Sup. Aaron Peskin spoke to a capacity crowd at Manny’s Friday night, then rallied a full house of volunteers Sunday morning at his new campaign office on Market Street—and I walked away with the distinct impression that he is enjoying this.
In the months before he entered the race, he was clear that he was looking forward, after all of these years in the stressful and often toxic environment of City Hall, to a nice peaceful retirement.
But going around town meeting people, and realizing that a lot of residents are unhappy with all of the other candidates and the general approach of neoliberalism and punitive law enforcement, he told the crowd Sunday that “I think San Francisco is ready for this campaign.”
At Manny’s, Joe Eskenazi, the Mission Local managing editor who did the interview, pressed Peskin on one of the biggest challenges he (and Mayor London Breed) are going to face:
If voters think San Francisco is going in the wrong direction, and they clearly do, will years of experience helping run the city be a positive or a negative?
Peskin made the case that a hands-on mayor who knows how City Hall works is the best hope for reform. And in the best line of the night, when Eskenazi asked him who he would fire, he said that while he wasn’t going to name department heads, he would of course have a new chief of staff.
“And the mayor, not the chief of staff, will be running the city.”
An old friend of mine got arrested once, many years ago, for being “drunk in public” on Bourbon Street. Yeah, in New Orleans. That was quite an accomplishment—some nights (and a lot of days) pretty much everyone is drunk in public on Bourbon Street. That’s kind of the point.
My friend was not terribly polite to police officers, and that may have triggered the arrest. But New Orleans has always been pretty open to public drinking.
Which is fine. I don’t care if people can carry open beverages out of a bar and into the street in some parts of San Francisco. (It became almost accepted practice during the pandemic anyway.)
So I’m all in favor of Mayor London Breed’s “entertainment zone” plan. Turn part of downtown into a San Francisco version of Bourbon Street, a tourist attraction to bring people into the city and a reason for locals to go to party in the largely empty Financial District.
That is, tourists and locals with money and housing, whose drug of choice is alcohol.
See, about ten blocks south of the proposed party area, in the Tenderloin, you can get arrested for being intoxicated in public. Under an initiative pushed by Breed, the cops are arresting people for the crime not of selling drugs but of being high on drugs.
That, of course, could include alcohol, since the cops are not qualified to determine if someone’s condition is due to opioids, alcohol, LSD, meth, even cannabis, or a lot of other intoxicants that can present similar symptoms.
So: Some people can use intoxicants in public, and it’s a great thing for the city. Unless one of them is as much of a troublemaker as my old pal in New Orleans, the cops will leave them alone.
Some people, a different group of people, can go to jail for the same behavior in a different part of town.
Party on.
We all know the Housing Element that the SF Planning Department presented, and the supes and the mayor approved, is a sham. It calls for 46,000 units of below-market housing, and nobody has any idea how to fund that.
Peskin has put forward an intriguing idea for financing some of that, the housing for people who make between 80 and 120 percent of Area Median Income. That’s known as the “missing middle,” housing for people who make too much to qualify for a lot of subsidized housing but can’t afford to buy or rent in the current market.
Peskin:
“The private market builds housing only in economic boom times and only for the wealthiest, while the public and nonprofit system struggles to keep pace, building low-income housing dependent on matching local and federal tax-credit subsidies with little or no debt,” he said, adding that, in down times, private developers “struggle to secure debt financing and equity partners.”
Key element here: The private market only builds housing when there’s enough return for speculative capital. And right now, thanks to the Federal Reserve’s war on inflation, interest rates are just too high. That’s a critical part of the discussion that the Yimbys generally ignore.
Peskin suggests that the city could issue revenue bonds, a form of financing, for apartments that the city would own but a nonprofit would build and operate. Since municipal bonds come at a way lower interest rate, it might make marginal projects feasible. Revenue bonds are backed not by local property taxes but by the projected income from a project; the airport issues revenue bonds all the time for infrastructure upgrades and the airline landing fees pay them off.
No risk to the public, just to the bond buyers. No increase in property taxes, so no need for a two-thirds vote.
Right now, highly rated tax-free municipal bonds are paying about 4.3 percent interest. Typical mortgage-style financing is about 7.6 percent, and financing for speculative, that is, unsold, housing in San Francisco is going to be higher than that.
The difference? In a $50 million project, private financing would run about $4 million a year in interest. Muni bonds, about $2.4 million. Maybe enough to make this work.
The rent would have to be high enough to pay back the bonds, but a lot lower than what investors would demand to pay back private capital. Plus: the city would own the buildings.
The idea has been discussed by affordable housing groups for some time now. Breed has shown no interest.
We’re not talking about deeply affordable housing. A four-person household at 80 percent of Area Median Income earns $115,000. At 120 percent, it’s $172,000. But two teachers, two cops, two firefighters, two unionized skilled trade workers, with two kids would qualify.
Meanwhile: Peskin is looking at the other end of the spectrum, the need for housing for Extremely Low Income people. The Housing Element calls for almost 14,000 ELI units over the next six years; ELI means less than $45,000 a year for a family of four.
Again: The Breed Administration has put forward no plan to provide those units at that level.
Peskin is holding a hearing at the Land Use and Transportation Committee Monday/6 to ask the Mayor’s Office what the plan is. I’m guessing here, but based on past experience, I suspect they will say: “It’s challenging.”
That means it isn’t going to happen.
The state is happy to demand that San Francisco upzone, deregulate, and help private developers build very high-end housing, which they aren’t building anyway. But the Newsom Administration is not putting up money for the true affordability needs.
That hearing starts at 1:30 pm.
Full disclosure: My son works on the Peskin for Mayor campaign.
