The holidays are over, 2020 is — blessedly — nearly over, and, based on what people are saying on social media, it’s time to lose some weight to fit into the clothes they’ve largely eschewed in favor of loungewear.
Well, good luck with that. Perhaps the maniacal look on the face of the woman in last year’s Peleton commercial was due to her ability to peer into the future. Thankfully, there are other weight-loss options. But one method even less sound than spending $1,895 on a goddamn exercise bike (plus monthly membership costs! Jesus!) is to simply redefine how much a pound weighs. Problem solved!
By now, you’ll not be surprised to learn that San Francisco officials are pushing for a version of this. Except in the far weightier field of capital planning.
Capital planning is, in word, important. Among the litany of problems with the Transbay Transit Center — sold as the Grand Central Station of the West — is that, for years, the massively over-budget, behind-schedule, glorified bus stop with structural deficiencies carried artificially low estimates of construction cost inflation. This gave it the appearance of being on budget, when, in point of fact, it was very, very not on budget.
So, it’s important to factor construction cost inflation into your budgeting when you’re making big plans for years and years down the road. The city now does this. It will have to find creative and new methods of going massively over-budget and under-delivering on its future projects.
By now, you’ll again not be surprised to learn we’re working on that.
Every year, San Francisco crafts a construction-cost inflation estimate based on extensive research and analysis across both the public and private sector. You can read the PowerPoint here.
This year’s estimate is a 3.5 percent inflation, based on a variety of Covid-19-related factors driving construction costs. This is a figure far lower than past years in good times — and also far higher than the artificially low rates at the Transbay Center that helped to ensure a disastrous budget shortfall.
In this city, however, this figure — which nobody objects to when it comes to long-term planning or budgeting, and nobody has knocked methodologically — is also coupled to the litany of impact fees charged of private developers building large projects.
And that makes things political. Not merely limited to boring ol’ prudent planning, this estimate controls how many millions of dollars major developers pay to the city — or keep for themselves.
And when politics is injected into ostensibly non-political activities reached by scientific or methodological consensus (another example might be wearing a mask during a pandemic), then odd things happen.
That’s how it went down when the innocuously named Capital Planning Committee met earlier this month to vote on the innocuously named Annual Infrastructure Construction Cost Inflation Estimate. In most years, as you’d expect, this is an innocuous vote.
This isn’t most years.
Again, nobody objected to using the 3.5 percent figure for planning and budgeting purposes.
But three department heads — Port Director Elaine Forbes, Recreation and Park General Manager Phil Ginsburg, and Planning Department Director Rich Hillis — pushed back regarding the using that figure to increase the fees charged to developers.
“Hypothetically, what if we had a zero percent or 1 percent assumed increase?” asked Ginsburg at one point. Hillis pointed to a huge drop in building applications in his department, and a commensurate loss of revenue. “Given the unprecedented nature of the drop and slowdown, what if we set the [inflation] rate lower and in six months come back…” he asked.
It’s hard to gauge whether the blank expressions in the now-ubiquitous Brady Bunch tableau of web meetings derived from Zoom fatigue or genuine shock. But this is shocking. In essence, the proposition being bandied about was to ignore the city’s extensive and methodologically derived estimates and simply set the rates at a politically palatable level.
Acting City Administrator Ken Bukowski calmly replied to Hillis: “I guess the problem is that doesn’t match up with the information we have in our review.”
Bukowski spoke in a monotone. This was a staid and bureaucratic process; nobody was waving their arms around or being powerbombed through a folding table. But Bukowski’s was a weighty statement: The data says what it says. Altering it or ignoring it so as to reach a more preferable outcome is a hell of an ask and a hell of a thing to do.
There are lots of terms for this sort of thing. “Good government” is not one of them.
With that said, Hillis’ concerns are not ill-founded. Applications to build are down. The approved projects in our pipeline are hardly guaranteed to move forward. And the burdensome nature of the San Francisco development process and the significant fees we extract from developers are a matter that should be discussed and revisited, especially in light of a coming economic reckoning.
Attempting to address these concerns, however, by ignoring or even altering the city’s data to produce a desired result takes us into the realm of weight loss via changing the concept of weight.
This is a questionable thing to do, and it’s further questionable to do it in a little-watched, obscure committee with minimal input from elected officials.
More subtly, Forbes suggested decoupling the inflation rate San Francisco uses to budget for the future from the rates it charges private developers for impact fees.
That’s a rich and worthy matter for discussion — but also a potential legal and interdepartmental minefield. It also would appear to undermine the rationale for San Francisco charging impact fees in the first place. If developers are paying for affordable housing or parks or transit mitigations to offset the impacts of their developments, and construction costs are going up on those things — by an estimated 3.5 percent, the study says — the city is going to get less of all that if it fails to commensurately raise the fees.
Fundamentally, however, it’s worth asking whether knocking off impact fees would lead to a boom or even a hefty increase in building applications. Development professionals tell me they don’t think it would.
The reason for the slowdown, one tells me, is simple: “We’re in a global fucking pandemic.”
The city struggles with the inflation rates on that one, too. But, absent that little situation being remedied, lowering fees is an afterthought. “The fee is not going to make the difference,” the longtime city player continues. “The fee will not be what stops the project.”
Lowering the fees, however, could be a big deal for a developer who’s already started his or her project, and has advanced to the point of pulling site permits.
Your humble narrator last week filed a public records request with the Department of Building Inspection, requesting the list of every project over 50,000 square feet in which DBI is currently processing its site permit.
The department promptly responded that “our search for records are address specific, however, our Management Information Systems Division can run a customized report at the cost of $212.”
Wow! What a bargain! Only one-ninth the cost of a Peloton (not factoring in the monthly fees. Jesus!).
To make things perfectly clear: I will be elected Pope before I hand over this money. I do expect to receive these records, however. This was, after all, a public records request.
Because it would be interesting to see who might stand to benefit from a fee reduction. And it also might be interesting to see who their people have been talking to around the city.
The Capital Planning Committee punted this matter into January. So, when it next meets in early 2021 — that’ll be interesting too.