Housing for Poor May be Sacrificed to Benefit $100,000 Earners

by Randy Shaw on April 12, 2004

A quiet revolution has occurred in San Francisco. Whereas housing assistance has been largely reserved for low-income residents, the push is now on for taxpayers and renters to subsidize housing for those earning $100,000 a year.

During the past two decades, a myriad of city policies and laws have prioritized the preservation of rent-controlled housing and the targeting of housing assistance to those earning 60% of median income or less.

The logic behind these policies is obvious. Given limited resources, it is most cost effective for San Francisco to preserve existing lower-cost housing and provide rental assistance to those who cannot otherwise obtain decent and affordable units.

During the boon of the late 1990’s, the housing needs of those earning $90,000 and more were addressed by the building of live-work lofts and condominiums. Thousands of new units were built that now house what for high-income San Francisco constitutes the middle-class.

At no point during this building frenzy did anybody suggest that the city should subsidize loft and condo developers on the grounds for performing the public service of building “middle-class housing.” Such a stance would have been universally deemed outrageous, and given the tenor of those days would have provoked mass protests if not outright rioting in some neighborhoods.

Today, a policy stance that was indefensible only a few years ago is now a commonly heard argument. Seeking to attract upscale residents to the city, the Chamber of Commerce has embarked on an ambitious plan to redefine the city’s housing crisis as primarily a lack of “affordable” home ownership for the “middle-class.”

In the Chamber’s view, the city has ignored the housing needs of those earning 100%-120% of the area’s median income. Forget about the thousands of recent buyers of condos and live-work lofts*the Chamber sees the city’s future at risk due to the lack of home ownership opportunities for its workforce. Safeguarding our future means publicly subsidizing builders and purchasers of upscale developments.

The Chamber’s campaign marketing theme is that San Francisco “needs housing at all income levels.” This phrase has become a mantra, and was repeated throughout the recent Prop J campaign. When Mayor Newsom convened the first meeting of his then 60-member Housing Task Force, he stated that he had no policy preconditions except that he believed San Francisco “needed housing at all income levels.”

Prop J was the test drive for the Chamber’s attempt to secure public subsidies for the affluent. The Chamber asked then-Supervisor Newsom to get three of his colleagues to put the measure on the November 2003 ballot, but he could not secure the votes. Newsom asked Mayor Brown to put the measure on the ballot but the Mayor refused. Willie Brown was accustomed to supporting whatever upscale housing development proposals came before him, but he drew the line at a plan that publicly subsidized such projects.

Prop J’s landslide defeat —and, as noted by Warren Hinckle, a 70%-30% loss is more akin to a humiliation—has had absolutely no impact on the Chamber’s marketing campaign. The Chamber is now trying to use the proposed November affordable housing bond to secure housing subsidies for the truly non-disadvantaged.

Soon after taking office, Mayor Newsom announced support for a $150 million bond to build supportive housing. This proposal brought Newsom widespread applause from the Coalition on Homelessness, Sister Bernie Galvin of Religious Witness with Homeless People, and others who had long been critical of the mayor’s homeless policies. The supportive housing bond would bring San Franciscans together in a locally-led effort to make a serious dent in the city’s homeless problem. Not a single organization or prominent individual publicly expressed opposition to the proposed bond.

But this moment of good feeling and common purpose was not to last. The San Francisco Organizing Project, which spearheaded the last (and failed) housing bond, sought to graft its housing proposals to the supportive housing bond. SFOP and other groups want a bond to include millions for “affordable home ownership,” an extremely ambiguous concept in a city with average home prices exceeding $500,000.

SFOP began meeting with groups to build support for what grew into a $450 million housing bond proposal. The bond would have something for everybody. Once each constituency was empowered to add their ornament to the tree, the Chamber had the vehicle it needed to get taxpayer support for upscale housing.

Supporters of the original $150 million supportive housing bond now face having their politically attractive measure connected to a housing subsidy proposal that opponents will gleefully describe as the “son of Prop J.”

I asked Jack Davis last week what he thought of all this. Davis has his detractors but for over two decades he has had no equal when it comes to analyzing San Francisco’s electorate.

According to Davis, “We had a $100 million housing bond pass in 1996 and people did not feel good about how the money was spent. Despite these concerns they went back to the voters with a $250 million housing bond in 2002, which only got 56% of the vote (66.6% is needed). Now they want voters to approve a $450 million bond. It ain’t gonna happen.”

Davis’ logic is hard to dispute. Retired homeowners in the Sunset are not going to vote to pay higher property taxes to subsidize home ownership for people whose incomes outpace their own. Nor will tenants vote to pay more rent (though bond passthroughs) so that those earning $100,000 a year can buy a below-market condominium.
A bond measure that combines the wish lists of organized groups fails to account for the fact that the vast majority of voters do not belong to such groups. To get the support of tenants and retired homeowners, the bond must represent an act of virtue and good will. That’s why the Laguna Honda bond passed with 72% of the vote, and that’s why a housing bond primarily benefitting homeless persons with mental disabilities and the working poor will also prevail.

Creating home ownership opportunities for the affluent by raising taxes and rents has never been, and should not be, a city priority. Yet if the Chamber and its allies have their way, their unpopular proposal will lead to the defeat of the otherwise winning$150 million measure. An historic opportunity to meaningfully reduce homelessness in San Francisco will be lost, all because those who backed Prop J refused to accept the voters will and now want a Mulligan (a golf term for hitting a second ball after a poor first shot).

With huge state and federal budget deficits, San Francisco must help its low-income residents now. This November is our chance, and this opportunity must not be destroyed by the Chamber’s obsession with securing tax dollars for upscale housing.

Mayor Newsom has said he wants to make sure that the November housing bond wins. Let’s hope the mayor takes Davis’ words to heart, and ultimately decides to return to his original proposal. It is time to help city residents who have gotten hard luck, not tax breaks, during the past four years.

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