July 6, 2015 Housing Action Coalition

How San Francisco Can Achieve Prop K’s Goals

San Franciscans set an ambitious goal when they voted for Prop K in November of 2014. The measure states that the City must strive to build or rehabilitate at least 30,000 homes by 2020, with 50 percent affordable for “middle-class” households, and at least 33 percent affordable for “low and moderate-income” households. The SF Housing Action Coalition (SFHAC) supported Prop K when it went to the ballot and it supports the measure today.

Unfortunately, there is danger that these affordability goals could be misinterpreted as project-specific mandates. The language in Prop K specifically states:

“This shall not be construed to require a specific housing project to achieve one-third affordability.”

5M and Mission Rock
Two projects recently committed to meeting and even exceeding the goals of Prop K. Forest City’s 5M project created a plan to meet the 33 percent benchmark and the SF Giant’s Mission Rock project will ensure that 40 percent of its homes are affordable to low- and middle-income residents. However, each project used a variety of tools to reach these targets.

5M plans to use a combination of on-site below-market-rate (BMR) housing and dedicated fees that will finance two other 100-percent affordable projects. Mission Rock will use the “Dial” concept to provide on-site BMRs for a range of income levels, from 45 to 150 percent of the Area Median Income (AMI). The project’s office space would also help finance the housing by keeping its jobs-housing linkage fees dedicated to on-site housing. Normally, that money would go straight to the City.

These are both outstanding projects, but they’re also large and enormously complex. They should not set precedent for smaller developments. Achieving the goals of Prop K will require a variety of tools, including new funding sources, policy changes and political will. The following are SFHAC’s solutions.

New State Funding Sources
The chief reason SF falls short of its affordable housing goals is due to a lack of funding. San Francisco lost $30 million annually, a major resource, when Jerry Brown abolished Redevelopment Agencies in 2011. New efforts are underway to replace what was lost, including expanding the Low Income Housing Tax Credit program and creating a real estate recording fee, among other options. SFHAC supports the work the Non Profit Housing Association of Northern California (NPH) is doing to help pass these measures.

Local Funding Sources
Passing the $310 million housing bond in November must be the City’s primary focus. The measure requires a two-thirds vote, a very high threshold. This money would provide a badly-needed resource for new low and middle-income housing.

San Francisco voters achieved a monumental victory when they passed the Housing Trust Fund in 2012. It will equate to over $1.2 billion over the course of 30 years. The money is primarily being used to rehabilitate existing public housing, but we should encourage the City to use it to fund new housing as well.

Local Policy Changes
The following policy changes would make it easier to build affordable housing in San Francisco without using taxpayer dollars.

– Implement an inclusionary Dial to allow new developments to subsidize BMR’s at a range of AMI levels.
– Reform the off-site Inclusionary Ordinance so it is easier for market-developers to acquire land off-site from their principal project and partner with nonprofit builders to produce affordable housing.
– Get San Francisco in compliance with the state density bonus law so we reward projects that provide BMRs on-site by allowing them to build more units.
– Incentivize more height and density in exchange for more community benefits. For example, the Planning Department is currently exploring ways development could deliver more affordable housing and community benefits through projects built under the evolving Central SoMa Plan by zoning for greater density and height.

Affordability by Design
San Francisco cannot rely on subsidies alone to achieve its affordability goals. If we are to produce enough housing to meet the City’s needs, especially for middle-income residents, we need to encourage housing that is naturally less expensive.

– Micro-units are cheaper than new studios and one-bedrooms. We’ve already seen two successful projects that house students.
– Group Housing is a relatively untested housing type in San Francisco. It would work well for residents who enjoy communal living and shared spaces.
– Accessory Dwelling Units (ADUs), better known as “in-law” homes, finally appear to be gaining acceptance in San Francisco during the past year-and-half under the leadership of Supervisors Scott Wiener and Julie Christensen. We should encourage ADUs in more districts.

San Francisco can reach its Prop K goals. But it will not be achieved through extended political battles over individual projects. Rather, our efforts should focus on solutions that make it easier to build low- and middle-income housing throughout the City.

Housing Action Coalition

The Housing Action Coalition is a member-supported non-profit that advocates for the creation of well designed, well-located housing at all levels of affordability. We believe more housing means more choices and better solutions.

Stay Up to Date

Get weekly updates with housing news, HAC updates, and more!