San Francisco Mayor Edwin M. Lee announced at his January inauguration his commitment to working with the city’s affordable housing community to establish a local permanent source of funding for a local housing trust fund to replace the impending loss of revenues due to the State’s dissolution of redevelopment agencies. The charter amendment proposal for a General Fund set-aside for the Housing Trust Fund was recently presented to the Board of Supervisors. The charter amendment is expected to be considered by the Board of Supervisors in July and the measure go before voters in November 2012.
The Charter Amendment was developed by a Housing Trust Fund Working Group assembled by Mayor Lee, with representatives from different stakeholders in local housing policy and real estate development, including: affordable housing advocates and affordable housing developers, market rate developers and development advocates, realtors, lenders, small property owners and members of the Board of Supervisors.
The Housing Trust Fund will begin with a set aside of $20 million in general fund revenue and increase to $50 million a year by year thirteen, then index to the city’s general fund growth. The Housing Trust Fund will mainly recapture and recycle former Redevelopment Agency Tax Increment funds that had been dedicated to affordable housing, as well as the addition of a small portion of Hotel Tax revenues that had already been appropriated yearly for affordable housing, plus an additional $13 million in new General Fund revenue.
A companion ballot initiative would increase the real estate transfer tax for transactions involving all properties valued at $1 million or above by 0.2%. If approved by voters, in total an estimated $1.1 billion will be invested in affordable housing production and programs over the next 30 years in San Francisco.
The charter amendment provides broad parameters for the operation of the Fund: to create, acquire, and rehabilitate affordable housing; promote affordable home ownership programs in the City; lower and stabilize the impacts of affordable housing regulatory impositions on private residential projects (by reducing on-site inclusionary zoning requirements); and authorize the development of affordable rental units in the City.
Within this design, the Fund will specifically:
- Create, acquire and rehabilitate rental and ownership housing for households earning up to 120% of the area median income.
- Invest $15 million within the first five years in a down payment assistance program for residents to purchase their first home in San Francisco.
- Utilize within the first five years up to $15 million for a Housing Sta¬bilization Program to help distressed residents remain in their homes and assist low income homeowners with improvements to reduce the risk of losing housing.
- Funds may be used for an Infrastructure Grant Program of up to 10% of the annual Housing Trust Fund amount, utilizing recycled former Redevelopment tax increment infrastructure bonds, appropriated to help build-out public infrastructure needed to support increased residential density.
The Housing Trust Fund is part of Mayor Lee’s 17-point Roadmap to Good Jobs and Opportunity. With the elimination of the Redevelopment Agency, the City has lost a primary engine for producing affordable housing. The Mayor’s Office of Housing also projects a 48% cut to federal HOME funds. These cuts would decimate future affordable housing production in San Francisco. According to the San Francisco Office of Economic and Workforce Development, after the economic downturn, affordable housing represented 42% of the new units produced in 2010. And for every 100 units of affordable housing created, 117 construction jobs and 30 management, maintenance and service jobs are created.
In 2011, only 418 units of new housing were constructed in all of San Francisco, half of which were affordable. If demolitions and removals are factored in, that number drops to 269.
The “Out of Reach” report released by the National Low Income Housing Coalition last 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.
“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 Mayor Lee. “Creating affordable and middle class housing will also help build our economy and create jobs in San Francisco.”
The Mayor’s Office of Housing documented economic competitiveness to the Housing Trust Fund Working Group and summarized these key factors:
- Housing production plays an important role in San Francisco’s economy.
- Matching housing production to housing need increases economic competitiveness.
- We continue to struggle to close the gap between what people need, and what people can afford.
- Funds to support housing production are in steep decline.
Given reductions in funding for affordable housing, the Mayor’s Office of Housing predicts that approximately $150 million in annual investment in San Francisco’s local economy will not occur, 300 units of housing won’t be built, 350 construction jobs will not be created, and 90 permanent jobs will not be created. The affordability gap for low and moderate income households will widen.
Housing advocates throughout the City are gearing up to ensure passage by the Board of Supervisors and broaden the public’s understanding of the importance of investing in affordable housing in San Francisco.
Contact: Olson Lee or Dan Adams, San Francisco Mayor’s Office of Housing, 1 South Van Ness, 5th floor, San Francisco, CA 94103 (415) 701-5500 or Peter Cohen, Council of Community Housing Organizations, 325 Clementina Street, San Francisco, CA 94103 (415)882-0901 www.sfccho.org