeded in blocking affordable housing). But as long as market-rate housing drives up rents in less wealthy parts of town, we need to be sure that those residents – yes, the existing residents, the ones who are already here – get a shot at affordable housing to keep them from being displaced.

And in some parts of town, the Safai-Breed plan would mean 90 percent of neighborhood residents would be unable to afford the affordable housing.

That’s why activists are arguing that housing ought to be priced at a level based on neighborhood income, not citywide income.

There’s another housing plan out there, sponsored by the mayor and Sup. Katy Tang and called HOME-SF. That one gives developers the right to build increased density – that it, more units per lot – in exchange for making some concessions to affordablility.

I have no problem with density; San Francisco is already the third-densest urban area in the US. But the Tang plan would overrule all of the other affordable housing regulations that everyone is working on.

It would also be death to a lot of neighborhood commercial districts, because it would give developers an incentive to demolish low-rise buildings with small businesses on the ground floor, build high-density housing, and then charge much higher rent for that same commercial space.

During the debate on the measure, Peskin asked about this, and Tang noted, correctly, that the state doesn’t allow commercial rent control. On the other hand, this “density bonus” deal is all voluntary; developers can decide to give the city want it wants in exchange for a bonus. Why not tell them that they can agree to keep neighborhood commercial rents at the same level and allow existing tenants back in with the same lease … or they don’t get the bonus?

The biggest problem here is that I don’t think the current board majority is seriously trying to get the best deal for the city. It’s all about “incentives” for developers. And none of them seem to be in need of much incentive at all.

All of this comes down at the Land Use and Transportation Committee Monday/15. There’s a rally at 1pm on the steps of City Hall for affordable housing.