19th Street 8:38 a.m. on a recent Sunday morning. Photo by Lydia Chávez

The mayor agrees: This city can’t responsibly spend money on homeless services — at least not money gleaned by taxing big business via Prop. C


It’s cold outside. As the sun slips behind the city skyline, more and more people gather here along the fetid streets, huddling on blankets and bedding down in corners.

Zak Franet is inside now, though. The 24-year-old’s small apartment is bright and warm and fastidiously neat. Every so often the plumbing emits a Cookie Monster-like gurgle, but nobody’s complaining. Because before, Franet was outside. Where there is no plumbing.

How did that happen? To borrow Hemingway’s phrase, “gradually, then suddenly.” Franet grew up in a turbulent household. There was abuse, instability, deaths in the family, stints in the juvenile justice system, and expulsions from schools. By the time his teenage years were through, he was homeless and addicted to heroin. Or whatever he could get: “I wasn’t picky,” he says now, sitting on the couch in his apartment.

The never-ending cycle ended two years ago. A tool belt sits at Franet’s feet; his job now is to climb up onto roofs or down into basements, take complete inventories of structures or complexes, and calculate their long-term capital budgeting plans. It’s a mix of brains and brawn and “the classic American story,” Franet says with a wry grin. “Start on the ground floor and work your way up.”

But Franet, truth be told, started out far below the floor. And he didn’t work alone.

He lived and received drug addiction treatment at Walden House. That led to Larkin Street Youth Services, where he received counseling and began earning educational degrees. Larkin connected Franet with shelter, then transitional housing catering to young people with behavioral health issues, and, finally, the studio where he lives today — for which Larkin Street will subsidize a portion of his rent until he can earn enough to pay his own way.

Every last one of the organizations and services that allowed Franet to turn his life around — housed him, treated his addictions, educated him, provided vocational training, fed him, counseled him — stands to gain from Prop. C, the November ballot measure that would raise perhaps $300 million a year by taxing the city’s highest-grossing businesses.

The high-publicity tussle over this measure has resulted in the spectacle of the Clash of the Tech Titans: Marc Benioff — who personally and via his company, Salesforce, has thrown some $6 million behind the measure — doing battle on Twitter with that online platform’s boss, anti-C CEO Jack Dorsey of Twitter and Square. Benioff’s largesse has, very nearly single-handedly, countered a flood of cash from corporations and moguls less keen on subjecting themselves to taxation for the greater good.

The tack taken by those opposed to the tax is simple and effective: Ridicule the notion of spending more on homeless services by denigrating the quality of the services we now provide, and bemoan the “insane” proposition of throwing more money to “failed” and “unaccountable” programs and service providers (unlike prior ballot measures, the money ain’t yours, it’s Marc Benioff’s and Jack Dorsey’s — but that’s not mentioned).

The No on C campaign belittles the very notion of competent government; it borders on nihilism. And this message is, bewilderingly, reiterated by its government allies, who are, amazingly, claiming that they can’t be trusted with Benioff and Dorsey’s money. Even — and especially — our mayor, London Breed.

For Franet, it’s hard not to take this personally. The programs that saved his life are described as “failed”; service providers subjected to a formidable amount of scrutiny, often from state and federal overseers, are described as “unaccountable.” The game plan is to inculcate San Franciscans on the utter ineptitude of government to solve any problem — so why try?

“I have a fundamental issue with almost every talking point played against” Prop. C, Franet says. “They’re damaging and harmful and hypocritical in some cases.”  

The sink emits a Cookie Monster moan, which throws everyone off for a moment. Franet collects himself. All of this is even more hurtful to him, individually, because his entré into civic participation in this city was working as a field agent for Breed’s successful supervisorial re-election campaign — while he was still living in a shelter.

He takes a deep breath: “I’m all for accountability. I pay taxes.”

“But,” continues Franet, “for someone in my position, ‘accountability’ means someone I love is getting a bed; my little sister is on a waitlist now in a shelter.”

“There are,” he continues with a wan smile, “limited resources.”   

Thanks to his own hard work and the services he received in this city, Zak Franet says that, “personally and professionally and financially, I am the most stable I have ever been in my life. By far.”

There’s an old saying in politics: When you’re explaining, you’re losing.

The No on C campaign doesn’t need to explain and it doesn’t need you to think. It needs you to feel. Its ads are plastered with scenes of San Francisco’s ubiquitous tent encampments. Our government has spent billions over the decades on its homeless population — and look at us now! Our residents are earning upper-class salaries to afford middle-class lives — and stepping over needles and feces and homeless people … who are getting a hand-out! And now they want more money. MORE! ALWAYS MORE! (Benioff and Dorsey’s money — but, again, that’s left unsaid).

I’m as mad as hell, and I’m not going to take this anymore! LOUD NOISES!  

Let the record show that Prop. C would raise the city’s expenditures on homeless issues from 3 percent of its budget to 6 percent — addressing San Francisco’s consensus No. 1 problem. More money is, in fact, a prime solution to the problem of not having enough money. And no serious person claims this city currently has sufficient resources to bring its homeless problem under control.  

This leads to the second line of attack against Prop. C: That our funds have been wasted, that the money is unaccounted for — look at us now! This is, again, an argument that works best if you feel and don’t think.  

If you do think, you might conclude that, while San Francisco’s homeless count has remained stubbornly stagnant, other west coast cities have seen theirs explode — even while our city is ground zero for unaffordability. And that’s significant because, despite what you saw on the Internet, you can’t just divide the city’s homeless budget by its homeless count and come up with a gaudy per-individual spending total and conclude we’ve made zero progress. The majority of our homeless budget goes to the formerly homeless like Franet; it goes to keep people housed.

If you take the No on C mantra to its logical conclusion — Why are we paying for any of this at all? Look at us now! — and turned off the spigot, the result would be pushing thousands of people like Franet out of the houses where you don’t see them and into the streets where you do. And you’d still be paying for them. You’d be paying more — it costs more to pay for Emergency Room visits and jail cells than to house people and deal with them when they’re stabilized. The Budget and Legislative Analyst quantified as much at the behest of Supervisor Mark Farrell two years ago.

That’s right: Every supe can sic the budget analyst to scour the numbers and the mayor can do the same with the controller (who pegged Prop. C’s fiscal impact on this city as negligible).

Whatever problems we have with our homeless services — and there are many, namely a lack of housing — not knowing where the money is going or large-scale mismanagement of funds is not among them.

San Francisco Public Works clears a homeless encampment on 14th and Mission Streets. Photo by Lola M. Chavez.

Our elected officials, in fact, didn’t seem so concerned with the black hole of unaccountable homeless services in 2016 when they were pushing Props. J and K to amass some $150 million a year for homeless and transit issues — not by taxing Marc Benioff and Jack Dorsey but you, via a sales tax hike.

And our elected officials certainly didn’t see the need to throw the Department of Homelessness and Supportive Housing and nonprofit homeless service providers under the bus as recently as June, when many of the city’s moderate politicians were backing Proposition D. This measure would have sextupled the city’s commercial rent tax to generate $70 million for homeless and housing funds. Mayoral candidate London Breed’s serene visage was featured prominently on the ads for this ultimately unsuccessful measure.

So, yes: When she wasn’t mayor and didn’t control the allocation of the funds, Breed wanted to raise taxes to pay for homeless services. But now that she is mayor and does control the allocation of the funds, Breed is concerned about unaccountability.

That’s odd. If you think about it.

Apparently, it all depends on who’s being taxed. It’s not you, which J and K would’ve done, or commercial real-estate interests, which D would’ve done, but big business — including our city’s ascendant tech outfits.  

Every financial deal in this town for the past decade or so has benefitted these tech companies. Dorsey’s outfits have gained from no fewer than three tax breaks: A mid-Market tax incentive; a holiday on taxing the stock options awarded to pre-IPO employees; and the city’s adoption of a gross receipts tax in lieu of a payroll tax in 2012.

Dorsey, Stripe CEO Patrick Collison and others are now arguing that, under San Francisco’s gross receipts tax structure, their companies will be dinged by Prop. C. But this tax framework was championed by the tech industry a scant six years ago, and 71 percent of the voters acquiesced and gave them what they wanted.

And not without consequences: Low-employee, high-revenue outfits like banks, real-estate companies, or hedge funds took a bath, and are now paying a higher percentage of the city’s taxes, while tech companies are paying less. Not to mention the ancillary effects of those tech titans’ wild success — the house a teenage Zak Franet rented six years ago for $1,200 a month now goes for three times that; in the interregnum, he descended into homelessness and clawed his way out again. Without subsidies, he and many others will be forced into the streets and/or out of San Francisco.

But, in San Francisco, in 2018, Dorsey, a CEO with an estimated worth of $5.3 billion, is arguing that the funding mechanism for those subsidies would be an inequitable tax burden — to his second major company.

Well, that’s a long ways from Dorsey quoting Gandhi about “being the change you wish to see in the world” in 2012 — the year we all voted him and others that gross receipts tax.

That’s something to think about. Don’t forget to think. Don’t forget to vote.  

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33 Comments

  1. The classic liberal wants high taxes and lots of government benefits and services. The doctrinaire economic conservative wants low taxes and small government. But who wants to live under a government with high taxes and poorly provided services? Unfortunately, it seems like a lot of San Francisco progressives are perfectly happy about that. The rest of the city population feels more and more frustration, though. I voted no on C because I can’t see it providing results and accountability under the current city regime. Bring me a measure that actually gets all 7000 homeless off the streets and I’ll be glad to support it.

  2. Clearly written as pork for these bloated non-profits, Prop C contains no quality of life guarantees for residents or even any accountability from the homeless industry which feeds on city money while having little to show for it. Mayor Breed is absolutely right not to support Prop C which doubles down on the obscene amount of money already shoveled to the inefficient and questionably motivated homeless service organizations without any accountability for the money given to them.
    Why is it when the Mayor criticizes the Department of Planning or the SFMTA it’s responsible leadership, but when she had the gall to touch the third rail or our lavish homeless industry it’s suddenly ‘assailing confidence in the concept of government’?

    1. Every time I hear some idiot say something like “our lavish homeless industry” I want to start punching people in the face. There is literally no place less lavish to work in the City, that includes sanitation and Mayor Breed’s new “Poop Patrol.”

      It is colossally ignorant to parrot the talking points given you by billionaires as if you had the vaguest notion of what you are talking about. Shawn Mendes, you are nothing more than a puppet, soaking up all the well funded propaganda that parrots like you so easily fall for.

      1. Did you have some sort of substantive response or were you just going to threaten violence to me and anyone who doesn’t see the world exactly the way you do? Perhaps mail a bomb to my house? Attitudes like yours is why we can’t have constructive dialogue in this country and what brought us to the political precipice where we find ourselves.

        Moderator please remove M.Anderburg’s comment, insulting and threatening violence to other posters

        1. Shaun —

          Nobody is threatening you. I posted your comment and I’ll post the prior one.

          1. Shaun —

            You seem to need a lot of reminding for an inveterate commenter. You OK?

            Best,

            JE

    1. You hit the nail on the head. While I won’t take it as far to say that Ms. London Breed has other motivations, her position and the logic behind it in this case has serious flaws. The post she wrote on Medium was disingenuous and when I requested citations for the reports she provided, I received no response by email.

      I truly had hoped for better.

  3. This guy sounds like a success story, but the reality is that many of the homeless in SF will never contribute more to society than they take from it. That’s ok – and we as a society should be willing to cover their cost, if for no other reason than their innate human worth. However, we should not, in my opinion, try to do so in the most expensive place in the country. And that is the philosophical divide at the bottom of this. If we had spent the money used to house previously homeless individuals in a cheaper place, there would be more than enough to cover all the remaining homeless on the street today. The price for 1 unit of housing is currently between 250-750k in SF. In many parts of the US, you could acquire at least 10 housing units for that amount, and probably closer to 20.

  4. This is a nice cherry picked success story on the programs offered in San Francisco. But for every Zac stories in San Francisco there are 100 stories of T. Barnes. This young man had supportive housing and a case worker who handled his SSI. So he came up with a drug addicts plan to get his money for more drugs. He kept breaking the windows of his SRO and was eventually evicted. For the last five or six years he gives his SSI to the Hondurans wherever he/they can find them.

  5. “So, yes: When she wasn’t mayor and didn’t control the allocation of the funds, Breed wanted to raise taxes to pay for homeless services. But now that she is mayor and does control the allocation of the funds, Breed is concerned about unaccountability.”

    And that sums it all up: city leadership isn’t doing their jobs. I respect the Mayor—I’d like to be able to trust her—, but she’s got nothing here. We can’t just keep doing what we’re doing: there were long lines of people around the block at Civic Center today waiting for basic social services at Project Homeless Connect across the street from a line of people waiting for $12 sandwiches from the new Bi-Rite.

    If the Mayor legitimately doesn’t believe that Prop C’s funds will be spent properly or thinks that the tax formula is unfair, she needs to step it up and propose something better. Prop C isn’t some kind of surprise; it’s been in the works for quite a while. There’s been plenty of time for the Mayor to put forward an alternate proposal and commit to its passage. And even if that plan fell short of what Prop C proposes, I think most voters would at least be willing to take a look at that and decide. But our city leaders have no other plan; we’ve been given every reason under the sun to reject Prop C besides the only one we deserve: “this is what I think will work better.”

    Senator Wiener’s statement calls for another “broad stakeholder process” and more “meaningful discussion.” We’ve been discussing homeless people in this city for entirely too long. How much more discussion do we have to have? If the Mayor wants to oppose Prop C, it’s on her as a leader to not just say no, but to put forward a better plan to address this crisis. She’s got nothing.

    1. “We’ve been discussing homeless people in this city for entirely too long. How much more discussion do we have to have?”

      The issue is not the quantity of discussion but the quality of discussion. Public policy needs to be decided ethically, by the public and their representatives not in secret by government departments, private service providers and private affordable housing developers. Those interests that would benefit financially from public policy should not be involved in setting public policy.

      And there needs to be a contextualization of any measure such as Prop C into a larger plan.

      “Do something, do anything, but do it now” is the worst justification for advancing a policy. That’s the argument that the boosters used to call for the passage of the unbalanced rezonings of Eastern Neighborhoods/Central SOMA and Market Octavia that focused on luxury condos, increased displacement and contributed to homelessness.

      Prop C comes off as a money hastily cobbled together money grab by the CCHO and HSN after the California Cannabis Coalition vs. City of Upland decision lowered the bar to an initiative tax to a simple majority and before a future ballot measure changes that.

      The nonprofits need to be taught that the public leads on public policy and the nonprofits follow public leadership.

      1. I’m not really sure why nonprofits that serve the homeless need to be taught a lesson, but you’ve inadvertently made my point: there is no public leadership here. Prop C was submitted no later than early July. City leaders have had ample time to begin the “quality” discussion you call for. They’ve had ample time to propose something else.

        Right now, the No on C campaign is simultaneously built on the premises that the status quo is untenable (it’s the first thing on the No on C website: “Everyone agrees that homelessness in San Francisco is a crisis”) and that Prop C is unacceptable. That’s not inherently illogical—it’s certainly possible to believe we need to take action and that Prop C is the wrong action—, but the onus is on our elected leaders to come up with that plan. And so far, all I’ve seen is people attacking Prop C for every reason under the sun, and nobody proposing what to do instead.

        I don’t expect Stripe or the Chamber of Commerce to have an alternative plan, but I do expect better from the Mayor. That’s part of the job.

        1. I expect “progressive” nonprofits and supervisors to bring the community into the conversation on the front end, along with the compensated advocates, so that public policy is determined by the public and not by those who get paid to provide services.

          These nonprofits speak in the first person for our neighborhoods, even though few of them live anywhere near here. Yet they refuse to engage with residents because we are not guaranteed to unconditionally support their agencies’ funding agendas.

          The supervisors are tight with the service providers, as they are the designated proxies for the community at the policy making table, they provide foot soldiers for campaigns while inhibiting any community organizing.

          So we are in a place where either we do what the nonprofits tell us to or we oppose “the community” and hate whatever “most vulnerable” population they are being paid to provide services to.

          It is not just that better policies will come out of such an inclusive process, but there would be political buy-in so that when election day rolls around, we won’t see nonprofits larding up on the guilt trips, the political product would be a collective effort and enjoy collective political support as a result. This is really just basic political organizing 101.

  6. I’m struck by Mr. Eskenazi’s characterization of the opposition to Prop C as all about the lack of accountability. What I’ve seen is criticism of ‘budget by proposition’ – taking larger and larger percentages of the city’s fund for specific purposes, making it impossible for the city to adjust the budget to deal with changes in the economy, etc.
    My question is why the Board of Supervisors wouldn’t be able to pass rules to create the accountability that is not part of the proposition itself?

    1. David —

      In the abstract, I’m not thrilled with ballot-box funding like this. But we’re very much in the concrete when it comes to the homeless crisis. And this is not an unfunded mandate. The $250M to $300M is a significant amount of money, but it’s adding to a $5.5B general fund. They mayor still has a strong hand in budgeting in this city.

      The claim that there’s a lack of accountability for these (or any) funds strikes me as a bit misguided. Before accepting any public or private funding in a moderate amount, there’s a complicated “accept and expend” resolution process to go through, which can involve the mayor’s office going through budget analyst reports and grant applications, assigning a supervisor to introduce the measure, and then hearings in board committees and multiple readings before the full board.

      I’m not saying the process is infallible; there are efficiencies to be found in San Francisco government. But the search for mismanagement and unaccountability requires a deeper investigation and more than just wild accusations meant to trigger people. They also seem to come from a lack of familiarity with the legislative and governmental process — or, perhaps, are coming from people who know the processes well and are hoping the people who hear these accusations will not.

      Best,

      JE

      1. Joe, the Mayor has unitary budget authority under the Charter.

        Only contracts > $10m must go before the Board for approval. Charter, section 9.118(b).

        Prop C is an initiative ordinance not a Charter Amendment.

        Accept and expend is when money comes from an outside source such as grant funding and is then used to fundan expenditure.

  7. Insightful, written as no one else can or does in our City. Back to first class journalism, kudos. Worthy of any publication.

  8. Very good article thank you. I would like to add, what is missing in much of these debates, is the very easily researched cut back of funds by state and federal governments to housing, to cities etc. Clinton cut twice what reagan did even no kidding. Except for one year Obama cut more than bush. This is that garbage ‘pay as you go’ lie, to ‘balance budgets’ while both parties do tax cuts for the rich and ramp up the wars. Until the 80’s with Reagan, and then moreso with Clinton in the 90’s, it was obvious that the feds, collecting so much tax money from cities, should return much to build transit, housing etc. The concept isn’t even in the discussion anymore, except by ‘leftists’ who offer the only real solution, when we see the ‘liberals’ play the same warehousing game and pay as you go. Massive bottom up socialist and anarchist type movements to demand and make happen, actual socialist alternatives to housing. That is, affordable dense cities, mixed income, at affordable rents, out of the market completely forever.

  9. Prop C represents the triumph of Gavin Newsom in converting progressive politics from a political movement into a constellation of city funded charities that provide care, not cash.

    If the $350m in annual revenues from C were converted into grants to all homeless people who have been in San Francisco for any length of time and are not completely disabled by mental health and substance issues, that would amount to more than $50K per such homeless person. A few years of such grants would put perhaps 2/3 of such homeless people back on their feet. That would free up the existing homeless budget to provide services to the remaining subset of those in need of programs.

    Not every problem is solved with services and programs. The answer to poverty is wealth redistribution, giving poor people money. But the Puritans inside so many Americans cannot countenance such an approach. And the nonprofit industrial complex that arose post-Care Not Cash wants their cut.

    Does anyone seriously think that this Mayor’s office along with the HSN and CCHO, the corrupt operators that shot down the Anti-Corruption Act of 2018, are going to be spending those tax proceeds in any way that addresses homelessness?

  10. I am for Prop C because what is the alternative? Do nothing? I do not think that frankly doubling or even trippling the amount spent on homelessness will make any meaningful difference in the situation on the streets. What I mean is, there will be just as many people using drugs, selling drugs, sh*tting on the streets, littering, sleeping on sidewalks, homeless encampments whether Prop C passes or fails. I have no doubt about that because the issue isn’t a lack of government funding.

    Like the City of San Francisco, I have given up on the street situation. I accept that the city government thinks this is OK and that the price of living in SF is to tolerate and deal with a dystopian future right out of the Michael Jackson “Thriller” video with people literally jamming needles in their feet right in the middle of the financial district while literally gangs of a dozen young men peddle drugs openly on the corner downtown with no repercussions and no consequences. We have created a true libertarian society, where anything goes! Shit on the street? No problem! Ride backwards on your motorized wheelchair high off your ass in the middle of the road going the wrong way? Go for it!

    However, more money will help the small percentage of chronically homeless who have the mental capacity and clarity of mind and lack of hardcore drug addiction to accept help, get off the streets, maintain a dwelling and maybe even get a job. So it will help some people and that’s good enough for me.

    The fact that the money is coming from the tech industry is a feature, not a bug, as the techies would say. If it means a few tech companies downsize or move their offices elsewhere, good! Don’t let the door hit you on the way out! I hear Seattle and Austin are wonderful! Sorry but its time, after all the tax breaks, to pay your fare share.

    1. “it will help some people and that’s good enough for me” is where I’ve come down on this issue. If the “there’s not enough money” excuse can be taken off the table, we might be able to have an actual discussion about what to do. Vote yes on C!

  11. This writer is a moron. Clearly they don’t have facts on their side so they choose to attribute words to people that nobody has said. San Francisco spend much more on homelessness that it did when I moved here, and for what? I don’t see less homelessness. I don’t see less squalor. For one, this is a state crisis and should be treated as such, and two, with as much as we are already spending, it seems obvious that we are not spending the money effectively….doesn’t take a rocket scientist to figure that out.

    1. Dear sir or madam — 

      You are, apparently, not a rocket scientist. Try reading the article again and, this time, actually read it.

      Best,

      JE

  12. The author wrote: “the money ain’t yours, it’s Marc Benioff’s and Jack Dorsey’s”

    And in doing so, the author confirmed that he is a bona fide moron lacking any semblance of credibility whatsoever.

    1. Sir or madam —

      You seem to have trouble comprehending just who’ll be paying a gross receipts tax initiated at the $50 million level, or the concept of an example.

      Glass houses. Just sayin’.

      JE

  13. When the leadership of a City demonstrates a pattern of utter incompetence for decades, what other reaction should they expect?

    1. If we listen to the Mayor, she does not seem to trust her own programs to work.

      “This city can’t responsibly spend money on homeless services — at least not money gleaned by taxing big business.”

      We need a different approach that could include slowing down the jobs race. If we can stop the mad rush to bring more jobs and increase the tax base by taxing big business a little more, they will quit dumping their disruptive industries on us. Tax them to stop the expansions.

  14. I’m going to vote yes. But this seems like another example of the squeaky wheel getting the grease. SF is becoming a city whose largest economic groups are the wealthy and the very poor. That’s not just anecdotal, it’s borne out in demographic data. The hollowing out of the middle IMO is largely the result of public policies that exclusively assist the “most vulnerable”, a phrase originated in the Medicaid program as similar to medical triage.

    Medical triage considers likelihood of surviving treatment as a factor for resource allocation, not only how ill a person is. But now “most vulnerable” is apparently used as the metric of all social programs, regardless of how impacted or dysfunctional a client is. That leads to significant resources devoted to clients who have little expected chance of recovery, and don’t. Hence the push back that complains homeless programs “don’t “work”. In a hospital, resources are allocated away from terminal patients, but social services now prioritize those clients above all others.

    1. “The Most Vulnerable” is the mantra of the poverty charity left. I’d not really seen it in common parlance in left politics until the 2000s. It is used by the Democrats to write off having to care about most of the electorate who have been facing economic headwinds and been stagnating for decades now as the elites prosper. The market system is functioning well for most people, the thinking goes, so all the Democrats need to do is to attend to the needs of “the most vulnerable” and we’re good to go.

      This is guilt trip politics that shames most people for wanting political consideration while triage for “the most vulnerable” is foregrounded. I’ve also noticed a preponderance of lapsed Catholics involved who reproduce a Jesus-like attentions to the modern day lepers by performing the anointing their their feet with oil. This giving of the hand to most people in favor of attending to the needy few goes a long way to explaining the Democrat political collapse. When people are dying the death of a thousand cuts and there is only an artificial shortage of bandages, they don’t like being told to wait their turn. That is how the middle gets hollowed out.

      If the $350m from Prop C were given in cash grants to those homeless people who are not completely consumed with mental health and substance issues, that would solve perhaps 2/3 of homelessness within a year. But that runs counter to triaging “the most vulnerable” so it will never be considered by the pious.

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