Earlier this week, San Francisco Mayor Ed Lee announced the specifics of his long-promised "Housing Trust Fund," which he plans on using to make housing more affordable in the city's breathtakingly expensive real estate market.
The Mayor expects his plan to generate between $20 and $50 million a year over the next three decades. That money would go toward the development of over 9,000 units of affordable housing, down-payment assistance for first-time home buyers and the creation of a program aimed at helping homeowners avoid eviction.
"Creating a permanent source of revenue to fund the production of housing in San Francisco will ensure that San Francisco is a viable place to live and work for everyone, at every level of the economic spectrum," said Lee in a statement. "Creating affordable and middle class housing will also help build our economy and create jobs in San Francisco."
Lee, a former tenants' rights lawyer, created the Housing Trust Fund Work Group at the beginning of this year and tasked the body with devising a plan that would allow for the construction of 2,000 new housing units annually.
The money for Lee's plan would come from a 0.2 percentage-point increase in the transfer tax on the sale of properties valued over $1 million, diverting 0.6 percent of the current tax levied on hotel stays and tapping future property tax revenue that would have gone to the city's now-defunct redevelopment agency, according to documents from the mayor's office. The proposal is slated to go before voters in November.
The plan...[lowers] by 20 percent the amount of on-site affordable housing that San Francisco requires private developers to build, expanding upward the income range of who qualifies for affordable housing and capping city fees on developers.
Some have criticized the mayor's plan for favoring home-buyers over the vast majority of San Franciscans who rent. The San Francisco Bay Guardian notes:
Lee's compromise with developers and the business community on his housing trust fund makes things even worse by diverting $15 million into a down payment assistance program for middle-class homebuyers (in a city where two-thirds of residents rent, and in a country that should have learned not to lure more families into overextending themselves to buy houses) and actually reduced the number of below-market-rate units that developers are required to build.
When California Governor Jerry Brown made the controversial decision to end redevelopment near the beginning of his term, he cut off the primary mechanism San Francisco had been using to subsidize sub-market rate housing for its shrinking middle class. The city previously spent nearly $50 million of redevelopment money on below market rate housing each year.
That funding source's dramatic demise created a gaping hole that needed to be filled quickly.
In 2011, only 418 units of new housing were constructed in all of San Francisco, half of which was affordable. If demolitions and removals are factored in, that number drops to 269.
The city's General Plan dictates that 60 percent of new housing be priced below the market rate; however, much like Muni's voter-approved goal of a 85 percent on-time rate, it's more of an ideal that a strict mandate.
A recent report released by National Low Income Housing Coalition this March found that San Francisco had the most expensive housing rental market in the country. The average rent on a two-bedroom apartment in San Francisco is just over $1,900 a month. It would take the full-time salaries of 4.6 jobs at San Francisco's highest-in-the-nation minimum wage to afford one of those two bedrooms.
The high cost of housing has increasingly pushed the middle class--especially families with children--out of the city and into the suburbs of the Peninsula and East Bay. With a mere 13.4 percent of its population under the age of 18, San Francisco has the lowest percentage of children of any major city in the United States.
However, as a generation of kids raised on the gospel of "New Urbanism" has started to have kids of their own, there's a growing desire of more parents to make of a go of it in San Francisco. San Francisco Unified School District officials told The Huffington Post that this year has seen a marked increase in the number of kindergarten applications.
The key is finding ways to those young parents to afford to stay here.
The Mayor has submitted his proposal to the city's Board of Supervisors. If they approve the deal by June 19, it will then go before San Francisco voters in November.
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