Notes from the January Meeting: Who Are We Building For?

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By Tes Welborn, HANC Treasurer

Ed Lee vs. The People of San Francisco

Calvin Welch gave a brief summary of development since World War II. While financial interests built office space until both resident displacement and a glut came to pass, community activists all over San Francisco worked to slow or stop displacement and to create a new model, community development. Community development focused on resident needs-- transit, neighborhood retail, housing, and the related struggle for local hire. The Haight struggled with hospital expansion and fought it back to retain housing.

Welch also presented much information on Mayor Ed Lee's legacy, which focused on large development and tech. Lee focused only on jobs while he ignored the need for housing for those new workers and the folks who would provide them services. His policies led to the greatest population transfer in San Francisco's history, with 400,000 people leaving San Francisco over his 6 year term, and 400,000 new, higher income residents arriving.


His ignoring the transportation needs of new tech workers, many commuting to the peninsula, led to a private tier of transportation of “Google” buses, and Uber/Lyft, that in turn caused congestion for public transportation.  Between 2011 and 2013, 69% of no-fault evictions occurred within four blocks of tech bus stops.

Right to Counsel and Costa-Hawkins

Rent Control prohibitions and limits are in the 1995 state legislation called Costa-Hawkins. On January 11th, in the Sacramento committee hearing, repeal failed by one vote! And three Democrats voted against repeal or abstained! Dean Preston, of Tenants Together, reported on that vote, the lack of transparency, and the stench of real estate money. The discussion at the State Capitol focused on “supply”--building more housing—and not on the concept of regulating rents. All over the state, California residents are struggling with rents that lead to having to make hard choices between other necessities. Preston reported that years ago, the Board of Supervisors had passed Vacancy Control (limiting rent increases on vacant apartments), but then-Mayor Feinstein vetoed it.

The Costa-Hawkins law guts cities' ability to regulate rents when apartments become vacant, and exempts new construction, condos, and single-family homes from rent control. Tenant advocates say this law protects the real estate industries and prevents local voters from controlling local rents.

Tenants and tenant organizers have made strong state-wide allies with labor, environmental organizations, and more. The mass of people at the hearing was very empowering. This will be a multi-year effort to put the repeal of Costa-Hawkins on the ballot and to continue to try to get it repealed through the legislature.

The Right to Counsel San Francisco ballot measure – providing lawyers for people being evicted - has been collecting signatures, and is expected to be on the June ballot.

Understanting Affordable Housing Needs

Peter Cohen, of the Council of Community Housing Organizations (CCHO) supports the repeal of Costa-Hawkins and praised Dean Preston's work. He first defined Affordable Housing as 30% of the household's combined income. So a single person making $60,000 a year should pay at most about $1,500 for a studio or about $1,700 for a one-bedroom. A working couple with a child who earn $105,000 should pay at most $2,500 rent for a two-bedroom, or be able to buy a home for up to $500,000.

But compare that to actual rents and current home prices. Average one-bedroom rents range from $2,200-$3,500. And average San Francisco homes sell for $1.2 million.

This means that lots of San Franciscans who may be evicted, lose a job, have health problems may be effectively prevented from staying in San Francisco. At the lower end of of affordability are seniors, part-time workers, janitors, and line cooks. Examples of workers in the $40,000 to $50,000 income group of single earners are para-professionals, security guards, entry-level teachers, construction apprentices, and mechanics. Teachers, union labor, librarians, park rangers, etc., typically are in the $64,000 to $80,000 income range. If they lose their housing, or take a new job in San Francisco, they too are likely to pay up to half their income for rent. And it's not much better for families with two earners.

San Francisco's Housing Plan calls for nearly 60% of new housing to be affordable for lower and moderate-to-middle income households. But only about 20% is being built! We know that the finance and real estate industries go for the highest profits, so most affordable housing is subsidized by the city and built by non-profit housing developers. This is a long-standing problem due largely to the federal government's abandoning affordable housing ever since the Reagan administration. Even California has cut affordable housing funds nearly 80% in the last eight years!

Furthermore, for every three units built of new affordable housing in San Francisco, two units are lost. Hundreds of rent-controlled housing units are taken out of rent control and usually the tenants are evicted. There are many factors including real estate speculation that treats housing as a commodity, not homes.  Examples are AirBnB, luxury housing and second homes, and investing to hold housing as an investment, rather than occupy it or renting it out.

What Can We Do?

Any solution to the current housing crisis will involve some combination of protecting current residents and communities that made this city and region, preserving housing stock, producing more housing, require private developers to build some affordable housing, and planning for equitable development. Specific housing policy measures for 2018 and beyond must include

  • Passing the state $4B housing bond in November 2018,
  • Passing a split roll revision to Prop 13 to tax commercial properties at a higher rate,
  • Tax second homes and vacant homes at a higher rate,
  • Let non-profit housing organizations have first right of refusal on apartment sales,
  • Restore Hotel Tax set-aside for homeless housing and services,
  • Tax landlord profits.
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