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San Francisco debates when, where, and how to build affordable housing

Prop. E aims to strike a balance by placing new limits on office projects

By Sasha Perigo, San Francisco Examiner, March 8, 2020

“While San Franciscans tracked the results of the presidential primary on March 3rd, an affordable housing ballot measure passed largely under the radar.

“San Francisco’s Proposition E — the Balanced Development Act — passed with 54 percent of the vote.

“The Balanced Development Act was introduced by affordable housing developer TODCO and aims to balance out the construction of office space and affordable housing.

“San Francisco’s office space and affordable housing development are clearly imbalanced.

“San Francisco’s job growth far outpaces all housing construction. Between 2010 and 2015, The City added nearly seven jobs for every new home.

“The Balanced Development Act reduces the 875,000-square-foot cap based on the City’s progress towards state-mandated affordable housing goals. If San Francisco only builds half of its affordable housing goal in a year, the cap is cut in half.

“The Balanced Development Act also offers office developers an opportunity to get around these restrictions. If they build 809 affordable homes for every 1 million square feet of office space, they can jump the line.

“‘The intention behind this … is either we’re gonna build more affordable faster or we’re gonna build office slower,’ TODCO’s Jon Jacobo told the San Francisco Public Press.

“Opponents of the measure argue it will have unintended consequences.

“A report from the non-partisan city economist calculated that Prop. E will hurt the city’s economic growth, causing it to lose out on fees and tax revenue that fund city services.

“Another concern is that the Balanced Development Act could actually reduce the amount of money the City raises for affordable housing. One of the primary ways the City raises money for affordable housing is by levying fees on office construction. If we build less office space, we get less money for affordable housing.

“The city economist report estimates this loss would be between $600 million to $900 million over the next 20 years. That sum could finance roughly 3,000 to 4,500 affordable homes.

“TODCO isn’t convinced. Executive Director John Elberling points out that the city economist’s report doesn’t consider tradeoffs in terms of the human consequences of the housing crisis.

“Their numbers also assume current rates of affordable housing construction, which TODCO wants to accelerate. If the City does, indeed, ‘build affordable faster’ (the campaign’s slogan), it will avoid these costs.

“The last question critics have zeroed in on is: Where should we prioritize the construction of affordable housing?

“The Balanced Development Act says developers building affordable housing as part of their office construction project can circumvent city limits if the housing is built either on-site or in a ‘community of concern.’

“The authors say they included this clause specifically to help expedite the construction of affordable housing in communities that are demanding it.

“There’s huge demand for affordable housing in the Mission, but it’s not being built at the pace residents demand, due to a lack of funds. Mission housing advocates advocated for inclusion of the ‘community of concern’ clause in the Balanced Development Act in hopes of ushering more construction to their community.

“But critics say that requiring affordable housing to be built in communities of concern keeps affordable housing out of wealthy communities, thus furthering segregation. Some have even questioned the clause’s legality.”

Read the full article here.

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