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Monday, March 8, 2021
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News + Politics Housing SF can buy housing for thousands of people, now.

SF can buy housing for thousands of people, now.

With federal and local money, taking over hotels would cost a fraction of the price of building affordable housing.

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I was living in an apartment at Fillmore and Hayes in 1985 when my landlord sold the seven-unit building for $280,000. A group of speculators bought it, did some minor renovations, and resold it a year later for $400,000.

That was the cusp of a major period of gentrification in the neighborhood, and I often think back on it and wonder: What if the city had bought that building – or put up the money for a land trust or nonprofit to buy that building — and turned it into permanent affordable housing?

The rooms are there. They cost very little.

Seven apartments for $280,000. Really only minor renovations needed. That’s $40,000 a unit. (Even in inflation-adjusted dollars, it’s less than $100,000 a unit.)

Today it costs more than $600,000 a unit to build affordable housing. It drives me crazy: Back then – when homelessness was well into the first decade of becoming a serious urban crisis – lots of places like mine were on the market, and the city could have bought thousands and thousands of apartments for what’s now basically budget pocket change. We could have taken a huge amount of housing off the market forever at a very modest cost.

Of course, Dianne Feinstein was mayor and had no interest in this – but really, neither did anyone else at City Hall. We missed a huge opportunity – ten years later, it was too late.

Now we’re in a 1985 situation again, and if we don’t take advantage of it, we will all look back in a decade and say: What were we thinking?

I’m talking about probably 100 hotels in the city that have together maybe 5,000 rooms that can be converted for cheap into permanent housing for low-income and homeless people – and many of them are for sale.

COVID has devastated the tourist industry. The big hotels will come back; they’re owned by real-estate investment trusts and have plenty of cash and a year from now, visitors will be coming back.

But the smaller, less fancy places? It might be five years before they see any real occupancy, and the owners (many of whom are small business people) know it.

That’s why they have made such a positive response to the city’s efforts to lease their property as Shelter-in-Place units for people on the streets. Jennifer Friedenbach, director of the Coalition on Homelessness, noted in a press conference Tuesday that “we have 70 hotels that have responded to the city to sell or lease, and there are many more.”

And, she noted, buying hotels is “less than half the cost of new construction” of affordable housing.

Most of these hotel rooms come with private baths. Many have kitchenettes. It will cost very little to make them into long-term housing.

Oh, and renovating hotel rooms for housing might take a couple of months. Building new affordable housing takes as much as four years.

Check it out:

This is, as COH Staffer Keegan Medrano noted, a once-in-a-lifetime opportunity: “This is a moment when we can save time, save money, and save lives.”

Right now, the Biden Administration is giving out money. The city’s going to get about $80 million in reimbursements for housing homeless people in hotels over the past few months. And there will almost certainly be more money in the next year.

Plus, San Francisco is bringing in close to $300 million a year in Prop. C money, which is earmarked for addressing homelessness.

This is, Christin Evans, a small business owner in the Haight said, “a unique moment when we can accomplish real solutions.” Sarah Shortt, who works at the Housing Rights Committee, said that “this is an incredible opportunity, and we don’t want the city to blow it … this chance is not likely to come again.”

Some 50 organizations have called on Mayor London Breed to take action and start buying property and taking it off the private market.  

I promise: If we don’t do this now, in ten years we will all be shaking our heads and wondering what was wrong with the city.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.

12 COMMENTS

  1. geekgirl: the right of first refusal does not require the seller to give the property to the City for below market. Sounds like, from your recap of that hearing, that the prog supes are getting rolled by Breed. Again.

    Breed has ultimate control of Prop C $. Either she gives the green light, or not one dollar gets spent. Like I told people when the measure was on the ballot, you’re GIVING Breed $350m/yr to fuck you. They told me I was being negative.

    Yet here we are, no plans, “progressive” nonprofiteers are circling Prop C $ like vultures, 490 South Van Ness remains empty six months after completion.

    This is a money laundering operation more than a poverty charity operation.

  2. geekgirl writes: ” San Francisco has right of first refusal. That is how hotels have already been bought.”

    Is that true? Surely if a property owner wants to sell that property then anyone can bid, and the city will only prevail if its bids are the highest.

    That is how SFCLT has bought the odd property here and there, by paying through the nose. I actually bid for one property and SFCLT outbid me by half a million. It was clearly not worth that amount but the city paid anyway.

  3. Gorn, San Francisco has right of first refusal. That is how hotels have already been bought. Who benefits? The people who will be housed. And it is the City’s responsibility to provide mental health care. Unfortunately, the City seems to be incompetent in doing so. I watched a BoS hearing on it that was quite infuriating. The officials “testifying” could not answer questions that they were asked. It was repeatedly, “I don’t have that information.” Giving them Prop C money would be a waste. It is difficult to compel those who are not a danger to themselves, or others, into treatment. As it should be. We don’t need a return to the snake pit asylums of the past.

  4. geekgirl: If SF does not condemn and seize the hotels, then other buyers would have an opportunity to compete with the City to purchase those hotels.

    The real story here is WHY are hotels being pushed by Tim, WHO benefits from promoting this, WHY are Prop C dollars sitting idly waiting for this practically uncertain eventuality when there is desperate need on the streets for substance and psych treatment? WHY are recently completed affordable housing buildings sitting idle and unoccupied?

    This is a business here, and has nothing to do with politics, values or anything else. $$$.

  5. Gorn, you can’t even tell the truth. No one is talking about seizing hotels. What is being suggested is buying hotels that the owners want to sell. There is no guarantee when things will reopen. We have already seen Newsom and Breed rush to reopen, only to have the infection rate skyrocket, and things being locked down again. The vaccine will help, but again, Newsom and Breed can’t seem to do a very good job of actually delivering it. And the impact of mutations is another unknown. They may require another vaccine be developed. And there is, of course, the ignorance factor. Many of Trumps supporters buy into bizarre conspiracy theories that claim that the vaccine is unsafe, unneeded, that masks are a hoax, etc. What Breed will not do is anything that deprives her of having the homeless as a wedge issue, and as a distraction from corruption and incompetence.

  6. geekgirl, You’re a font of excuses for your friends and blame for your opponents. Activists whine about how the housing crisis impacts the vulnerable during a pandemic but are unable to open affordable housing for half a year after completion and counting. People live together in buildings during the pandemic. Lotteries have long since been completed. Yet brand new housing remains empty while people die in the streets. And you are okay with that.

    Breed is not panicking. She will ignore any laws the Board passes and not buy tourist hotels.

    Things will be reopening and slowly moving towards a new normal in a few months.

    What’s interesting is why the issue of housing homeless people in hotels is promoted here? There is not a snowball’s chance in hell that Breed will spend money to buy out her support base. Yet SF’s homeless industrial complex and Los Angeles housing activists are barking at this same moon on seizing hotels.

  7. Gorn, you keep ignoring the fact that we are still in the middle of a pandemic. A lot of stuff is on hold. People have to be chosen to move in, usually by lottery. They have to complete paperwork to qualify for the lottery, and those chosen have to sign paperwork and such.

    But, of course the very idea of housing 5000 homeless is no doubt sending Breed into a panic. That would go a long way towards stripping her of her political football. That’s 5000 less wedge issues. So you rush in wanting to put the brakes on an actual solution.

    And, of course, falsely attack those trying to actually address the crisis that Breed depends on. Oh well…your spiel is getting old.

  8. curious40, sure if you are homeless then a free hotel room sounds great. Who wouldn’t want a free home paid for by the magic money tree? Does that include unlimited hot water, heating and room service?

    And I feel sure that giveaway would not be lost on any homeless person for 1,000 miles around who can scratch together the bus fare to show up here and claim their “free” room.

    All spraying ever larger amounts at the homeless has ever led to, is the city accumulating more and more homeless people. It is the ultimate bottomless pit or black hole, choose your own metaphor.

    Tin has been fundamentally dishonest here. He originally supported hotel rooms for the homeless as a temporary emergency measure, he claimed. But all along he saw that as a backdoor way of getting hotel rooms for the homeless permanently. After all, we all know he doesn’t like tourists and conventioneers coming here, even though it is them who pay for the city’s largesse towards the homeless. A classic “bait and switch” strategy based on the old maxim of never wasting a crisis.

  9. San Francisco could buy a $1M condo for every single homeless person in the City with just one year’s worth of the extra $7B/year we get from the tech windfall compared to 2008. Not saying that’s good policy, but just to give an idea of how fabulously wealthy the city is, the scale of waste and corruption, and how its revealed preferences (where money is actually spent) contradict the lip service paid to fixing the housing crisis.

    The question is, what is that $7B spent on instead? By my calculations, at least 40% was absorbed in wages and benefits for the city bureaucracy, who always looks out for number one (and Ed Lee, as a beneficiary of a city pension, was unlikely to crack the whip for fiscal discipline).

  10. This is a brilliant idea that makes sense and save the city money. Therefore, it will never happen.

    Tom, beggars can’t be choosers. To say “nobody wants to live in a studio” is an extremely ignorant comment. I guess the street is better than a studio in your opinion? Wants and Needs are very different things.

  11. The first problem is that nobody wants to live in a “studio” (really a hotel room) in a crappy old hotel with hundreds of de facto housemates. Except the people with absolutely no money who will need to have their rent paid by the hapless taxpayer.

    Second, the city would most likely be outbid for these hotels (even assuming that they are for sale, which they are not) by corporations who could instead convert them to market rate housing.

    The guys who own these second and third tier hotels are not stupid. They know Covid is temporary and that demand will return. They know not to sell at the bottom and can afford not to. And even if a seller is desperate how is the city going to outbid hedge funds, who snapped up ParkMerced, and StuyvesantTown in Mamhattan.

    Sorry, Tim, but you are dreaming, just like you were in 1985 and 1995 and . . .

  12. “Today it costs more than $600,000 a unit to build affordable housing” It takes >$600K to build a supportive/transitional housing unit with wrap-around services. Homeless, Inc. claims that all homeless people need this kind of service provision because, believe it or not, homeless, Inc. just happens to sell those services. Tell you what I’m gonna do.

    The City financed 100% affordable 490 South Van Ness three years ago. Construction was completed in mid-September. Yet the 80-odd units remain vacant as if there were no housing crisis.

    “Plus, San Francisco is bringing in close to $300 million a year in Prop. C money, which is earmarked for addressing homelessness.”

    Oh, really? Have those escrow-freed dollars been programmed yet? Have any of them been spent yet?

    We have both:

    1) A 100% affordable building in the Mission that has been completed but remains unoccupied for almost half of a year.
    2) $400m+ sitting in a bank account somewhere, earmarked for housing, substance and psych care, but which has not been programmed.

    So when we talk about throwing more money into the system, shouldn’t we investigate why previous investments remain idle?

    The SFCLT innovated the small sites program to conserve rent control units at risk as permanently affordable coops. Tim’s patrons, Calvin, Fernando and Peter, saw that as a threat to public affordable housing dollars which the nonprofits view as their private property. Thus, CCHO stonewalled small sites for years as housing prices skyrocketed. After sitting on their hands as the Mission was evicted, CCHO finally assented to small sites, but with the proviso that small sites acquired sites must be managed by a certified management agency. San Franciscans, it turns out, cannot be trusted to run our own affairs. A for-profit subsidiary of a housing nonprofit must manage the units.

    Tim likes to talk a big game. But this is no game, it is all personal and all business. And his allies will sell out everything that Tim claims to believe in. And Tim will bounce right back and propagandize for them like nothing ever happened. All business.

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