Farrell Attacks Tenderloin Tenants in War Against Kim

by on February 9, 2017

Farrell Seeks to Torpedo Tenderloin Affordable Housing

San Francisco Supervisor Mark Farrell is attacking an affordable housing deal in the Tenderloin as part of a cynical strategy to undermine the affordable housing credentials of Supervisor Jane Kim. Farrell seeks to void an historic jobs, housing victory negotiated by Tenderloin residents, falsely accusing Kim of negotiating a “multi-million dollar development benefit” for the 950-974 Market project sponsor, Group I.

Farrell does not know what he is talking about. And his arguments against building step up housing for the very poor on a Tenderloin parking lot have troubling implications for nonprofit housing throughout San Francisco.

The Truth About 180 Jones

Like other public officials who speak before ascertaining the facts—Farrell’s office never told Group I it has any problems with the  project prior to the hearing—his attacks were misplaced.

First, Jane Kim had nothing to do with negotiating the deal whereby the developer (Joy Ou of Group I) shifted her on-site inclusionary requirement to an off-site development at 180 Jones. This came from Tenderloin tenants who argued that few if any in the surrounding neighborhood earned the 90% of area media required to buy a below-market condo in the market-rate project. The tenants felt that housing affordable to Tenderloin residents off-site was far preferable, and asked Ou to consider it.

I had heard that 180 Jones, a long entitled 37-unit project that has passed through multiple owners without any construction, was available for purchase. I asked Ou to try to buy it for affordable rental housing and she moved quickly to do so.

After she got in contract for the site, Joy and I met with Mayor’s Office of Housing Director Olsen Lee. He quickly rejected 180 Jones as an option. Lee felt that 37 units were not financially viable on the site.

That could have been the end of it. If it had been, Joy Ou would not be facing these problems and Tenderloin residents would get no affordable housing from 950-974 Market.

But Joy is committed to the Tenderloin.  Instead of giving up she figured out a way to build 68 units within the same building envelope. Tenants then asked Supervisor Kim to ensure that half of these units were for “step up” housing for SRO tenants living in supportive housing, and the D6 Supervisor immediately agreed.

This is the housing deal that Farrell now seeks to sabotage. He wants to penalize Joy Ou for working collaboratively with tenants on an affordable housing strategy that is better for them and for the Tenderloin.

Farrell doesn’t push for affordable housing in his own district. He even has a problem with market-rate housing.

In 2014, he got the city to pay $9.9 million to prevent housing from being built on the long-closed Francisco Reservoir on Russian Hill. It seems Farrell’s wealthy constituents feared that housing on the site would block their views and increase traffic, so he jumped to their aid.

An editorial by prominent San Francisco developer John Stewart urged the land be used to build 60 units of moderate-income housing, which is desperately needed in Farrell’s district. Stewart’s vision for the site was backed by the San Francisco Housing Action Coalition (SFHAC), which wrote a letter to the mayor noting that “Given our current housing affordability crisis, it makes far more sense to use this vacant public land in a way that contributes to both improving housing affordability and extracting the land’s significant intrinsic value for public benefits that also include open space.”

But Farrell ignored these calls for housing. Instead, he pursued public funds to stop housing in his district with the same fervor he is now trying to stop affordable housing in the Tenderloin. And I bet you can guess which Supervisor most strongly questioned this outrageous spending of public dollars to stop critically needed housing? That’s right—Jane Kim.

Now Farrell sees 180 Jones as payback time. His idea of payback is killing step-up housing for SRO tenants and forcing Ou to provide below market condos on site.

Nobody who cares about reducing housing inequality in San Francisco can sit by and allow this to happen.

The Greywater Issue

Farrell has two issues. First, he questions why the project got an exemption from a grey water requirement enacted well after 950-974 Market was in the pipeline. That would have been a valid question prior to the Planning Commission voting 6-1 to approve the project with the exemption.

The grey water train has long left the station.

A supervisor who prides himself on bringing a “business perspective” to the Board should understand the unfairness of requiring a developer to relitigate an issue already resolved by the Planning Commission. The Commission realized that applying the grey water exemption would be unfair because delays to the project that brought Ou under the law were caused by the Planning Department. Just consider this fact: Planning Director John Rahaim pulled the project from the July 23, 2016 calendar because he said the design was unacceptable; yet when that design was put before the Commission at the rescheduled November hearing, the Commission backed Ou’s original plan over Rahaim’s by a 6-1 vote.

So Ou’s project was delayed four months for nothing.

When higher inclusionary requirements were passed, the Board grandfathered in projects in the pipeline. Ou’s water issue is no different.

The Funding “Gap”

Farrell’s second argument is that there is a “funding gap” for the offsite affordable project that requires Ou to contribute additional funds.

This argument should alarm all backers of nonprofit housing. Why? Because every nonprofit project has a funding gap the minute after it gets approved by the Planning Commission. Soaring construction costs and delays in getting full financing ensure this.

Consider TNDC’s long awaited project at Eddy and Taylor. Purchased in 2008, construction has still not commenced due to a funding gap. Had Jane Kim not gotten $18 million from the 5M developers to go toward Eddy and Taylor, the Tenderloin’s most important nonprofit project would remain a parking lot for many more years instead of starting construction later in 2017.

Under Farrell’s logic, TNDC should not have been allowed to buy the site because of the “funding gap.” He would have left the critical Eddy/Taylor site to private developers for market rate condos instead of it becoming the nonprofit family housing the community prefers.

Every nonprofit housing project, like every market rate project, faces skyrocketing construction costs in the current environment. If we are going to require nonprofits to have full funding at time of site acquisition, the days of  nonprofit housing in San Francisco will soon end.

Here’s the bottom line. The on-site inclusionary condos slated for 950-974 Market had no value to Tenderloin residents. Providing these below market rate for-sale units would cost the developer millions of dollars but produce no community benefit.

So to her enormous credit, Joy Ou chose to allocate her affordable housing dollars to actually help the people of the Tenderloin. We will have at least 68 units on a site where we have long had zero. Half will be deeply affordable.

Longtime Tenderloin tenant activist David Elliott Lewis testified at this week’s hearing that he has never previously spoken in favor of a market rate housing project. That’s what 180 Jones means to Tenderloin residents and why this deal must go forward.

It doesn’t matter if full funding for the 180 Jones housing now exists anymore that it mattered that TNDC had insufficient funds to build Eddy/Taylor when it acquired the land. Joy’s contribution ensures that the additional money will come.

I’ve been critical of Jane Kim’s approach to 950-974 Market not because, as Farrell argues, she has been too lenient with the developer but because I feel she demanded too much. To borrow a line used by Aaron Peskin this week, the notion that Jane Kim has granted Joy Ou special “multimillion dollar benefits” at 950-974 Market is “unfair, unjust and untrue.”

Supes Support This Project

Mark Farrell may not care about building new affordable housing in the Tenderloin, but I know our new supervisors Sandy Fewer, Jeff Sheehy, Hillary Ronen and Ahsha Safai all do. All of these supervisors would take the same action Jane Kim did in backing a community negotiated affordable housing deal.

Malia Cohen and London Breed have played critical roles in preserving public housing; these supervisors know well how hard it is to get new housing built for the very poor.

Aaron Peskin was taken by surprise by Farrell’s concerns at the hearing but he’s got a long history of supporting deeply affordable housing and will back this project. Katy Tang also understands the economics of this deal serves the Tenderloin best.

Norman Yee and Farrell are the two supervisors most resistant to low-income housing and services in their district. Their votes aren’t needed to make this project happen.

Everyone who cares about the future of Mid-Market, the Tenderloin and affordable housing citywide should come down to the Land Use hearing on Monday to show support for 950-974 Market.

Randy Shaw is Editor of Beyond Chron. Read about other struggles by Tenderloin tenants to preserve the neighborhood in his book, The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

Randy Shaw

Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw's latest book is Generation Priced Out: Who Gets to Live in the New Urban America. He is the author of four prior books on activism, including The Activist's Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century. He is also the author of The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

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