"SF’s Competing Affordable-Housing Measures Could Reshape Policy"

SF Chronicle, October 16, 2016

Two competing propositions on the San Francisco ballot both claim to be good government measures that will increase the city’s affordable housing stock.

One is the brainchild of the local Realtors association. The other is a countermeasure by the progressives on the Board of Supervisors. Both have political motivations, and both would have major policy implications.

Proposition P, which the Realtors are pushing, would require the city to consider at least three bids when contracting with affordable housing developers. Proposition M, by the progressives, would render Prop. P void and also create a housing commission to oversee responsibilities currently handled by the mayor’s office.

Supervisor Mark Farrell, a proponent of Prop. P, said the city needs to do more to encourage competition among affordable housing builders.

“It’s our obligation as a city to spend our taxpayer dollars efficiently and effectively,” Farrell said. “Fundamentally, as a government we should not be in the business of discouraging competition but rather encouraging competition so our residents get the best bang for our buck.”

Over the years the number of affordable housing builders has declined. One of the biggest, Citizens Housing, went bankrupt. Another, Bernal Heights Neighborhood Center, is struggling financially and is on the list of nonprofits with which the city won’t partner. Mission Housing and Mission Economic Development Agency have entered the mix and been awarded projects.

Housing construction at 1050 Valencia Street in San Francisco, Calif. on Wed. January 13, 2016.Photo: Michael Macor / The Chronicle

Just a handful of capable builders in the city — Tenderloin Neighborhood Development Corp., Chinatown Community Development Center, Mercy Housing, Bridge Housing and Community Housing Partnership — have built nearly all the projects over the last five years.

But opponents of Prop. P say requiring three bids will neither increase competition nor decrease the cost of building affordable housing.

“Mark’s theory about somehow you are bidding on sewer pipe installation is a complete miss on how the whole system works,” said Peter Cohen, co-director of the Council of Community Housing Organizations, a politically powerful coalition of affordable-housing developers and tenant advocates. “We have 30,000 units of affordable housing, and all of a sudden in 2016 the Realtors decide there is a problem with affordable housing.”

Cohen said far from making affordable housing less expensive to build, it would actually stymie construction, because projects could not go forward if there were not three bids.

Cohen also said Prop. P is “all about politics” — an effort by Realtors to undermine the Council of Community Housing Organizations and the progressive politicians who back it.

Some Prop. P supporters agree. Laura Clark, president of the pro-development group Grow San Francisco, said, “Prop. P is 100 percent politically motivated. Just like every other ballot initiative.”

Even so, Clark said, the measure could encourage developers outside the city to bid for affordable housing projects.

“I have not heard any good arguments about why we should be protecting local affordable housing developers,” Clark said. “When government is attempting to build as many affordable housing units as possible, that means we are subsiding affordable housing. We are not subsiding affordable housing developers.”

Enter Prop. M, the progressives’ countermeasure. If Prop. M passes, it renders Prop. P void — even if Prop. P also passes. It also trumps another measure pushed by the Realtors, Proposition U, which raises the income limits for people vying for a below-market rental unit.

But Prop. M is far more than a poison pill. It would create a seven-member housing commission to oversee the Mayor’s Office of Housing and the Office of Economic and Workforce Development.

That’s a big deal. The Mayor’s Office of Housing funds all affordable housing projects, while the Office of Economic and Workforce Development oversees big developments that have public-private partnerships, such as the San Francisco Giants’ 28-acre Mission Rock development.

Supervisor Aaron Peskin, who helped craft Prop. M, said too many affordable housing projects are hashed out behind closed doors.

“This is about making sure our long-term investments are the right ones — about having a place where housing experts, housing activists and everyday public citizens can be part of the public process,” Peskin said. “The notion of having a transparent oversight body overseeing housing and development is not a new concept.”

Opponents of Prop. M, including Mayor Ed Lee, counter that the proposed housing commission would slow the production of new affordable housing by creating more red tape and a duplicate review process.

Emily Green is a San Francisco Chronicle staff writer. Email:egreen@sfchronicle.com Twitter: @emilytgreen