Renters

A call to arms

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OPINION No one can deny that the San Francisco of the new dot-com boom is a scary place to live. Rents are astronomical: $2,353 is the median rent for a one-bedroom in the Bayview, an area that has never had high rents. Ellis Act evictions are up 68 percent from last year, and buyouts and threats of Ellis (de facto evictions) are skyrocketing. Longterm rent-controlled tenants live in absolute dread that their buildings will be sold to a real-estate speculator who will decide, a month later, to “go out of the business of being a landlord.”

Neighborhoods are being transformed, and not for the better. The once immigrant Latino and working-class lesbian area of Valencia Street is now mostly white, straight and solidly upscale. The Castro has more baby strollers per square foot than a suburban mall, not to mention a high rate of evictions of people with AIDS. Along Third Street and in SOMA and other areas, people of color are being pushed out, and the working-class is being replaced by middle-income condo owners. The African American population of the city is down to 6 percent.

Small businesses, too, are being decimated, as landlords demand higher and higher rents and chain stores try and creep into every block. If the demographics of the city continue to change and become more moderate, many longstanding political gains could be lost.

Resistance is not futile.

During the Great Depression, the Communist Party in the Bronx and elsewhere successfully mobilized the working class to block doorways when the marshals arrived to evict tenants. In the 1970s here in San Francisco, the “redevelopment” of the Fillmore and the I-Hotel was met with widespread protests. Then-sheriff Richard Hongisto went to jail rather than evict the working-class Filipino tenants at the I-Hotel. In the late 1990s, organizing to fight the evictions and displacement happening in the wake of the first dot-com boom culminated in a progressive takeover of the Board of Supervisors.

These days, there’s no mass movement to fight the evictions and displacement. Occupy Bernal, ACCE and others have successfully stopped the auctions of foreclosed homes, and even twisted the arms of banks to renegotiate some mortgages. Tenant organizations have been holding back efforts to weaken rent control for years.

Where is the building-by-building organizing of renters? Where is the street outreach in every neighborhood? Where are the blocked doorways of those being forced out of their apartments by pure greed? Where are the direct actions against the speculators and investors who are turning our neighborhoods into a monopoly game? Where is the pressure on the Board of Supervisors to pass legislation to curb speculation and gentrification rather than approve tax breaks for dot-com companies? Where is the pressure on state legislators to repeal the Ellis Act and other state laws that prohibit our city from strengthening rent control and eviction protections?

Every moment we wait, more people are displaced from their homes, more neighborhoods become upscale, more small businesses are lost. Progressives wake up.

It’s time to take back what’s left of our city.

Tommi Avicolli Mecca is a longtime queer housing activist who works at the Housing Rights Committee. He is editor of Smash the Church, Smash the State: the early years of gay liberation (City Lights).

 

Proposal would halt condo conversions for ten years

Sasha Cuttler And Mary Magee
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San Francisco Supervisors Norman Yee, Jane Kim and Board President David Chiu gathered with a cluster of tenant advocates at City Hall April 15 to unveil a proposal billed as a more equitable alternative to a highly controversial condominium conversion legislation that’s fueled a months-long battle over affordable housing.

Crafted with the input of tenant advocates, the new plan seeks to amend controversial legislation proposed earlier this year by Sups. Scott Wiener and Mark Farrell to allow a backlog of approximately 2,000 housing units to convert immediately from jointly held tenancies-in-common (TICs) to condos.

The proposal would effectively shut down the city’s condo conversion lottery for a minimum of 10 years, a measure aimed toward ending the cycle of real estate speculation that tenant advocates say has given rise to a spike in evictions in San Francisco’s supercharged housing market.

The proposal would still allow a current backlog of TICs to convert to condos without having to wait in a lottery system created to limit the number of units lost from the city’s rental housing stock. The board’s Land Use and Economic Development Committee, which is currently in session, will take up the legislation and proposed amendments later this afternoon.

The 10-year suspension on condo conversions would allow time for permanently affordable units to be built in place of the rental units that would be lost in the one-time conversion, proponents of the alternative legislation said. “If more affordable housing isn’t produced, then units don’t get to convert,” Housing Rights Committee executive director Sara Shortt told the Guardian. 

Chiu stressed that the proposal was crafted to “ensure that as we expedite condo conversions … we protect tenants by suspending the lottery for at least 10 years.”

The 10-year minimum suspension is based on current regulations capping condo conversions at 200 per year. It would last a decade because an estimated 2,000 units would be converted, but could last longer than that.

“For example, if 2,200 units are converted,” Chiu explained, “the suspension would last for 11 years.”

Meanwhile, the proposal would require the conversions that would be intially allowed to be staggered over the course of three years.

The plan “puts the Board of Supervisors on record that we strongly believe in preserving our affordable housing stock,” said Sup. Yee, adding that the package of amendments seeks to “address the risk of speculation that will ensue with a large number of TICs being converted to condominiums.”

The Wiener-Farrell proposal spurred a months-long opposition campaign led by tenant advocates, who said it would permanently remove affordable rental units from the city’s housing stock and incentivize evictions of long-term tenants at a time when Ellis Act evictions are already on the rise. 

“Condo conversions are the number one reason why people are being evicted from the city,” San Francisco Tenants Union executive director Ted Gullicksen said at the April 15 rally and press conference.

Wiener and Farrell’s proposal was presented as a way to remedy TIC owners’ complaints that onerous shared mortgages had left them financially strapped.

But Sup. David Campos, who also appeared at the rally, commented that the real challenge “is for the renters who are finding it very hard to live in San Francisco.”

Campos seemed dubious that a one-time condo conversion should be allowed to move forward at all. “If anything, I think we should be doing more to protect tenants,” he said. “My hope is … if it’s something we cannot live with as a community, we will make sure it dies,” he added, referring to the original condo conversion proposal. 

In an earlier attempt to strike a compromise between TIC owners and tenant advocates, “negotiations broke down quickly,” Shortt said in an interview. At the rally, she said this alternative was “drafted in a way that’s not trying to meet any political agendas.”

For many elderly and low-income tenants who have few options if they are faced with eviction, “there is no price tag that you can put on their units,” said Matt McFarland, a staff attorney at the Tenderloin Housing Clinic, who spoke at the rally. “Their most valuable possession is the long-term rent control on their property. For these tenants, it’s basically a death sentence when you get these eviction notices.”

Time to enforce the law

Andrew Lam
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83

EDITORIAL The new tech companies that are making waves in San Francisco — Airbnb in the short-term rental business and Lyft and Uber in the taxi industry — may describe themselves as innovative and disruptive, and they may be appealing to investors.

But there’s a more accurate word that describes their relationship to the city:

Cheaters.

The way these companies are luring customers isn’t really about high-tech applications or brilliant business models. They’ve just found a way to get around the rules that everyone else has to obey.

Some city officials are talking about hearings and new legislation, all of which is fine. But in the rest of the business community, when someone flagrantly, openly violates the regulations, the City Attorney’s Office cracks down. That’s what needs to happen here, and soon.

Airbnb has a slick and appealing promise: You can rent out your house or apartment on the Internet to someone who wants to stay in the city for a few days, but is looking for an alternative to a traditional hotel. The homeowner or tenant gets some extra bucks; the visitor gets to stay in a cool neighborhood at a bargain price. What’s not to like?

Well, for one thing, most leases in San Francisco bar unauthorized sublets, so renters who offer their places on Airbnb face problems with their landlords, including possibly eviction. City laws also bar the use of residential property for commercial purposes. And, as we’ve pointed out repeatedly, Airbnb isn’t collecting the transient occupancy tax that every other hotel operator in the city has to pay. The total tab: At least $1.8 million a year.

Lyft and Uber say they’re using creative apps to offer an alternative to the screwed-up taxi system. Drivers offer rides to people who can “volunteer” to pay at the end — but if nobody pays, the whole business model fails and the venture capitalists who put up the money lose. So everyone knows that these are pay-for-hire taxis.

Except that San Francisco requires every taxi driver to have a permit, called a medallion — and drivers have to go through training, background checks, and carry extensive insurance. If a driver overcharges or refuses a fare, a customer can complain to the city, and get recourse. The startups don’t follow the same rules.

There are reasons the city regulates cabs and charges hotel taxes. Cab drivers are ferrying people, some of them vulnerable; it’s only a matter of time before a rogue driver who sneaks into the new unregulated startups winds up in a horrible crash or criminally preying on riders.

Driving a cab without a medallion is illegal. Failing to pay city taxes is, too. City Hall can debate and dither and try to avoid offending the mayor (who, unfortunately, is trying to help Airbnb slide). But this is a clear-cut case of businesses flouting city law. Herrera needs to put an end to it.

 

Condo conversion compromise in the works despite Realtors’ resistance

Sasha Cuttler
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180

[UPDATED BELOW] Negotiations between tenant advocates and real estate interests (including the political advocacy group Plan C) over the controversial condo lottery bypass legislation haven’t gone well or found common ground. But sources tell the Guardian that Sup. Jane Kim and Board President David Chiu, who has been mediating the dispute, are preparing to introduce compromise amendments that have the support of the San Francisco Tenants Union and other tenant advocates if a deal can’t be worked out with real estate interests.

Details are still being hammered out with advocates and the City Attorney’s Office, so the hearing scheduled for this Monday at the Land Use and Economic Development Committee will likely be postponed until March 25. But the basic deal is to allow the roughly 2,000 tenancies-in-common now seeking to convert into condos to do so in exchange for a long moratorium on new condo conversions, possibly indexed to construction of new affordable housing for the renters who comprise nearly two-thirds of San Franciscans.

The original legislation by Sups. Mark Farrell and Scott Wiener is being strongly backed by both current TIC owners who want the ability to refinance and Plan C and other real estate interests that want to continue converting ever more rent-controlled apartments into condos, rather than abiding the city’s current limit of 200 per year, awarded through a lottery system. The SFTU has strenuously resisted opening up those flood gates, but it’s open to clearing out the backlog in exchange to shutting the gates for awhile (see my story in this week’s Guardian for more on the political dynamics surrounding this issue).

“We’re hopeful that a majority of the board will support amendments which will significantly protect tenants and which will allow a version of the Wiener-Farrell legislation to be approved,” SFTU head Ted Gullicksen told us.

Progressives on the board oppose the legislation as currently written, and the swing votes are thought to be Sups. London Breed (which Plan C supported in the last election in exchange for what it says was her promise to support more condo conversions, an assurance she denies making), Norman Yee (who was brought into the Chiu-mediated negotiations), and Malia Cohen, with just one of them needed to force changes to the legislation.

But the real estate interests – including Plan C, the Association of Realtors (whose government affairs director we left a message for and are waiting to hear back from, and we’ll update below if/when we do), San Francisco Apartment Association, and other downtown-based groups – who are pushing for more condo conversions are likely to strongly resist the amendments. They simply want more rent-controlled apartments turned into condos they can sell, period.

Their perspective is reflected in SF Apartment Magazine, put out by the San Francisco Apartment Association, which every month offers advice to real estate investors and apartment building owners on various ways to buy apartment buildings, evict tenants or increase their rents, and convert the buildings to TICs or condos.

It runs a regular column called “TIC Corner” with the latest tricks for financing acquisitions and getting rid of those pesky tenants. In the November 2012 issue, for example, attorney D. Andrew Sirkin wrote excitedly about a new Securities and Exchange Commission rule that will now allow owners to advertise the sale of apartment buildings as TIC/condo investments, which he said “will dramatically ease the regulatory burden for real estate entrepreneurs wishing to raise money for apartment acquisitions and make it much easier to find investors.”

Another feature story in the magazine, “The ABCs of OMIs,” teaches these investors all the tricks for evicting tenants from their buildings, while “Roommate Roulette” offers advice to owners of rent-controlled buildings for keeping new roommates of existing tenants off the lease so they can charge market rate rents as soon as possible.

And, of course, the magazine is filled with ads for San Francisco apartment buildings that are for sale and just waiting to be cleared of tenants and turned into amazing real estate investment opportunities. Gullicksen says it is this mentality, applied to what even Mayor Ed Lee has called the city’s “precious few rent-controlled apartments,” that has animated the opposition to the Wiener-Farrell legislation. SFTU had planned a rally for Monday called “Stop Rent Control Attack,” which has now been postponed until March 25.

UPDATE 3/11: Sup. Wiener got back to us and said, “I hope we can move to a compromise and I don’t want to prejudge that compromise.” Asked about the concept of approving TICs in the pipeline in exchange for halting on all condo conversions for some number of years, he said, “It’s definitely something to explore, a pause in the lottery, and I’m open to that. But the devil is in the details.”

Compromised position

Andrew Lam
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16
Compromised position

steve@sfbg.com

When Mayor Ed Lee came to the Board of Supervisors for his monthly “question time” appearance Feb. 12, Sup. David Chiu tried to get some sense of where the mayor stood on a controversial piece of legislation that would allow more condominium conversions.

Chiu explained the complexities and implications of an issue where the two sides have dug in and appear to have little common ground, and he asked the mayor for some guidance.

“What is your position on this pending legislation?” he asked. “What protections would you support to prevent the loss of rent-controlled housing in our increasingly unaffordable city? How would you address the concern that if we allow the current generation of tenancy in common owners to convert, we will replace then with a new generation of TIC owners and additional real estate investments that will lead us right back to an identical debate within a short time?”

But if Chiu and other board members were looking for leadership, direction or a clue of where the mayor might stand, they didn’t get it. Lee said he understood both sides of the issue and hoped they could reach a consensus solution — without offering any hints what they might look like or how to achieve it. “I can’t say that I have a magic solution to this issue that will make everyone happy,” the city’s chief executive explained.

Asked by the Guardian afterward why he didn’t take a position and whether he might be more specific about how he’d like to see this conflict resolved, he replied, “I actually did take a position, even though it didn’t sound like it, because I actually believe they have good points on both sides.”

That’s a typical answer for a mayor who rose to power preaching the virtues of civility and compromise and striving to replace political conflict with consensus. But now several major, seemingly intractable issues are facing the city — and insiders say Lee’s refusal to take a strong stand is undermining any chance for successful.

The lack of mayoral leadership has been maddening to both sides involved in the negotiations over the condo-conversion legislation. Tenant advocates say the mayor’s waffling hardened the positions on both sides and emboldened the group Plan C and its allies in the real estate industry to reject the compromises offered by supervisors and tenant advocates.

“It’s very unhelpful,” San Francisco Tenants Union head Ted Gullicksen said of Lee’s refusal to take a stand. “Someone needs to kick the realtors in the butt, and that’s not happening. They have no impetus at all to compromise.”

Then there’s the case of California Pacific Medical Center’s proposed new hospital, a billion-dollar project that would transform the Cathedral Hill neighborhood and have lasting impacts on health care in San Francisco.

The mayor’s eagerness to get the deal done — even if it wasn’t the best deal for the city — led to a proposal that fell apart last year under scrutiny by the Board of Supervisors. That project has now been in mediation for months — and sources tell us they’re getting close to a deal that has little resemblance to the anything offered by the Mayor’s Office.

California Nurses Association Director of Public Policy Michael Lighty, who has been involved with the CPMC negotiations, said Lee’s unwillingness to take a strong and clear stand, or to help mediate the dispute once the deal blew up, is why this negotiation has been so difficult and protracted.

“If he had engaged stakeholders and the supervisors, we wouldn’t have had to go to the brink last summer,” he said. “You’ve got to have clear objectives and be willing to fight for those, and that means saying no…If you’re willing to accept any deal and just put political spin on it, this is what you get.”

 

 

ADMINISTRATOR-IN-CHIEF

Neither Lighty nor others involved in the CPMC negotiations would discuss details of the pending deal, as per the instructions of mediator Lou Giraudo. But they did talk to the Guardian about the political shortcomings that led to such a protracted mediation process on a project that has been in the works for many years and involving a looming state deadline to replace the seismically unsafe St. Luke’s Hospital.

Lighty called Lee’s conciliatory approach to CPMC “an administrative orientation and not a political one,” noting that what worked during Lee’s long career as a city administrator may not be working well now that he’s in the Mayor’s Office dealing with issues where consensus isn’t always possible.

“I don’t think it’s a very sophisticated view and I don’t think it’s one that produces the best results,” Lighty said.

Lighty did say the negotiations were getting close to resolution. “What comes before the board is going to be vastly superior to what the mayor and CPMC proposed,” he said. “I think what you’ll find whenever this comes out is it will repudiate the mayor’s approach.”

He contrasted Lee’s style to that of his predecessor, Gavin Newsom, who took positions on most controversial issues and would often get involved with forcing his allies to cut deals. For example, shortly after taking office on 2004, Newsom demanded that his allies in the hospitality industry end their lockout of hotel workers, and when they refused he turned on them and even famously joined workers on the picket line, pressuring the hotels to soon end the lockout.

“Why did you need to bring in an outside mediator for CPMC? Why didn’t the mayor do that?” Lighty asked, noting that Lee has stayed away from the current negotiations.

Ken Rich from the Mayor’s Office of Economic and Workforce Development has been in those meetings but didn’t return our call. Mayoral Press Secretary Christine Falvey has also ignored repeated messages seeking comment on the issues raised in this story.

Rudy Nothenberg, who negotiated big deals on behalf of five successive mayors before Lee and who has been critical of the Warriors Arena deal that the Mayor’s Office has negotiated, said Lee’s unwillingness to take strong stands with developers is hurting the city.

“I was able to say I’m going to get the best deal I can for the city,” Nothenberg told us, saying he approached all negotiations, including the construction of AT&T Park, with the understanding from the mayors he worked for that he could simply say no to bad deals. “You need to bargain for the city as if these guys walked away, well, then that’s okay too.”

Sup. David Campos, who has been trying to get CPMC to strengthen its commitment to keeping St. Luke’s open as a full-service hospital, agreed that, “There have to be times when you’re willing to say no.” And on the CPMC project, Campos said that fell to the supervisors when the Mayor’s Office wasn’t willing to. “It was clear that the board was not going to approve it,” Campos said, “and sometimes you have to do that to get to a result you can live with,”

UCSF Political Science Professor Corey Cook said the problem is less with Lee’s overall philosophy than with what is strategically smart on individual issues.

“The mayor’s strength is in trying to come up with consensus measures,” Cook told us, calling the approach “generally a good one” and saying “the decider isn’t always who you want, then you get George W. [Bush].” Yet Cook also said intractable problems like the condo conversion debate may require a different approach. “Sometimes you do need to stake out clear ground to limit the terms of the debate.”

 

 

CHIU’S CENTRAL ROLE

Chiu has at least been willing to put his energies behind his belief in compromise, taking an active role in the CPMC and condo negotiations, as well as complicated current negotiations involving how to legalize but limit Airbnb’s shared housing business in San Francisco, which involves landlord-tenant-neighbor dynamics, regulation of private leases, and complex land use and taxation issues.

“It’s been a very long month. I’ve been going around the clock on several challenging negotiations,” Chiu told the Guardian. “The most important things to work on are often the ones that are the most difficult to get done.”

Chiu was reluctant to discuss the negotiations, calling it a sensitive moment for each of them. But he did admit that he was disappointed in Lee’s non-answer to his publicly posed question. “I had hoped for a little more direction,” Chiu said. And while these negotiations haven’t shaken his faith in compromise, he did say, “It depends on the substance of the issue whether there are common ground solutions that are superior to two warring sides.”

But all involved in the condo debate say it appears we’ll be stuck with the latter. “The two sides are so far apart that I don’t know what a compromise that both sides would live with would even look like,” Campos said. “There are certain issues where I don’t think compromise or consensus is possible.”

On this one, tenant advocates are trying to protect a finite supply of rent-controlled housing and real estate interests want to convert that same housing into condos. “If the issue was just existing TIC owners, we would come to an agreement,” Gullicksen said. “But clearly the agenda of Plan C and the realtors is they just want more condos.”

Plan C board member Kat Anderson told us, “I have a simple approach to this: Home ownership is important to me.”

She was undeterred by arguments that thousands of new condos are now being built in San Francisco, but there’s a steadily dwindling number of rent-controlled apartments in a city where two-thirds of San Franciscans are renters.

Anderson made it clear that she wants to not only allow the backlog of condo applicants to be approved, but she doesn’t want to slow the flow of condo conversions for a few years thereafter or place TICs themselves under the cap, compromises offered by Gullicksen. “The worry is that if you change the system, it will never come back and we’ll lose our tiny toehold of 200 units [that the lottery allows to be converted to condos annually],” Anderson said. And so we end up with the very thing Lee sought to avoid: a big, nasty, divisive public fight that will probably end up being decided by big money and deceptive campaign mailers rather than a civil, deliberative political process. And the mayor has nobody to blame but himself.

Earthquake safety legislation could hit renters hard

Sasha Cuttler
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Earthquake safety legislation could hit renters hard

Pending legislation that would require seismic retrofitting of thousands of properties at the building owners’ expense could hit renters harder than anyone, causing evictions and increasing rents by up to 10 percent, impacts that tenant advocates are trying to get the Mayor’s Office and sponsoring Supervisors David Chiu and Scott Wiener to address.  

As stated in the Earthquake Safety Implementation Program (ESIP) Workplan, retrofit costs are expected to range from $10,000 to $20,000 per dwelling unit. In a five-unit building, this could add up to as much as $100,000. According to a public statement by Mayor Ed Lee, before the first retrofit is required, they will “develop financial incentives and assistance programs to help defray costs for property owners.”

But with apartment owners allowed to pass the cost of the work on to their tenants — a class of San Franciscans already being hit with rising rents, a wave of evictions, and legislation that would encourage more conversation of apartments into condos — this earthquake safety measure could make their situation even worse.

“We have concerns about this, mainly that landlords will be able to pass on the costs to tenants and that landlords will use it as a pretext to evict long-term tenants with affordable rents, so we’ll be working to increase tenant protections in this plan,” says Ted Gullicksen from the San Francisco Tenants Union.

According to the San Francisco Rent Board (SFRB) website, for seismic work that is required by law, 100 percent of the capital improvement cost may be passed through to the tenants, regardless of property size, over a period of 20 years. The increases are subject to an annual limitation of 10 percent of the tenant’s base rent. Gullicksen says that rent increases will be up to $100 a month for many tenants, which is on top of the annual 1.9 percent increase landlords are allowed to impose in rent-controlled apartments.

Another worry for long-term tenants is the possibility of eviction. The SFRB also states some of the just cause evictions these landlords could use would be “…non-payment or habitual late payment of rent… to perform capital improvements which will make the unit temporarily uninhabitable while the work is being done, and… to perform substantial rehabilitation of a building that is at least 50 years old, provided that the cost of the proposed work is at least 75 percent of the cost of new construction.” This would mean rent increases and nearly any construction could be the reason a long-term tenant would be evicted.

This seismic retrofitting could drive up rent prices around the city and be one more obstacle tenants have to face. As Gullicksen said, “I think the mayor and sponsors don’t understand the impact this will have on tenants, so we will look to educate them and press for amendments to lower the rent increases.”

Two good questions for Mayor Lee

Sasha Cuttler
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Two good questions for Mayor Lee

UPDATED When Mayor Ed Lee appears before the Board of Supervisors this afternoon (Tues/12) for the voter-mandated monthly “Formal Policy Discussions” (aka Question Time), he will be asked a couple of good, relevant questions with no easy answers. This is exactly what voters and progressive supervisors intended, a serious policy discussion, rather than sterile, hollow ritual that our current crop of politicians have turned it into.

The first question is by Sup. Eric Mar, who asks, “The Municipal Transportation Agency recently released its Draft Bicycle Strategy, which lays out an aggressive plan to upgrade San Francisco’s bicycle facilities. It supports biking for everyone, including seniors, families, and persons with disabilities. However, I am hearing growing concerns both in my district and city-wide about the mismatch between verbal commitments to better bicycling and budget realities. Currently, bicycle projects account for just 0.46 percent of all MTA capital. This is not enough to get us to the goals laid out in the Bicycle Strategy. How will you fund the Bicycle Strategy to make San Francisco a national leader in bicycling safety and use?”

Great question! This report, which came out in December, has the modest, realistic goal of increasing the share of vehicle trips taken by bike from 3.5 percent last year up to 8-10 percent by 2018. That already seems to abandon the official city goal – heavily touted by Lee and Board President David Chiu – of 20 percent by 2020. But even this new plan isn’t fully funded, so the question is simply asking the mayor whether he will put his money where his mouth is.

The second question comes from Chiu, who is trying to find a way to mediate the very real and challenging dispute between the city’s renters and those trying to convert more apartments into condos. Understanding where Lee stands on the issue is important to solving this problem, and Chiu’s question seems to genuinely seek guidance from the chief executive.

He asks, “Mr. Mayor, the Board of Supervisors is considering legislation to allow existing owners of Tenancies in Common (TICs) to bypass the condominium conversion lottery and be converted after the payment of a fee. I recently asked supporters of the legislation and tenant advocates to engage in negotiations, which Supervisor Farrell and I are hosting.

“What is your position on this pending legislation? What protections would you support to prevent the loss of rent-controlled housing in our increasingly unaffordable city? How would you address the concern that if we allow the current generation of TIC owners to convert, we will replace then with a new generation of TIC owners and additional real estate investments that will lead us right back to an identical debate within a short time?”

Again, excellent questions that go right to heart of one of the central struggles facing this city: Who gets to live here? And given Lee’s role in relentlessly promoting taxpayer-subsidized economic development strategies that are gentrifying the city and fueling this clash, one could argue that he has a moral obligation to help find a solution to this problem, or at the very least to say where he stands so voters can judge him accordingly.

Mayor Lee received these questions last week, so he and his staff have had plenty of time to think about them and prepare real, substantive answers. Will we get real answers or just the normal political platitudes that kick the can down the road in dealing with these pressing problems? We’ll see. Tune in at 2 pm to SFGOVTV to watch yourself, or check back here later and I’ll tell you what Mayor Lee said.

4PM UPDATE: And the winner is…meaningless political platitudes, misleading data, and shameless fence-sitting.

“I can’t say that I have a magic solution to this issue that will make everyone happy,” was how Mayor Lee answered Chiu’s question about the condo lottery bypass legislation, after saying he understood the positions of TIC owners who want to convert to condos and tenant groups concerned about the loss of what he called “the precious few rent-controlled units.”

Lee said he hopes that the two sides can find a “consensus solution” to the problem, which seems to indicate that he does indeed believe in magic considering the diametrically opposed viewpoints of the two sides and the zero sum game this issue represents. Afterward, I told the mayor that he didn’t seem to take a position on the issue and asked him to elaborate on what should be done, and he maintained that, “I actually did take a position, even though it didn’t sound like it, because I actually believe they have good points on both sides.”

Yet when KCBS reporter Barbara Taylor tried to help discern what that position may be, asking whether we could at least say that Lee didn’t support the legislation in its current form, he wouldn’t even agree to that weak stance. No, his position was that both sides have good points, even though they’re opposing points, and he’s hoping for the best. Next question.

Lee didn’t provide a clear or responsive answer on the bike question either. He reiterated his support for cycling improvements and said, “SFMTA’s prime responsibility is to ensure the streets are safe for all San Franciscans, and that includes bicyclists.” And he tried to dispute Mar’s point about how less than a half of 1 percent of the agency’s capital budget goes to bicycling improvements.

“To look at the percentage might not tell the whole story,” Lee said, citing how the SFMTA and the Transbay Joint Powers Authority are now seeking about $40 million in state and federal grants for transportation projects that would include cycling infrastructure improvements.

And that might have seemed like a somewhat responsive answer to the casual listener who isn’t aware that the price tag for improvements identified in the SFMTA Bicycle Strategy total about $200 million, of which the agency has only identified about $30 million in available funding. So the question of “How will you fund the Bicycle Strategy?” remains unanswered.

Perhaps it was too much to expect straight answers from a politician.

Out of place

Andrew Lam
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414

news@sfbg.com 

In his State of the City address last week, Mayor Ed Lee cheerfully characterized San Francisco as “the new gravitational center of Silicon Valley.” He touted tech-sector job creation. “We have truly become the innovation capital of the world,” Lee said, “home to 1,800 tech companies with more than 42,000 employees — and growing every day.”

From a purely economic standpoint, San Francisco is on a steady climb. But not all residents share the mayor’s rosy outlook. Shortly after Lee’s speech, renowned local author Rebecca Solnit published her own view of San Francisco’s condition in the London Review of Books. Zeroing in on the Google Bus as a symbol of the city’s housing affordability crisis, she linked the influx of high-salaried tech workers to soaring housing costs. With rents trending skyward, she pointed out, the dearth of affordable housing is escalating a shift in the city’s cultural fabric.

“All this is changing the character of what was once a great city of refuge for dissidents, queers, pacifists and experimentalists,” Solnit wrote. “It has become increasingly unaffordable over the past quarter-century, but still has a host of writers, artists, activists, environmentalists, eccentrics and others who don’t work sixty-hour weeks for corporations — though we may be a relic population.”

LIMITED OPTIONS

The issue of housing in San Francisco is highly emotional, and there is perhaps no greater flashpoint in the charged debate than Ellis Act evictions.

When the housing market bounces upward, Ellis Act evictions tend to hit long-term tenants whose monthly payments, protected by rent control, are a comparative bargain. Even if they’ve submitted every payment on time and upheld every lease obligation for 20 years, these renters can find themselves in the bind of being forced out.

And they don’t just lose their homes; often they lose their community. San Francisco has become so expensive that many Ellis Act victims are tossed out of this city for good.

Enacted in 1986, the state law allows a landlord to stop renting units, evict all tenants, and sell the building for another purpose. Originally construed as a way for landlords to “go out of business” and move into their properties, the Ellis Act instead gained notoriety as a driving force behind a wave of evictions that slammed San Francisco during the tech boom of the late 90s. Between 1986 and 1995, just 29 Ellis evictions were filed with the San Francisco Rent Board; in the 1999-2000 fiscal year alone, that number ballooned to a staggering 440.

Under the current tech heyday, there are indications that Ellis Act evictions are gaining fresh momentum. The San Francisco Rent Board recorded 81 this past fiscal year, more than double that of the previous year, and there appears to be an upward trend.

TIC CONTROVERSY

Buildings cleared via the Ellis Act are typically repackaged as tenancies-in-common (TIC), where several buyers jointly purchase a multi-unit residence and each occupy one unit. Realtors often market TICs as a path to homeownership for moderate-income individuals, creating an incentive for buyers to enter into risky, high-interest shared mortgages in hopes of later converting to condos with more attractive financing.

The divide between TIC owners and renters came into sharp focus at a contentious Jan. 28 hearing, when a Board of Supervisors committee met to consider legislation that would allow some 2,000 TIC units to immediately convert to condos without having to wait their turn in a requisite lottery system.

One TIC owner said he was financially burdened, but had only entered into the arrangement because “I wanted to stay here and raise my family, but we couldn’t afford a single family home.” Yet tenants brought their own set of concerns to the table, saying the temptation to create TICs was putting a major dent in the city’s finite stock of rent-controlled units — the single greatest source of affordable housing in San Francisco.

“My feeling is, let’s stop doing TICs,” Tommi Avicolli Mecca, a tenants right activist with the Housing Rights Committee, told the Guardian following the hearing. “The city has to just start making sure that the condos that are built are the kind of thing [TIC buyers] can afford. Instead, we cannibalize our rental stock? That’s a reasonable way? You evict one group of people to house another: How does that make sense?”

The grueling five-hour hearing illustrated the sad fact that San Franciscans in a slightly better economic position were being pitted against economically disadvantaged renters. The two groups were bitterly divided, and all seemed weary, furious, and frustrated by their housing situations.

The condo-conversion legislation, co-sponsored by Sups. Scott Wiener and Mark Farrell, did not move forward that day. Instead, Board President David Chiu made a motion to table the discussion until Feb. 25, to provide time for “an intensive negotiation process.” Chiu, who rents his home, added: “While I myself would like to become a homeowner someday … I do not support the legislation in its current form.”

Sup. Jane Kim sought to appeal to the tenants as well as the TIC owners. “It’s very tragic that we have set up a situation where [TICs and renters] are pitted against one another,” she said. She hinted at what a possible alternative to might look like. “We should be looking at a ban of scale,” she said. “If we allow 1,800 potential units to go thru this year, are we willing to do a freeze for the next 8 to 10 years?”

It’s unclear what will happen in the next few weeks, but if this legislation makes it back to the full board in some form, the swing votes are expected to be Sups. London Breed, Malia Cohen and Norman Yee.

CASH OR EVICTION?

New protections were enacted following the late-90s frenzy to discourage real-estate speculators from using the Ellis Act to turn a profit on the backs of vulnerable seniors or disabled tenants. Yet a new wave of investors has discovered they can persuade tenants to leave voluntarily, simply by offering buyouts while simultaneously wielding the threat of an Ellis Act eviction. “The process got more sophisticated,” explains San Francisco Rent Board Deputy Director Robert Collins.

Once a tenant has accepted a check in lieu of eviction, rent-controlled units can be converted to market rate, or refurbished and sold as pricey condos, without the legal hindrances of an eviction blemish. Buyouts aren’t recorded with the Rent Board, and the agency has no real guidance for residents faced with this particular dilemma. “We don’t have the true number on buyouts,” says Mecca. “We don’t know how many people have left due to intimidation.”

Identity-wise, renters impacted by the Ellis Act defy categorization. A contingent of monolingual Chinese residents rallied outside City Hall recently to oppose legislation they believed would give rise to evictions; in the Mission, many targeted tenants are Latinos who primarily speak Spanish. From working immigrants, to aging queer activists, to disabled seniors, to idealists banding together in collective houses, the affected tenants do have one thing in common. When landlords or real-estate speculators perceive that their homes are more valuable unoccupied, their lives are susceptible to being upended by forces beyond their control.

The upshot of San Francisco’s affordability crisis is a cultural blow for a city traditionally regarded as tolerant, forward thinking, and progressive. In the words of Rose Eger, a musician who faces an Ellis Act eviction from her apartment of 19 years, “it changes the face of who San Francisco is.

Out of the Castro

By Tim Redmond

You can’t get much more Castro than Jeremy Mykaels. The 62-year old moved to the neighborhood in the early 1970s, fleeing raids at gay bars in Denver. He played in a rock band, worked at the old Jaguar Books, watched the rise of Harvey Milk, saw the neighborhood transform and made it his home.

He’s lived in a modest apartment on Noe Street for 17 years, and for the past 11 has been living with AIDS. Rent control has made it possible for Mykaels, who survives on disability payments, to remain in this city, in his community, close to the doctors at Davis Hospital who, he believes, have saved his life.

And now he’s going to have to leave.

In the spring of 2011, his longtime landlords sold the building to a real-estate investment group based in Union City — and the new owners immediately sought to get rid of all the tenants. Two renters fled, knowing what was coming; Mykaels stuck around. In September of 2012, he was served with an eviction notice, filed under the state’s Ellis Act.

He’s a senior, he’s disabled, his friends are mostly dead and his life is in his community — but none of that matters. The Ellis Act has no exceptions.

Mykaels spent a fair amount of his life savings fixing up his place. The walls are beige, decorated with nice art. Dickens the cat, who is chocolate brown but looks black, wanders in and out of the small bedroom. Mykaels has been happy there and never wanted to leave; “this,” he told me, “is where I thought I would live the rest of my life.”

There’s no place in the Castro, or even the rest of the city, where he can afford to move. Small studios start at $2,500 a month, which would eat up all of his income. There is, quite literally, nowhere left for him to go.

“A lot of my friends have died, or moved to Palm Springs,” he said. “But this is where my doctors are and where I’m comfortable. I’m not going to find a support system like this anywhere else in the world.”

Mykaels is the face of San Francisco, 2013, a resident who is not part of the mayor’s grand vision for bringing development and high-paying jobs into the city. As far as City Hall is concerned, he’s collateral damage, someone whose life will have to be upended in the name of progress.

But Mykaels isn’t going easily. The former web designer has created a site — ellishurtsseniors.org — that lists not only his address (460 Noe) and the names of the new owners (Cuong Mai, William H. Young and John H. Du) but the addresses of dozens of other properties that are facing Ellis Act evictions. His message to potential buyers: Boycott.

“Do not buy properties where seniors or the disabled have been evicted for profit by real estate speculators using the Ellis Act,” the website states.

Mykaels is a demon researcher — his site is a guide to 31 properties with 94 units where seniors or disabled people are being evicted under the Ellis Act. In some cases, individuals or couples are filing the eviction papers, but at least 14 properties are owned by corporations or trusts.

Mai told me that he knew a disabled senior was living in the building when he and his two partners bought it, but he said his plan all along was to evict all the tenants and turn the three-unit place into a single-family house. He said he hasn’t decided yet whether to sell building; “I might decide to live there myself.” (Of course, if he wanted to live there himself, he wouldn’t need the Ellis Act.)

Mai said he “felt bad about the whole situation,” and he had offered to buy Mykaels out. The offer, however, wouldn’t have covered more than a few months of market rent anyplace else in the Castro.

By law, Mykaels can stay in his apartment until September. If he can’t stave off the eviction by then, San Francisco will lose another longtime member of the city community.

 

Dark days in the Inner Sunset

By Rebecca Bowe

The living room in Rose and Willie Eger’s Inner Sunset apartment is where Rose composes her songs and Willie unwinds after playing baseball in Golden Gate Park. Faded Beatles memorabilia and 45 records adorn the walls, and a prominently displayed poster of Jimi Hendrix looms above a row of guitar cases and an expansive record collection.

It’s a little worn and drafty, but the couple has called this 10th Ave. apartment home for 19 years. Now their lives are about to change. On Jan. 5, all the tenants in their eight-unit building received notice that an Ellis Act eviction proceeding had been filed against them.

“The music that I do is about social and political things,” explains Rose, dressed from head-to-toe in hot pink with a gray braid swinging down her back. Determined to derive inspiration from this whole eviction nightmare, she’s composing a song that plays with the phrase “tenants-in-common.”

Cindy Huff, the Egers’ upstairs neighbor, says she began worrying about the prospect of eviction when the property changed hands last summer. Realtor Elba Borgen, described as a “serial evictor” in online news stories because she’s used the Ellis Act to clear several other properties, purchased the apartment building last August, through a limited liability corporation. The notice of eviction landed in the mailbox less than six months later. (Borgen did not return Guardian calls seeking comment.)

“With the [average] rent being three times what most of us pay, there’s no way we can stay in the city,” Huff says. “The only option we would have is to move out of San Francisco.” She retired last year following a 33-year stint with UCSF’s human resources department. Now, facing the prospect of moving when she and her partner are on fixed incomes, she’s scouring job listings for part-time work.

The initial notice stated that every tenant had to vacate within 120 days, but several residents are working with advocates from the Housing Rights Committee in hopes of qualifying for extensions. Huff and the Egers are all in their fifties, but some tenants are seniors—including a 90-year-old Cuban woman who lives with her daughter, and has Alzheimer’s disease.

Willie works two days a week, and Rose is doing her best to get by with earnings from musical gigs. Both originally from New York City, they’ve lived in the city 35 years. When they first moved to the Sunset, it resembled something more like a working-class neighborhood, where families could raise kids. The recent tech boom has ushered in a transformation, one that Rose believes “changes the face of who San Francisco is.” Willie doesn’t mince words about the mess this eviction has landed them in. “I call it ‘Scam-Francisco,'” he says.

The trio recently joined tenant advocates in visiting Sup. Norman Yee, their district supervisor, to tell their stories. Yee, who is expected to be one of the swing votes on an upcoming debate about condo-conversion legislation vehemently opposed by tenant activists, reportedly listened politely but didn’t say much.

As for what the next few months have in store for the Egers? “I can’t really visualize the outcome,” Rose says. “I can only visualize the day-to-day fight. And that’s scary.”

 

Fighting for a home in the Mission

By Tim Redmond

Eleven years ago, Olga Pizarro fell in love with Ocean Beach. A native of Peru who was living in Canada, she visited the Bay Area, saw the water and decided she would never leave.

Fast forward to today and she’s built a home in the Mission, renting a small room in a basement flat on Folsom Street. The 55-year-old has lived in the building for eight years; polio has left her wearing a leg brace and she can’t climb stairs very well, but she still rides her bike to work at the Golden Gate Regional Center. She’s a sociologist by training; the walls in her room are lined with bookshelves, with hundreds of books in Spanish and English.

The place isn’t fancy, and it needs work, but it’s hard to find a ground-floor apartment in the Mission that’s affordable on a nonprofit worker’s salary. Since 2011, when she moved in, she and her three housemates have been protected by rent control. And Pizarro’s been happy; “I love the neighborhood,” she told me.

The letter warning of a pending eviction arrived Jan. 16. A new owner of the building wants to turn the place into tenancies in common and is prepared to throw everyone out under the Ellis Act. There’s no place else in town for Pizarro to go.

“I’ve looked and looked,” she said. “The cheapest places are $2,500 a month or more. Maybe I’ll have to move out of the city.”

Pizarro’s building is owned by Wai Ahead, LLC, a San Francisco partnership registered to Carol Wai and Sean Lundy. I couldn’t reach Wai or Lundy, but their attorney, Robert Sheppard, had plenty to say. “San Francisco is going the way of New York,” he told me. “Manhattan is full of co-ops that used to be rentals, and lower-income people are moving to Brooklyn and Queens. That’s happening here with Oakland and further out.” He argued that TICs, like co-ops, provide home-ownership opportunities for former renters.

Sheppard, who for years represented tenants in eviction cases, said the Ellis Act is law, and America is a capitalist country, and “as long as there is a private housing market, there will be shifts of people as the housing market shifts.” He agreed that it’s not good for lower-income people to lose their homes, but “the poor will always be hurt by a changing economy. It’s called evolution.”

Pizarro told me she’s shocked at how expensive housing has become in the Mission. “It’s gotten so gentrified,” she said. “People show up in their BMWs. It’s starting to feel very isolated.”

She’s fighting the eviction. “I didn’t intend it to be this way,” she explained. “I just want to live here.” Lacking any family in the area, the Mission has become her community — “and I’m frustrated by the violence of how expensive it is.”

 

Affordability goes out of style

By Rebecca Bowe

Hester Michael is a fashion designer, and her home doubles as a project space for creating patterns, sewing custom clothing, weaving cloth, and painting. She’s lived in her Outer Sunset two-bedroom unit for almost two decades, but now she faces an Ellis Act eviction. Michael says she initially received notice last June. The timing was awful -– that same month, her husband passed away after a long battle with terminal illness.

“I’ve been here 25 years. My friends are here, and my business. I don’t know where else to go, or what else to do,” she says. “I just couldn’t picture myself anywhere else.”

Michael rents the upstairs unit of a split single-family home, a kind of residence that normally isn’t protected by rent control. Yet she leased the property in 1994, getting in under the wire before that exemption took effect. Since she pays below-market-rate rent in a home that could be sold vacant for top dollar, a target was essentially inscribed on her back when the property changed hands in 2004. That’s about when her long battle with the landlords began, she says.

From the get-go, her landlords indicated that she should look for a new place, Michael says, yet she chose to remain. The years that followed brought things falling into disrepair, she says, and a string of events that caused her feel intimidated and to fear eviction. Finally, she consulted with tenant advocates and hired an attorney. A complaint filed in superior court alleges that the property owners “harassed and retaliated [Michael] when she complained about the defective and dangerous conditions …telling [her] to move out of the property if she did not like the dangerous conditions thereat … repeatedly making improper entries into [the] property, and wrongfully accusing [her] of causing problems.”

Records show that Angela Ng serves as attorney in fact for the property owner, Ringo Chung Wai Lee. Steven Adair MacDonald, an attorney who represents both landlords and tenants in San Francisco housing disputes, represents the owners. “An owner of a single family home where the rent is controlled and a fraction of market has virtually no other choice but to terminate the tenancy,” MacDonald said when the Guardian reached him by phone. “They’ve got to empty it, and the only way to empty it is the Ellis Act.”

While Michael received an extension that allows her to remain until June 5, she fears her custom sewing business, Hester’s Designs, will suffer if she has to move. There’s the issue of space. “I have so much stuff in this house,” she says. And most of her clients are currently located close by, so she doesn’t know where her business would come from if she had to relocate. “A lot of my clients don’t have cars,” she says, “so if I live in some suburb in the East Bay, forget it. I’ll lose my business.”

The prospect of eviction has created a major dilemma for Michael, who first moved to San Francisco in 1987. While moving to the East Bay seems untenable, she says renting in San Francisco feels out of reach. “People are renting out small, tiny bedrooms for the same price as I pay here,” she says. With a wry laugh, she adds: “I don’t think there’s any vacant apartments in San Francisco -– unless you’re a tech dude and make seven grand a month.”

Housing stability for all

Andrew Lam
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9

OPINION San Francisco is in the midst of a housing affordability crisis. It’s way too expensive to live here, and for those fortunate enough to have housing they can afford, we need to provide stability. This need for housing stability applies to renters as well as homeowners. If we’ve learned anything from the foreclosure crisis, homeowners are not all rich, and they are not all stable in their housing.

Last week’s Guardian argued against legislation I’m co-sponsoring, which provides one-time relief to owners of tenancies-in-common (TICs) — mostly middle- and working-class first-time homeowners who reside in their units — while providing strong protection to renters. While the editorial correctly stressed the need to support rent control, it failed to acknowledge the need to support housing stability for homeowners as well.

Rent control is one of the pillars of our city. It stabilizes housing prices, recognizes that housing isn’t just another commodity, keeps communities intact, and helps maintain San Francisco’s diverse fabric. I’ve long supported rent control, as reflected by my voting record. I supported a series of rent control measures designed to reduce evictions, including requiring sales disclosure of a unit’s eviction history, requiring increased relocation benefits to evicted tenants, outlawing harassment of tenants, and restricting use of the Ellis Act by real-estate speculators. As a member of the Board of Supervisors, I authored successful legislation to ban conversion of rent-controlled units to student dorms and to provide temporary affordable units to renters displaced by disasters.

The current legislation I’m co-sponsoring will provide needed relief to struggling TIC owners, many of whom are experiencing serious financial distress, while protecting the small number of tenants who live in these units. TIC owners have group mortgages, meaning that if one owner defaults, all owners default. They pay double the interest rate other homeowners pay and usually cannot refinance. The legislation will allow them to convert their units to condos and obtain their own mortgages, at lower rates and less foreclosure risk.

While some caricature TIC owners as speculators and wealthy people, that’s untrue. Many TIC owners are quite middle class, former renters who scraped together a down payment to purchase a home. Many are teachers, social workers, public employees, and other workers who are anything but speculators. These are people who, if they didn’t own TICs, would be renting. They aren’t Martians who dropped out of the sky. They’re our neighbors, co-workers, and fellow San Franciscans. They are part of the city’s fabric.

Under the legislation, owner-occupied TICs that are in the condo lottery will be able to convert to condos by paying a fee of $20,000 per unit, with the proceeds dedicated to affordable housing. Buildings with Ellis Act and other problem evictions are typically prohibited from condo converting in San Francisco, under a 2006 law, and that restriction applies to this legislation. In other words, this legislation won’t encourage Ellis Act evictions. Moreover, buildings that aren’t owner-occupied can’t condo convert. Nor can buildings with more than six units. The legislation is one-time in nature and not an ongoing invitation to condo convert.

The legislation covers very few units with tenants — 85% are owner-occupied — and protects this small number of tenants by mandating they receive lifetime leases, with full rent and eviction controls identical to our rent control laws. This protection is stronger than what most tenants receive in buildings that win the condo lottery currently.

Renters and homeowners both deserve housing stability. This legislation moves us in that direction.

Supervisor Scott Wiener represents District 8.

 

Condo conversion legislation on hold for now

Sasha Cuttler And Mary Magee
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153

Following a contentious five-hour hearing, a committee of the Board of Supervisors postponed voting on a controversial housing proposal, and agreed to revisit the issue on Feb. 25. Over the next few weeks, opposing sides are expected to negotiate a possible alternative.

Authored by Sups. Scott Wiener and Mark Farrell, the proposed condo conversion impact fee would have allowed as many as 2,000 tenancy-in-common (TIC) units to be immediately converted to condos for a fee, allowing owners to bypass a housing lottery system that places an annual cap on conversions.

While TIC owners voiced frustration about the backlogged lottery system, tenants expressed fears that the legislation could give rise to a wave of Ellis Act evictions if landlords or speculators interpreted it as a signal that lucrative condo conversion would be easier to achieve.

Prior to the hearing, a group of tenants gathered in front of City Hall in a show of opposition to the condo-conversion legislation, waving signs that read, “Stop the Attack on Rent Control.”

“The reality is, if this legislation passes, there will be more evictions in San Francisco,” said Tommi Avicolli Mecca of the Housing Rights Committee, who spoke at the rally.

Tenant advocates worry that the legislation would result in a permanent loss of affordable, rent-controlled units from the city’s housing stock, at a time when rents are soaring. When landlords rent out their condos or TICs in San Francisco, there’s a key difference: TICs are covered by rent control, but condos are exempt.

“I’ve been evicted three times,” one woman said while addressing members of the Land Use & Economic Development Committee. “I know so many people who have gotten evicted. I don’t know anyone who’s won their case against eviction.”

During the hearing, Farrell adopted a defensive tone against critics who’d described the proposal as an attack on rent control. “The tactics that these opponents have deployed is out of line,” he said. To assuage concerns, he noted that he and Wiener had included a provision guaranteeing lifetime leases for existing tenants in units that qualified for condo conversion under the program.

But Sup. Jane Kim drilled down on this detail, questioning whether such an agreement would be legally enforceable in the long run. In response, a representative from the City Attorney’s office said he thought the provision was on solid legal ground, but noted that the specific matter “has not been litigated before,” meaning there is still a question as to whether it could withstand a court challenge. When Kim asked if any funding was set aside to enforce these lifetime leases, the response was “no.”

Board President David Chiu proposed holding off on a vote for several weeks. “I do not support the legislation in its current form,” he said. If the current generation of TIC owners were allowed to convert this time, he explained, the next generation’s frustrations with the housing lottery would only “lead us back to an identical debate in a short period of time.”

Kim echoed this point. “My concern was that … folks were looking at this legislation as an ice-break for more condo conversion,” she said just after a public comment session that lasted several hours. And she acknowledged that there is a larger problem to consider. “It’s very tragic that we have set up a situation where [TICs and renters] are pitted against one another,” she said.

Disappearing poles

Andrew Lam
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5
Disappearing poles

steve@sfbg.com

Political dynamics on the Board of Supervisors moved into uncertain new territory this week with the inauguration of two new members -– London Breed and Norman Yee –- who break the mold in representing districts that have long been predictable embodiments of opposite ideological poles.

Breed and Yee are both native San Franciscans with deep roots in their respective districts, which they tapped to win hotly contested races against challengers who seemed more closely aligned with the progressive politics of Dist. 5 and the fiscally conservative bent of Dist. 7. Both tell the Guardian that they represent a new approach to politics that is less about ideology and more about compromise and representing the varied concerns of their diverse constituencies.

“I don’t see everything as a compromise, but I want to be sure we find compromises where we can and don’t let personalities get in the way,” said Yee, whose background working in education and facilitating deals as a school board member belies District 7’s history of being represented by firebrand opponents of the progressive movement.

Some of the strongest champions of the pro-tenant, anti-corporate progressive agenda have come from the Haight and Dist. 5, a role that Breed has no intention of playing. “When you talk about the progressives of San Francisco, I don’t know that I fit in that category,” Breed told us. “I’m a consensus builder. I want to get along with people to get what I want.”

Yet what Breed says she wants are housing policies that protect renters and prevent the exodus of African-Americans, and development standards that preserve the traditional character of neighborhoods against corporate homogenization. “I don’t see the difference between my causes and progressive causes,” she said, claiming a strong independence from some of the monied interests that supported her campaign.

We spoke a few days before the Jan. 8 vote for board president (which was scheduled after Guardian press time, and which you can read about at the SFBG.com Politics blog). Neither Yee nor Breed would tip their hands about who they planned to support -– the first potential indication of their willingness to buck their districts’ ideological leanings.

Breed had raised some progressive eyebrows by telling the Guardian and others that she admired moderate Sup. Scott Wiener and would support him for president, but she had backtracked on that by the time we spoke on Jan. 5, telling us, “I’m going into this with an open mind.

“I’m waiting on my colleagues to decide who has the most votes,” Breed said, ing a candid take on valuing compromise over conflict. “I really would like to see us walk into this all together.”

Yee had similar comments. “They’re all competent people and can be leaders, it just depends on where they want to lead us,” he said. “I value people who can work with anyone and see themselves as facilitators more than as dictators.”

Both Breed and Yee come from humble roots that they say give them a good understanding of the needs of the city’s have-nots. Breed was raised in the public housing projects of the Western Addition, an experience that makes her want to solve the current dysfunction in the San Francisco Housing Authority.

“I can’t tell you what needs to be done, but I can tell you something is wrong,” Breed told us. “My goal is to get to the bottom of it and be extremely aggressive about it.”

Yee grew up in Chinatown, his father an immigrant who worked as a janitor, his mother a garment worker. They later lived in the Sunset and the Richmond, and Yee moved into his district’s Westwood Park neighborhood 26 years ago.

When Yee was eight years old, the family saved enough money to open a grocery store at 15th and Noe, and he said that he basically ran the store in his teen years while his father continued working another job.

That was where Yee developed his deep appreciation for the role that small, neighborhood-serving businesses play in San Francisco. In an era before credit cards, he would offer credit lines to local customers struggling to make ends meet; that experience showed him how stores like his family’s were essential parts of the city’s social and economic fabric.

“That’s why I value small businesses,” Yee said, calling that his top focus as a supervisor. “They’re going to have a bigger voice now.”

Yee draws a clear distinction between the interests of small business and that of the larger corporations that dominate the powerful San Francisco Chamber of Commerce. Asked where he might have placed on the Chamber’s recent scorecard ranking supervisors’ votes — where Yee’s predecessor, Sean Elsbernd, got the highest marks — Yee said, “Probably not on their A list. They are just one entity in San Francisco and I’m not going to be judged just by them.”

At 63 years old, Yee is by far the oldest member of the youngest Board of Supervisors in recent memory, while Breed, at 38, is closer to the current average. Yee hopes his age and experience will help him forge compromises among all the supervisors.

“People draw their lines, but I try to listen to people and see where their lines are,” Yee said. “It’s a balancing act, but at the same time, there’s things I’ve been working on all my life, like education and safety net issues, and this district does care about those things. At the same time, they care about their homes. Are these issues in conflict? I don’t think they have to be.”

Sharing the sun

Jesse Hawthorne Ficks
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1
Sharing the sun

news@sfbg.com

Dan Rosen, the co-founder of Solar Mosaic, told us there was an ironic note to the devastation that Hurricane Sandy recently brought to New York City. The same power grid that helps create such fierce hurricanes through the burning of fossil fuels was unable to distribute power to thousands of homes, in mostly low-income neighborhoods, for weeks in the wake of storm.

Sandy brought to the forefront a huge energy challenge: how to move over to renewable energy fast enough to avoid catastrophic climate change and the killer storms in generates, build more efficient and reliable grids, and ensure that everyone can equitably participate in the new renewable energy economy. Bay Area energy entrepreneurs such as Rosen are working on innovative energy models that address those issues.

So far, the solar debate has mostly been between proponents of personal solar projects such as residential rooftop installations, also known as distributed generation, and those who back industrial-scale projects in far away plains and deserts.

But Rosen and other entrepreneurs are championing a middle route: They propose vastly increasing the prevalence of large solar power arrays and other renewable power plants close to where the energy is consumed, and opening up creative new ways for more people to buy into those projects.

This kind of approach to energy has the potential to democratize power production, avoid costly and environmentally unsound transmissions lines, and prevent utilities from monopolizing renewable energy.

 

CROWD FUNDING SOLAR

One of the barriers to the proliferation of solar is the relatively high upfront cost of purchasing and installing the panels. But with the rising costs of fossil fuel and the government incentives around renewable energy, investments in solar infrastructure can pay off big.

Bloomberg New Energy Finance crunched the numbers and according to a report that came out in June, large solar projects may soon pay a 5-9 percent return on investment. Big financial institutions and other corporate players have taken note of these figures and potential for profit they represent.

For example, Google has invested almost $1 billion in renewable energy that it plans to sell into the grid, including opening a $75 million fund for residential rooftop solar this past September. The problem is that big lenders are only looking for large-scale solar deals in order to cover their costs.

Enter Rosen and Solar Mosaic, who are coming up with a way to harness the power of crowds to fund the local and decentralized projects that big financial institutions tend to overlook. Solar Mosaic specializes in raising seed capital for solar projects by collecting many small investments into one pool.

That idea won Solar Mosaic a $2 million grant from the Department of Energy’s SunShot Initiative, and attracted $3.5 million in venture capital.

“Our job — not just as Mosaic, but as society — is to make sure that the next energy economy has participation and ownership from millions of people and communities around the world,” Rosen said. “Crowd funding is really the beginning of a broader movement to democratize and distribute capital — enabling people to invest in projects they otherwise wouldn’t have had access to.”

This vision proved itself initially with a successful Kickstarter-like crowd funding platform that facilitated the development of five solar projects with the participation of more than 400 small investors and over $350,000 raised. The money went to fund solar panel installations on the roofs of community organizations in California and Arizona, including People’s Grocery in Oakland.

But there’s a catch. As the law currently stands, Solar Mosaic, or any company engaged in crowd funding, cannot offer any interest on the money invested by small online contributors. Since there is only a limited pool of people who believe in an energy revolution enough to shell out money for free, these examples are not entirely replicable. “We chose to start with those ones because they have very strong constituencies and we were using more a philanthropic model,” Rosen said.

The new model the company is developing is “getting people who are not necessarily just environmentalists invested in the clean energy economy,” Rosen said. “I want people who are like, ‘Oh, cool, I can make [a decent return] if I invest in this,’ and that gets more stakeholders than Sierra Club members. Let’s have millions of stakeholders with skin in the game.”

So how to move forward? The controversial federal Jumpstart Our Business Startups (JOBS) Act passed in April by Congress included a much-trumpeted crowd funding provision. The bill charged the Securities and Exchange Commission with the responsibility of putting meat on the legislation’s skeleton.

The SEC has until the Dec. 31 deadline to come up a set of rules allowing start-ups to gather small investments from ordinary people online while still offering provisions to protect the public from fraud. Many are skeptical that the SEC will complete the rule-writing process by the end of year.

Impatient to wait for the SEC and unsure whether the provisions will be practical for their purposes, Solar Mosaic is following a different path. It is using the funds raised already to pay for a lengthy and expensive filing with the SEC to upgrade its financial status.

Rosen said he couldn’t discuss details, but he said the new status should grant Solar Mosaic some leeway on offering financial returns to a wider variety of investors.

 

ENERGY IN THE CLOUD

Investment opportunities in local solar projects may be a good way to get people financially involved in clean energy but what about Californians who simply wish to purchase renewable energy for their homes or business?

California leads the country in rooftop solar installation, much to the credit of two programs: rebates that offset the cost of the panels through the California Solar Initiative and a program that allows those who own a rooftop with solar panels to offset their utility bills with credit from the energy they produce. California Public Utilities Commission statistics indicate these programs are largely responsible for some 1,379 megawatts of solar that have been installed in California at 131,874 different sites; about as much energy as one large nuclear reactor.

There has been record growth in adoption of solar by homeowners in the past two years, according to the CPUC, including a 364 percent jump in low income areas in since 2007. Yet that’s a far shot from the goal of 12,000 megawatts of local clean energy by 2020 called for by Gov. Jerry Brown in July.

Californians who do not have savings or a high credit score or who have shaded roofs usually can’t participate in the state’s renewable energy programs. But the most significant obstacle to increased participation is that only homeowners are eligible, while renters must contend with whatever power they can get from their utility. In a city like San Francisco, where almost two-third of residents rents, that is the overwhelming majority of citizens.

One solution that would circumvent the property-owning restrictions is allowing people to subscribe to solar gardens and other renewable energy facilities in their area and receive the same credit on their utility bill for their share of energy delivered to the grid. Decoupling where energy is made from who is able to buy it “allows everyone to participate, it makes it so it doesn’t matter if you are rich or poor, the only thing that matters that you have a utility bill,” said Tom Price of CleanPath, a solar project investment firm.

California Senate Bill 843, introduced by Sen. Lois Wolk (D-Davis) and coauthored by Price, attempted to create the legal framework for this kind of virtual transaction. Over the summer, it died in the Assembly Committee on Utilities and Commerce as result of late session lobbying by Pacific Gas & Electric and Southern California Edison. Notably, the state’s other largest utility, San Diego Gas and Electric, supported SB843. Also supporting the bill was a wide and diverse coalition ranging from the US Department of Defense to the Ella Baker Center for Human Rights. Wolk plans to reintroduce SB843 in the next legislative session.

Price and other supporters see the bill’s eventual passage as inevitability: “In an age when so many transaction are virtual [and] we can put so many parts of our lives in the cloud, why can’t we put energy in the cloud and let people virtually subscribe to it? From the grid’s perspective, there is no difference.”

 

COOPERATIVE ENERGY

Democratizing the green energy industry is about allowing everyone to participate easily, but it is also about empowering those who are typically left out of the conversation.

Low-income and marginalized communities are often the ones most impacted by the environmental and health effects of burning fossils fuels. As the green energy revolution expands, those same communities will potentially be last in line to benefit from or exert influence over the transformation.

Considering that solar can be small scale and still financially sound in the long term, “there is an opportunity to rebuild the energy infrastructure…from the grassroots,” said Shiva Patel who co-founded Energy Solidarity Cooperative. Patel and his partner Dave Ron want to set up multi-stakeholder cooperatives that promote ownership and decision-making by consumers.

In a low-income neighborhood, residents are most likely tenants with little leverage and no eligibility for California’s renewable energy incentives. The cooperative model suggests residents can pool space, financial resources, and labor to become players in small-scale power production.

Normally, consumers considered downstream along the energy supply chain do not have the financial or political means to make decisions about the energy their communities use. “We are flipping that on its head,” said Ron “We want those people to be upstream. We are taking a very horizontal approach.“

The nuts and bolts of the coop’s structure may be new, but the distinction between those who own and control the community power project and those who finance it is important. There are three types of members in the cooperative: consumers, workers, and community investors. The consumers initiate the community power project and then maintain ownership of it. They contribute labor and money toward the project according to their ability. The workers are a group of energy experts organized into a collective that provide support and advice for the project. Decisions about the coop and its projects are left to the consumers and workers. Community investors are drawn to the project by crowd funding, but financial support does not buy them a decision making role. Once the upfront costs of the project are paid back to the community investors, consumers can keep the revenue or use it to foster more community power projects.

One source of inspiration for the duo is Co-op Power based in Boston, which has more than 150 full-time green jobs with living wages, spawning 10 businesses in the decade since its founding.

“We had a large number of people trying to solve the puzzle of how communities could come together and create sustainable energy models,” said President and CEO Lynn Benander. “It’s the brain child of many people.”

Sorting out a strange election

Andrew Lam
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120
Sorting out a strange election

steve@sfbg.com, tredmond@sfbg.com

The way the San Francisco Chronicle pundits put it, Mayor Ed Lee was the clear winner in a grand San Francisco election. “All his measures on the ballot won hands down,” noted Willie Brown, the high-paid lawyer and political operative who also functions as a Chron columnist. “It was a great day for Ed Lee,” proclaimed columnist C.W. Nevius.

Well, not really.

There are a lot of ways to explain and analyze the inconsistent results of one of the most heavily propagandized elections in recent San Francisco history. But no matter how you look at it, the election was at best a wash for the mayor. Indeed, we’d argue that voters rejected the basic premise of the mayor’s political agenda – that tax cuts and favors for big business are the best economic policy – despite record-breaking outside spending selling that agenda and targeting those who stood in its way.

Let’s take a look at the real facts:

• Every single initiative backed by the mayor, the ones he’s getting credit for – from the City College parcel tax to the housing fund to the business tax – was either a compromise with progressives or a measure that originated on the left. There was nothing the mayor pushed that had any significant progressive opposition; his wins were equally, if not more dramatically, wins for the left.

• Both people the mayor appointed to office were soundly rejected by the voters. Rodrigo Santos, his high-profile appointee to the troubled City College Board of Trustees, spent almost $200,000 and finished a distant sixth. Sup. Christina Olague lost to the candidate Lee had rejected for appointment, London Breed, in a complicated race where the mayor’s actual role was unclear (he never withdrew his endorsement of Olague even as his allies trashed her in nasty ways).

• A million-dollar effort funded by some of the mayor’s allies to oust Sup. Eric Mar was a spectacular failure, suggested some serious problems in the mayor’s political operation, and undermined his emphasis on “civility.”

• The voters made clear on every level that they believe higher taxes on the wealthy and closing tax loopholes on big business are the right approach to the economy and to funding government. From Prop. 30 to Prop. 39 to Prop. A to Prop. E, the message was pretty clear: The tax revolt that started in California in 1978 may be winding down, and the notion of making property owners and the wealthy pay for education and public services is no longer a radical idea.

Robert Cruikshank, who writes for the Calitics blog, argues that the November election signals a major sea change in California. “[The] vote to pass Prop 30 — by a larger margin than most observers expected — does more than just provide $6 billion of badly needed funding to the state’s public school,” he wrote. “It brings to a close a 34-year long tax revolt that came very close to destroying California’s middle class, locking its low income families into permanent poverty, and left the state on the edge of financial ruin.”

That sounds like a progressive message. The agenda put forward by the mayor’s closest allies, including right-wing billionaire Ron Conway, who played a heavy-handed role in this election, not only failed to carry the day; the big-money types may have overplayed their hand in a way that will shape the political narratives going forward.

A LOT OF CONSENSUS

Let’s start with the ballot measures (before we get to the huge and confusing mess that was D5).

Proposition A, the parcel tax for City College, didn’t come out of the Mayor’s Office at all; it came from a City College board whose direction the mayor tried to undermine with the appointment of Santos, a pro-development engineer so conservative that he actually endorsed the Republican opponent of Assembly member Tom Ammiano.

Lee didn’t even endorse Prop. A until a few weeks before the election, and played almost no role in raising money or campaigning for its passage (see “Words and deeds,” 9/11/12). Yet it got a higher percentage of the vote than any of the three measures that Lee actively campaigned for: Props. B, C, and E.

Then there’s Prop. C, the Housing Trust Fund. Lee’s office played a central role in drafting and promoting the measure -– but it wasn’t exactly a Lee initiative. Prop. C came out of the affordable housing community, and Lee, who has strong ties to that community, went along. There were tough negotiations -– the mayor wanted more guarantees and protections for private developers -– and the final product was much more what the progressives who have spent decades on the housing front wanted than what the mayor would have done on his own.

The way the mayor envisioned business-tax reform, the city would have eliminated the payroll tax, which tech firms hate, and replaced it with a gross-receipts tax -– and the result would have been revenue-neutral. It was only after Sup. John Avalos and the progressives demanded that the tax actually bring in more money that the outlines of Prop. E were drafted and it received strong support from groups across the ideological spectrum.

“You had a lot of consensus in the city about these ballot measures,” political consultant David Latterman, who usually works with downtown-backed campaigns, said at SPUR’s post-election round-up.

The supervisorial races were a different story, with unprecedented spending and nasty messaging aimed at tipping the balance in favor of real estate and development interests. Mayor Lee didn’t get directly involved in the District 1 race, but he was clearly not a supporter of incumbent Sup. Eric Mar.

The real-estate and tech folks who are allied with Lee spent more than $800,000 trying to oust Mar — and they failed miserably, with Mar winning by 15 points. While Mar did have the backing of Chinatown powerbroker Rose Pak, who raised money and helped organize ground troops to help, Mar’s victory was primarily the result of a massive outpouring of support from labor and progressive activists, many reacting to the over-the-top effort to oust him.

Mar, who voted to put Lee in office, won’t feel a bit indebted to the mayor for his survival against a huge money onslaught. But in District 5, the story was a whole lot more complicated, and impact more difficult to discern.

THE D5 MESS

Before we get into what happened in D5, let’s dispel some of the simplistic and self-serving stories that circulated in the wake of this election, the most prominent being that Olague’s loss -– the first time an incumbent was defeated in a ranked-choice election –- was payback for crossing Mayor Lee and voting to reinstatement Sheriff Ross Mirkarimi.

It’s certainly true that Lee’s allies went after Olague and supported London Breed, and that they tried to make an issue of domestic violence, but there was much, much more to this district election. Breed is an SF native with a compelling personal story who ran a strong campaign –- and that three strongest progressive candidates in the race each had major flaws that hurt their electability. By most accounts, the Olague campaign was a disaster until the very end. Equally important, the progressive community was divided over D5, leaving room for Breed to slip in.

“It’s hard to unravel what happened here,” Latterman said.

San Francisco Women for Responsibility and an Accountable Supervisor was an independent expenditure group fronted by domestic violence advocates and funded by more than $100,000 from the families of Conway and fellow right-wing billionaire Thomas Coates. It attacked Olague’s Mirkarimi vote as being soft on domestic violence — but it also did a last minute mailer criticizing Olague’s vote for CleanPowerSF, muddling its message of moral outrage.

On election night, Olague told us she believed her split with the Mayor’s Office really had more to do with CleanPowerSF –- which the board approved with a veto-proof majority over the objections of Lee and the business community –- and with her insisting on new revenue from Prop. E than it did with Mirkarimi, whose ouster she dismissed as “a power play” aimed at weakening progressives.

“They don’t want to say it, but it was the whole thing around CleanPowerSF. Do you think PG&E wanted to lose its monopoly?” she said.

Yet Olague said the blame from her loss was also shared by progressives, who were hard on her for supporting Lee, courting his appointment to the D5 seat, and for voting with him on 8 Washington luxury condo project and other high-profile issues. “The left and the right both came at me,” she told us. “From the beginning, people were hypercritical of me in ways that might not be completely fair.”

Fair or not, Olague’s divided loyalties hurt her campaign for the D5 seat, with most prominent progressives only getting behind her at the end of the race after concluding that John Rizzo’s lackluster campaign wasn’t going anywhere, and that Julian Davis, marred as he was by his mishandling of sexual impropriety accusations, couldn’t and shouldn’t win.

Olague told us she “can’t think of anything I would have done differently.” But she later mentioned that she should have raised the threats to renters earlier, worked more closely with other progressive candidates, and relied on grassroots activists more than political consultants connected to the Mayor’s Office.

“The left shouldn’t deal with consultants, we should use steering committees to drive the agenda,” Olague said, noting that her campaign finally found its footing in just the last couple weeks of the race.

Inside sources say Olague’s relations with Lee-connected campaign consultant Enrique Pearce soured months before the campaign finally sidelined him in the final weeks, the result of his wasteful spending on ineffective strategies and divided loyalties once a wedge began to develop between Olague and the Mayor’s Office.

Progressive endorsements were all over the map in the district: The Harvey Milk Club endorsed Davis then declined to withdraw that endorsement. The Tenants Union wasn’t with Olague. The Guardian endorsed Rizzo number one. And none of the leading progressive candidates had a credible ranked-choice voting strategy — Breed got nearly as many second-place votes from Davis and Rizzo supporters as Olague did.

Meanwhile, Breed had a high-profile falling out with Brown, her one-time political ally, after her profanity-laden criticism of Brown appeared in Fog City Journal and then the San Francisco Chronicle, causing US Sen. Dianne Feinstein to withdraw her endorsement of Breed. That incident and Olague’s ties to Lee, Brown, and Pak may have solidified perceptions of Breed’s independence among even progressive voters, which the late attacks on her support from landlords weren’t ever able to overcome.

Ironically, while Breed and some of her prominent supporters, including African American ministers in the district, weren’t happy when Lee bypassed her to appoint Olague, that may have been her key to victory. Latterman noted that while Olague was plagued by having to divide loyalties between Lee and her progressive district and make votes on tough issues like reinstating Mirkarimi –- a vote that could hurt the D5 supervisor in either direction -– Breed was free to run her race and reinforce her independence: “I think Supervisor Breed doesn’t win this race; challenger Breed did.”

But even if Breed lives up to progressive fears, the balance of power on the Board of Supervisors could be up in the air. District 7 soundly rejected Mike Garcia, the hand-picked successor of the conservative outgoing Sup. Sean Elsbernd.

At press time, progressive favorite Norman Yee seemed headed for victory, although FX Crowley was within about 30 votes, making this too close to call. But either way, the once-solid conservative seat will now be a swing vote on many issues, just as Breed will be in the once-solid progressive D5.

“The Board of Supervisors as a whole is becoming a helluva lot more interesting,” was how political consultant Alex Clemens put it at SPUR election wrap-up. “Determining what’s going to happen before it happens just got more difficult.”

GOBS OF MONEY

The other big story of this election was money, gobs of it, and how it can be spent effectively — or used to raise suspicions about hidden agendas.

Third-party spending on D1 loser David Lee’s behalf was $454,921, with another $219,039 to oppose Mar, pushing total spending to defeat Mar up over the $1 million mark, roughly doubling the previous record. Labor groups, meanwhile, spent $72,739 attacking Lee and $91,690 backing Mar. But many political analysts felt that lop-sided spending only served to turn off voters and reinforce the idea that powerful interests were trying to buy the seat.

In District 5, the landlords, Realtors, and tech moguls spent $177,556 in support of Breed, while labor spent $15,067 attacking her as a shill for the landlord lobby. The only other D5 candidate to attract significant spending by outside groups was Olague, who had $104,016 spent against her, mostly by the families of Conway and Coates, and $45,708 spent in support of her by SEIU 1021. Yet ultimately, none of these groups bought very much with their money. Conway, Salesforce CEO Marc Benioff, and San Francisco Association of Realtors each spent hundreds of thousands of dollars of their money, and the most obvious result was to convince San Franciscans that they’re working together to move an agenda in San Francisco. They may have the mayor on their side, but in a politically sophisticated city like San Francisco –- with its cost of living being driven up by the schemes of Lee, Conway, and the Realtors -– they seem to have a long way to go before they achieve they’re stated desire of destroying the progressive movement, particularly with its rising new leaders on the left, including Matt Haney and Sandra Fewer on the school board and Steven Ngo and Rafael Mandelman on the City College board. As Haney said on Election Night, “It was a good night for progressive San Francisco,” which stands for important egalitarian values. “We are the ones about equity and compassion. That’s what this city is about.”

D5 race displays key SF political dynamics

Sasha Cuttler
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70
D5 race displays key SF political dynamics

There’s so much to say about the District 5 supervisorial race, whose top five finishers’ parties I attended tonight, gathering interesting perspectives from each candidate. But given the late hour, I’m just going to run a few thoughts and quotes and save most of it for a more in-depth report tomorrow, because there’s a fascinating story to be told here.

Christina Olague, John Rizzo, and Julian Davis – respectively the second through fourth place candidates – each presented as more progressive than the likely winner, London Breed, who has an 8-point lead going into the final ballot tally and ranked choice tabulation. They and their allies raised concerns that renters were undermined by Breed’s victory in one of the city’s most progressive districts.

“It was a lie. I’m a renter, I live in a rent-controlled apartment,” she told us just before midnight outside in party at Nickie’s on Haight. “I will do everything to protect rent control. I will work with the Tenants’ Union. I’m here to be everybody’s supervisor.”

She pledged to work productively with all the progressive groups who opposed her, such at SEIU Local 1021, whose members “ take care of my mom at Laguna Honda,” while others are her friends.

“The pettiness of politics is over and it’s time to move forward,” Breed said.

It was a widely sounded theme among jubilant progressives tonight, but D5’s (likely) runner-up Olague sounded a bit of bitterness when we caught up with her a little after 11pm as she was leaving her party at Rassela’s on Fillmore. “The Left and the Right both came at me,” she told us.

She felt unfairly attacked by progressives after being appointed to the D5 seat by Mayor Ed Lee, saying her only bad vote was in favor of the 8 Washington luxury condo project, which Sup. Eric Mar also backed without losing progressive support. “From the beginning, people were hypercritical of me in ways that might not be completely fair.”

Then, this fall, Mayor Lee’s people – chief of staff Steve Kawa, tech point person Tony Winnicker, and billionaire backer Ron Conway – turned on her after a series of votes culminating in the one to reinstate Sheriff Ross Mirkarimi, resisting what she labeled “a power play” aimed at progressives.

Yet she believes her key vote in favor of CleanPowerSF, coming after her support for Sup. John Avalos getting new revenue out of the business tax reform Prop. E, was really what turned Conway and the downtown crowd against her and attracted outrageous attacks that she condoned domestic violence and supported Big Oil.

“They don’t want to say it, but it was the whole thing around CleanPowerSF. Do you think PG&E wanted to lose its monopoly?” she said. “It’s not about disloyalty, it’s about power.”

Julian Davis was similarly deflective about his campaign’s fourth place finish, despite having a strong presence on the streets today and lots of energy at his crowded campaign party at Club Waziema, after he weathered a loss of prominent progressive endorsements over his handling of sexual misconduct allegations.

“It’s been a challenging few weeks, but I’ve kept my head held high in this campaign,” Davis said, decrying the “self-fulfilling prophecy of the local media” that didn’t focus on the progressive endorsers who stayed with him, such as former D5 Sup. Matt Gonzalez and the SF Tenants Union.

Third place finisher John Rizzo, whose party at Murio’s Trophy Room party reflected his less-than-exuberant campaign, was generally positive about the night, although he expressed some concerns about the agenda of the “people putting up hundreds of thousands of dollars” into this race and the D1 contest, where progressive favorite Eric Mar won a strong victory.

I stopped by Breed’s party twice tonight: at the end, and a little before 10pm, when the results were coming over the television proclaiming that voters in Maryland approved same-sex marriage and Colorado voter legalized marijuana – and the room erupted in cheers – and Oregon voters rejected legalizing weed, drawing big boos.

Breed’s was a liberal crowd, a D5 crowd, and a largely African American crowd. Rev. Arnold Townsend, who is on the Elections Commission and local NAACP board, told me as I left Breed’s party the second time, “It’s a good election for my community. The black community was energized by this.”

New school board member Matt Haney, whose party at Brick & Mortar was my final stop of the night, also likes Breed and said her likely victory was another part of “a good night for progressive San Francisco,” which stands for important egalitarian values. “We are the ones about equity and compassion. That’s what this city is about.”

Endorsements 2012: San Francisco propositions

Andrew Lam
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85
Endorsements 2012: San Francisco propositions

PROPOSITION A

CITY COLLEGE PARCEL TAX

YES

The scathing accreditation report by the Western Association of Schools talks about governance problems at the San Francisco Community College District — a legitimate matter of concern. But most of what threatens the future of City College is a lack of money.

Check out the accreditation letter; it’s on the City College website. Much of what it says is that the school is trying to do too much with limited resources. There aren’t enough administrators; that’s because, facing 20 percent cuts to its operating budget, the college board decided to save front-line teaching jobs. Student support services are lacking; that’s because the district can barely afford to keep enough classes going to meet the needs of some 90,000 students. On the bigger picture, WASC and the state want City College to close campuses and concentrate on a core mission of offering two-year degrees and preparing students to transfer to four-year institutions. That’s because the state has refused to fund education at an adequate level, and there’s not enough money to both function as a traditional junior college and serve as the training center for San Francisco’s tech, hospitality and health-care industry, provide English as a second language classes to immigrants and offer new job skills and rehabilitation to the workforce of the future.

It’s fair to say that WASC would have found some problems at City College no matter what the financial situation (and we’ve found more — the nepotism and corruption under past boards has been atrocious). But the only way out of this mess is either to radically scale back the school’s mission — or to increase its resources. We support the latter alternative.

Prop. A is a modest parcel tax — $79 dollars a year on each property lot in the city. Parcel taxes are inherently unfair — a small house in Hunters Point pays as much as a mansion in Pacific Heights or a $500 million downtown office building. But that’s the result of Prop. 13, which leaves the city very few ways to raise taxes on real property. In the hierarchy of progressive tax options, parcel taxes are better than sales taxes. And the vast majority of San Francisco homeowners and commercial property owners get a huge benefit from Prop. 13; a $6 a month additional levy is hardly a killer.

The $16 million this tax would raise annually for the district isn’t enough to make up for the $25 million a year in state budget cuts. But at least the district would be able to make reasonable decisions about preserving most of its mission. This is one of the most important measures on the ballot; vote yes.

PROPOSITION B

PARKS BOND

YES

There are two questions facing the voters: Does the San Francisco Recreation and Parks Department need money to fix up badly decrepit, sometimes unsafe facilities, and build out new park areas, particularly in underserved neighborhoods? Has the current administration of the department so badly mismanaged Rec-Park, so radically undermined the basic concept of public access to public space, so utterly alienated neighborhoods and communities all over the city, that it shouldn’t be trusted with another penny?

And if your answer to both is yes, how the hell do you vote on Prop. B?

It’s a tough one for us. The Guardian has never, in 46 years, opposed a general obligation bond for anything except jail or prisons. Investing in public infrastructure is a good thing; if anything, the cautious folks at City Hall, who refuse to put new bonds on the ballot until old ones are paid off, are too cautious about it. Spending public money (paid by increased property taxes in a city where at least 90 percent of real estate is way under taxed thanks to Prop. 13) creates jobs. It’s an economic stimulus. It adds to the value of the city’s resources. In this case, it fixes up parks. All of that is good; it’s hard to find a credible case against it.

Except that for the past few years, under the administrations of Mayors Gavin Newsom and Ed Lee and the trusteeship of Rec-Park Directors Jared Blumenfeld and Phil Ginsburg, the city has gone 100 percent the wrong way. Parks are supposed to be public resources, open to all; instead, the department has begun charging fees for what used to be free, has been turning public facilities over to private interests (at times kicking the public out), and has generally looked at the commons as a source of revenue. It’s a horrible precedent. It makes us sick.

Ginsburg told us that he’s had no choice — deep budget cuts have forced him to look for money wherever he can find it, even if that means privatizing the parks. But Ginsburg also admitted to us that, even as chief of staff under Newsom, he never once came forward to push for higher taxes on the wealthy, never once suggested that progressive revenue sources might be an option. Nor did any of the hacks on the Rec-Park Commission. Instead, they’ve been busy spending tens of thousands of dollars on an insane legal battle to evict the Haight Ashbury Neighborhood Council’s recycling center — entirely because rich people in the Haight don’t want poor people coming through their elite neighborhood to cash in bottles and cans for a little money.

So now we’re supposed to cough up another $195 million to enable more of this?

Well, yes. We’re not happy to be endorsing Prop. B, but the bottom line is simple: The bond money will go for things that need to be done. There are, quite literally, parks in the city where kids are playing in unsafe and toxic conditions. There are rec centers that are pretty close to falling apart. Those improvements will last 50 years, well beyond the tenure of this mayor of Rec-Park director. For the long-term future of the park system, Prop. B makes sense.

If the measure fails, it may send Lee and Ginsburg a message. The fact that so many neighborhood leaders are opposing it has already been a signal — one that so far Ginsburg has ignored. We’re going Yes on B, with all due reservations. But this commission has to go, and the sooner the supervisors can craft a charter amendment to give the board a majority of the appointments to the panel the better.+

PROPOSITION C

AFFORDABLE HOUSING TRUST FUND

YES

This measure is about who gets to live in San Francisco and what kind of city this will be in 20 years. If we leave it up to market forces and the desires of developers, about 85 percent of the housing built in San Francisco will be affordable only by the rich, meaning the working class will be forced to live outside the city, clogging regional roadways and transit systems and draining San Francisco of its cultural diversity and vibrancy. And that process has been accelerated in recent years by the latest tech bubble, which city leaders have decided to subsidize with tax breaks, causing rents and home prices to skyrocket.

Mayor Ed Lee deserves credit for proposing this Housing Trust Fund to help offset some of that impact, even if it falls way short of the need identified in the city’s Housing Element, which calls for 60 percent of new housing construction to be affordable to prevent gentrification. We’re also not thrilled that Prop. C actually reduces the percentage of housing that developers must offer below market rates and prevents that 12 percent level from later being increased, that it devotes too much money to home ownership assistance at the expense of the renters who comprise the vast majority of city residents, and that it depends on the passage of Prop.E and would take $15 million from the increased business taxes from that measure, rather than restoring years of cuts to General Fund programs.

But Prop. C was a hard-won compromise, with the affordable housing folks at the table, and they got most of what they wanted. (Even the 12 percent has a long list of exceptions and thus won’t apply to a lot of new market-rate housing.) And it has more chance of actually passing than previous efforts that were opposed by the business community and Mayor’s Office. This measure would commit the city to spending $1.5 billion on affordable housing projects over the next 30 years, with an initial $20 million annual contribution steadily growing to more than $50 million annually by 2024, authorizing and funding the construction of 30,000 new rental units throughout the city. With the loss of redevelopment funds that were devoted to affordable housing, San Francisco is a city at risk, and passage of Prop. C is vital to ensuring that we all have a chance of remaining here. Vote yes.

PROPOSITION D

CONSOLIDATING ODD-YEAR LOCAL ELECTIONS

YES

There’s a lot of odd stuff in the San Francisco City Charter, and one of the twists is that two offices — the city attorney and the treasurer — are elected in an off-year when there’s nothing else on the ballot. There’s a quaint kind of charm to that, and some limited value — the city attorney is one of the most powerful officials in local government, and that race could get lost in an election where the mayor, sheriff, and district attorney are all on the ballot.

But seriously: The off-year elections have lower turnout, and cost the city money, and it’s pretty ridiculous that San Francisco still does it this way. The entire Board of Supervisors supports Prop. D. So do we. Vote yes.

PROPOSITION E

GROSS RECEIPTS TAX

YES

Over the past five years, Board of Supervisors President David Chiu estimates, San Francisco has cut about $1.5 billion from General Fund programs. It’s been bloody, nasty, awful. The budget reductions have thrown severely ill psych patients out of General Hospital and onto the streets. They’ve forced the Recreation and Parks Department to charge money for the use of public space. They’ve undermined everything from community policing to Muni maintenance.

And now, as the economy starts to stabilize a bit, the mayor wants to change the way businesses are taxed — and bring an additional $28.5 million into city coffers.

That’s right — we’ve cut $1.5 billion, and we’re raising taxes by $28.5 million. That’s less than 2 percent. It’s insane, it’s inexcusable, it’s utterly the wrong way to run a city in 2012. It might as well be Mitt Romney making the decision — 98 percent cuts, 2 percent tax hikes.

Nevertheless, that’s where we are today — and it’s sad to say this is an improvement from where the tax discussion started. At first, Mayor Lee didn’t want any tax increase at all; progressive leaders had to struggle to convince him to allow even a pittance in additional revenue.

The basic issue on the table is how San Francisco taxes businesses. Until the late 1990s, the city had a relatively rational system — businesses paid about 1.5 percent of their payroll or gross receipts, whichever was higher. Then 52 big corporations, including PG&E, Chevron, Bechtel, and the Gap, sued, arguing that the gross receipts part of the program was unfair. The supervisors caved in to the legal threat and repeal that part of the tax system — costing the city about $30 million a year. Oh, but then tech companies — which have high payrolls but often, at least at first, low gross receipts — didn’t want the payroll tax. The same players who opposed the other tax now called for its return, arguing that taxing payroll hurts job growth (which is untrue and unfounded, but this kind of dogma doesn’t get challenged in the press). So, after much discussion and debate, and legitimate community input, the supervisors unanimously approved Prop. E — which raises a little more money, but not even as much as the corporate lawsuit in the 1990s set the city back. It’s not a bad tax, better than the one we have now — it brings thousands of companies the previously paid no tax at all into the mix (sadly, some of them small businesses). It’s somewhat progressive — companies with higher receipts pay a higher rate. We can’t argue against it — the city will be better off under Prop. E than it is today. But we have to look around our battered, broke-ass city, shake our poor bewildered heads and say: Is this really the best San Francisco can do? Sure, vote yes on E. And ask yourself why one of the most liberal cities in America still lets Republican economic theory drive its tax policy.

PROPOSITION F

WATER AND ENVIRONMENT PLAN

NO, NO, NO

Reasonable people can disagree about whether San Francisco should have ever dammed the Tuolumne River in 1923, flooding the Hetch Hetchy Valley and creating an engineering marvel that has provided the city with a reliable source of renewable electricity and some of the best urban drinking water in the world ever since. The project broke the heart of famed naturalist John Muir and has caused generations since then to pine for the restoration of a valley that Muir saw as a twin to his beloved nearby Yosemite Valley.

But at a time when this country can’t find the resources to seriously address global warming (which will likely dry up the Sierra Nevada watershed at some point in the future), our deteriorating infrastructure, and myriad other pressing problems, it seems insane to even consider spending billions of dollars to drain this reservoir, restore the valley, and find replacement sources of clean water and power.

You can’t argue with the basic facts: There is no way San Francisco could replace all the water that comes in from Hetch Hetchy without relying on the already-fragile Delta. The dam also provides 1.7 billion kilowatt hours a year of electric power, enough to meet the needs of more than 400,000 homes. That power now runs everything from the lights at City Hall to Muni, at a cost of near zero. The city would lose 42 percent of its energy generation if the dam went away.

Besides, the dam was, and is, the lynchpin of what’s supposed to be a municipal power system in the city. As San Francisco, with Clean Power SF, moves ever close to public power, it’s insane to take away this critical element of any future system.

On its face, the measure merely requires the city to do an $8 million study of the proposal and then hold a binding vote in 2016 that would commit the city to a project estimated by the Controller’s Office to cost somewhere between $3 billion and $10 billion. Yet to even entertain that possibility would be a huge waste of time and money.

Prop. F is being pushed by a combination of wishful (although largely well-meaning) sentimentalists and disingenuous conservatives like Dan Lungren who simply want to fuck with San Francisco, but it’s being opposed by just about every public official in the city. Vote this down and let’s focus our attention on dealing with real environmental and social problems.

PROPOSITION G

CORPORATE PERSONHOOD

YES

If San Francisco voters pass Prop. G, it won’t put any law into effect. It’s simply a policy statement that sends a message: Corporations are not people, and it’s time for the federal government to tackle the overwhelming and deeply troubling control that wealthy corporations have over American politics.

Prop. G declares that money is not speech and that limits on political spending improve democratic processes. It urges a reversal of the notorious Citizens United vs. Federal Elections Commission Supreme Court decision.

A constitutional amendment, and any legal messing with free speech, has serious potential problems. If corporations are limited from spending money on politics, could the same apply to unions or nonprofits? Could such an amendment be used to stop a community organization from spending money to print flyers with political opinions?

But it’s a discussion that the nation needs to have, and Prop. G is a modest start. Vote yes.

Farmville, for real

Andrew Lam
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Farmville, for real

yael@sfbg.com

In the next few months, San Francisco will lose some of its most beloved urban farms.

The City Hall victory garden is now reduced to dirt. The grants that kept afloat Quesada Gardens Initiative, which creates community gardens in Bayview, were temporary and are now drying up. Kezar Gardens, funded by the Haight Asbury Neighborhood Council recycling center, is facing eviction by the city.

Time is up for Hayes Valley Farm, on the old freeway ramp, where developers are now ready to build condos.

St. Paulus Lutheran Church has also announced that it wants to sell the land that the Free Farm uses at Eddy and Gough.

“There’s the old joke about developers,” said Antonio Roman-Alcalá, co-founder of Alemany Farm and the San Francisco Urban Agriculture Alliance. “God must be a developer, because they always seem to get their way.”

At the same time, new urban agriculture projects have sprung up across San Francisco. Legislation authored by Sup. David Chiu will create a city Urban Agriculture Program, with the goal of coordinating efforts throughout the city.

So is the movement to grow food in the city progressing? It’s a tricky question that gets down to one of the oldest conflicts in San Francisco: The best use of scarce, expensive land.

THE VALUE OF FARMING

The San Francisco Planning and Urban Research Association lauds the value of community gardens. An April 2012 SPUR report notes that urban agriculture connects people “to the broader food system, offers open space and recreation, provides hands-on education, presents new and untested business opportunities, and builds community.”

According to the report, the city had “nearly 100 gardens and farms on both public and private land (not including school gardens),” two dozen of which started in the past four years.

But that’s nowhere near enough for the demand. “The last time waiting lists were surveyed, there were over 550 people waiting,” Eli Zigas, Food Systems and Urban Agriculture Program Manager at SPUR, told us. “That likely underrepresents demand because some people who are interested haven’t put their name down.”

Changes in zoning last year, and the recent ordinance to create the Urban Agriculture Program, show a measure of city support for urban farming and gardening.

“We have one of the most permissive zoning codes for urban agriculture that I know of in the country,” said Zigas.

One zoning change from 2011 makes it explicit that community gardens and farms less than one acre in size are welcome anywhere in the city, and that projects on larger plots of land are allowed in certain non-residential districts.

More recent legislation is meant to streamline the process of starting to grow food in the city. Applying to use empty public land for a garden can be an arduous process, and every public agency has a different approach. The hoops to jump through for land owned by the Police Department, for example, are entirely different than what the Public Utilities Commission requires. A new Urban Agriculture Program would coordinate efforts.

“The idea is to create a new program that will serve as the main point of entry. Whether it will be managed by existing agency or nonprofit is to be determined,” said Zigas.

If the timeline laid out in the ordinance is followed, the plan will be implemented by Jan.1, 2014.

By then, if all goes according to plan, no San Franciscan looking to garden will wait more than a year for access to a community garden plot.

NO NEW LAND

Roman-Alcalá said that efforts to clear the way for urban agriculture are much less controversial than for affordable housing and other tenets of anti-gentrification. But for all the good the latest legislation does, it doesn’t secure a single square foot of land for urban agriculture.

“If you look at the language, there’s nowhere in it that mandates or prioritizes urban agriculture on any site,” said Roman-Alcalá. “The closest thing is a call for an audit of city owned rooftops. That’s the closest it comes to changing land use.”

And it won’t be easy. “No matter how much support there is for urban agriculture, in the end, developers and their ability to make money is going to be prioritized,'” he said. “The only way to really challenge that right now is cultural. Social change is not an event but a process.”

Janelle Fitzpatrick, a member of the Hayes Valley Farm Resource Council and a neighborhood resident who has been volunteering at the farm since it started, is committed to that process.

“Hayes Valley Farm proves that when the city, developers, and communities come together, urban agriculture projects can be successful,” Fitzpatrick said. She and dozens of other volunteers created the farm, which is now lush with food crops, flowers, and trees. The farm has a bee colony, a seed library, and a green house. It offers yoga and urban permaculture classes.

Hayes Valley Farm started on land that used to be ramps to the Central Freeway before that section was damaged in the Loma Prieta earthquake. The land under the freeway was toxic, but volunteers spent six months layering mulch and cardboard and planting fava beans to create soil. It took less than a year to create a productive farm on a lot that had been vacant and overgrown for nearly two decades.

“We’re producing food, we’re producing community, we’re producing education,” said Zoey Kroll, another volunteer and resource council member.

When they vacate their land in the winter, many Hayes Valley Farm team members will already be knee deep in new urban agriculture projects. These include Bloom Justice, a flower farm in the Lower Haight that Kroll says will teach job skills like forestry and landscaping. The farm has also built a relationship with Hunters Point Family, working together to offer organic gardening and produce at Double Rock Community Garden at the Alice Griffith Housing Development and Adam Rogers Community Garden.

As for the loss of the current site, Kroll says, “It’s an exercise in detachment.” Change in landscapes and ownership is part of urban life, she said — “We’re a city of renters.”

We’re also a city of very limited land. “Securing permanent public land for urban agriculture would be challenging,” said Kevin Bayuk, an instructor at the Urban Permaculture Institute. “And securing long-term tenure on anything significant, an acre or more of land in San Francisco, if it were on private land, would be cost prohibitive.”

Of the city’s three largest farms, only Alemany Farm seems secure in its future. The farm is on Recreation and Parks Department land, and has been working with the department since 2005 to create a somewhat autonomous governance structure.

Community gardens on Rec-Park land are subject to a 60-page rulebook, and according to Roman-Alcalá, Alemany Farm’s operations were restricted by the rules.

Last week, the group’s plan to be reclassified as a farm instead of a garden was approved, eliminating some of the rules and creating an advisory council of community stakeholders that will exert decision making power over the farm, although Rec-Park still has ultimate authority.

“Now it’s more secure,” said Roman-Alcalá. “We’ve finally reached this point where the city acknowledges it as a food production site.”

“I think the urban agriculture movement is still growing and burgeoning in the grassroots sense,” said Bayuk. “And I think some of the grassroots growth is reflected in the policy and code changes. “I’m optimistic for the idea of people putting land into productive use to meet human needs and be a benefit of all life.”

This article has been corrected to reflect information about the location and ownership of the Free Farm.

Compromise measures

Andrew Lam
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3
Compromise measures

news@sfbg.com

San Franciscans are poised to vote this November on two important, complicated, and interdependent ballot measures — one a sweeping overhaul of the city’s business tax, the other creating an Affordable Housing Trust Fund that relies on the first measure’s steep increase in business license fees — that were the products of intense backroom negotiations over the last six months.

Mayor Ed Lee and his business community allies sought a revenue-neutral business tax reform measure that might have had to compete against an alternative proposal developed by Sup. John Avalos and his labor and progressive allies, who sought around $40 million in new revenue, although both sides wanted to avoid that fight and find a compromise measure.

Meanwhile, Mayor Lee was having trouble securing business community support for the housing trust fund that he pledged to create during his inaugural address in City Hall in January. So he modified his business tax proposal to bring in $13 million that would be dedicated to the Affordable Housing Trust Fund, but that didn’t satisfy the Avalos camp, who insisted the city needed more general revenue to offset cuts to city services and help with the city’s structural budget deficit.

Less than a day before the competing business reform measures came before the Board of Supervisors on July 24, a compromise was finally struck that would bring $28.5 million a year, with $13 million of that set aside for the affordable housing fund, tying the fate of the two measures together and creating a kumbaya moment at City Hall that was reminiscent of last year’s successful pension reform deal between labor and the business community.

But there was one voice raised at that July 24 meeting, that of Sup. David Campos, who asked questions and expressed concerns over whether this deal will adequately address the “crisis” faced by the working class in a city that will continue to gentrify even if both of these measures pass. Affordable housing construction still won’t meet the long-term needs outlined in the city’s Housing Element that indicates 60 percent of housing construction would need public subsidies to be affordable to current city residents.

It’s also worth asking why a business tax reform measure that doubles the tax base — just 8.4 percent of businesses in San Francisco now pay the payroll tax, whereas 16.4 percent would pay the gross receipts tax that replaces it — doesn’t increase its current funding level of $410 million (the $28.5 million comes from increased business license fees). Some industries — most notably the technology and restaurant industries that have strongly supported Mayor Lee’s political ambitions — could receive substantial tax cuts.

Politics is about compromise, and Avalos tells us that in the current political climate, these measures are the best that we can hope for and worthy of progressive support. And that may be true, but it also indicates that San Francisco will continue to be more welcoming to businesses than the working class residents struggling to remain here.

 

SOARING HOUSING COSTS

As Mayor Lee acknowledged during his inaugural speech, the boom times in the technology industry has also been driving up commercial and residential rents, he sought to create “housing for the 100 percent.”

The median rent in San Francisco has been steadily rising, jumping again in June an astounding 12.9 percent over June of last year, according to real estate monitor RealFacts, leaving renters shelling out on average an extra $350 a month to landlords.

Driven by a booming tech industry and a lag in new housing, the average San Francisco apartment now rents for $2,734. That’s an annual increase of $4,000 per unit over last year, in a city that saw the highest jumps in rent nationally in the first quarter of 2012. Even prices for the average studio apartment have edged up to $1,800 a month.

The affordability gap between housing and wages in the city is stark. Somebody spending a quarter of their income on rent would need to be making $85,000 a year just to keep up with the average studio. With a mean wage of $64,820 in the San Francisco metro area, even middle class San Franciscans have a difficult time affording a modest apartment. For the city’s lowest paid workers, even earning the country’s highest minimum wage of $10.25 an hour, even devoting every earned dollar to rent still wouldn’t pay for the average small studio apartment.

For those looking to buy a home in the city, it can be a huge hurdle to put aside a down payment while keeping up with the city’s high rents. Almost 90 percent of San Franciscans cannot afford a market rate home in the city. The average San Francisco home price was up 1.9 percent in June over May, climbing to $713,500, or a leap of $50,000 per unit over last year’s prices.

In the 2010 census, before the recent boom in the local real estate market, San Francisco already ranked third in the nation for worst ratio between income and home ownership prices, behind Honolulu and Santa Cruz.

But as the city leadership grapples to mitigate the tech boom’s effects, the lingering recession and conservative opposition to new taxes have gutted state and federal funds for affordable housing. Capped off last December by the California Legislature’s decision to dissolve the State Redevelopment Agency, a major source of money for creating affordable housing, San Francisco has seen a drop of $56 million in annual affordable housing funds since 2007.

Trying to address dwindling funding for affordable housing, the Board of Supervisors voted 8-2 on July 24 to place the Affordable Housing Trust Fund measure on the fall ballot. Only the most conservative supervisors, Sups. Sean Elsbernd and Carmen Chu, opposed the proposal. Sup. Mark Farrell, who has signaled his support for the measure, was absent.

“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. I applaud the Board of Supervisors,” Mayor Lee said in response.

At the heart of the program, the city hopes to create 9,000 new units of affordable housing over 30 years. The measure would set aside money to help stabilize the ongoing foreclosure crisis and replenish the funds of a down payment assistance program for those earning 80 to 120 percent of the median income.

To do so, the city anticipates spending $1.2 billion over the 30-year lifespan of the program, with a $20 million annual contribution the first year increasing $2.5 million annually in subsequent years. It would fold some existing funding in with new revenue sources, including $13 million yearly from the business tax reform measure. Language in the housing fund measure would allow Mayor Lee to veto it is the business tax reform measure fails.

The board was forced to delay consideration of the business tax measure until July 31 because of changes in the freshly merged measures. That meeting was after Guardian press time, although with nine co-sponsors on the board, its passage seemed assured even before the Budget and Legislative Analysts Office had not yet assessed its impacts, as Campos requested on July 24.

“I do believe that we have to ask certain questions when a proposal of this magnitude comes forward,” Campos said at the hearing, later adding, “When you have a proposal of this magnitude, you’re not going to be able to adjust it for some time, so you want it to be right.”

The report that Campos requested, which came out in the late afternoon before the next day’s hearing, agreed that it would stabilize business tax revenue, but it raised concerns that some small businesses exempt from the payroll tax would pay more under the proposal and that it would create big winners and losers compared to the current system.

For example, it calculated that between the gross receipts tax and business license fee, a sample full service restaurant would pay 69 percent less taxes and a supermarket 33 percent less taxes, while a commercial real estate leasing firm would pay 46.7 percent more tax and a large engineering firm would see its business tax bills more than double.

Board President David Chiu, who has co-sponsored the business tax reform measure with Mayor Lee since its inception, agreed that it is a “once in a decade reform,” calling it a “compromise that reflects the best sense of that word.” And that view, that this is the best compromise city residents can expect, seems to be shared by leaders of various stripes.

 

BACKING THE COMPROMISE

The business community and fiscally conservative politicians have long called for the replacement of the city payroll tax — which they deride as a “job killer” because it uses labor costs to gauge the size of company’s size and ability to pay taxes — with a gross receipts tax that uses a different gauge. But the devil has been in the details.

Chiu praised the “dozens and dozens and dozens of companies that have worked with us to fine-tune this measure,” and press reports indicate that representatives of major corporations and economic sectors have all spent hours in the closed door meetings shaping the complicated formulas for how they will be taxed, which vary by industry.

When the Guardian made a Sunshine Ordinance request to the Mayor’s Office for a list of all the business representatives that have been involved in the meetings, its spokespersons said no such list exists. They have also asked for a time extension in our request to review all documents associated with the deliberations, delaying the review until next week at the earliest, after the board approves the measure.

But the business community seems to be on board, even though some economic sectors — including real estate firms and big construction companies — are expected to face tax hikes.

“The general reaction has been neutral to favorable, and I expect we’ll be supportive,” Jim Lazarus, the vice president of public policy for the San Francisco Chamber of Commerce, who participated in crafting the proposal but who said the Chamber won’t have an official position until it votes later this week.

Lazarus noted the precipitous rise in annual business license fees — the top rate for the largest companies would go from just $500 now to $35,000 under the proposal, going up even more in the future as the Consumer Price Index rises — “but some of it will be offset by a drop in the payroll tax,” Lazarus said.

He also admitted that the new tax system will be “hugely complicated” compared to the payroll tax, with complex formulas that differ by sector and where economic transactions take place. But he said the Chamber has long supported the switch and he was happy to see a compromise.

“I’m assuming it will pass. I don’t believe there will be any major organized opposition to the measure,” Lazarus said.

Labor and progressive leaders also say the measure — which exempts small businesses with less than $1 million in revenue and has a steeply progressive business license fee scale — is a good proposal worth supporting, even if they didn’t get everything they wanted.

“We fared pretty well, the royal ‘we,’ with the mayor starting off from the position that he wanted a revenue-neutral proposition,” Chris Daly, who unsuccessfully championed affordable housing ballot measures as a supervisor before leaving office and becoming the political director for SEIU Local 1021, the largest union of city employees.

Both sides say they gave considerable ground to reach the compromise.

“Did we envision $28.5 million in new revenue? No,” said Lazarus, who had insisted from the beginning that the tax measure be revenue-neutral. “But we also didn’t envision the Affordable Housing Trust Fund.”

Daly and Avalos also said the measures need to be considered in the context of current political and economic realities.

“We were never going to be able to pass — or even to craft — a measure to meet all of the unmet needs in San Francisco,” Daly said. “Given the current political climate, we did very well.”

“If we had a different mayor who was more interested in serving directly the working class of the city, rather than supporting a business class that he hopes will serve all the people, the result might have been different,” Avalos said. “But what’s significant is we have a tax measure that really is progressive.”

Given that “we have an economic system that is based on profits and not human needs,” Avalos said, “This is a good step, better that we’ve had in decades.”

 

THE HOUSING CRISIS

The tax and housing measures certainly do address progressive priorities — bringing in more revenue and helping create affordable housing — even if some progressives express concerns that conditions in San Francisco could get worse for their vulnerable, working class constituents.

“I don’t know if the proposal before us is aggressive enough in terms of dealing with a crisis,” Campos told his colleagues on July 24 as they discussed the housing measure, later adding, “As good as this is, we are truly facing a crisis and a crisis requires a level of response that I unfortunately don’t think we are providing at this point.”

Not wanting to let “the perfect be the enemy of the good,” Campos said he still wanted to be able to support both measures, urging the board to have a more detailed discussion of their impacts.

“I wish this went further and created even more funding for critically needed affordable housing,” Sup. Eric Mar said before joining Campos in voting for the proposal anyway. “I think they need to build 60 percent of those units as below market rate otherwise we face more working families leaving the city, and the city becoming less diverse.”

Yet affordable housing advocates are desperate for something to replace the $56 million annual loss in affordable housing the city has faced in recent years, creating an immediate need for action and potentially allowing Lee to drive a wedge between the affordable housing advocates and labor if the latter held out for a better deal.

Many have heralded the mayor’s process in bringing together developers, housing advocates, and civic leaders to build a broad political consensus for the measure, particularly given the three affordable housing measures crafted by progressives over the last 10 years were all defeated by voters.

“One of the goals of any measure like this is for it to gain broad enough support to actually pass,” Sup. Scott Wiener said at a Rules Committee hearing on the measure.

In the measure’s grand bargain, developers receive a reduction in the percentage of on-site affordable housing units they are required to build, from 15 percent of units to 12 percent. The city will also buy some new housing units in large projects, paying market rate and then holding them as affordable housing — the buying power of which could be a boon to developers while creating affordable housing units.

At its root, the measure shifts some of the burden of funding affordable housing from developers to a broader tax base and locks in that agreement for 30 years, which could also spur market rate housing development in the process.

A late addition to the proposal by Farrell would create funding to help emergency workers with household earnings up to 150 percent of average median income buy homes in the city, citing a need to have these workers close at hand in the event of an earthquake or other emergency.

While some progressives have grumbled about the givebacks to developers and the high percentage of money going to homebuyer assistance in a city where almost two-thirds of residents rent, affordable housing advocates are pleased with the proposal.

“Did we gain out of this local package? Yes, we got 30 years of local funding. We came out net ahead in an environment where cities are crashing. We essentially caught ourselves way early from the end of redevelopment funds,” said Peter Cohen, executive director of the San Francisco Council of Community Housing Organizations.

Without it, Cohen says many affordable housing projects in the existing pipeline would be lost. “This last year was a bumpy year, and we will not be back to the same operation level for a number of years,” Cohen said. “There was a dip and we are coming out of that dip. It will take us a while to get back up to speed.”

The progressive side was also able to eliminate some of the more controversial items in the original proposal, including provisions that would expand the number of annual condo conversions allowed by the city and encourage rental properties to be converted into tenancies-in-common.

With ballot measures notoriously hard to amend, the Affordable Housing Trust Fund measure is a broad outline with many of the details of how the fund would be administered yet to be filled in. If passed, it will be up to Olson Lee, head of the Mayors Office on Housing and former local head of the demised redevelopment agency, to fill in the details, folding what was essential two partnered affordable housing agencies into a single local unit.

But even the most progressive members of the affordable housing community said there was no other alternative to addressing affordable housing in the wings — which is indeed a crisis now that redevelopment funds are gone — making this measure essential.

As Sara Shortt of the Housing Rights Committee of San Francisco told the Rules Committee, “We lost a very important funding mechanism. We have to replace it. We have no choice.”

Guardian Voices: Hassle-free housing

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Guardian Voices: Hassle-free housing

I’m talking to the amazing organizers at Causa Justa:: Just Cause (CJJC) about their work to protect homeowners from foreclosure by the big banks, about their long history of tenants’ rights work, and what they are up to right now. Blanca Solis says they’ve launched a new campaign for what they’re calling the “Hassle-Free Housing” ordinance. She’s a grassroots leader from CJJC, and she’s asking for our support. To protect tenants from unscrupulous landlords. To stop unfair evictions. To stop wringing our hands about gentrification and families leaving the city. She says we can do something very straightforward to keep working families in their homes.
 
On Tuesday July 31st, Solis will join other tenant leaders, advocates and supporters at city hall to call for an end to tenant harassment by landlords. The San Francisco Tenants Union will be there. Organizers at CJJC have learned from years of experience with Latino tenants struggling to make ends meet in the midst of this rapidly gentrifying city that “one of the quickest and cheapest ways to evict a tenant is by harassing them until the situation becomes unbearable and the tenant moves on their own. Whey they leave, the landlord has an empty unit that they can rent to new tenants at market-rate rent.”
 
Faced with a pattern of such blatantly unfair practices, tenant activists took the issue to the voters in 2008; when “Prop M” passed, it was an important victory for this still-majority-renter-city. But then, the landlord’s lawyers got hold of it, and sued to stop implementation.
 
No one seems to be denying that landlords do this, and that it’s wrong. But what can a family do to stop the harassment, hold on to their housing and get some relief? Here’s where the “Hassle-Free Housing” ordinance comes in. It builds on Prop M and addresses the landlords’ legal issue. It would “allow tenants to claim damages from their landlords for each incident of harassment in small claims court to collect statutory damages of up to $2,000 for each incident.”
 
Sounds good, let’s do it. City Hall – get on it.
 
All over San Francisco, probably every night, people are sitting around shaking their heads about how expensive the city has become. How families have been pushed and priced out. Folks shrug and say “But, what can you do?”
 
There is a long, proud, and painful history in San Francisco of everyday people organizing to put a stop to unfair evictions, developer-driven displacement, and the over-production of luxury housing. From the African American community’s fight to save the Fillmore from redevelopment’s “negro removal” in the 1960s, to the Filipino-led struggle to stop the eviction of elderly men at the I-Hotel in the 1970s, and to Mission activists’ campaigns to control land use during the intense gentrification of the 1990’s dot-com boom. (Just this week there’s a big celebration marking the 35th Anniversary of the I-Hotel struggle.) 
 
These “housing justice” fights are ultimately about who has the power to shape the future of our city and who has the power to determine who can and cannot afford to live here. That’s where we all come in – all of us who are renters whose lives will be better with a “Hassle-Free Housing” ordinance; all of us whose housing is insecure – because we fear foreclosure or are a paycheck away from homelessness. This is an issue of people power, and you can do something now – attend the press conference at 10am tomorrow on the steps of City Hall, or go to CJJC’s website to sign up as a campaign supporter. Being right is good, but ultimately it’s people power that matters.
 
When Solis was asked why she joined the hassle-free housing campaign and why she’s coming to City Hall tomorrow, she said:
 
“Que los supervisores aseguren que los inquilinos estemos protegidos de los desalojos injustos por parte de los caseros y asi mismo vivamos en lugares dignos, seguros y libres de hostigamiento”
 
“So that the supervisors can ensure that we, tenants, are protected from illegal and unjust evictions by landlords and be able to live in homes that are dignified, safe and free of harassment”
 
Solis and the other incredible grassroots leaders at CJJC are full of courage and determination, and have not given up hope that there is a bright future for San Francisco. Let’s join them!

Brown, Pak, and Olague

Zelda Bronstein
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Brown, Pak, and Olague

Christina Olague was a great planning commissioner. I’ve always liked her, and when she was appointed we pointed out how strongly she was rooted in the progressive community.

Olague has strong progressive activist credentials, from working with the Mission Anti-Displacement Coalition to protect low-income renters during the last dot-com boom to her more recent community organizing for the Senior Action Network. She co-chaired the 2003 campaign that established the city’s minimum wage and has been actively involved in such progressive organizations as the Milk Club, Transit Riders Union, and the short-lived San Francisco People’s Organization.

She also served two terms on the Planning Commission — appointed by Board of Supervisors then-President Matt Gonzalez in 2004 and reappointed by then-President Aaron Peskin in 2008 — where she was known for doing her homework on complicated land use issues and usually landing on the progressive side of divided votes.

We’ve had some disagreements since she took office — particularly around 8 Washington. (I also disagreed with the Labor Council on that one, and only three of the supervisors agreed with me.) And it’s not the first time an elected official I supported turned around and infuriated me on a development vote.

I want Olague to succeed; I want her to come to us in the fall with a record that makes us want to endorse her for a full four-year term. She’s been talking seriously about violence in the district and about young people, predominantly African Americans, getting killed. I feel like she wants to do the right thing.

But her reelection effort is starting to feature some bad actors.

At a recent fundraiser in Chinatown, former Mayor Willie Brown, who ranks as one of the most corrupt public officials in modern San Francisco history and whose administration was a disaster for poor and working-class people (he once even said that poor people ought to just get out of town because this city is too expensive for them), stood up and made a speech, warmly endorsed Olague and said he would be with her “all the way.” Olague then thanked Rose Pak, the Chinatown power broker, for “all of her support over the last few months.”

This makes me nervous. And it hasn’t helped my nerves that I’ve been trying to talk to Olague about these issues for the last week, and she keeps avoiding the conversation by not returning calls or cutting conversations short when I do reach her.

Willie Brown, with his Chron column, has taken on this funny, warm, man-about-town persona, but when he was running City Hall, everything was about money. He cut deals right and left that destroyed communities and neighborhoods. He oversaw, aided and encouraged what we called the “Economic Cleansing of San Francisco.” Tens of thousands of working-class people, artist, writers, young people … were driven out of the city by a steamroller of gentrification — all with the mayor’s blessing.

Now he’s working as a private attorney, and last time we checked was getting $200,000 a year to represent PG&E. We have no idea what other big corporate clients he has or what he does for them — but it’s clearly not writing legal briefs and handling litigation. He gets paid for being a political fixer. For the bad guys.

And he’s going to be with Olague “all the way.”

Damn.

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