Ideas that work: a plan for a new San Francisco

Pub date August 10, 2010

OPINION San Francisco is a city of tremendous riches and problems — a locus of wealth, inequality, innovation, creativity, and sometimes stifling resistance by political and economic power brokers. It’s time to break through. We have the ability, and opportunity, to create a whole new set of economic, social, and political relationships between people and government. On everything from municipal banking, to Muni reform, to public-controlled sustainable energy production and community-driven budgeting, we have a flood of ideas from thinkers and activists across the city.

The Aug. 14-15 Community Congress at the University of San Francisco will focus on turning those ideas into a political platform the city can implement. Last week, we described the vision; this week, we offer some proposals that will be discussed at the event; following the event, others will be posted at

The event runs Aug. 14 from 9 a.m.–5 p.m. and Aug. 15 from 9 a.m.–1 p.m. at USF’s McLaren Conference Center. For information, go to (Karl Beitel and Christopher Cook)


San Francisco is rich — it has $16.1 billion in assets, with a net worth of $6.5 billion, according to the city treasurer. With a little maneuvering and political will, roughly a half-billion of that money could be devoted to creating a municipal bank: a fiscally solvent, federally insured economic engine that would invest in community development projects serving underfunded activities and endeavors, providing significant economic and social benefits to the residents of San Francisco.

With its own public bank, San Francisco could begin to fund and promote more community-centered forms of economic development. Worker co-ops, for instance, could get loans for projects that are socially beneficial and economically viable. The bank could also help generate new homegrown industries that produce both revenue and social value to the city. This would help democratize the city economy, giving financial muscle to community-based projects and neighborhood-serving businesses.

Over a period of three to five years, a modest portion of the city’s liquid investments can be transferred to create to the new bank. The bank could use this pool of capital to extend low-interest, long-term loans for projects located in San Francisco. The bank would offer a full spectrum of retail banking services, such as money market accounts, to attract additional deposits to supplement funds from the city.

A municipal bank has potential to grow into a major economic force in the city for financing community-centered development. With the right up-front commitment from the city, the total asset portfolio of loans and other investments would grow far beyond this initial public investment — representing a significant infusion of loan capital into currently underserved segments of the credit market in San Francisco.

The municipal bank would be a member-owned, federally chartered, and federally insured credit union. It would engage in rigorous vetting of loan applicants. But because the bank would not run as a profit-maximizing enterprise, loan officers would explicitly consider projects in light of their economic viability and potential contribution to the economic, social, and cultural well being of San Francisco.

Priority could, for instance, be given to loans for affordable housing development and community economic development. In particular, the bank could prioritize businesses and enterprises that represent alternative models of ownership such as worker co-ops and worker collectives, and smaller, community-serving, locally-based, social enterprise-type businesses.

To ensure that the bank’s lending activities reflect the need for more democratic modes of credit and finance, governance and oversight could include representation from social groups and constituents normally excluded from corporate governance. The bank’s member-owners would elect the board of directors.

Municipal bank funds would be completely separate from the city’s general fund, with strict firewalls imposed to assure that lending activities do not become intermingled in any way with the annual appropriations process.

By creating its own bank, San Francisco would be a national model for community-based development and economic democracy. It would be a national first, and has the potential to transform how cities think about local economic development. (Beitel)


Since the beginning of the dot-com boom, San Francisco has seen displacement of low-income families from rent-controlled housing in alarming numbers. Much of this displacement has been happening through conversion of small residential apartment buildings (between four and 12 units) into tenancy in common units. Small-site displacement tends to target seniors, disabled people, and working class families — and many of the units that were converted were, under rent control, de facto affordable housing.

In addition, over the past 15 years the city has lost 4,370 units due to Ellis Act evictions. At the same time, the city’s housing production model favors larger projects because of the economies of scale possible for new construction of big projects, with 70 or more units. While these projects are important in adding to the city’s affordable housing stock, sites to accommodate giant developments are in short supply.

So how do we address San Francisco’s chronic affordable housing crisis. First, stabilize low-income communities and preserve diverse neighborhoods by encouraging the city to invest in developing a small sites acquisition and rehabilitation program that could help nonprofits take over and operate affordable rental housing for low-income tenants. That property could also be converted to limited equity housing cooperatives and community land trust properties.

Next, the city should ban all TICs from becoming condos. The city can give landlords and speculators a choice: If you want your property to be eligible for condo conversion, with all the economic benefits that come with that designation, then you need to follow the process and abide by tenant protections in the condo law. If you want to ignore the condo law, then you’re stuck with a TIC.

To further protect renters, prior to sale of a renter-occupied unit, the city could require the owner to offer tenants the right to buy the unit, at a price based on the last best offer from a bona fide purchaser.

The Rent Board also needs reform. The panel, which oversees rent increases, consists of five members: two landlords, two tenants, and one homeowner. All are appointed by the mayor. We suggest three tenants, two landlords, and two homeowners — with the appointments split between the mayor and the supervisors.

There also must be a permanent, local source of funding for affordable housing development. A progressive increase in the real estate transfer tax could generate $45 million annually.

We further support Sup. Ross Mirkarimi’s proposed legislation that would protect resident’s rights during relocation and ensure their right to return to buildings that have been redeveloped. (Amy Beinart and the Council of Community Housing Organizations)


More than any other American city, San Francisco relies on a network of faith- and community-based nonprofits to deliver critical health and human services to its poorest and sickest residents. More than 15,000 people are employed in this sector, which had a total budget of almost $800 million in 2000.

Health and human service nonprofits play a significant role in providing a substantial portion of the city’s services for seniors, people with AIDS, the homeless, children and youth, people with special physical and mental needs, and those who suffer from substance abuse.

Yet this critical sector finds itself bearing the brunt of cuts and reduction in services caused by the fiscal crisis facing San Francisco.

So what can we do? Here are seven suggestions.

First, conduct a coordinated citywide health and human services needs assessment driven by neighborhoods and communities.

Second, working with service users, service providers, and city employees, create a 10-year plan for health and human services that can guide yearly budget considerations.

Third, as the city implements the 2009 ballot measure that calls for a two-year budget cycle informed by five-year financial plans, require department heads and commissions to include the perspective of professional service providers and service users, including a standards analysis plan and a narrative about the impact on services.

Fourth, open a dialogue with the foundation community on addressing the changing needs of the nonprofit human services community, including community needs, accountability, and funding cycles.

Fifth, depoliticize the request-for-proposals (RFP) process by moving it out of city departments and into the Controller’s Office.

Sixth, require city departments that contract with nonprofit health and human service providers to complete their implementation of the recommendations to streamline the city’s contracting and monitoring processes approved by the 2003 City Nonprofit Contracting Task Force, and ensure that current procedures and processes are consistent with those recommendations.

And seventh, preserve services for the most vulnerable San Franciscans by focusing on revenue solutions to the city’s ongoing structural budget deficit, including November 2010 campaigns to increase the hotel tax and the real property transfer tax. (Debbi Lerman, Human Services Network)


Although these are hard times, there’s an opportunity for San Francisco to realize a new model of economic sustainability — by supporting worker cooperatives.

The worker cooperative model is a business form well-suited to the diverse needs of urban areas and is already viable in a broad variety of sectors including manufacturing, service, and retail. A key aspect of worker cooperative development is that its goal is not just the creation of jobs; it’s also about making business ownership accessible.

An inspiring new model of economic development is currently taking place with the Evergreen Cooperatives in Cleveland. In an ambitious effort, anchor institutions such as the local universities, hospitals, and the City of Cleveland have established procurement agreements with developing worker cooperatives rooted in the struggling urban communities of Cleveland (where unemployment rates are as high as 25 percent). The goal is to redirect the estimated $3 billion that these anchor institutions spend on goods and services toward worker cooperatives in the communities where these institutions are located. The first two business models underway are a commercial laundry service and a solar installation company.

There’s also a lot of inspiring work already being done by the worker cooperative community in the Bay Area. The Arizmendi Association continues to develop new worker-owned bakeries despite the economic recession. This fall, Arizmendi will launch its second SF location in the Mission District, creating new jobs and opportunities for local residents to have ownership over their work. Rainbow Grocery and Other Avenues are two extremely successful, long-lasting worker-owned grocery stores in San Francisco.

The city ought to officially recognize the worker cooperative model as both viable and preferable, and include it in the city’s various efforts of economic development. And city officials should take a leadership role in reimagining what a vibrant economy could look like and begin to promote worker cooperatives as central to that vision. (Poonam Whabi, Rick Simon, Steve Rice, Inno Nagara, and Nadia Khastagir)