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City HallThe AgendaFor supes, mayor, there's no more ducking a crucial rent-control issue

For supes, mayor, there’s no more ducking a crucial rent-control issue

Breed, board will have to side with landlords or tenants. Plus: The failure of state housing mandates, and fall charter amendments. That's The Agenda for July 7-14

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J. K. Dineen is a good reporter, and his Chronicle story on the new decision by Gov. Gavin Newsom’s housing regulators to force San Francisco to approve most new housing with no public input or hearings is generally balanced and accurate.

Except for the headline: “S.F. becomes first California city to miss its housing goals. The impact will be massive.”

Supervisor Dean Preston is asking the mayor and the other supes to take a stand on a bright-line tenant issue. Photo by Heidi Alletzhauser

The story explains that under legislation by state Sen. Scott Wiener, San Francisco hasn’t approved enough building permits to meet state mandates, so now approvals have to be “ministerial,” meaning no Planning Commission hearings and no appeals to the Board of Supes. Just go ask for a permit, meet the zoning, and you get one.

From the story:

“San Francisco has had the longest permitting timeline for housing in the state and now because of SB423 San Francisco will have one of the shortest permitting timelines,” said Wiener. “And that is a game-changer.”

But there’s something missing here.

The reason San Francisco hasn’t issued many building permits is simple: Developers aren’t applying for them.

I follow the Planning Commission and the Board of Supes every week. I read every agenda. I watch every meeting. In the past 12 months, there have been no projects rejected by the commission, no projects delayed by the supes … really, no projects at all. That’s not Nimbys or the “Byzantine” permit process (can we please find a better word, since that one seems to appear in every single housing story every written by the mainstream media? The Byzantine Empire collapsed in 1453).

It’s the fact that given today’s interest rates and the current demand for high-end housing in San Francisco, which is all developers build, nothing makes financial sense today.

Dineen notes:

Soaring construction costs and elevated interest rates have combined to make most projects economic non-starters while the city’s hollowed-out downtown and inability to bounce back from the pandemic’s shift to remote work has made San Francisco a risky proposition for most lenders and developers.

At some point, that may end, and developers will free rein to send bulldozers into the neighborhoods, demolish existing housing, including vintage Victorians that can never be replaced, and put up more, denser housing that will be no more affordable than what it replaced. There will just be more profits for developers and the investment funds that finance them.

I think neighborhoods across the city will rebel, loudly. And good projects, including infill and affordable housing projects, will be caught in the crossfire.

Bad policy creates bad results. Eventually.

The Supes have been unable to hold a vote on a simple measure endorsing the state bill that would allow an expansion of rent control, and for one reason: Not enough members were on hand.

The first week, Sup. Ahsha Safai was missing. Last week, several of the supes were missing.

Now the measure will go to the Rules Committee Monday/8, and to the full board the next day. And Mayor London Breed will appear before the supes Tuesday/9 for Question Time, and Sup. Dean Preston, the sponsor of the Costa-Hawkins repeal resolution, is going to ask her about “rent control.”

Preston told me that he will ask about Costa-Hawkins repeal. That would mean she will have to go on record siding with every tenant group in the state or with the big landlords.

This could be a serious issue in the mayor’s race in a city that where two-thirds of the voters are renters.

I texted Safai a week ago to ask if he supported repealing the Costa-Hawkins act; he’s usually pretty quick to get back to me, but I haven’t heard a word. But he’s on the Rules Committee, so he will have to either miss that meeting or take a position.

Mark Farrell didn’t respond at all.

Daniel Lurie said in a statement:

San Francisco’s rental and eviction policies have helped keep thousands in their homes who would otherwise have faced displacement. I support continuing those policies that have been shown to be effective, and ensuring that they are implemented effectively. Ultimately, I believe that the state must do more to prevent unjust evictions, produce more affordable housing, help small “mom and pop” landlords, and catch up on the decades-long under build of new homes in California.

Which most clearly doesn’t answer the question.

Sup. Aaron Peskin supports the resolution.

This could also be an issue in the contested supes races.

On a pure policy level, it’s strange: The repeal of Costa-Hawkins doesn’t mandate any new rent control in San Francisco, or any other city. It simple gives local government the same rights it had until 1995. Why local officials want the state to take away their power only makes sense if you ignore the influence of the real-estate industry.

Rules will also hear all of the major City Charter amendments that the supes are proposing for the fall. That includes the creation of an Office of the Inspector General, a minimum police staffing measure, making the director of the Department of Police Accountability an elected position, an affordable housing for seniors and families set-aside, and a commission reform measure that would compete with the right-wing proposal to eliminate many of the city’s commissions.

That hearing starts at 10am.

Peskin has a really interesting proposal that comes before the Budget and Finance Committee Wednesday/10. In essence, he wants to expand the city’s ability to issue revenue bonds to finance workforce and middle-class housing.

Revenue bonds are a powerful tool for local government. Unlike general-obligation bonds, which put the city’s full faith and credit (and property-tax base) at risk and require a two-thirds vote, revenue bonds are backed by a specific future revenue stream and require no public vote at all.

The airport issues revenue bonds all the time, to finance capital improvements that the airlines will pay back with landing fees.

The city currently has the right to issue revenue bonds for low-income housing. This would expand the program to help build what everyone agrees the city needs—housing for the existing workforce—but no private developer will ever build because the return isn’t high enough.

At some point, if San Francisco gets a public bank, that entity could make those loans. In the meantime, the idea here is to expand housing options beyond what Wall Street will finance, with no risk to the taxpayers.

That hearing starts at 10am.

Oh, and the Dolores Hill Bomb went on. The skaters outwitted the cops, who were determined to close off Dolores Street and had an inordinate force on hand. Instead, people moved a block over and rode down Church St.

Other than one skater getting injured, nothing bad happened.

Talk about an overreach.

48 Hills welcomes comments in the form of letters to the editor, which you can submit here. We also invite you to join the conversation on our FacebookTwitter, and Instagram

Tim Redmond
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.

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