Calvin Welch

It’s on

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Invoking the spirit of George Moscone and Harvey Milk "so that we may be worthy of their powerful legacy," Assemblymember Mark Leno announced his candidacy March 2 for the State Senate seat now held by Carole Migden, setting off a high-profile fight between the two for the Democratic Party nomination next year.

"Welcome to democracy in action. Welcome to people power," Leno told the large crowd that gathered under the warm noontime sun at Yerba Buena Gardens, adjacent to the Martin Luther King Memorial and Moscone Center with its rooftop array of solar panels, which Leno said he will work to bring to more buildings.

MCing the event was Assessor Phil Ting, who praised Leno’s efforts to legalize same-sex marriage and said, "That’s the kind of leadership and integrity we deserve in San Francisco." District Attorney Kamala Harris then told the crowd, "I stand here in strong and unequivocal support for Mark Leno."

Among the other local notables on hand to support Leno were Fiona Ma, Susan Leal, Laura Spanjian, Julian Davis, Kim-Shree Maufas, Hydra Mendoza, Norman Yee, Lawrence Wong, Donna Sachet, Theresa Sparks, James Hormel, Natalie Berg, Bob Twomey, Jose Medina, August Longo, Linda Richardson, Calvin Welch, Jordanna Thigpen, Leah Shahum, Tom Radulovich, David Wall, Tim Gaskin, Esperanza Macias, and Espanola Jackson.

Notably absent were all the members of the Board of Supervisors, but it’s still very early in a campaign that is bound to be heated. (Steven T. Jones)

Leno announces

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By Steven T. Jones
Invoking the spirit of George Moscone and Harvey Milk “so that we may be worthy of their powerful legacy,” Assembly member Mark Leno today announced his candidacy for the Senate seat now held by Carole Migden, setting off a high-profile fight between the two for the Democratic Party nomination next year. “Welcome to democracy in action. Welcome to people power,” Leno told the large crowd that gathered under the warm noontime sun at Yerba Buena Gardens, adjacent to the Martin Luther King Memorial and Moscone Center, with its rooftop array of solar panels that Leno said he will work to bring to more buildings. MCing the event was Assessor Phil Ting, who introduced District Attorney Kamala Harris, who told the crowd, “I stand here in strong and unequivocal support for Mark Leno.” Among the other local notables on hand to support Leno were Fiona Ma, Susan Leal, Laura Spanjian, Julian Davis, Kim-Shree Maufis, Hydra Mendoza, Norman Yee, Lawrence Wong, Donna Sachet, Theresa Sparks, James Hormel, Natalie Berg, Randy Shaw, Bob Twomey, Jose Medina, August Longo, Linda Richardson, Calvin Welch, Jordanna Thigpen, Leah Shahum, Tom Radulovich, Melissa Dodd, David Wall, Tim Gaskin, Esperanza Macias, and Espanola Jackson. Notably absent were any members of the Board of Supervisors, but it’s still very early in a campaign that is bound to get heated.

The next big fight

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› steve@sfbg.com
San Francisco’s eastern neighborhoods — the Mission District, Potrero Hill, Showplace Square, Dogpatch, the Central Waterfront, and SoMa — are shaping up to be a prime battleground in the fight over who will determine the city’s future.
Can city officials, working with community groups, set development standards that will create adequate housing for all income groups, protect the job-generating businesses that use light-industrial property, and include enough open space and other community benefits? Or will the community have to, for the most part, simply accept what the market forces are willing to provide?
This is the basic dichotomy at the heart of the Eastern Neighborhoods Plan, which has been in development for years and will be unveiled by the Planning Department sometime in 2007. In anticipation of that release, members of the Board of Supervisors are attempting a preemptive strike in the form of a resolution demanding the plan prioritize affordable housing and other public needs.
The 11-page resolution — which was sponsored by Supervisors Sophie Maxwell, Jake McGoldrick, Aaron Peskin, and Tom Ammiano — restates policies from the city’s General Plan, particularly its Housing Element, and emphasizes the need for the Planning Department to ensure those policies are reflected in land-use decisions for the eastern neighborhoods.
The problem is that the city isn’t meeting its goals, particularly in the realm of affordable housing. The resolution notes that the Housing Element calls for 28 percent of new housing to be affordable to people with moderate incomes, 10 percent affordable to low-income residents, and 26 percent affordable to those with very low incomes.
Yet the city’s inclusionary housing law calls for developers to offer only 15 percent of their units below market rate, and a study associated with that law’s recent update indicates most developers won’t build if asked to contribute more (see “Homes for Whom,” 6/18/06, at www.sfbg.com). The vast majority of what’s now being built isn’t affordable to even middle-class San Franciscans — a far cry from the 64 percent of such housing called for in city policies.
“We do not have a housing crisis in San Francisco,” Maxwell declared during a Dec. 12 hearing on the resolution. “We have an affordable housing crisis.”
Most of the progressives who constitute the board majority agree with Maxwell’s statement, which has been made before by housing activist Calvin Welch and some of the community groups pushing the resolution. They all want the eastern neighborhoods, where a disproportionate number of low-income San Franciscans live, to be where the city begins to correct its housing imbalance.
“We need land specifically set aside for affordable housing, and the best place to do that is in the eastern neighborhoods,” Maxwell said at the meeting. “Let’s make this official city policy.”
Or as McGoldrick told the Guardian, “What we’re talking about here is a paradigm shift of major proportions.” He sees the eastern neighborhoods as the ideal place to create and protect working-class housing with aggressive affordability goals, and he said, “Those developers who can’t meet those goals will have to build in other parts of the city.”
But real estate speculators and developers who have spent years waiting to move forward their projects in the neighborhoods have attacked the resolution and its goals. The stakes are extremely high. The plan will set standards for the 4,800 housing units already proposed in the eastern neighborhoods, including 11 projects in the Showplace Square area that total 1,800 units, and more on the way.
“Our projects are being held hostage,” Residential Builders Association president Sean Keighran told us, saying of his members, “They were speculators, but they were playing by the rules.”
Keighran insists RBA builders will help bridge the affordable housing gap if the city works in partnership with them and uses incentives like density bonuses and height variances rather than strict limits and set-asides. But the resolution, he said, “will be interpreted as a tool to stop market-rate housing.”
That’s something even progressive Sup. Chris Daly doesn’t want. Daly emerged as the primary critic of the resolution during the Dec. 12 meeting, blasting it as unnecessary and offering a list of confusing amendments that set the stage for Sup. Bevan Dufty to successfully continue consideration of the resolution to Jan. 9, 2007.
Welch and community leaders such as Tony Kelly of the Potrero Hill Boosters were unhappy with Daly’s maneuver. Kelly told us, “It’s the community groups of the eastern neighborhoods who pushed for this.” He felt it was important for the board to give planners specific marching orders. “It’s meant to say this is what we’ll accept.”
Daly said he supports the basic goals of the resolution — and even said at the meeting that he will ultimately vote for it — but he told the Guardian he would rather find creative ways to work with developers on increasing the amount of affordable housing than draw bright lines that might block market-rate housing.
“I’m not sure it’s the right resolution at the right time,” Daly told us.
During the meeting he also questioned city planner Ken Rich on what impact this nonbonding resolution would have and concluded that it’s merely symbolic, although Rich did say it might spur planners to investigate and present more mechanisms for meeting affordable housing goals.
Daly then suggested a complete revision of the Housing Element to overcome the “balancing act” Rich said planners must perform between competing imperatives, such as facilitating jobs, open space, and housing.
“The General Plan asks us for a lot of different things,” Rich told the board.
“If that’s a weakness in the General Plan, we need to work on that,” Daly said, making the motion that the resolution also require planners to develop a list of “contradictions in the General Plan that will require them to balance conflicting mandates.”
“That could be a thesis topic in itself,” Peskin responded.
Daly’s motion was discussed among the supervisors, clouding and sidetracking the discussion, but it was preempted by Dufty’s motion to delay the matter until the next board meeting. Maxwell said she’s not giving up on the measure, which she sees as necessary to focus planners who feel constrained by market forces.
“Affordable housing seems to be last on the list, and we want it to be a priority,” Maxwell said at the meeting.
It’s an open question whether she has enough votes to win approval and what kinds of pressures and distractions the RBA and its allies will bring to the debate. But the heated division over this simple resolution is a harbinger of what’s to come next year, when the real fight over San Francisco’s future socioeconomic makeup begins.
Or as Peskin said at the hearing, “This is just a preamble to our receipt of the plans themselves.” SFBG

Migden and Ammiano

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By Tim Redmond

Well, within a few minutes after my blog on Mark Leno and Carole Migden was posted, Eric Potashner, Migden’s aide and political advisor, called me to say that Migden has endorsed Tom Ammiano for state Assembly and to poo-poo all the talk of a heated Leno-Migden race, which he says he isn’t worried about.

Okay, I believe him. But he should be worried, because it’s real — and unless the term-limits law is modified, I see Leno wanting to go for it.

Anyway, I just got back from the Haight Asbury Neighborhood Council post-election forum, where another fascinating wild-ass scenario was floated: Suppose Migden does the math and decides that she has a better chance running against Gavin Newsom than she does defending her Senate seat against Mark Leno?

After a member of the audience floated her name in the mayoral sweepstakes, Calvin Welch, who has been watching local politics for a very long time, pointed out that Migden is extremely smart — and not afraid to make a bold political decision.

I don’t exactly see it, but it’s a very strange world out there right now.

The risk of honest planning

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OPINION At the Nov. 1 meeting of the land use committee of the Board of Supervisors, a seemingly straightforward statement of policy will be heard. It simply requires that the city apply its own General Plan guidelines to future development in the eastern neighborhoods.
But the legislation, proposed by Supervisors Sophie Maxwell, Jake McGoldrick, Aaron Peskin, and Tom Ammiano, is creating quite a furor. A senior planning official has testified that if it’s adopted, the entire development boom in the eastern neighborhoods may be halted. The mayor has threatened a veto.
The policy in question calls for city planners to show how they intend to ensure that 64 percent of all new housing development is affordable to moderate-, low-, and very low-income San Franciscans. That’s what the housing element of the master plan says is needed.
Land use development policy lies at the very heart of San Francisco politics. It’s dangerous work for supervisors to attempt to determine that policy, especially if it calls for protection of existing neighborhoods and their residents.
Just ask Supervisor Chris Daly.
Don’t for a minute believe that he is in the fight of his political life because he’s rude, because he doesn’t care about law and order, or because he prefers dirty streets upon which to raise his son. These petty and silly charges mask a far more serious objection: the way his opponents see it, Daly has been too slow in adopting the massive wave of market-rate housing slated for his district and is far too protective of lower-income residents in District 6.
Never mind that since Daly took office some 3,000 units of housing have been built in the South of Market portion of his district alone or that an equal amount wait in the pipeline at the Planning Department. Mayor Gavin Newsom and his market-rate developer allies are simply not satisfied with Daly’s pro–housing development approach — because Daly has sought some balance in that development.
Likewise, the Maxwell resolution calls for plans that will be balanced, contain sustainable development policies, and guarantee a voice for residents against the headlong drive of the current administration to convert the eastern neighborhoods (South of Market, Potrero Hill, the Mission District) into vertical gated communities for Silicon Valley commuters. It states that it shall be the policy of the city that future plans explain not only how they will meet the affordability goals of the housing element but also how they will meet policies of preserving the arts and other productive activities; providing for public transit, pedestrian, and bike rider needs; protecting employment opportunities for current and future residents; and keeping families with children in the city.
There’s a working majority of the Board of Supervisors willing to fight for current neighborhoods and residents and a future that includes them. The battle in District 6 shows that the fight is not without risk. Do the rest of us realize it? SFBG
Calvin Welch
Calvin Welch is a community organizer in San Francisco.

EDITOR’S NOTES

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› tredmond@sfbg.com
There are people at the daily newspapers around here who bristle when I accuse them of ignoring important local stories, particularly ones involving powerful political, business, or social figures (and most particularly, involving the newspapers themselves). No representative of the Hearst Corp. stands in the newsroom door announcing that stories about management will be sent to New York for prior censorship. Nobody tells the Chronicle’s reporters that they can’t cover a pressing story.
And I believe all that. I really do. I know it doesn’t work that way.
Carl Jensen knows that too. When he started Project Censored back in 1976, he knew he’d get a lot of criticism. “Censored” is a pretty strong word; it evokes a mirthless military guy with a pair of scissors and a big black pen, preventing real news from emerging out of a pressroom bunker somewhere.
But what Jensen has been trying to say for years is that the stories cited by Project Censored represent choices made by editors and publishers about what’s important in today’s world. That’s what the front page of a newspaper is — a set of choices. Is the confession of the purported killer of JonBenet Ramsey more important than the Bush administration’s illegal wiretapping of millions of Americans? Is the latest news about Brad and Angelina more important than the latest news from Iraq? Is one man’s quest to take control of every daily newspaper in the Bay Area worth more than a first-day story and a few tiny news briefs?
Editors are paid to make those decisions — and the ones who want to keep their jobs know what the rules are. That’s why some stories get more coverage, more play, and more attention and some get deeply buried or published in one place and never picked up by anyone else.
Anyone who reads political blogs knows about stories like the ones on this year’s Project Censored list (see page 15). Nobody blacked out the news with a big rubber stamp; it just never got reported in the first place.
For a Sunday afternoon on a Labor Day weekend, it was truly impressive: I counted at least 300 people at the Delancey Street events room for the Sue Bierman memorial. Just about everyone on the local left seemed to be there, along with a few luminaries like John Burton, Gavin Newsom, and Willie Brown, who were Bierman’s friends even when they were wrong and she was right.
Newsom, who was often at odds with Bierman, looked out over the crowd and made the point succinctly: “This is what happens,” he said, “when you’re nice to people.”
There were many funny and moving stories. Burton, who showed up in his usual sartorial splendor (striped sweatpants and an untucked shirt, which makes me respect the guy as much as anything he’s ever done in politics) talked about how Bierman always, always enjoyed herself, even in the most boring political drudgery. It was wonderful to see her children, grandchildren, and great-grandchildren there (and wonderful for them to see how many people were part of Bierman’s San Francisco community).
Calvin Welch, her Haight Asbury neighbor, friend, and longtime comrade in arms, reminded us all that Bierman “created the neighborhood movement in San Francisco” — and that she did it in her own style, always believing that “fun is important.”
A lot of people go to political funerals because they have to; most of us went to this one because we wanted to. Thanks, Sue. SFBG

Fair fees for rich developers

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EDITORIAL The information that emerged from the Board of Supervisors’ Land Use Committee on July 12 was mind-bending: According to a new city report, private developers will not even consider going forward with a big housing construction project unless the profit margin is at least 28 percent.
Think about it: Without a guaranteed profit about three or four times larger than what most normal businesses strive for, the developers won’t pour an ounce of concrete. And they still complain that the city wants them to build more affordable housing.
As housing activist Calvin Welch pointed out at the hearing, it used to be illegal in most states to charge that much interest on loaned money. The word for it was usury.
And in much of the construction industry, profit margins are far, far slimmer than that. On big public-works projects, like the Bay Bridge retrofit and the construction of the new terminal at San Francisco International Airport, the margin was designed to be about 5 percent.
As Steven T. Jones reports on page 15, this information, which has received very little press attention, ought to be the strongest boost yet for advocates of what’s known as “inclusionary housing” legislation — rules that would require developers building market-rate housing units to set aside a percentage of those units for sale or rent at levels that are affordable to nonwealthy San Franciscans. The current law requires that 12 percent of the units in any project have to be priced below market rate. (That goes up to 17 percent if the affordable units are built somewhere off-site or if the developers simply pay a per-unit fee into a city low-cost housing fund.)
Sup. Chris Daly, who has long been an advocate of inclusionary housing, forced the developer of One Rincon Hill, a high-rise condo project, to hike the affordable-housing share to 25 percent last year — and that convinced him that the city’s legal requirement was too low.
So now the supervisors are looking at increasing the levy, and as part of the discussion, a task force operating under the Mayor’s Office of Housing hired a consultant to look at industry finances and standards. If the report is correct, and 28 percent margins are considered a minimum in San Francisco’s private-sector housing market, then the rather modest increases the supervisors are looking at (a hike from 12 to 15 percent of below-market-rate units and some tighter rules for enforcement) are eminently reasonable. In fact, the legislation isn’t nearly ambitious enough.
Suppose the city mandated 25 percent below-market-price units in all new housing projects of more than, say, 20 units. Would the developers really walk away, saying that profits of, say, 20 percent just weren’t enough? Somehow, we doubt it — in fact, we suspect there are plenty of builders out there who would be more than happy with that level of return. And suppose the market for high-end, million-dollar condos — which clearly aren’t serving the unmet housing needs of the city anyway — started to dry up. So what? San Francisco doesn’t need more housing for the very rich. In fact, the overall impact of these luxury housing projects on the city is almost certainly negative — that sort of housing tends to drive out blue-collar industry and is already turning parts of the city into a bedroom community for Silicon Valley.
Daly argues that without these new market-rate projects, very little affordable housing will be built. And he has a point. Government subsidies and nonprofit programs are immensely valuable, but there’s never enough public cash to meet the stratospheric need for affordable housing in San Francisco.
But there’s no reason for the city to be held hostage by developer profits that exceed all reason. At the very least, the board should approve Daly’s proposals — and should look seriously at jacking up the requirements even more. SFBG

Homes for whom?

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› steve@sfbg.com
“Inclusionary housing program” is a bureaucratic term that seems to invite mental drift. And when the Board of Supervisors’ Land Use Committee considered updating the program’s standards July 12, there was enough mind-numbing economic and regulatory minutiae to sedate the standing-room-only crowd.
But there were also diamonds in that jargony rough. For one thing, San Francisco is now poised to finally force housing developers to spend more of their astronomical profits on housing that sells or rents for far less than the city’s equally obscene housing market dictates. And that’s been made politically possible by an unlikely deal that has downtown developers such as Oz Erickson, affordable housing activists including Calvin Welch, the market-friendly Mayor’s Office of Housing, and progressive Sup. Chris Daly all on the same side.
In the process, a city-commissioned report has lifted the financial veil from big-money housing development in San Francisco, revealing that those who build the biggest high rises require a profit margin of at least 28 percent — or a take-home profit of about $250 million — before they’ll take on a project.
“It used to be illegal [usury to seek such high interest on loaned money], so 28 percent is a sobering number,” Welch said at the hearing.
The public good likely to come from this ordinance — if the current compromise can hold for a few more weeks — is a fairer system for getting people into below-market-rate (BMR) units, policies designed to encourage more housing construction for a wider income mix, and ways to involve more developers and phase in the program so as not to disrupt ongoing projects.
But before we get too deep into the program’s details, let’s take a step back, because the backstory of how we got to this compromise is an intriguing tale with important political implications, particularly for downtown’s current public enemy number one: Chris Daly.
The story really began last summer when the developers of those big new luxury high-rise condos known as One Rincon Hill were trying to get their final approvals. Daly and many of his constituents were concerned that this lucrative project didn’t include enough community benefits or BMR housing.
So the supervisor stepped in and negotiated with the developer a $120 million deal with a huge low-cost-housing element. In the end, the developer agreed to provide affordable units equivalent to about 25 percent of the project.
That’s more than double the city’s current inclusionary housing requirement, which mandates that 12 percent of the units be available below market rate. The requirement rises to 17 percent if the units are built off-site, and developers can pay the city a fee in lieu of doing the actual construction.
The deal got Daly thinking: If the Rincon developers could afford 25 percent, then others probably could too. So he used some of the developer’s money he’d extracted to fund a study looking at how increasing the mandates to 20 and 25 percent would impact housing construction in the city.
Last fall, the Planning Department and Mayor’s Office of Housing assembled a technical advisory committee — made up of cochairs Erickson and Welch and a mix of for-profit and nonprofit developers plus community representatives — to work with the study’s consultants.
Daly put his efforts in the form of an ordinance last October. Sup. Sophie Maxwell also had introduced legislation to strengthen the inclusionary housing program, which has been combined with the Daly legislation. And Sup. Jake McGoldrick last fall introduced legislation to apply the program to buildings of five or more units (it now applies to buildings of 10 units and more), and his ordinance is now being considered along with the Daly-Maxwell legislation.
“This is about housing for everyday people in San Francisco,” Daly said at the July 12 hearing, which was attended by the three supervisors, city staff and consultants, top developers, and a large crowd of housing activists wearing “Housing Justice Now” stickers.
That volatile mix produced a surprising amount of unanimity and compromise (although the Land Use Committee ultimately decided to push the matter back a week to work out some details). Just a few days earlier, when the consultants’ numbers first came in, the measures had seemed headed for an ugly showdown between the progressives and downtown.
The report by Keyser Marston Associates analyzed how much the city can ask for before developers just say no. It was a wake-up call in many respects, showing that San Francisco developers and their financers expect at least 18 percent profit margins for small projects and more than 28 percent for big ones.
For starters, that means that no private developer will build new rental housing in San Francisco, because the profits aren’t high enough. The report also says that developers will avoid putting affordable units in their luxury condo towers; it makes more economic sense to build them off-site or to pay into the city fund instead.
Doug Shoemaker of the Mayor’s Office of Housing (MOH) said his office has learned a lot from the study, particularly about how the in-lieu fee could be adjusted to make BMR housing construction a more attractive option for developers.
“It’s created a bias for developers to just pay the fee,” Shoemaker said, noting that his office increased the in-lieu fee by 15 percent on July 1 and indicating that further increases could be on the way. In fact, one requirement of the ordinance is for the MOH to regularly update fees to reflect evolving market realities.
Yet there was also a potential kiss of death in the report, which ran the numbers and found that developers wouldn’t pursue projects that met the 20 to 25 percent inclusionary housing standard that Daly was seeking.
Daly and his housing activist constituents understood that the report — which was issued just five days before the hearing — would likely translate into a mayoral veto of the legislation, allowing Mayor Gavin Newsom to claim it would hurt the city’s economy and housing needs.
“What we were confronted with last Friday was political death,” Welch said.
So Daly lowered his requirement to 15 and 20 percent respectively and agreed to compromises that grandfather in projects now in the pipeline and ease up the standards on projects that work within their current zoning.
“We do support the compromise,” Matt Franklin of the MOH told the Guardian.
But for Daly the legislation is about more than percentages. For example, it also creates standards for marketing the BMR units to prevent fraud, allows lower-income residents to qualify for them, and requires off-site BMR units to be within one mile of the project.
Daly, a tough former housing activist known for sometimes taking strong and unbending progressive stands, told the Guardian that this deal is consistent with his approach: “Yes, I’ll push the envelope, but that doesn’t mean I won’t take a good deal.”
The July 12 hearing demonstrated that this was a deal being grudgingly accepted by all of the usually polarized sides.
“We, by and large, support this legislation,” Erickson — the Emerald Fund developer and San Francisco Planning and Urban Research Association board member who cochaired the committee — said at the hearing. He also added, “I think it’s doable. I think it’s not going to kill development.”
Yet he also emphasized that the development community is giving all it can: “Fifteen percent was a compromise and we were very reluctant to see it go from 12 to 15 percent.”
Welch also said the compromise was painful for housing activists, who were hoping to get more BMR units out of market-rate housing developers and were astonished at the huge profit margins that are expected by developers and those who finance their projects.
“I think we have been successful at coming up with public policy that meets the needs of developers and low-income residents,” Welch said at the hearing.
Later he told the Guardian that the inclusionary housing update is designed to promote the kind of housing — BMR units for those making just less than the median income — that is also being created by the controversial practice of evicting tenants from apartments and converting those units into condos.
“What this does is help prevent the rental stock from being converted by [tenancies-in-common],” said Welch.
Developer Mike Burke took issue with the criticism of developers at the hearing. “It’s not a guarantee of a 28 percent return. It’s a fair return based on a substantial risk.”
Yet housing activists note that developers already anticipate delays and other financial risks when constructing their financial models, so many developers actually make more than 28 percent on their projects, a fact that the consultant’s report acknowledged.
Eric Quesada of the Mission Anti-Displacement Coalition called on city officials to adopt as tough a standard as possible, using that as a starting point to a broader discussion.
“We need to dig deeper to look at what the goals of San Francisco are for housing,” he said. “This is the ceiling of what we need.” SFBG

Windfalls and compromise

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By Steven T. Jones
For anyone who could sort through the sometimes mind-numbing minutiae of land use economics and regulation, today’s Board of Supervisors Land Use Committee contained some interesting insights. Sup. Chris Daly has been trying to strengthen the city’s inclusionary housing ordinance — which now requires most developers build some below market rate units in their projects (12 percent if done on-site, 17 percent for off-site, or an in-lieu fee) — by increasing the percentages to 20-25, changing who qualifies to buy them and how they’re sold, and a few other tweaks. But a consultant report that came out Friday concluded that developers wouldn’t build at that level because that would drop their take below their minimum required 28 percent profit margin for big high rises (or a profit of around $250 million). Daly and housing activists who worked on the ordinance, including Calvin Welch, expressed astonishment developers required that much profit before they’d build, but they read the political handwriting and lowered their percentages to 15 and 20 percent, which pencil out. “What we were confronted with last Friday was political death,” Welch told me. But now, after that and a change grandfathering in current projects, the ordinance has the support from both the Mayor’s Office and leaders in the development community, although the committee punted it for a week to deal with a few details. There’s lots more to say about all this, but I’ll save most of it for my article in next week’s paper.

Newsom loses control

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› steve@sfbg.com

In the early days, the mayor tried to sound like a practical, hands-on executive who was ready to run San Francisco.

Mayor Gavin Newsom used his inaugural address on Jan. 8, 2004, to emphasize that he was a uniter, not a divider and that he wanted to get things done.

"I say it’s time to start working together to find common purpose and common ground," he proclaimed. "Because I want to make this administration about solutions."

It’s a mantra he’s returned to again and again in his rhetoric on a wide range of issues, claiming a "commonsense" approach while casting "ideology" as an evil to be overcome and as the main motive driving the left-leaning majority of the San Francisco Board of Supervisors.

"Because it’s easy to be against something," Newsom said on that sunny winter day. "It’s easy to blame. It’s easy to stop…. What’s hard is to hear that maybe to come together, we need to leave behind old ideas and long-held grudges. But that’s exactly what we need to do."

But if that’s the standard, Newsom has spent the past 17 months taking the easy way.

It’s been a marked change from his first-year lovefest, when he tried to legalize same-sex marriage, reach out to BayviewHunters Point residents, and force big hotels to end their lockout of workers.

A Guardian review of the most significant City Hall initiatives during 2005 and 2006 as well as interviews with more than a dozen policy experts and public interest advocates shows that Newsom has been an obstructionist who has proposed few "solutions" to the city’s problems, and followed through on even fewer.

The Board of Supervisors, in sharp contrast, has been taking the policy lead. The majority on the district-elected board in the past year has moved a generally progressive agenda designed to preserve rental units, prevent evictions, strengthen development standards, promote car-free spaces, increase affordable housing, maintain social services, and protect city workers.

Yet many of those efforts have been blocked or significantly weakened by Newsom and his closest allies on the board: Fiona Ma, Sean Elsbernd, Michela Alioto-Pier, and Bevan Dufty. And on efforts to get tough with big business or prevent Muni service cuts and fare hikes, Newsom was able to peel off enough moderate supervisors to stop the progressives led by Chris Daly, Tom Ammiano, and Ross Mirkarimi at the board level.

But one thing that Newsom has proved himself unable to do in the past year is prevent progressive leaders particularly Daly, against whom Newsom has a "long-held grudge" that has on a few recent occasions led to unsavory political tactics and alliances from setting the public agenda for the city.

Balance of power

The Mayor’s Office and the Board of Supervisors are the two poles of power at City Hall and generally the system gives a strong advantage to the mayor, who has far more resources at his disposal, a higher media profile, and the ability to act swiftly and decisively.

Yet over the past year, the three most progressive supervisors along with their liberal-to-moderate colleagues Gerardo Sandoval, Jake McGoldrick, Aaron Peskin, and Sophie Maxwell have initiated the most significant new city policies, dealing with housing, poverty, health care, alternative transportation, violence prevention, and campaign finance reform.

Most political observers and City Hall insiders mark the moment when the board majority took control of the city agenda as last summer, a point when Newsom’s honeymoon ended, progressives filled the leadership void on growth issues, problems like tenants evictions and the murder rate peaked, and Newsom was increasingly giving signs that he wasn’t focused on running the city.

"Gay marriage gave the mayor his edge and gave him cover for a long time," said Tommi Avicolli Mecca, a queer and tenants rights activist. "About a year ago that started to wear off, and his armor started to be shed."

Daly was the one supervisor who had been aggressively criticizing Newsom during that honeymoon period. To some, Daly seemed isolated and easy to dismiss at least until August 2005, when Daly negotiated a high-profile deal with the developers of the Rincon Hill towers that extracted more low-income housing and community-benefits money than the city had ever seen from a commercial project.

The Newsom administration watched the negotiations from the sidelines. The mayor signed off on the deal, but within a couple months turned into a critic and said he regretted supporting it. Even downtown stalwarts like the public policy think tank San Francisco Planning and Urban Research Association noted the shift in power.

"I think we saw a different cut on the issue than we’ve seen before," SPUR executive director Gabriel Metcalf told us. "Chris Daly is not a NIMBY. I see Chris Daly as one of the supervisors most able to deal with physical change, and he’s not afraid of urbanism…. And he’s been granted by the rest of the board a lot of leadership in the area of land use."

SPUR and Metcalf were critical of aspects of the Daly deal, such as where the money would go. But after the deal, Newsom and his minions, like press secretary Peter Ragone, had a harder time demonizing Daly and the board (although they never stopped trying).

Around that same time, hundreds of evictions were galvanizing the community of renters which makes up around two-thirds of city residents. Newsom tried to find some compromise on the issue, joining Peskin to convene a task force composed of tenants activists, developers, and real estate professionals, hoping that the group could find a way to prevent evictions while expanding home ownership opportunities.

"The mayor views the striking of balance between competing interests as an important approach to governing," Ragone told the Guardian after we explained the array of policy disputes this story would cover.

The task force predictably fell apart after six meetings. "The mayor was trying to find a comfortable way to get out of the issue," said Mecca, a member of the task force. But with some issues, there simply is no comfortable solution; someone’s going to be unhappy with the outcome. "When that failed," Mecca said, "there was nowhere for him to go anymore."

The San Francisco Tenants Union and its allies decided it was time to push legislation that would protect tenants, organizing an effective campaign that finally forced Newsom into a reactionary mode. The mayor wound up siding overtly with downtown interests for the first time in his mayoral tenure and in the process, he solidified the progressive board majority.

Housing quickly became the issue that defines differences between Newsom and the board.

Free-market policy

"The Newsom agenda has been one of gentrification," said San Francisco Tenants Union director Ted Gullicksen. The mayor and his board allies have actively opposed placing limitations on the high number of evictions (at least until the most recent condo conversion measure, which Dufty and Newsom supported, a victory tenants activists attribute to their organizing efforts), while at the same time encouraging development patterns that "bring in more high-end condominiums and saturate the market with that," Gullicksen explained.

He pointed out that those two approaches coalesce into a doubly damaging policy on the issue of converting apartments into condominiums, which usually displace low-income San Franciscans, turn an affordable rental unit into an expensive condominium, and fill the spot with a higher-income owner.

"So you really get a two-on-one transformation of the city," Gullicksen said.

Newsom’s allies don’t agree, noting that in a city where renters outnumber homeowners two to one, some loss of rental housing is acceptable. "Rather than achieve their stated goals of protecting tenants, the real result is a barrier to home ownership," Elsbernd told us, explaining his vote against all four recent tenant-protection measures.

On the development front, Gullicksen said Newsom has actively pushed policies to develop housing that’s unaffordable to most San Franciscans as he did with his failed Workforce Housing Initiative and some of his area plans while maintaining an overabundance of faith in free-market forces.

"He’s very much let the market have what the market wants, which is high-end luxury housing," Gullicksen said.

As a result, Mecca said, "I think we in the tenant movement have been effective at making TICs a class issue."

Affordable housing activists say there is a marked difference between Newsom and the board majority on housing.

"The Board of Supervisors is engaged in an active pursuit of land-use policy that attempts to preserve as much affordable housing, as much rental housing, as much neighborhood-serving businesses as possible," longtime housing activist Calvin Welch told us. "And the mayor is totally and completely lining up with downtown business interests."

Welch said Newsom has shown where he stands in the appointments he makes such as that of Republican planning commissioner Michael Antonini, and his nomination of Ted Dienstfrey to run Treasure Island, which the Rules Committee recently rejected and by the policies he supports.

Welch called Daly’s Rincon deal "precedent setting and significant." It was so significant that downtown noticed and started pushing back.

Backlash

Board power really coalesced last fall. In addition to the housing and tenant issues, Ammiano brought forward a plan that would force businesses to pay for health insurance plans for their employees. That galvanized downtown and forced Newsom to finally make good on his promise to offer his own plan to deal with the uninsured but the mayor offered only broad policy goals, and the plan itself is still being developed.

It was in this climate that many of Newsom’s big-business supporters, including Don Fisher the Republican founder of the Gap who regularly bankrolls conservative political causes in San Francisco demanded and received a meeting with Newsom. The December sit-down was attended by a who’s who of downtown developers and power brokers.

"That was a result of them losing their ass on Rincon Hill," Welch said of the meeting.

The upshot according to public records and Guardian interviews with attendees was that Newsom agreed to oppose an ordinance designed to limit how much parking could be built along with the 10,000 housing units slated for downtown. The mayor instead would support a developer-written alternative carried by Alioto-Pier.

The measure downtown opposed was originally sponsored by Daly before being taken over by Peskin. It had the strong support of Newsom’s own planning director, Dean Macris, and was approved by the Planning Commission on a 61 vote (only Newsom’s Republican appointee, Antonini, was opposed).

The process that led to the board’s 74 approval of the measure was politically crass and embarrassing for the Mayor’s Office (see “Joining the Battle,” 2/8/06), but he kept his promise and vetoed the measure. The votes of his four allies were enough to sustain the veto.

Newsom tried to save face in the ugly saga by pledging to support a nearly identical version of the measure, but with just a couple more giveaways to developers: allowing them to build more parking garages and permitting more driveways with their projects.

Political observers say the incident weakened Newsom instead of strengthening him.

"They can’t orchestrate a move. They are only acting by vetoes, and you can’t run the city by vetoes," Welch said. "He never puts anything on the line, and that’s why the board has become so emboldened."

Rippling out

The Newsom administration doesn’t seem to grasp how housing issues or symbolic issues like creating car-free spaces or being wary of land schemes like the BayviewHunters Point redevelopment plan shape perceptions of other issues. As Welch said, "All politics in San Francisco center around land use."

N’Tanya Lee, executive director of Coleman Advocates for Children and Youth, said the Newsom administration has done a very good job of maintaining budgetary support for programs dealing with children, youth, and their families. But advocates have relied on the leadership of progressive supervisors like Daly to push affordable housing initiatives like the $20 million budget supplemental the board initiated and approved in April.

"Our primary concern is that low- and moderate-income families are being pushed out of San Francisco," Lee told us. "We’re redefining what it means to be pro-kid and pro-family in San Francisco."

Indeed, that’s a very different approach from the so-called pro-family agenda being pushed by SFSOS and some of Newsom’s other conservative allies, who argue that keeping taxes low while keeping the streets and parks safe and clean is what families really want. But Lee worries more about ensuring that families have reasonably priced shelter.

So she and other affordable housing advocates will be watching closely this summer as the board and Newsom deal with Daly’s proposal to substantially increase the percentage of affordable housing developers must build under the city’s inclusionary-housing policy. Newsom’s downtown allies are expected to strongly oppose the plan.

Even on Newsom’s signature issue, the board has made inroads.

"In general, on the homeless issue, the supervisor who has shown the most strong and consistent leadership has been Chris Daly," said Coalition on Homelessness director Juan Prada.

Prada credits the mayor with focusing attention on the homeless issue, although he is critical of the ongoing harassment of the homeless by the Police Department and the so-called Homeward Bound program that gives homeless people one-way bus tickets out of town.

"This administration has a genuine interest in homeless issues, which the previous one didn’t have, but they’re banking too much on the Care Not Cash approach," Prada said.

Other Newsom initiatives to satisfy his downtown base of support have also fallen flat.

Robert Haaland of the city employee labor union SEIU Local 790 said Newsom has tried to reform the civil service system and privatize some city services, but has been stopped by labor and the board.

"They were trying to push a privatization agenda, and we pushed back," Haaland said, noting that Supervisor Ma’s alliance with Newsom on that issue was the reason SEIU 790 endorsed Janet Reilly over Ma in the District 12 Assembly race.

The turning point on the issue came last year, when the Newsom administration sought to privatize the security guards at the Asian Art Museum as a cost-saving measure. The effort was soundly defeated in the board’s Budget Committee.

"That was a key vote, and they lost, so I don’t think they’ll be coming back with that again," Haaland said, noting that labor has managed to win over Dufty, giving the board a veto-proof majority on privatization issues.

Who’s in charge?

Even many Newsom allies will privately grumble that Newsom isn’t engaged enough with the day-to-day politics of the city. Again and again, Newsom has seemed content to watch from the sidelines, as he did with Supervisor Mirkarimi’s proposal to create a public financing program for mayoral candidates.

"The board was out front on that, while the mayor stayed out of it until the very end," said Steven Hill, of the Center for Voting and Democracy, who was involved with the measure. And when the administration finally did weigh in, after the board had approved the plan on a veto-proof 92 vote, Newsom said the measure didn’t go far enough. He called for public financing for all citywide offices but never followed up with an actual proposal.

The same has been true on police reform and violence prevention measures. Newsom promised to create a task force to look into police misconduct, to hold a blue-ribbon summit on violence prevention, and to implement a community policing system with grassroots input and none of that has come to pass.

Then, when Daly took the lead in creating a community-based task force to develop violence prevention programs with an allocation of $10 million a year for three years Measure A on the June ballot Newsom and his board allies opposed the effort, arguing the money would be better spent on more cops (see “Ballot-Box Alliance,” page 19).

"He’s had bad counsel on this issue of violence all the way through," said Sharen Hewitt, who runs the Community Leadership Academy Emergency Response project. "He has not done damn near enough from his position, and neither has the board."

Hewitt worries that current city policies, particularly on housing, are leading to class polarization that could make the problems of violence worse. And while Newsom’s political allies tend to widen the class divide, she can’t bring herself to condemn the mayor: "I think he’s a nice guy and a lot smarter than people have given him credit for."

Tom Radulovich, who sits on the BART board and serves as executive director of Transportation for a Livable City (which is in the process of changing its name to Livable City), said Newsom generally hasn’t put much action behind his rhetorical support for the environment and transit-first policies.

"Everyone says they’re pro-environment," he said.

In particular, Radulovich was frustrated by Newsom’s vetoes of the downtown parking and Healthy Saturdays measures and two renter-protection measures. The four measures indicated very different agendas pursued by Newsom and the board majority.

In general, Radulovich often finds his smart-growth priorities opposed by Newsom’s allies. "The moneyed interests usually line up against livable city, good planning policies," he said. On the board, Radulovich said it’s no surprise that the three supervisors from the wealthiest parts of town Ma, Elsbernd, and Alioto-Pier generally vote against initiatives he supports.

"Dufty is the oddity because he represents a pretty progressive, urbane district," Radulovich said, "but he tends to vote like he’s from a more conservative district."

What’s next?

The recent lawsuit by the San Francisco Chamber of Commerce and the Committee of Jobs urging more aggressive use of a voter-approved requirement that board legislation undergo a detailed economic analysis shows that downtown is spoiling for a fight (see “Downtown’s ‘Hail Mary’ Lawsuit,” page 9). So politics in City Hall is likely to heat up.

"There is a real absence of vision and leadership in the city right now, particularly on the question of who will be able to afford to live in San Francisco 20 years from now," Mirkarimi said. "There is a disparity between Newsom hitting the right notes in what the press and public want to hear and between the policy considerations that will put those positions into effect."

But Newsom’s allies say they plan to stand firm against the ongoing effort by progressives to set the agenda.

"I think I am voting my constituency," Elsbernd said. "I’m voting District Seven and voicing a perspective of a large part of the city that the progressive majority doesn’t represent."

Newsom flack Ragone doesn’t accept most of the narratives that are laid out by activists, from last year’s flip in the balance of power to the influence of downtown and Newsom’s wealthy benefactors on his decision to veto four measures this year.

"Governing a city like San Francisco is complex. There are many areas of nuance in governing this city," Ragone said. "Everyone knows Gavin Newsom defies traditional labels. That’s not part of a broad political strategy, but just how he governs."

Yet the majority of the board seems unafraid to declare where they stand on the most divisive issues facing the city.

"The board has really, since the 2000 election has been pushing a progressive set of policies as it related to housing, just-taxation policies, and an array of social service provisions," Peskin said. "All come with some level of controversy, because none are free." SFBG

Whole paycheck

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› amanda@sfbg.com

On a Sunday afternoon, the Cala Foods at Stanyan and Haight is a dismal sight. Thrifty shoppers, beckoned by the 6070 percent off price tags walk out into the drizzle, empty-handed. The doors close permanently May 24, and there isn’t much left.

The owner of the building, Mark Brennan, plans to demolish the place, and is negotiating with Whole Foods the fast-growing organic food chain to build a new store on the site. Some Haight neighbors are looking forward to the organic option, but many are scowling about the potential for increased traffic in the foot-friendly hood and the fact that Whole Foods is known for high-end products with high-end prices. They refer to the store as "Whole Paycheck."

According to plans, the 28,000-square-foot store will be capped with 62 residential units, seven below market rate, and will sit on three levels of underground parking, tripling the current number of spaces. It will also be the westernmost Whole Foods location in the city, potentially drawing traffic eastward through the park.

"We talked briefly with Trader Joe’s and Rainbow Grocery, and sent a letter to Berkeley Bowl," Brennan told the Guardian. "Whole Foods is the only one willing to wait for development."

The construction is expected to take up to five years, so those in need of a local supermarket will be hard up for a while. "I’m very worried about the old ladies," said Spencer Cumbs, who’s worked at the Cala location for 11 years and often delivers groceries for the more infirm. "Where are they going to shop?" He tells them to visit him at the Cala on California and Hyde, where he’s been transferred, but that’s a long bus ride. There’s no other full-service supermarket in the area.

Like any chain store moving into a neighborhood, Whole Foods could hurt small local businesses, like Haight Street Market, an organic grocery started 25 years ago by Gus and Dmitri Vardakastanis and currently managed by the third generation of the family, Bobby Vardakastanis. "I don’t know if the neighborhood could support it," Bobby told us. "But we have a lot of loyal customers who don’t want to see us get hurt."

Fresh Organics, on the corner of Stanyan and Carl, is also optimally situated to take a hit. "This place rocks," said Erik Christoffersen, with his daughter strapped to his back and arms full of local produce. But he confesses he’d shop at Whole Foods too. "They don’t get meats and fish," he says of the local corner store. A recent Haight Ashbury Neighborhood Council meeting on the future of the site drew some 80 residents. According to Calvin Welch, HANC’s housing and land use chair, the major concerns were that Whole Foods is too high-end and, he included, that "people would prefer a unionized grocery store like Cala."

The union issue is huge all over California, where unionized grocery stores are trying to compete against giant nonunion competitors like Wal-Mart. And the San Francisco supervisors are trying to give locals a degree of protection.

A new Grocery Worker’s Retention Ordinance, signed into law by Mayor Newsom on May 12, mandates a 90-day period of continued employment for grocery workers when retail stores larger than 15,000 square feet change hands. It would benefit workers at union stores, like Cala, that are replaced by nonunion retailers, like Whole Foods or Trader Joe’s.

Sup. Fiona Ma, who introduced the measure, was inspired by a meeting with employees facing potential job losses due to new ownership at three Albertson’s stores in the city, Bill Barnes, an aide to Ma, told us. An endorsement of her run for State Assembly from United Food and Commercial Workers Local 648, which advocated for the ordinance, was probably pretty inspiring as well.

Still, the bill comes too late to help the Cala workers. Employees at the Haight Ashbury store have been transferred to other locations, while ten workers trumped by their seniority have been laid off. SFBG

A deep breath for city planning

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It was, as housing activist Calvin Welch explained to the Planning Commission March 16, the “canary in the coal mine.” A decision by the Board of Supervisors demanding further environmental review of new market-rate housing projects has thrown the future of development on the eastern side of the city into doubt