San Francisco Supervisor Ahsha Safai (left to right), San Francisco Mayor Ed Lee and SF Supervisor Katy Tang enjoy a lighter moment during a Valentine's Day press conference in front of City Hall, where they announced a new proposal to provide incentives for the creation of more affordable housing in the City.
Story and photo by Thomas K. Pendergast
(Originally published in the March, 2017, issue of the Sunset Beacon newspaper, a community newspaper serving the Sunset District of San Francisco.)
San Francisco supervisors Katy Tang and Ahsha Safai are using a tag-team approach to tackle affordable housing, as Tang will bring her HomeSF program back to the Board of Supervisors in March or April, and Safai introduced an ordinance on the issue.
Tang said Safai’s legislation will match her Home SF program, in that her legislation will apply to working class, middle-income people, defined as having incomes in the range between 60-percent-to-150-percent of the Area Median Income (AMI), so they “go hand in hand.”
“We are trying incentivize developers who are building three or more units where you have to build 30 percent affordable on-site to serve middle-class families, a 40 percent requirement that it’s two-bedrooms or more, and we have some amendments also that we’re bringing forth that will try to make it more family friendly, and also close to transit,” Tang said.
Tang is working with the mayor's office to develop the legislation.
The definition of "affordable" depends on who is asked. According to the U.S. Department of Housing and Urban Development (HUD), it means housing that costs no more than 30 percent of an individual's income. In San Francisco, however, “affordable housing” is attached to something called the Area Median Income (AMI).
Joshua Sabatini reported in the SF Examiner newspaper that last year 100 percent of the AMI for a single person is $75,400 and $107,700 for a family of four.
The AMI being used by Tang and the mayor is based on the overall average income of three counties: San Mateo, San Francisco and Marin. Using that standard, Tang claims, this program will create affordable homes for families making between $60,000 and $140,000 per year for a family of four. These are households for whom no subsidized public housing programs exist, Tang said.
“We will never again, in the history of San Francisco, build housing for working people. That will never, ever happen again,” Safai told the Board when he introduced his legislation. “Today homes in the Excelsior are going for a million dollars. Homes in Bayview/Hunter’s Point are approaching a million dollars and in some cases exceeding it. Homes in the Richmond and the Sunset are going north of a million dollars. The market used to take care of working people, and I’m talking about teachers, laborers, nurses, firefighters, first-responders, janitors, hotel workers ….
“We think the private market is where we can begin to tackle building housing for working people,” he said. “Eighteen percent of that housing should be set aside, and that would range from a family of three beginning at $43,000 (in annual income) and go all the way up to a family of three at $126,000…. We have to be careful that we don’t set that number too high that we kill housing altogether, and that we put people out of work. We have to set it at a responsible number.
“In the next three years we will still build 7,500 or more units of low-income affordable housing. This inclusionary piece of legislation that I’m introducing with (Board) President Breed is a complimentary piece, in my mind, to Supervisor Katy Tang’s HomeSF. And the two together have the opportunity to build about 2,500 units for working people…. We want to include a minimum bedroom count. We think it’s very important. We can’t just be building studios and one-bedrooms in San Francisco. We have to have a frank conversation about two bedrooms and three bedrooms, so we put in there a minimum requirement that we would shake things up in the development industry for their ability to produce more housing for working people.”
While many agree that the City does not have enough housing for working people, not everyone agrees that Tang and Safai’s plan is the solution, especially when California has a state program for affordable housing that developers can choose instead.
“The state law is far more generous in terms of height increases, whatever height you need to get to 30 percent additional density, you get that height,” Tang admits. “And there’s only a requirement for 20 percent affordable housing (but) the income bracket does not serve middle-class families and so we feel that we were trying to offer, for Home SF, a program that matched our values here in San Francisco to serve working class families.”
The State law requires 5 percent of units be affordable to very-low income households (those who earn less that 50 percent of the AMI), 10 percent of units be affordable to households earning less than 80 percent of the AMI, and 10 percent of units affordable to households with incomes up to 120 percent of AMI, if the latter is a project “for sale development.”
Local housing activist Calvin Welch, a lecturer at the University of San Francisco, and a board member of the Haight-Ashbury Neighborhood Council, is not convinced. He thinks it is likely that more developers will instead choose the State’s program over the local one.
“Her proposal is absolutely meaningless in that developers can choose instead the state density program, which requires less overall affordable housing units but at a more affordable level. So I believe that developers are going to choose the state density bonus over the City’s density bonus being proposed by Supervisor Tang, which leaves me the question of what the hell is she proposing it for? Is this just simply political eyewash?” Welch said.
“Given the choice of doing fewer units at a more affordable level, as opposed to doing more units while providing less number of below market rate units, even if they are affordable, why would the developer pick Tang’s (proposal)? … Why would a developer choose that option? The answer is, they won’t.”
Last year's Proposition C raised the percentage of inclusionary, or “affordable,” housing from 12 percent to 25 percent last year. There was an option in the law, however, to change this figure later. A feasibility study released last month recommended lowering this figure to between 14 percent and 18 percent for rental projects, and between 17 and 20 percent for ownership projects.
The ordinance introduced by Safai requires developers of rental projects with at least 25 units who opt to build affordable housing onsite to provide 18 percent of it as affordable. Of that, a third would go to people who earn 55 percent of AMI; another third would go to those earning 80 percent of AMI and a third for those earning 110 percent of the AMI.
For ownership developments the requirement is 20 percent of the units having the average affordable sales price set at 120 percent of AMI or less, with those units equally distributed at 90 percent of AMI, 120 percent of AMI and 140 percent of AMI, according to Sabatini of the SF Examiner.
Supervisor’s Jane Kim and Aaron Peskin have an alternative proposal, and a struggle between the “progressive” faction of the board and the “moderate” faction is expected in this arena.
“This program is set out to achieve something that no other program has or offers in San Francisco at all, or at the state level. Nothing,” said Tang. "I certainly hope that my colleagues will come around and support me on this effort.”