May 23, 2012

The Mayor's Housing Trust Fund And Missing Lottery Bypass Fee

Yesterday, San Francisco Mayor Ed Lee presented a proposed "Housing Trust Fund Charter Amendment" to the Board of Supervisors for consideration. If adopted by the Board and voters in November, the fund would create a permanent source of revenue to fund the creation of affordable housing for low and moderate income households in San Francisco.

As proposed, the Housing Trust Fund would begin with $20 million in general fund revenue, increasing to $50 million over time, and generate an estimated $1.1 billion in affordable housing production over the next 30 years in San Francisco.

Specific goals of the fund include:

1. Developing 9,000+ units of permanently affordable housing for residents at 60 percent or below the average median income (AMI), including the HOPE SF rebuild of Sunnydale and Potrero, and the Hugo Hotel;

2. Investing over $15 million over the first five years of the program in a down payment assistance program for residents to purchase a home in San Francisco with no-interest loans for first-time homebuyers;

3. Creating a Homeowner Stabilization Program to help distressed homeowners remain in their homes; and

4. Purchasing up to 20% of a development’s units to create permanent below market rate units available for moderate income renters and home buyers.

The fund would be funded by way of property tax revenues formerly earmarked for the now defunct redevelopment agency, a percent of existing hotel taxes, and a companion ballot initiative that would increase the real estate transfer tax for properties valued at $1 million or more by 0.2 percent.

Missing from the Mayor’s proposed amendment, press release and presentation, any mention of a condo-lottery bypass fee which many had hoped would be included as a source of funding and politically pave the way for the adoption of a lottery bypass.

Mayor Lee Announces San Francisco Housing Trust Fund [sfmayor.org]
TIC Conversion Lottery Bypass And Mayoral Take Two [SocketSite]
JustQuotes: Additional Details (Like Dollars) On Keeping Hope SF Alive [SocketSite]
Hugo Hotel Hangs On As Redevelopment Agency Is Dropped [SocketSite]

First Published: May 23, 2012 12:00 PM

Comments from "Plugged In" Readers

A condo bypass fee would allow many more TIC owners to convert which means TIC would be revalued as quasi-condos.

A higher TIC value would mean a higher incentive for landlords to sell their buildings as TICs (and evict tenants as a side effect).

In short this would allow landlords to get out of a rent controlled dead-end to an actual market where they can sell their buildings at close to market rate.

Anathema!

Where do these landlords think they are? America?

Posted by: lol at May 23, 2012 12:46 PM

Why is this even necessary?

Do other cities cities with high demand for housing do this?

It seems to be other cities handle this problem by, you know, actually building.

If the city would streamline the process and not attempt to appease every NIMBY whim or attempt to declare any structure with bay windows or that has stood for more than a few years "historic" it would seem that SF (and the bay area) wouldn't have a problem getting housing built.

I understand that developers tend to go for "luxury" but today's luxury is tomorrows affordable if the city would just allow the housing stock to get replaced at a decent pace.

The problem, as far as I can tell, isn't a lack of money or interest from developer's, it's that the city lets lots sit vacant for 35 years and allow proposals to get rejected time and time again over relatively trivial matters by people who don't seem to understand that they live in an URBAN environment and some bedroom community.

In fact there have been several articles looking at how the Bay Area's inability to accept basic facts about the need to building more housing to accommodate all the 'highly paid' tech workers is actually depressing the local economy and preventing what should be an economic boom that would help lift the local and state revenues and alleviate a lot of their fiscal issues.

Posted by: badlydrawnbear at May 23, 2012 12:57 PM

The mayor's proposal does include some (very) minor incentives for the development of market-rate housing, such as a slight reduction in required on-site BMR housing, a cap on affordable housing impact fees, and an increase in the building-size threshold that triggers the BMR requirement (from 5-10 units).

I am puzzled, though, by the total absence of a condo-lottery bypass fee, both from the proposal and from the media coverage of it. Lee stated his support for condo lottery bypass during the election campaign--it was one of the few issues on which he was willing to stake out a position in candidate surveys. And the median Supervisor is now pretty moderate. So why did advocates for a condo lottery bypass (e.g. Plan C) fail so abjectly? Here are a few possibilities:

1. Homeowners and condo-owners, who tend to be ideologically moderate, may be opposed to bypass for the same reasons of economic self-interest that lead them to oppose other measures to increase the housing supply. (This is shortsighted, though, for any owner who hopes some day to "trade up" for higher-quality housing in the City.)

2. Builders of new housing exercised disproportionate influence on the mayor's advisory group, and opposed condo-lottery bypass so as to limit competition from converters of the existing housing stock.

3. Plan C suffers from some internal problem which renders it an ineffective advocate.

I'd be very curious to hear from anyone who has actual knowledge of the negotiations on the mayor's advisory group, or of the involvement (or lack of involvement) of Plan C and supportive supervisors such as Mark Farrell.

Posted by: observantneighbor at May 23, 2012 1:12 PM

All property owners that don't want to pay another 1% in transfer taxes when they sell their +$1m place should be emailing the Mayor and their respective Supervisor.

mayoredwinlee@sfgov.org

of for your Supervisor look on their website.

www.sfbos.org

Posted by: uber at May 23, 2012 1:51 PM

To me this seems as if it is and end-run around Jerry Brown's elimination of redevelopment agencies. Also, I thought that Lennar Corp. was already committed to building affordable housing in Hunter's Point? Ridiculous!

Posted by: nancydrew99 at May 23, 2012 1:56 PM

Sure. And the creation of redevelopment agencies were themselves an end-run around the restrictions of Prop. 13. And the reason Jerry Brown wanted to eliminate redevelopment agencies was because of lack of revenue due to Prop. 13. And the reason more revenue can't be obtained without raiding/eliminating other agencies is Prop. 13.

Posted by: Brahma (incensed renter) at May 23, 2012 2:28 PM

It will be interesting to see where this goes. This will be the first time in my 15 years here that a mayor seems poised to actually get some legislation going which actually (in a very very small way) encourages construction.

This from a city that is likely the most conservative in the country when it comes to new construction.

For years and years our default mode has been to make sure things dont get built. I may be wrong, but it seems like this is ever so slightly beginning to shift.

Posted by: Joe at May 23, 2012 2:34 PM

Reading this I get the impression that this is a way to continue tearing down old projects and gentrification of neighborhoods. It makes more sense for the City to draw revenue from property tax than run decrepit / byzantine era public housing. The increase in tax rate would apply to most sales in the city and this program would be a thin veiled attempt at hiding this tax hike. My quick analysis tells me that this program is better suited to drive revenue for the city than actual improvement for the working poor, but then maybe "What's good for the goose is good for the gander".

Posted by: Bob at May 23, 2012 2:55 PM

The condo bypass legislation will be introduced before the Board of Supervisors in the next few weeks. Unclear whether the Mayor will be openly supportive or not, but it will be introduced. When that happens, TIC owners need to be LOUDLY supportive.

Posted by: Mike at May 23, 2012 3:18 PM

"This from a city that is likely the most conservative in the country when it comes to new construction."

SF is bad but hardly the worst. Boulder, CO comes to mind as a city with even more restrictions on building.

Posted by: The Milkshake of Despair at May 23, 2012 3:28 PM

I don't want to use public funds "the help distressed homeowners stay in their homes." People who can't afford their homes should sell them.

I also don't like the idea of on-site BMR units. They represent a block of people who basically are living above their means and can't afford (and would probably oppose) improvements and maintenance desired by the other 80% who can afford to be living where they are.

So I will probably be voting against this.

Posted by: BT at May 23, 2012 4:37 PM

Oh, great . . . more welfare and handouts in commie SF. I say, if you can't afford to live somewhere, you go/move to where you CAN afford it. That's how nature intended it: survival of the fittest. The rest die off or get eaten.

Posted by: Whatever at May 23, 2012 5:47 PM

The actual objectives of a proposal like these always seem a bit fuzzy. 9,000 units of "permanently affordable" housing sounds nice, but why was that number chosen? Is that enough? Or do we "need" more? If so, why? How will the City be different with 9,000 of such units?
It just seems like a knee-jerk reaction. Housing is expensive, so the City is going to make some of it cheap. But there is probably a near infinite demand for cheap housing, so what is the right level?
No one asks those questions. It just seems that they want to show they are doing something.
As others have suggested, it would be much better to address some of the structural impediments to more/cheaper housing.

Posted by: NoeNeighbor at May 23, 2012 7:29 PM

"Meanwhile, San Francisco—one of the most expensive cities in the United States—added just 418 new housing units in 2011, the fewest since 1993. What’s more, 149 existing units were removed, leading to a nearly nonexistent increase in housing supply."

http://www.slate.com/articles/business/moneybox/2012/05/facebook_george_lucas_and_nimbyism_the_idiotic_rules_preventing_silicon_valley_from_building_the_houses_and_offices_we_need_to_power_american_innovation_.html

[Editor's Note: Or as we first reported: San Francisco’s Total Housing Inventory And Pipeline Report.]

Posted by: badlydrawnbear at May 23, 2012 8:27 PM

Posted by: SocketSite at June 13, 2012 7:58 AM

Post a comment


(required - will be published)


(required - will not be published, sold, or shared)


(optional - your "Posted by" name will link to this URL)

Remember Me?

(you may use HTML tags for style)


Continue Perusing SocketSite:

« U.S. New Home Sales: Up 9.9% YOY In April But Well Below Average | HOME | Dogpatch Development Refined, Ready To Be Approved »