Is San Francisco Ready to Pass a $600 Million Housing Bond? – Next City

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Is San Francisco Ready to Pass a $600 Million Housing Bond?

(Photo by Tony Webster / CC BY 2.0)

The last time the San Francisco Board of Supervisors put a housing bond on a general-election ballot, it was 2015, Ed Lee was mayor and the average home price to start the year was $993,000, according to data collected by Zillow. This month, as the city gears up for another bond push, Zillow puts the average home price at $1,357,500. If you had only the $364,000 that marks the difference between those prices, you could treat yourself to a handsome home in a vibrant neighborhood in a city no less charismatic than Philadelphia.

“It’s stunning,” says Myrna Melgar, president of the San Francisco Planning Commission. “We thought we were in a crisis in 2015. Here we are: it’s only gotten worse.”

In 2015, the housing bond — directing $310 million for affordable housing for low-income families, revitalization of public-housing projects and down-payment assistance for middle-income homebuyers — was approved by nearly three quarters of voters. This year, Mayor London Breed is hoping to repeat that success while doubling the ask. In May, Breed and Board of Supervisors President Norman Yee introduced a bill that would authorize a $500 million affordable-housing bond on the November ballot. The size of the bond was later increased to $600 million after the City Controller determined the city had a greater debt capacity based on projected tax revenues, according to the San Francisco Chronicle. Before it’s all said and done, the proposal, which would already be the largest housing bond in the city’s history, may grow more, according to a spokesman for Mayor Breed. And Melgar and other housing advocates are hoping to make the case to voters.

“We have to continually be building housing, because what has happened is that during the times that we have just left the foot off the pedal, the need for production just accrues,” Melgar says. “And then not only do we have to keep building, but we have to play catch-up.”

Cities and states have been pushing for larger and larger housing bonds lately. Californians approved $6 billion in bonds for housing production last year. Austin voters broke records with a $250 million housing bond the same day. And although San Jose failed to approve a record-setting $450 million housing bond last year, Mayor Sam Liccardo is reportedly thinking about trying again.

To develop a spending plan for the bond proposal, Breed and Yee co-chaired a working group that met for about a month earlier this spring to talk about priorities. Initially the proposal was just for $300 million, but by the time the working group got started, it had grown to $500 million. The working group completed its plan prior to the bond being increased by another $100 million, so the final spending plan will need to be amended by the Board of Supervisors.

“The needs are pretty great, and it’s one of these situations where it’s never going to be enough, no matter the amount,” says Yee. “So one of the things we’re careful about is not to go over the limit in terms of how much we’re going to charge property owners.”

In previous years, San Francisco saw a number of bond measures fail because they would have added to the tax bills of property owners, according to Yee and Jeff Cretan, a spokesman for Mayor Breed. But it has had more success since committing to only bonding as much as it could expect to pay back under current tax projections. While the city is proposing more infrastructure bonds this fall, Breed is planning to prioritize any additional bond capacity for affordable housing measures, Cretan says.

Still, it’s never enough. According to a press release from the mayor’s office, the 2019 bond would finance 2,000 units of housing — though that estimate was made when the bond was set at $500 million, so it may be adjusted upward. Of the original $500 million proposal, $150 million would be dedicated to repair public housing, $210 million for “shovel-ready” projects to construct and repair affordable housing for people earning up to 80 percent of area median income, $30 million to preserve existing affordable units, $20 million for middle-income housing programs and $90 million for affordable senior housing.

Melgar, who chaired a sub-working group focused on middle-income housing, says that even the greater $600 million is not enough to meet the need, but she doesn’t expect the overall distribution of funds to change very much.

“I think that we have laid out the priorities and the justification, and I think it will now be up to the Board of Supervisors to negotiate around the edges of what we presented,” Melgar says.

When it was introduced, the bond proposal had a number of co-sponsors, but Breed and Yee are still working to build support among the Board of Supervisors, who will need to approve the ordinance by the end of July to have it placed on the November ballot, according to Cretan. At least one supervisor, Matt Haney, has reportedly called for the bond to be increased to $1 billion. He has also said that if the bond stays at $600 million, he believes the $100 million increase should be dedicated to supportive housing for people with mental health and substance-abuse issues. Haney did not respond to a request for an interview.

There’s another wrinkle, as the news site Mission Local reported last week. The San Francisco Building and Construction Trades Council, a group representing 28 construction unions, is apparently on the fence about whether to support the bond over questions about whether the developments it funds would be subject to a law passed earlier this year that expands the requirements around project labor agreements. Cretan, the mayor’s spokesman, confirmed that the city is in conversations with labor unions about the proposal. A representative of the Building Trades Council did not respond to a request for an interview.

The mayor’s office is hopeful that it will work through the unions’ concerns, while acknowledging that it needs all the support it can muster to pass such a large bond. Within the working group, there were also discussions about how far the city could push while also maintaining widespread support for its proposals. Malcolm Yeung, the deputy director of programs at the Chinatown Community Development Center, served as a community co-chair in a sub-working group focused on the portion of the bond that would be committed to shovel-ready affordable-housing projects. Within those discussions, Yeung says, there were some people who wanted to push for even more money — enough to raise the bond beyond what could be covered without a property-tax increase. It was “a conversation that needed to be had,” Yeung says, but he believes that staying within the bounds of the current bond capacity is the right move.

“A general obligation bond requires 66 and two-thirds percent to pass,” Yeung says. “I think history has shown us that the only moment at which something can get 66 and two-thirds percent is when there’s an overwhelming consensus built around it. And I’m not even talking about political consensus — I’m talking about overwhelming citywide consensus.”

This article is part of Backyard, a newsletter exploring scalable solutions to make housing fairer, more affordable and more environmentally sustainable. Subscribe to our thrice-weekly Backyard newsletter.

Jared Brey is Next City's housing correspondent, based in Philadelphia. He is a former staff writer at Philadelphia magazine and PlanPhilly, and his work has appeared in Columbia Journalism Review, Landscape Architecture Magazine, U.S. News & World Report, Philadelphia Weekly, and other publications.

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Tags: affordable housingsan francisco