How we beat the real estate industry

Tenant activists found a strategy to beat back a million-dollar landlord campaign against affordable housing

As we assess the implications of last week’s elections, it is worth considering two clear wins for progressives and for the tenant movement in San Francisco – and what those wins may suggest for a path forward.  

Last week, San Francisco voters decisively rejected Propositions P and U, cynical measures that would have caused long-term damage to this city’s affordable housing programs and deliberately pitted middle-class tenants against lower income tenants.  The two proposals were defeated by huge margins: 67-33 and 65-35.

The faith-based community joined with tenant groups to defeat the realtor measures
The faith-based community joined with tenant groups to defeat the realtor measures

The margins of defeat may suggest they were doomed from the start.   But in reality, these divisive measures were on the verge of passage just two months before.  

As previously reported in 48 Hills, Proposition P and U were designed and paid for by the real estate industry.  The national and state realtor associations invested more than $1.2 million putting the measures on the ballot and running an extensive campaign to secure voter approval. Local realtors provided staff and political connections, lining up the support of Supervisors Mark Farrell and Katy Tang and others.

Why were the realtors investing in a campaign to reform affordable housing, programs in which the realtors and their clients had no direct financial interest? Tenants and housing rights organization puzzled over this question when the proposals surfaced early this summer. We knew realtors generally did not support affordable rental housing programs. They had blocked legislation in Sacramento to strengthen inclusionary housing programs and asked the Supreme Court to find all such programs unconstitutional. 

As we researched P and U, it became clear that the realtor’s agenda was less about policy and more about political strategy.

Stepping back from the wonky details of the specific proposals, it is apparent that the realtor’s campaign for P and U was an attempt to coopt, divide, and disrupt our movement. 

The realtors’ ballot arguments and campaign literature explicitly sought to appeal to people concerned about the eviction and displacement of tenants, nurses, and others – concerns that our movement brought forward to public awareness. They then sought to redirect that concern into narrow class interests: claiming that the “middle class” was being left out of affordable housing programs.

Their solution was to “expand the availability” housing by offering housing presently targeted for lower-income families to the middle class.  And they promised to “cut costs” of future affordable housing development via their version of free-market competition — denigrating nonprofit housing organizations along the way. (A sample of one of their many mailers can be found here).

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This map shows how P and U lost in most of the city
This map shows how P and U lost in most of the city

In short, the realtors were trying to steal our issues and then hijack the affordable housing that our communities have been fighting for over the past 20 years.

As housing rights activists began researching these measures, we also discovered that the realtors had cleverly designed measures and messages that they could sell to unwary voters. Polling in August showed that about 60% or more of likely voters, including a majority of tenants, would likely support Propositions P and U as described on the ballot.  

So if we wanted to defeat these measures, we had to reach beyond the low-income tenants who would lose the most and convince voters who considered themselves “middle class” to vote against measures that appeared to be in their own interest. 

Then we needed to overcome what would certainly be a huge campaign funding disadvantage. We needed to act quickly in a crowded field of ballot measure and candidate campaigns.

We won. We overcame those challenges and completely turned around voter perceptions about these two measures. Without retracing every step, our movement achieved this result through a number of strategies and factors.

First, we found supportive allies who could represent and speak to a broader audience. In particular, the progressive faith community embraced our cause and helped us lift up our message turning it into a moral critique. Glide Church hosted our kick off “No on P & U” event and the First Unitarian Universalist Church launched our second press conference and protest. The labor movement stepped up. The teachers and nurses unions helped counter the realtors’ attempt hijack the concerns of their members. Union leaders spoke eloquently about the need to protect lower income workers, appealing for solidarity and not narrow self interest (note: we will need to fight to for labor when they come under attack by the new regime). 

And while our mayor was silent, almost all progressive elected officials rallied to our side (the campaign’s endorsements are here).

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Second, with a crowded ballot, organizational endorsements and slate cards seemed to matter.  Except for a few realtor-sponsored organizations and the Republican Party, almost every meaningful slate card opposed either or both measures, including the Tenants Union, the League of Pissed off Voters, and the Bay Guardian “Clean Slate.”  In addition, the No on P&U campaign committee managed to raise some funding.  The committee was outspent six-to-one but it was able to conduct a direct mail and ad campaign.

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Third, our movement laid the groundwork first. For the past four years we have built a foundation of public understanding about the housing crisis — which is why the realtors were trying so hard to co-opt the issue.  While the realtor message worked initially, voters became more skeptical when they were informed about who was paying for the measures.   The initial support for the measure could and would be reversed with enough outreach and education.

Finally, long-term investing in organization and coalition was essential to our success. The SF Anti Displacement Coalition and the Council of Community Housing Organizations provided the basis for us to quickly reach out to allies, form our message, and come together for actions and public events that turned out hundreds of people. While our events received minimal traditional media coverage, they mobilized our activist members and we utilized social media to promote the events to tens of thousands more.

Together our movement blocked a million-dollar effort to hijack affordable housing and divide our city. We accomplished this despite being outspent six-to-one. When the last ballot is counted we will show that the vast majority of San Franciscans are united in support of building and protecting rent controlled housing that is affordable to lower income families and seniors.

Deepa Varma is executive director of the SF Tenants Union.

  • Do Something Nice

    I think identifying the source of outside money and Republican support was probably enough to sink these two propositions, but thank you all for your work.

    I propose a tax on realtors to off-set the cost associated with fighting P and U.

    • jhayes362

      I’m inclined to agree. Voters in San Francisco, and everywhere else, are getting tired of legislation written by and for special interests.

      • Heart

        I heartily agree. Developers and realtors are hoping to exhaust and confuse the electorate. Thankfully this meatheaded strategy backfired spectacularly. This pattern of our Planning Dept insisting their hands are tied coupled with the pre election Board of Supes’ refusal to weigh in on development projects is shifting. A majority of San Franciscans are fed up and are not going to sit passively by while our neighborhoods are colonized by carpetbaggers.

  • curiousKulak

    “Affordable” or low income housing is not rent controlled housing. There are probalby more rights under RC than for “affordable” units, like Eviction Control. There are some minuses too – like lack of Vacancy control for RC. But once you have a tenancy, you are better off in an RC unit that an “affordable” one.

    • FunKing

      No, it’s the lack of vacancy control that makes it the exact other way about. A unit that is rent controlled has no value as an affordable unit if, for instance, it is owner-occupied or left vacant. In fact, once the tenants move out, while the new tenants will have rent control, the base rent is at such a high level that it’s meaningless.

      A true affordable unit, on the other hand, has in-built vacancy control in the sense that there is a cap to the rent that cannot be exceeded.

      Eventually, every rent controlled unit in SF will either become vacant, or a TIC, or a condo, or otherwise owner-occupied and, in all those cases, it will never again be affordable.

      The solution lies elsewhere. Rent control has a “sell by” expiry date embedded into it.

      • curiousKulak

        Obviously, there will never be $500 RC apts created again. However, I disagree that re-rented RC units aren’t “affordable”. My neighbors, a couple, rented a reno’d 1Br in ’05 for $1500? (the going rate at the time). Today they still pay <$900 per person (intern and software developer); so "affordable". If they move out, it goes to maybe twice that. But, in 10 yrs, that will definitely be below market (by definition) and probably "affordable" to those who were able to rent it back then.

        You still did not address the 'Eviction Control' aspect – which grants more rights to RC than a BMR or other "subsidized" unit. In some, you earn more you pay more; in others, you behave poorly, you're out. RC units are immune to those situations.

        The issue of providing housing for low earners (or non-earners) is not easily solved when the average cost for "affordable" construction is $350-500 Ft2 – which pencils out to, for a 400 ft cheap construct, to abt $1400/mth ($900/ financing, $160/ tax, $300/ HOA (no profit, no subsidy; no land cost!); excluding anyone making less that $60+k (1st time teachers, most in service industry, pensioners, etc). And thats small and cheap housing.

        Yes, the solution lies elsewhere. Most likely, outside the City.

  • Kraus

    “Affordable Housing” is a misnomer; a patently misleading term which serves the hypocritical political/”non-profit” power structure of SF just fine.

    The more accurate term would be “Subsidized Housing” — as that accurately describes how it is produced. And the subsidy has to come from somewhere — It’s not “free”.

    Currently, in the main, the subsidy is extracted as $ from Market Rate (i.e., Unsubsidized) development.

    Accordingly, all those paying Market Rate for housing are subsidizing a very small minority of “lottery winners” that receive a Subsidized unit.

    This “system” works hand-in-hand with our manifestly failed anti-housing-development policies which, over the past 40+ years, have consistently restricted the production of adequate amounts of housing and have guaranteed consistently-increasing housing costs — which suits current homeowners like Tim Redmond, Calvin Welch et al just fine, btw.

    Ever-increasing housing costs, in turn, raise the cry for more and more subsidies to deal with this political/man-made crisis and around-and-around we go.

    NIMBYs and Subsidized Housing Advocates are actually secret lovers.

    • Stephen M.

      hey buddy! sorry you don’t like subsidizing housing. guess what? working class people don’t like paying a higher tax rate, going to lower quality schools, and almost exclusively serving in the military.

      also, please don’t hide behind this whole “middle class” label. DEVELOPERS are the ones paying the fees, and families earning up to around 80k/year can qualify for subsidized units. MORE funding for affordable housing – not less – is the answer here.

      • Kraus

        Hey buddy ol’ pal!

        I’m not against Subsidized Housing, I just think we should “call a spade a spade” and not use misleading language like “affordable housing” that results in people not understanding the underlying economics of housing creation.

        Furthermore, I also think that it’s likely that a portion of the population will always need some kind of subsidy with regard to housing. However, we should do everything we can to limit the need for this subsidy — such as encouraging and incentivizing the production of housing rather than disincentivizing its creation as we currently do. This will result in significantly more supply relative to demand and will control costs for the vast majority.

        Additionally, there is no way we can subsidize our way out of a housing crisis (i.e., a housing shortage), we need to remove the barriers to its production and produce as much as possible. (BTW, do you really think that Developers are the “ones paying the fees” out of their profit margins and that these costs aren’t passed on to housing consumers? If you do, then you definitely do not understand the economics of our current dysfunctional “housing system.”

    • Sigmarlin

      Since you’re all about honesty lets rename the Mortgage Interest Deduction the Homeowner’s Subsidy and Prop 13 – rent control for owners. Even Ronald Reagan opposed mortgage interest deduction on second homes but the real estate industry had their way with him too.

      • Kraus

        I agree, Proposition 13 is one of the reasons we’re in the mess we’re in. It is in need of reform. I’d also advocate for elimination of the Mortgage Interest Deduction.

        • curiousKulak

          Prop 13 was a poor “solution” to seniors being priced out of their homes due to prop taxes.

          Instead of capping the payments, they should have added the additional expense -above current levels – as a lien on the prop. Then, in X yrs, when the senior sells/dies, the bldg is sold and the heirs get their cut and the State gets its (well, the other way around, but you get the idea).

          Of course, then CA would not only have one ofthe highest Income taxes, and highest Sales taxes (gas tax is relatively low) – but also the highest RE taxes. Just imagine the fun the pols would have spending that!

    • diogenes

      A landlord is a predator. A bank-mortgage is a predatory instrument. Neither has anything to do with the cost of housing. Both have everything to do with the cost of legalized predation. It takes a lot of smoke and mirrors to hide these obvious facts. Kraus is helping. I wonder why.

  • NoeValleyJim

    P and U lost because both Progressives and Moderates opposed it. Nowhere in this article do the authors acknowledge that SPUR opposed P and U, Scott Weiner opposed P and U, the SF YIMBYs opposed P and U. It is as if the 55% of San Franciscans who reliable vote Moderate or conservative don’t even exist. I guess beat your chest about a Progressive victory if you must (and in this election cycle, maybe you have to) but a real Progressive coalition that wins elections in San Francisco cannot be exclusionary, it needs to include the concerns of some other block, most likely pro-growth, pro-environment New Urbanist moderates or unaligned voters.

  • 4th Gen SF

    I think I have popcorn on this. Either way will not stop gentrification.

  • curiousKulak

    “For the past four years we have built a foundation of public understanding about the housing crisis … While the realtor message worked initially, voters became more skeptical when they were informed about who was paying for the measures. ”

    Maybe you could ‘splain (again, if thats necessary) what the nature of the housing crisis is. Because if its not the chronic under-building and a shortage of housing, then its BS.

    As for being good at scapegoating (the real estate industry, developers, landlords etc), yeah, I’d say you’ve done your work well.

  • sebra leaves

    Pumping millions of doubles into divide and conquer ballot initiatives pitting middle class citizens against the poor and homeless failed to work for the real estate industry that sought to break up the progressive voting block that is growing larger as more people feel at risk of losing their positions due the changing political and economic landscape. Voters looked at the source of the money.

    Residents proved they do not trust developers or City Hall when they stopped the Affordable Bonus Housing plans. They don’t want to be forced to give up their lifestyles. People who have them want to retain their single family homes with private yards and garages or driveways. They voted to preserve neighborhoods and protect local merchants and cultural institutions.

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