The new 6-5 majority on the Board of Supes was in full force today when Sup. John Avalos moved to increase modestly the amount that developers pay the city for the impacts their buildings have on public transit.

Sup. John Avalos managed to get six votes to charge developers a more equitable price for Muni
Sup. John Avalos managed to get six votes to charge developers a more equitable price for Muni

The issue is pretty critical. Every time someone puts up an office building in the city, that building fills with workers, and those workers (or many of them) take transit, which means the city has to buy more buses and hire more drivers and spend more money.

How much? A city study puts the figure – the actual, cash impact, the amount that the city (that’s us, the taxpayer) will have to spend to support new office buildings is about $87 a square foot.

The city wants to charge developers $18.

It’s a huge giveaway to developers, worth billions. It’s astonishing that the city is willing to say: You can build and make millions in our city without paying even a fraction of the cost of that growth.

So Avalos wanted to hike the fee just a little bit – not to the $87 level where it ought to be, but closer to $20. That would bring in another $2 million a year for Muni, and backdating it would bring in a one-time payment of about $30 million.

You would think that the city would be thrilled with this idea – nobody has ever suggested that development would cease if the people making massive profits in SF were asked to pay for the full costs of growth. But no: Sup. Scott Wiener said that we were already asking enough.

“Someone can always say that it’s still not enough,” Wiener said. He said that over the past five years, city agencies have discussed the fees at great length, that the current fees are higher than they were in the past, and that when some increases were proposed, “the development community could have opposed it but they didn’t.”

Sup. David Campos pointed out that “there’s a reason the developers didn’t fight it. The Board of Supervisors left hundreds of millions of dollars on the table.”

This is a classic issue, pitting the interests of developers against the interests of the city, and a year ago, it would have been a hopeless battle. But now the power on the board has shifted.

Still, Sup. London Breed, who is running for re-election in one of the city’s most progressive districts, said she considers the current fees fair. “Setting these fees is more of an art than a science,” she said.

Actually, it’s not that hard: You do a study that shows how much the developers have to pay to cover the costs to the city, then you charge that much.

And this time around, the board voted 6-5 to at least come a little bit closer. The Avalos measure passed, with Sup. Breed joining Sups. Katie Tang, Scott Wiener, Malia Cohen, and Mark Farrell in opposition.

The mayor may veto this – which will leave him and the five supes who opposed it to explain to the public why they are willing to let developers get away with billions of dollars and why they did such a bad job negotiation a deal to pay for Muni.

  • sojourner_7

    More hogwash “Actually, it’s not that hard: You do a study that shows how much the developers have to pay to cover the costs to the city, then you charge that much.” Thats the City problem, a study… The credibility of SF studies is down there in Junk Bond territory. Nothing they study or predict remotely reflects reality. $87/sq.ft.? Ludicrous.

    • Ringo

      Yes, I think the $87 stimate is bogus. It assumes that every new job equates to an extra round-trip commute every working day. That ignores all kinds of factors such as jobs lost, cases where someone changes job, cases where people walk or bike to work, people who live in the east and north bays and take a ferry or BART and walk, and so on. Hundreds of thousands of city workers do not use Muni.

      A 6-5 vote is as close to a tie as you can get with an odd number of votes, and represents no kind of mandate. A year ago it would have been 6-5 the other way, and maybe in a year’s time as well.

      With so many supe seats up for grabs in November, Lee should respect the voters enough to veto this, and let the new board vote again in 2016.

  • notadvised

    great news! About time the developers actually shared their mega profits!

  • Bryan Costales

    Can someone post a link to the study that set $87 per square foot? Perhaps I mistyped my web search, but sadly I couldn’t find it.

    • Chuck

      I believe the $87 number was grabbed from Establishing a New Citywide Transportation Sustainability Fee (San Francisco Planning Department, September 10, 2015 hearing date)
      http://commissions.sfplanning.org/cpcpackets/2015-009096PCA.pdf
      See report p. 6 to verify that the Maximum Justified TSF [Transportation Sustainability Fee] per Building Square Foot (2015 dollars) is $87.42 for Nonresidential (excluding PDR) uses.

      To say that the “maximum justifiable” level is also attainable or even desirable seems a bit of a stretch, since on report pp. 7-8 the level that would “maximize transportation revenues, without stifling development or causing housing and commercial real estate costs to increase substantially” is estimated at $18.04.

      • Bryan Costales

        It took me a while to get through that planning document. The $87 was the maximum allowed by law. We cannot charge more than that. A separate study decided that builders would suffer if the number reached $19. That study was not on line. Why not set the number at $87 because we can, and then watch for a year and see the effect. If there are abandoned projects, hole with work stopped before the foundation was poured, or other bad effects, the number could be reduced (if, that is, such bad effects turned out to be desirable). Nothing ventured, nothing gained.

  • Steve Rhodes

    Yes, the Chron reports: That wasn’t the only drama at the board Tuesday. The board’s progressives won a 6-5 vote to increase the fee that builders must pay to support the city’s transit system. Shortly after it passed, Lee promised a veto…

    Within a few hours, the mayor’s office said Lee would veto the legislation.

    http://www.sfchronicle.com/news/article/Lee-loses-vote-on-affordable-housing-6850675.php?t=257ebd8394e0edb0f1&cmpid=twitter-premium

  • Pingback: The D5 debate shows candidate differences - 48 hills()

  • Pingback: How we can tax Uber - 48 hills()