Supe says that a room with no kitchen for $1,770 a month should count as “affordable housing”

Sup. Scott Wiener wants market-rate SRO developers to get special treatment
Sup. Scott Wiener wants market-rate SRO developers to get special treatment

By Tim Redmond

JULY 16, 2015 – Developers of new market-rate single-room occupancy hotels could rent some units to people making $65,000 a year and call that “affordable housing” under a plan pushed by Sup. Scott Wiener this week.

And if the developers sold the units, people making $107,000 a year would qualify to buy “affordable” housing.

The move essentially guts the idea of putting market-rate group housing under the city’s inclusionary housing ordinance by allowing developers to call “affordable” units that would rent or sell for what is currently market rate anyway.

SRO units were never an issue for the city’s inclusionary housing ordinance in part because there weren’t a lot of new units built by private developers in the past 30 years – and in part because most of those rooms were rented to low-income people.

Although the 2002 inclusionary housing law specifically states that developers of group housing should play by the same rules as everyone else, the Planning Department has never enforced that provision and has treated SROs as exempt.

But now we’re seeing higher-end SROs and micro-units coming onto the market, aimed at single people who are willing to live without a kitchen in a group setting. Frankly, they’re aimed at young tech workers who get their meals at the office and just need the equivalent of a dorm room to sleep in.

These are not the low-budget SROs that are common in the Tenderloin and the Mission. The projects coming on line are much more fancy – and are renting for close to $2,000 a month.

So Sups. John Avalos and Jane Kim have proposed legislation that would clarify existing law and instruct the Planning Department to treat market-rate group housing like any other type of development. The project sponsors would have to make at least 12 percent of the units available to people with incomes at or below 50 percent of the city’s average income – which for a single person is about $36,000 a year.

The federal government says that people should pay about a third of their income for housing, which would mean $12,000 a year for that income range, or about $1,000 a month.

But the developers don’t like doing that, because renting some units for less than they can get on the open market cuts into their profits.

Wiener said that he’s happy to see more group housing coming onto the market, and argued that forcing the developers to pay for deeper subsidies might make the projects harder to finance. So he moved an amendment at this week’s Land Use and Transportation Committee meeting that would allow developers to meet their affordable-housing obligations by renting to people making 90 percent of the city’s average income and selling to those making up to 150 percent.

That, Avalos said, “undermines the entire idea of the inclusionary housing law. These projects should be treated the same as any other market-rate housing.”

Wiener noted that the city has done a terrible job of creating middle-class housing. But Fernando Marti, with the Council of Community Housing Organizations, testified that “the idea that this is a place for 90 percent AMI is ludicrous.” He said that some of the micro-units now coming on the market are renting for about $1,900 a month – and at 90 percent of the city’s area median income, a person in one of the “affordable” units would be paying $1,770 a month.

So the developers would be fulfilling their affordable-housing commitments by renting for about what the market would let them charge anyway.

Kim noted that the Wiener amendment would “create a new standard for affordable housing.”

In fact, she announced, her office and the Mayor’s Office of Housing are currently working on a bill that would allow developers to build fewer affordable units if they rented them to lower-income people, and would make the affordable requirements much higher if the subsidized units were to go to people at 90 percent of AMI.

She urged Wiener to hold off until the city could have that conversation.

But Wiener declined, and pushed forward with his amendment, which passed 2-1. Supervisor Malia Cohen joined him in supporting it, while Kim voted no.

So the measure as amended will be back before the committee next week, and then will go to the full board – where the sponsors will have to try to amend out the damage that Wiener has done.

But I have been counting a lot of votes lately, and most of the time, the developers seem to have six.

  • Y.

    Charming. A new version of the “artists’ lofts” loophole of ca. 1999.

    I’m starting to think that determining what “affordable” means should be linked to regional incomes, not San Francisco ones. If median incomes rise in the city it is not because everyone is earning more. It is because higher income residents are replacing lower-income ones, who are forced to commute into the city from outlying areas.

  • Ezra Villarreal

    Great idea, Scott! This is the lighter footprint living we used in the past and need again in the future. It deserves this jump start. Not everyone needs a car, and not everyone needs a dedicated room with stove, refrigerator and dishwasher. Let’s do this, even if it attracts what Tim considers the “wrong type of people” (by which he means smart, young, motivated people with good jobs).

  • Scotts Wiener

    Actually, after taxes, Scott Wiener wouldn’t even be able to afford that. Not at 1/3 of a Supervisor’s monthly salary. Perhaps he’s taking into account all the kickbacks he’ll be getting from the realtors he keeps making rich? After all…….they did BUY HIM a position on the board of supervisors.

    • CleanuptheHaight

      Campos takes a lot of money from market rate developers.

      • VivaShotwell

        I look forward to hearing about all the other good ideas coming from the ethically-challenged Supervisor Avalos, who was last seen feeding lucrative campaign contracts to his mistress.

    • jhayes362

      And Wiener hopes this same group will help him buy his way into the California Senate.

  • sffoghorn

    We need to figure out how to set aside 2/3 of units for rent or sale affordable to a range of incomes from very low to the highest income where current prices are > 40% of their income. That would come in just short of $150K at the top, two cops/teachers/firefighters/Muni operators. This is not that.

    But the idea that the affordable housing program would produce fewer units for lower income is political suicide because it means “affordable housing for nobody I know” for 4/5 of San Franciscans. This is yet another passage in the political suicide pact because it gives middle income people the finger.

    • Frobish

      It’s easy to figure out how to do it The hard part is getting the voters to agree to pay more taxes to fund the necessary subsidies.

      We will find out in November when the housing bond either passes, or fails for the third time in succession.

      • sffoghorn

        The inclusionary take could be set to run from very low to moderate income and cover 2/3 of units. This would meet the constitutional test to guarantee a fair rate of return on invested capital of 8% or so. When I said “figure out,” I meant divorcing the developers from purchasing politicians to rig the game such that the “downsize” costs of mid double digit profits were not “externalized” onto existing San Francisco residents.

        • Frobish

          An 8% return makes no sense without regard to time. A project can take ten years to complete, which implies an 80% ROI

  • Greg

    A tiny room with a common kitchen? I think they used to have that in the old Soviet Union. Well at least in the early years. It was considered revolutionary, but it kind of fell out of favor during Khruschev’s time. “Lighter footprints,” as Ezra says, are nice, but they kind of found out that people need their privacy. But those days are long forgotten now, and capitalist developers can now take a lovely concept such as the “kommunalka” and repackage it as an “innovative” and environmentally friendly solution.

    Of course in the USSR you didn’t have to pay $1770 a month for the privilege of living in such a rathole, but that’s the beauty of capitalism for you. Capitalists perfected making money off of people’s misery in a way that the USSR never quite managed.

    • GarySFBCN

      In the minds of these sociopath libertarians, it is all that poor people deserve because everyone who is poor is lazy, a drug addict, etc. in this ‘land of opportunity.’

      • Greg

        No, no, no. These SROs aren’t even for poor people. They’re for “smart, young, motivated people with good jobs.” These are *high* end SROs, because SRO living is not just for the homeless anymore!

        • sffoghorn

          Weiner’s hijacking of affordable like this is bogus.

          But if the goal is to build a political coalition capable of standing up for San Franciscans against the corrupt neoliberals, then why are “smart, young, motivated people with good jobs” excised from the coalition?

          Since when did leftism devolve into “anyone who makes more money than ‘me’ is rich and can fend for themselves?”

          • Greg

            Well honestly I don’t think they are excluded. That description can be applied to me, and I’ve never felt excluded. It’s just that folks like myself, or you for that matter, don’t need the same kind of assistance that a homeless person does, or for that matter a teacher.

            That said, I’ve been conscious of what you’re saying, which is why for example I always frame my arguments in as inclusive way as possible. For example… take rent control. I always point out that fairness from being gouged should apply to *everyone*, even if you can “afford” it -it’s the only way to maintain support for the program among all classes. Or take police violence -even though it does disproportionately affect minorities, and that needs to be acknowledged, at the same time I often point out the effect on *everybody*. America’s incarceration rate just for *whites* would put it in the top tier, if not #1 among per capita incarceration rates in the world. I do think more of those arguments need to be explicitly made by the left.

          • sffoghorn

            It is not like progressives are trying to appeal to either of us, rather to folks who are not already on board need to be persuaded.

            If the only pitch is “you are privileged and you need to vote for us to help ‘the most vulnerable,'” then that political appeal has proven diminishing utility at the ballot box for candidate races.

            For me, San Francisco offered up a safe refuge from the homophobic flyover when I was just starting out in life. I value not consuming the thing that helped me and which I love, rather conserving it as a refuge to pass down to those who come after me.

            Obviously the economic, race, gender and queer oppressions are live. But they are not the be all and end all of a successful political appeal.

            The reaction of the affordable housing mafia to this is reminiscent of the reaction of the immigrant activists to the Pier 14 slaying.

            The presumption was that all immigrants would be tainted with the acts of the alleged perp which is ludicrous outside of the precincts of Fox News. Nobody in real politics was making that claim, rather moves are afoot to ensure that repeat felons are not welcome as immigrants. If there are going to be borders, then I’m okay with that.

            The presumption here is that anyone who even broaches the notion of including moderate income people in the affordable housing definition opposes any affordable housing for those earning less. Weiner’s legislation clearly does that.

            But just as the immigrants should have resisted the marginalized nativist xenophobe’s efforts to paint all immigrants as killers by changing the subject to ICE/Homeland Security’s abject failure to do their job, affordable housing mafiosi likewise should have changed the subject to providing affordable inclusionary to both the very low income, currently served middle income as well as moderate income.

            Appeals like that play with a broad range of voters who are not traditionally voting progressive. This would involve a broader strategic view than “how do we fund our nonproftis” and “how do we get good labor contracts” that seem to be all of substance that the progressive [sic] coalition defines as victory.

          • Pvt. Hudson

            Forreal. I mean, 90% of AMI is great money, but you can’t really afford market rate for a 1br with it – at least not at 30% of your take home. We need to hold the city accountable for failed policies, mismanaging of BMR funds (i.e. buying land @ $2,000/sq ft), and come together to get a better deal from developers. Middle income housing has to be a part of the picture if we don’t want the city to be only populated heavily subsidized people making 40-50% of AMI and people pulling mid 6-figures or more.

      • sffoghorn

        In the minds of these progressives factota, if you’re not “the most vulnerable,” then you’ve got to fend for yourself because people more entitled to assistance than you need help first and nobody gets paid to help the middle class.

    • Deborah Giattina

      Yes! I’m fond of referring to this plan as the Socialist Worker’s Housing Proposal. Next thing you know he’ll be proposing housing with dorms full of bunkbeds with shared bathrooms and kitchens, as sweatshop workers do in China, for a mere $1250 a month. Surely, we can do better than this.

    • NoeValleyJim

      I lived in a student co-op with a shared kitchen and loved it. And it was affordable, which is the only way I could have attended college. Not everyone expects everything handed to them on a silver platter.

  • Bob

    Here’s a challenge, Tim. Build 100,000 affordable units in SF. How do we do this ?
    I want to hear once how you support building any significant amount of housing in SF

    • VivaShotwell

      Tim does not trade in constructive ideas or viable solutions. He just has good guys, and bad guys, and a bunch of predictable narratives.

      • Nancy Snyder

        i believe you just described the Ayn Rand consciousness that dominates here; greed=good; “nobody wants to be poor and ugly” and, the long-suffering white people of San Francisco

        • VivaShotwell

          Who is Ayn Rand?

          • Greg

            She was a human reptile whose idol was a serial killer. Her philosophy has been adopted by conservatives and internet trolls.

          • Frobish

            All trolls are right-wing?

          • sffoghorn

            Yes, all trolls are right wing.

          • Frobish

            You are not right wing.

          • Theleona

            Ayn Rand was a proponent of uber-capitalism who supported survival of the fittest – her version. She wrote a book called Atlas Shrugged. She was the darling of the capitalist class in the USA.

        • NoeValleyJim

          I guess if you are a hard core Marxist anyone to the right of Lenin looks like a libertarian. But the truth is that most San Franciscans are liberal or even extremely liberal, from the point of view of the rest of the country.

  • GarySFBCN

    I propose that Scott live in one of these SRO’s for 5 years.

  • danimalssf

    Oh noes! Somebody is trying to look out for the SF middle class as opposed to only the most unfortunate amongst us. The horror of it all!

  • folderpete

    “Weiner … argued that forcing the developers to pay for deeper subsidies might make the projects harder to finance.”

    Tim – there’s your cue. If the private banks won’t do it, how about the bulging coffers of the SF Retirement Board? Nothin’ better than neighbors helping’ neighbors, eh?

    Of, if the Pension Board won’t do it, how about some of the $50B in the ‘Housing Trust Fund’?

    • Frobish

      I suspect that the pension fund would be breaching its fiduciary responsibility by making such a low-return undiversified and illiquid investment.

      Maybe SEIU can invest all their surplus funds?

      • folderpete

        Could that be amended in the ballot?

        • Frobish

          Doubtful. Detroit crammed down pensions somewhat in their C9 bankruptcy but it wasn’t enough. Chicago and Illinois have suffered setbacks in trying to reality-check pensions

          It will take wholesale municipal bankruptcies to cram down penions but, luckily, that is inevitable

          • folderpete

            Ah, pensions! The “lifetime lease” of tax dollars.

            I shouldn’t complain; but mine is nowhere near as generous as these

            The “elephant in the room” is not always a Republican.

          • Theleona

            The elephant is the room is if people are dis-satisfied with their salaries and benefits they should work to change them through unions or associations. What City employees receive has been inflated by the press working in the service of the capitalists. In addition most workers are underpaid, including city workers. Mainstream economists attest to that all the time – that salaries have not kept up with inflation.

        • Theleona

          Possibly. The Mayor, the BOS and the highly paid union Executives increased pension contributions as well as increasing the length of time it would take to reach full retirement and full benefits through Prop C. They also diminished the capacity for current retirees to receive a COLA based on investments – again Prop C. This was illegal in terms of a large group of retirees (over 17,000) and was rescinded by a Superior Court judge. It is possible that a reversal of the Mayor’s proposal could be put on the ballot or through a lawsuit.

      • Theleona

        The investment is based on a portfolio of DALP loans for market rate housing and the Board is now trying to do an analysis. One issue is that there is little cash flow ie the term of these loans is 40 years ie 40 years before a yield. However, people do pay these loans off early but there is no guarantee. In addition the returns on the investment are based on appreciation of the property (not interest) and we really do not know how long this inflated market will last. ALSO, THE MAYOR PROMISED TO USE THE 126 MILLION FOR LOW TO MODEST INCOMES AND RIGHT NOW THE MOH HAS INCREASED THIS TO UP TO 175 OF AMI. The suggested range is hardly low to modest. Last report this starts at 90 percent AMI. The pension fund is held in trust for the members ie City retirees who contribute to the fund on a monthly basis. It does not belong to the public. In spite of what the media has promoted, most City workers do not make huge salaries – especially those in SEIU and would not qualify for a DALP loan. It is so like the Mayor to try to raid this fund. and this would be an unprecedented move (no other City has done this as far as I know). There is no guarantee that Mayor Lee whose affiliation is with the wealthy will actually use this money for BMR-DALP loans. The Board of SFERS is under the gun right now to do what Lee wants.

    • sffoghorn

      Good. The take should be raised until 1/2 of all projects don’t pencil out so that the ones that do carry their full freight.

      • folderpete

        “Their” full freight, or “the” full freight?

        Ever look at bldgs from the 80s & 90s? They don’t appear to be holding up v well. I suspect part of the “freight” will come from skimping on quality of constructions – moreso in the BMR units, but also on the total project. After all, developers are all about the ROI. They’ll get it, one way or the other.

        Leaving stuff thats gotta get bulldozed in 25 yrs is foolhardy – but I can see it as politically expedient.

      • Frobish

        Hike the take too much and nothing gets built. We already have that discussion.

    • And a municipal bank to manage the money.

  • NoeValleyJim

    Why does Tim Redmond hate “tech workers” so much?

    • sffoghorn

      Because since we make more money than Tim does, we are rich.

  • Many supporters of “Mr.Micro Housing, whom soft money from antagonist favoring Ellis Act matter fact whom deterring. Housing dilemma: San Francisco always indirect excuse refusal to listen those facing gentrification Scott. Oppose fair housing eventually seeking not senate race possible run for mayoral office someday would Scott win with false grin? Loyal corporate cartels, lobbied gotten Mr.Plea whom that be, Ed Lee secondary term whom learning certainly not affluent. Making profits criticism “Scott” development around Market street and Castro st: developers bought out of inclusion act. Your support of Ed’s policies fellow advocate before say Mr.Lee whom behind gentrified policies loyal Board of Supervisors Ms.Nonpartisan! Whom, eager to become mayor or senate laugh, without humor race is political: San Francisco Mission and Castro St minorities. Scott and London Breed puppets antics of Ed Lee, soon how many “TIC” units 2016 2,800 haven’t influence repeal housing policies. Scott,Ed and London opinion which irrelevant position influence public policies not personal efforts no longer democratic upon decisions! Favors eliminating lower income neighborhoods for corporate controlled enclaves especially Castro,Noe Valley and Diamond Heights argument. Could the “gentrification been postpone probably not why (NIMBY policies) … admittedly housing development essential fighting developers whom. Oppose “BMR” housing inclusion, 255 Fremont St example of preference whom getting need housing formerly required law and “HUD” able sumit application in person. Or mail online no longer new polices Scott,London and Ed decided low income developments only available limited time. Come person center not…allowed fill out application, just submit your name for possible application. Scott where is fairness your using charade” many LGBTQ getting deceive to believe you care approving majority high rises Scott popular among developers! Besides San Francisco never respect those whom not affluent nor home owners you have fight I see division among LGBTQ. Many expect only affluent if living rental chastised why pretentious attitude new corporate money. Scott besides technology and financial corporations whom behind your agenda have they support LGBTQ employment equality? Scott your “coy”
    attitude determine make “San Francisco” visual of your economic desires absolutely
    yes political ideology opposing fair housing and employment. Scott spoke upon revitalizing dilapidated buildings… called Mr.Budget Scott, where housing developments LGBTQ” you answer us? Nothing to discuss expect the senate: really what to become mayor hidden agenda. Anxiety egoism when spoken refuse be resilient… may aspiring working “LGBTQ” support Scott your rental in doubt by whom?
    Small Pro- S.F and CAA fighting to increase abolish renters rights and TIC units,LGBTQ no longer welcome only pride shows? Rich conservative LGBTQ making
    profits new economics gathering to remove LGBTQ society believe seen this other minorities San Francisco history whom trusted. Representative because of “heritage” example London Breed whom feeding into antics of Ed Lee support gentrification ask
    London where economic opportunities for Blacks? Racism and homophobic segregation increase in San Francisco” Scott bemusing speaking only expected discourse detest those not of his political interest expect to be mayor never! Conclusion where divided “LGBTQ” no longer cajole superficiality if not expected interest your not consider of merit. No this “Queen” not rationalizing, guys ratio of affluent whom LGBTQ’ remain impartial buying homes with cash! Seldom understand
    discrimination they’re loyal to Scott not Dave Campos whom bringing attention of bigotry Scott your using LGBTQ. Rainbow Nation if don’t decide where no longer going be majority of Bay area many detest are political strengths to Scott my comments are rant and babble! Naïve going dine on refine wine going face unkind,
    encounter when Scott empowers his agenda for LGBTQ where facing now! New housing many displace LGBTQ” goal heterosexual affluent whom lobby segregate the hate which arisen. Resolution where going elect official whom fighting goals not opposing them where is fair housing “LGBTQ” we never gotten anything liar Scott.
    Friends of Ellen guess on show speaking with Chris Hughes Tim Cook anticipating a
    high rise development Mission Bay or Financial district if valid. Scott hold (forums) LGBTQ for equality Scott assured we don’t need exclusive interest able obtain careers and housing irrelevant why lobbying. Inept policies Board of Supervisors passing dear
    Scott using time for defeat once prosperity LGBTQ enjoyed. Repeal is needed never
    defeated, Scott your laughing you pass

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