Last November, San Francisco voters overwhelmingly passed a measure to allow subsidized teacher housing on public land, freeing up potentially dozens of sites, and to speed up the approval process.
It wasn’t as broad a change in affordable zoning laws that Mayor London Breed and her allies wanted, in part via a city charter amendment. But a political tussle last summer tipped the scales to a narrower version, proposed by Sandra Lee Fewer and other supervisors, that ultimately made the November ballot.
When the United Educators of San Francisco union backed the supervisors’ version, Breed withdrew her proposals and forged a compromise.
How much public land Prop E would actually unlock for development was a matter of debate. But even critics acknowledged that the measure’s modest steps forward were better than nothing.
At least projects like the old Francis Scott Key school site — 135 units of desperately needed teacher housing in the Sunset district near Ocean Beach — could finally push ahead, bypassing lengthy public review and legal challenges, and perhaps shave some of the sky-high costs that make affordable housing construction so onerous.
After Prop E’s passage, the Francis Scott Key developer, MidPen Housing, wrote on its website that it could shave time and complete the work by the end of 2022. “Prop E has been a big boost for the project,” MidPen project manager Matthew Lewis told The Frisc this week. “It has likely saved us six months on our schedule.”
Final piece of the puzzle
Even though Prop E got the voters’ green light six months ago, the legislation itself is now in the slow lane. Affordable housing fundraising is hard enough in good times. Now a recession, perhaps even a depression, looms.
“With a longer-term softening in the market, the available funding will go down,” said Carolina Reid, a UC Berkeley planning professor and author of a recent study by the UC Berkeley Terner Center for Housing Innovation on the exorbitant costs to build affordable housing in California.
It’s no secret that monthslong (or yearslong) bureaucratic delays, a common occurrence in San Francisco, add to the highest building costs in the world. No surprise, San Francisco is also the most expensive place to build affordable housing in the state by a wide margin—averaging $1,100 per square foot for all projects built between 2008 and 2019, according to the Terner study.
Prop E is supposed to help with that, cutting red tape, boosting density, and avoiding bureaucratic reviews that anyone with about $600 and a complaint can trigger. But it’s unclear how long one piece of it — the final and extremely important piece of the puzzle — will take to snap into place. Or if it will at all.
That’s because, to forge a compromise with the mayor, the supervisors promised to make two major changes if Prop E passed, in what’s known as trailing legislation. One was to change requirements related to the mix of units allowed per project (how many two-bedroom, three-bedroom, and so forth). Check. That fix made it through in December.
But the second amendment — the more important one — has yet to become law. It’s meant to lift the height limit on projects from 40 feet to 50 feet, which would give developers more financial help. The extra story, especially on smaller parcels of land, means more density and economies of scale that make projects practical (or “pencil out,” as builders like to say).
As with other workers who should live close to the communities they serve, San Francisco teachers need housing help.
Before the supervisors can vote on the height amendment, city planners must prepare a report saying it passes environmental muster, and the Planning Commission must approve it. The commission was supposed to review it last week and send it to City Hall.
That didn’t happen. The supervisors granted city planners three more months. Ian Fregosi, an aide to Sup. Fewer, said the coronavirus pandemic has jammed up the planning department’s workflow.
Whether planners need all three months to finish the report remains to be seen. The bottom line, though, is months more of delays for even a modest improvement in the way San Francisco addresses an acute crisis.
At least the Francis Scott Key site shouldn’t be affected, says MidPen’s Lewis: The developer can raise the height beyond neighborhood norms using a California “density bonus” law instead of waiting for the Prop E height amendment to pass.
MidPen submitted key paperwork in February. The mayor’s housing department (known as MOHCD) “has been notified that it will be approved in the coming days and therefore is not impacted by the timing of the current Prop E trailing legislation,” MOHCD spokesperson Max Barnes said.
School property deja vu
But the old Francis Scott Key site (not to be confused with the current school of the same name two blocks away) is a pilot project that the city has championed for years. No other site, including some that have been in discussion for years, has gotten underway.
In January, the school board said the district would find room for at least 550 teacher housing units on its properties by the year 2030. You’re forgiven if you feel a sense of deja vu. More than a decade ago, in the middle of the previous recession, SFUSD officials, facing heat, admitted they needed to make better use of their sprawling real-estate portfolio.
One prime spot identified back then, an empty lot in the Inner Sunset known for its pumpkin patch and Christmas tree sales, is now one of the three sites the board identified for “potential development” earlier this year. The other two are in the Inner Richmond and Bayview-Hunters Point. None of them is listed in the Planning Department’s pipeline.
“We have identified three sites but with COVID-19, we have been prioritizing completing the one project and look forward to continue to explore the three sites in this ever-evolving world,” said Viva Mogi, the school district’s city government liaison.
City and school officials did not provide estimates when the height legislation might come to the mayor’s desk to sign.
The Frisc also reached out to UESF officials multiple times. They declined to answer questions about the delay or to comment on other potential housing sites.
As with other workers who should live close to the communities they serve, San Francisco teachers need housing help. Before the pandemic hit, the school district reported a 10% annual attrition rate. They’re now dealing with remote instruction, and many are sequestered at home with their own families. What’s more, the district warned of surprise deficits for the current school year — and this was before coronavirus-fueled projections of budget catastrophe for the district, the city and state.
It’s one thing to identify sites. It’s another to find the money to build on them. A massive $600 million affordable housing bond, the largest ever in SF, passed last fall alongside Prop E. But the city’s outrageous costs make that windfall look like a modest pool. According to proponents, it will be enough to build, buy, or renovate just 2,800 units, which barely moves the needle: In a report earlier this year, city planners estimated that to become diverse and affordable once again, San Francisco needs 150,000 new housing units by 2050, one-third of them reserved for lower-income residents.
Of the $600 million bond money, only $20 million was earmarked for teacher housing. That would be enough to fund about 20% of the Francis Scott Key project — based on an early 2019 budget of $98 million. (MidPen says the budget has changed but declined to share updates.)
Even if an economic crash brings down the high cost of materials and labor, as some observers believe could happen, those gains will likely be offset, even outshadowed, by the higher cost of whatever financing might be available.
“It’s not going to be enough,” said UC Berkeley’s Reid. If funding is available at all, it likely means cobbling it together from more fragmented sources, which means more work, more fees, and more demands to meet, as each funder has its own conditions. “I can’t imagine a scenario where the recession makes it cheaper to build.”
[Correction: A previous version of this story misspelled Viva Mogi’s last name.]