On April 1, The City convened a meeting of the 2015 Housing Bond Working Group to hammer out the details of a bond that will supposedly solve the housing crisis. In true blue-ribbon-panel style, the meeting was a lot more scripted talking than working. The invite list included tech companies, developers, nonprofits, labor and some neighborhood organizations — everyone from venture capitalist Ron Conway to us humble housing advocates from the Council of Community Housing Organizations. New District 3 Supervisor Julie Christensen spoke about the need for neighborhood stabilization (yay!), but seemed confused about the need for rent control (boo!).
If passed by two-thirds of the voters this November, Mayor Ed Lee's one-time housing bond will be a welcome shot in the arm for a number of affordable-housing developments stuck in limbo due to insufficient funds. But the devil, as always, is in the details: how large a bond, to what ends, and where does it fit in the expanding crisis of a city that's losing its diversity and character to the onslaught of evictions, speculation and market-driven development?
For the moment, the Lee administration is suggesting a modest $250 million bond, a good slug of money but significantly less than the total critical funding demanded by our housing crisis. (We estimate this to be closer to $500 million.) What would it take to move that housing bond number up to at least $350 million? This is, after all, a one-time shot in an urgent moment of crisis.
There's also talk again by the administration of getting some money from a private investment fund (last year's idea was called a "catalyst fund"; this year it's called an "accelerator fund"), but after two years so far of no success getting the tech investors to put funds into housing, we can only hope that this time it adds up to more than an April Fools' prank.
Clearly, we need more money for affordable housing. Through The City's existing sources (such as the Housing Trust Fund, inclusionary fees and redevelopment tax increment), San Francisco might be able to build close to 500 net new affordable homes per year over the next five years and continue to rehab its public housing. This is significantly short of the level needed to address the acute imbalance of new housing production — the current "pipeline" of approved development is a mere 16 percent affordable-, low- and moderate-income housing compared to 84 percent market-rate housing. This imbalance is especially acute in The City's neighborhoods experiencing the greatest brunt of development pressures. In good years in the past we've built 700 and even up to 900 units of new affordable housing.
Equally critical to address is the displacement crisis that has undermined The City's working-class neighborhoods. In 2014 alone, we saw 2,000 evictions and over 400 housing units permanently removed from rent control (through Ellis Act actions and condo conversions) — and this number doesn't even touch the tenancy-in-common conversions. The best strategy to stabilize neighborhoods for the long term, in addition to direct anti-displacement policies like last year's Proposition G speculator tax and this year's renewed attempt at Ellis Act reform, is to acquire existing rental buildings and preserve them as permanently affordable for the tenants who already live there.
So, with a housing bond as one piece of the funding puzzle, now is the time to take a comprehensive approach and work toward other funding measures in addition to the bond. We can look, as an example, to how the Mayor and the voters have addressed the crisis in our transportation infrastructure. The City just committed to a $700 million increase in transportation funding for the next five years by combining a $500 million bond, a $30 million per year set-aside, and an expanded transit impact fee.
The City could demonstrate its commitment to a more complete funding strategy right now, this month, by moving toward funding the Neighborhood Stabilization Trust called for by San Francisco's voters in last November's Proposition K. An immediate $30 million appropriation to this trust would begin saving buildings threatened by speculation and evictions ($30 million happens to match the estimated amount The City has received from Airbnb's back taxes, and mitigating the extensive loss of housing from short-term rentals is the most appropriate use of these proceeds).
Considering the scale of the crisis, we believe The City needs to secure at least $500 million dedicated to affordable housing for the next five years. This new funding would serve needs for family housing, senior housing, homeless and supportive-services housing, public housing and special needs housing, as well as first-time home-ownership.
With $500 million, The City would have:
n $100 million to establish a neighborhood stabilization trust large enough to fund the acquisition of 600 or more units at risk of displacement over the next five years;
• $200 million to build up to 1,000 additional affordable units to keep pace with the runaway scale of market-rate and "luxury" developments in the neighborhoods most impacted by gentrification;
• $100 million to "land-bank" up to 15 new sites before they become lost opportunities;
• $80 million to fill the gap in the HopeSF public housing rebuild;
• and $20 million to expand the downpayment assistance program for teachers and other first-time homebuyers.
In addition to a one-time bond measure, The City can and should pursue ongoing sources of funding: establishing a local tax-increment set-aside for the neighborhood stabilization trust (jump-started with a $30 million bump this year); dedicating new hotel tax revenue from Airbnb and other short-term rentals to mitigate their impact on our neighborhoods; establishing "infrastructure finance districts" in the most impacted neighborhoods; increasing "job-housing linkage" fees on commercial developers to reflect the new worker densities of tech offices (probably close to double what they were when this fee was last updated in the 1990s for old-style cubicle offices); and creating a fairer framework for the "inclusionary housing" fees on market-rate residential developers to reflect the luxury nature of high-rise development.
The first of April may have been an auspicious day to start the conversation, but this is no joke. There's a lot we can do to garner the necessary funding to mitigate this housing crisis. We just need serious thinking and serious action.
Peter Cohen and Fernando Marti are co-directors of San Francisco's Council of Community Housing Organizations.