The right housing fees

Pub date April 18, 2006
SectionEditorialSectionNews & Opinion

EDITORIAL The San Francisco Chronicle has finally noticed what we reported a month ago: The Board of Supervisors has effectively put in place a moratorium on new market-rate housing on the east side of the city. We hear that city planners are looking for loopholes to undermine the temporary ban, but the intent of what the supervisors did is clear: Until there’s a detailed and valid review of how new high-end condos and lofts impact blue-collar jobs and low-income housing, the developers will have to let their demolition and excavation equipment idle.

Meanwhile, Sup. Chris Daly is moving to increase significantly the amount of low-cost housing that private developers have to build to win permission for future projects. Daly’s legislation is a good start and sets the right tone for the debate, but the board should go even further.

The Daly plan would apply to almost all new market-rate housing built anywhere in the city and would take effect whenever the moratorium ends. It would require most developers to offer 15 percent of the units of any project for less than market rates, and that number would jump to 25 percent if the affordable housing was built on another site. In other words, a builder who wants to put up 500 luxury condos in SoMa would have to build 125 affordable units somewhere else in the city.

That’s nice, but it’s not enough.

The city’s own general plan makes it clear that 72 percent of all new housing needs to be affordable to moderate- and low-income people. And the planning process for the eastern neighborhoods has still offered no proposals for how to make that happen.

At the same time, of course, the plans to intensely develop an area poorly served by transit and generally bereft of public infrastructure and open space utterly ignore the fact that it will cost hundreds of millions of dollars to create real neighborhoods (instead of clusters of heavily fortified, gated buildings).

Daly’s got the right idea: Developers are making a fortune building million-dollar condos in San Francisco, and they can well afford to give the city a whole lot back. But it’s worth taking a longer approach here and considering the price of bringing as many as 100,000 more people to SoMa, Potrero Hill, Dogpatch, the central waterfront, and BayviewHunters Point and figure out who is going to pay for it.

Daly could start by asking for a detailed independent study of what it really costs a developer to build new condo units in the city and what the current profit margins are. Then take the city’s affordable-housing needs, the need for public-sector development, and the estimated new tax revenue and compare: Can fair taxes and requirements on the developers raise enough money to meet the city’s needs?

And, if not, we get back to the question this paper has been asking for over a year: Why are we building any new market-rate housing, anyway? SFBG