Deciphering Two SF Housing Propositions

At 234 pages, the California Voters Guide is longer than the first Harry Potter book. San Franciscans will be asked to sort through 24 city ballot items this November — and five of them have to do with housing.

Propositions P and U are among the more contentious. Both are opposed by more than 50 organizations and city officials, including the majority of the Board of Supervisors, but the bills received $125,000 each from the California Association of Realtors.

Prop. P

Proposition P would change bidding rules for affordable housing projects. The biggest policy shift would require a minimum of three bids be made on a project before moving forward to construction. The goal of the measure is to spark outside interest in affordable housing and create transparency around the city’s affordable housing funds, according to Jay Cheng, spokesperson for the San Francisco Association of Realtors.

“Not one realtor is going to make a dime off these bills,” he said. “We don’t buy and sell affordable housing, that’s the city’s job.”

Instead, he said, he wants the city to make the bidding process fairer.

“We’re going to spend $1.8 billion on affordable housing and we don’t have a competitive bidding process.”

“We’ve spent millions and millions of dollars on affordable housing this way without checking if we have the best deal, without checking if there are better alternatives,” he added.

Opponents of Proposition P argue that the process for developing specialized housing is often so complex that adding such a caveat would be unduly restrictive.

“This could gum up the system,” said Peter Cohen, co-director of the Council of Community Housing Organizations, meaning it could take even longer to get affordable housing built because there simply aren’t that many affordable housing builders.

San Francisco has more than 30,000 units dedicated to permanently low-income housing. Back in 2014 the mayor promised to add 3,219 more by the year 2020. Getting that done will not be easy.

“This isn’t like flipping pancakes,” said Cohen. “There’s a real concern that some of these special-needs population housing will be most vulnerable to delays or blocking due to this new forced system.”

“Affordable housing development is a very complicated endeavor,” said April Veneracion, a staffer who works in land use, planning and development for Jane Kim’s office, “these non-profit organizations have developed a specific set of expertise.”

“We’re recommending a ‘no,’ position, because we don’t see that there is a problem. There’s already a competitive process,” said Kristy Wang, a former affordable housing project manager, and current community planning policy director at the San Francisco Bay Area Planning and Urban Research Association, known as SPUR.

Prop. U

While Proposition P aims at the bidding process, Proposition U affects those who would be eligible for affordable housing. The measure aims at loosening up the income requirements for access to affordable housing from 55 percent of area median income to 110 percent.

This would raise the cap from $44,850 to $89,650 for a family of two. The realtors argue that this would allow middle-income San Franciscans an opportunity to stay in the city.

“Prop. U really came from this understanding that middle-income families have nowhere to live in San Francisco,” said Cheng. “If you’re working class or middle-income, exactly zero homes on the market are affordable to you”

Opponents are quick to point out the lack of proposals for new housing in the bill.

“It expands the pool of households that can apply for this housing, but it doesn’t expand the pool of housing,” said Wang, “it doesn’t make you more likely to get it, it just makes it more competitive for a variety of people.”

Peter Cohen argues that it’s, “politically divisive,” and “perverse.”

“Prop. U basically eliminated dedicated units for low-income families and put everybody from the lowest income level all the way up to middle-income households into one big pool,” said Cohen. “It’s like a frenzy, everybody just gets to compete against each other.”

Cohen worries that the bottleneck of more applicants for affordable units will mostly affect those populations that are already having a hard time securing housing.

“Low-income families no longer have the certainty that at least some portion of those units are going to be available to them,” said Cohen,“Uncertainty for low-income families, frankly, is not the same thing for middle-income families.”

The measure would restructure the way rent is paid. Instead of a fixed number given by the landlord, residents would pay an amount that corresponds directly with a household’s salary, allowing residents to pay 30 percent of household income on a sliding scale.

Affordable housing advocates worry that this shift would incentivize landlords to evict low-income tenants in favor of their middle-income counterparts. They fear that by raising the income threshold and therefore raising the price you could previously charge for a unit, landlords would then be enticed to bring in residents who could pay up to double the current rate.

“Those 800 existing low-income rental units, which are occupied, now are essentially like rent control units,” said Cohen, “as soon as somebody moves out the rent is no longer set at 55 percent of the AMI, it’s now set to the new income, which is up to 110 percent.”

Whatever the voters decide this November, the question will remain: Should measures this complex appear on the ballot in the first place?

“They’re solutions searching for problems,” said Cohen, “in both cases these go down into the weeds to shift things up, and then put some really clever marketing titles so that voters think they’re doing something good, when in fact they’re being duped.”

Wang, the author of the SPUR Voter Guide, said, “These kinds of rules changes should be done, not at the ballot, but through city policy. Just because it’s complex, things change and city priorities change.”

Cheng said the ballot measures are a sign of the frustration running through San Francisco.

“These bills are on the ballot because you see families, and friends and people who should be in San Francisco have to leave for the East Bay because they can’t afford anything here,” said Cheng. “As those people leave San Francisco, they push people out of the East Bay, and we get this ripple effect of gentrification because we can’t seem to figure out our own middle-income housing solutions.”