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News + PoliticsHousingSocial housing can work in SF, a groundbreaking new report shows

Social housing can work in SF, a groundbreaking new report shows

BLA study shows it's entirely feasible for the city to build housing for all, outside of the private market.

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The final report requested by outgoing Sup. Dean Preston is a massive breakthrough that could help shape future housing policy in San Francisco.

The Board of Supes budget and Legislative analyst released today a report on the feasibility of building social housing in the city—and it shows that, particularly with a public bank, San Francisco could follow the model of Vienna and other European cities and profoundly change the way we think about housing.

Preston is leaving office—but a new report could cement his legacy of pushing for social housing.

And it’s entirely financially feasible—more so than most private-sector for-profit housing these days.

Social housing, as the report defines it, isn’t just low-income apartments; it’s publicly owned units with a mix of income levels. By definition, the report starts with the concept that at least half of the units will be priced at a level that people making less than 80 percent of the city’s median income can afford.

The idea of social housing is simple: Turn housing into a public good and a human right, not something that can be bought and sold for profit. San Francisco already has a robust nonprofit sector that builds affordable housing.

But this goes a step further: The report suggests that, for the first time in decades, the city could get directly into building new mixed-income housing, entirely bypassing the private market:

While mixed-income social housing developments are found in other cities and countries, notably Vienna and Singapore, they are less common in the United States. Montgomery County, Maryland, has created a type of social housing with its Housing Opportunities Commission. This public entity invests in privately constructed housing with public funds, assumes ownership, and subsidizes rents for tenants with a mix of incomes up to a certain cap.

The study looked at six different scenarios for building social housing, and found that five of them made economic sense:

Five of the six mixed-income social housing scenarios we modeled for this analysis were found to be financially sustainable in our model; one scenario was not. We assembled robust development and operations and maintenance cost data from 2021 to use for our cost basis for five of our six scenarios. …. Social housing could allow for the creation of more family units (two- or three-bedrooms) than are currently being produced – our financially sustainable mixed-income social housing scenarios presented in this report include more family units than are typical for current affordable housing developments.

The report suggests that the program could be run through the Mayor’s Office of Housing and Community Development, not through the scandal-plagued Housing Authority, which has brought discredit on public housing for decades.

More:

A City-owned and operated mixed-income social housing program would potentially provide labor and workforce benefits beyond those of current affordable housing programs. MOHCD’s projects have prevailing wage, local business enterprise/small business enterprise (LBE/SBE), and local hire requirements. Since social housing projects envisioned in this report would be developed or renovated under contract to the City, we assume similar mandates would be imposed. Beyond those benefits, our analysis comparing operating costs of MOHCD affordable projects and City wages shows that an affordable housing development that employs City workers to manage and maintain the building would pay higher wages and benefits than a privately administered project.

Financing for the projects could come through a public bank, which is in the process of moving forward (and has a champion in new Sup. Jackie Fielder), or through a series of other options. The report specifically mentions Prop. I, a ballot measure sponsored by Preston that has so far raised $300 million for affordable housing—which Mayor London Breed has refused to spend.

Sup. Aaron Peskin has also passed legislation that would allow the city to issue revenue bonds (which don’t require going to the ballot) to fund social housing.

The options are open:

issuing City bonds for funding a revolving loan fund, obtaining funding from a forthcoming public bank; borrowing funds for developing projects to be paid off over time with Housing Stability Fund and/or General Fund monies, including the Housing Trust Fund; the LowIncome Housing Tax Credit (LIHTC) program; and collaborating with the Bay Area Housing Finance Authority (BAHFA) on forthcoming bond issuances.

For people who really love numbers, here’s a summary of the proposals, which include land purchase (although that could be lower if the city used existing public parcels), construction costs, and operations.

From Preston:

“The voters and a unanimous Board have called for the City to create social housing, but Mayor Breed has blocked it for years, while other jurisdictions have moved forward,” said Preston who commissioned the report and has advocated for social housing for years. “With a new mayor, and this groundbreaking report, San Francisco can finally move forward with this desperately needed strategy to provide housing for working class people in our city.” 

From a press release his office put out:

“This report is a huge step toward realizing a broad vision that’s inclusive of city-owned housing alongside our nonprofits that have developed the majority of affordable housing in San Francisco,” said Shanti Singh, Chair of the Housing Stability Fund Oversight Board. “Obviously in the long run our City will need state and/or federal investment to fully scale up to meet the need, but the City can get started immediately to create good union jobs and build thousands of affordable homes for San Franciscans.” 

There is no way the city can possibly meet it state-mandated housing goals without dramatic changes in the way we think about housing—and that doesn’t mean upzoning and removing “obstacles” for market-rate developers, which clearly hasn’t worked.

In plenty of cities, social housing has. The new mayor and supes could use this as a blueprint.

I will miss Preston’s votes on issues, but challenging department heads and calling for these types of reports will be a central element of his legacy.

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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