Mayor Ed Lee’s Next Challenges

by Randy Shaw on November 14, 2011

Now that San Francisco Mayor Ed Lee has been elected to a full term, let’s take a look at three of the biggest issues he faces in the months ahead. The first involves California Pacific Medical Center’s (CPMC) proposed $2 billion project on Van Ness. This project, oddly ignored during the mayor’s race, will include packed hearings at Planning and the Board of Supervisors. The mayor’s office is expected to reach its development agreement with CPMC within a month. Second, the mayor will have to soon decide if he wants to try to assemble the citywide coalition necessary to pass the city’s first housing bond since 1996. This would appear on the November 2012 ballot, and comes as other sources of housing construction financing have dried up. Third, with departmental budgets for 2012-13 due in a few months, Mayor Lee will soon have to choose whether employees of nonprofit contractors running city programs go a fourth straight year without salary increases. Balancing city budgets on the backs of nonprofit workers is a longtime custom that this mayor can change.

In declaring victory last week, San Francisco Mayor Lee pledged to continue the same hard-working pace he has demonstrated since taking office last January (he even joked that his wife has given him permission to work a few more hours each night). Fortunately, a mayor who enjoys hard work will have plenty to keep him occupied in the next few months alone.


The mayor’s race altered the city’s negotiations with CPMC by making a pre-election agreement virtually impossible. After Lee announced his candidacy there were false rumors that he would strike even a bad deal with CPMC so long as he could announce it before the election; this meant that even a great deal reached in October would be accused of falling short.

Given this heads I lose, tails you win scenario, coupled with the city’s ongoing difficulties reaching agreement with CPMC on some key issues, the best estimate for the mayor’s office to reach a deal is by mid-December.

The mayor’s agreement with CPMC is only the starting point for a lengthy process that will involve long hearings at the Planning Commission and Board of Supervisors. It is a process seemingly tailor-made for Mayor Lee, who has shown time and again that he can bring opposing forces together to get things done.

But the CPMC project could prove the Mayor’s most difficult test.

The challenge is not simply bridging a likely unbridgeable gap between the community coalitions and CPMC over housing and health care funding associated with the project. Rather, CPMC’s new $2 billion facility opens after all of the current health care rules are changed under the Obama health care plan —and even health care experts cannot predict with certainty how a deal on the delivery of health services to low-income people made now will work effectively when the hospital opens.

No candidate talked about CPMC during the mayor’s race, but its about to be a front and center story.

2012 Housing Bond

San Francisco’s affordable housing cupboard is bare. And one reason is that city voters have not passed a housing bond since 1996.

When you combine the lack of affordable housing funds with a national banking system that has refuses to finance market-rate housing (other than luxury projects), here’s what you get: huge unemployment among construction workers while entitled projects with units that people would want to buy never get built (which also hurts the city’s revenue stream).

Mayor Lee showed with Prop B (street repair bond) that he can get a 2/3 vote for measures that he is identified with, that create jobs, and that meet city needs. Now he must decide whether he wants to try to assemble a coalition to pass a housing bond in 2012 after three prior housing revenue measures have failed.

I think he can. But he will have to accept that voters will only pass a bond that primarily benefits the middle-class.

The 2008 housing set aside initiative, which only needed 50% plus one for passage, was opposed by the city’s teachers union because too little of the benefits went to those earning teacher salaries. Nobody disputes that our state and federal governments have deserted those with the greatest housing needs, but a local housing measure primarily targeting the low and very-low income cannot win.

Reviving housing construction creates jobs, boosts revenues available for social programs, and creates purchasing opportunities for those who might otherwise evict tenants and convert rental housing to tenancies in common. And the portion of the bond that goes to affordable housing provides money that would otherwise be unavailable.

Passing a housing bond has proved a Herculean task, but Mayor Lee thrives on such challenges.

Justice for Non-Profit Workers

The nearly two-year controversy over city employee pensions rarely acknowledged that there are thousands of workers performing city services who get no city-funded pensions at all – non-profit workers. And because nonprofit workers have no master contract with the City as do public employees, there is no requirement that the city even bargain before freezing nonprofit salaries.

Since the national fiscal crisis began, San Francisco’s nonprofit workers paid through city contracts have gone three straight years with no salary hikes. Meanwhile, Kaiser health care costs have soared, with most nonprofit workers now paying more for health care today than three years ago.

This means thousands of nonprofit workers providing vital city services are taking home less in actual dollars, and far less when adjusted for inflation, than three years ago.

City department heads cannot include pay hikes for nonprofit workers without mayoral direction. And the mayor’s budget office becomes so concerned with saving programs and having to deal with contractual obligations to city workers that the easiest way to save money is just to freeze nonprofit salaries year after year.

But what’s easy is not what’s fair.

It sends a terrible message to the people the city is indirectly paying to clean bathrooms in Care Not Cash hotels, provide services in homeless shelters, assist victims of domestic violence, stabilize persons with AIDS, or any other of the many vital services these workers provide that no matter how good a job they do, they will not get a raise.

It’s time for Mayor Lee, a veteran of the nonprofit sector, to change this dynamic.

Randy Shaw is Editor of Beyond Chron, which is published by the Tenderloin Housing Clinic, many of whose employees are paid through city contracts.

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