People in San Francisco don’t agree on much. Even the icon that is the Golden Gate Bridge has its detractors. But city housing watchers are close to unanimity when it comes to Proposition A, the $300 million bond before voters in the upcoming March election.
Update: Prop A passed on March 5 with 70 percent of the vote.
The measure’s top sponsors include both the YIMBY-leaning Mayor London Breed and the man YIMBYs love to hate, Sup. Aaron Peskin. That’s as close to a kumbaya moment as housing talk is likely to get. In fact, the entire 11-member Board of Supervisors voted to put this bond on the ballot.
The plan, which needs two-thirds voter approval to pass, calls for borrowing $300 million for subsidized housing; $240 million would go toward “senior housing and workforce housing for extremely low-income, very low-income, and lower-income households,” while another $30 million is set for “lower-income and moderate-income” households.
The last $30 million would go toward supportive housing for victims of domestic abuse and other violent crimes.
Those income levels are based on the city’s median income, or AMI, which is $100,850 for a single person, or $144,100 for a family of four. “Moderate” is a household making between 80 percent and 120 percent of AMI. “Very low” is 30 percent to 50 percent, and “extremely low” between 15 percent and 30 percent.
YIMBYs and other Prop A backers estimate the money will fund just over 1,500 new units.
SF is now pushing housing development harder than at any time in the city’s modern history, but funding is scarce in the current economic climate.
Most private projects have stalled, which means the number of affordable homes those projects are obligated to supply has also been reduced. (This article explains how SF’s inclusionary system works.)
A very unusual consensus
Without that source of affordable housing, the city must put up more money itself. Bonds are a reliable housing tool, but borrowing money costs money. SF Controller Ben Rosenfield estimates that after interest, the city will end up paying more than $544 million on the debt.
The city has already budgeted for this level of borrowing, so the proposal’s backers say it will not require more taxes. Rosenfield cautions that if budget plans go sideways, a property tax hike might be required.
SF voters have never turned down a housing bond, and passed even larger bonds in 2019 ($600 million) and 2015 ($310 million), largely dedicated to housing.
Endorsements for the proposition cut across a wide swath of SF’s factions, including influential Democrats, a small business association, the city’s labor council and teachers union, the urban planning think tank SPUR, and the affordable housing developer MEDA. The exclusive focus on affordable housing means there’s little political risk in backing the plan.
The opposition’s take
The sole formal opponent is self-described tech executive and SF Republican County Central Committee delegate Larry Marso, a critic of city borrowing in general. He opposed a 2022 transit bond that ended up failing at the ballot box. In his statement against Prop A, Marso criticizes state housing mandates as “insane” and predicts that new affordable housing will result in “poverty, drugs, crime, and homelessness.”
“I’m not a no-go bonds guy,” Marso tells The Frisc via email, but he believes the costs of the proposed housing are too high to realistically meet.
If anything is throwing off A’s vibes, it’s the sobering fact that $300 million is not that much money in today’s housing terms. A single unit can cost $1 million or more to build in SF. Sometimes those costs can be reduced, and the city’s recent efforts to cut red tape could shave time and money off projects, but labor, materials, building codes, geography, and process will always make SF an expensive place to build.
The 1,500 homes this bond could yield are a fraction of the 82,000 that the city has pledged to make room for this decade. (More than half of them are supposed to be affordable.)
For perspective, in 2019 SPUR wrote that the $600 million bond — twice the size of Prop A — was “the largest affordable housing bond in San Francisco’s history.” But it was “not sufficient to address the full scope of the housing crisis,” even back in the seeming quaintness of a pre-pandemic world.
The mayor’s office estimates that funding current housing goals could cost up to $19 billion by 2031, although that’s based on market variables that are hard to predict so far in advance. In flush times, SF leans on private developers to boost its supply, which means minimal public expenditure or borrowing. It’s difficult to imagine SF meeting or even approaching those housing goals unless private markets come back.
But these are not flush times, and the city must work with the tools it has. The unusual moment of consensus amid SF’s often bellicose housing wars signals that City Hall has few other practical options right now to keep its pipeline of affordable homes open.