On November 3, San Francisco residents will vote on two housing referendums. Proposition A would provide $310 million dollars in funding. Proposition K would increase the sale of public land for the development of affordable housing. Mayor Edwin Lee (D) heralds the ballot initiatives as important for creating affordable housing in the city.
The San Francisco Board of Supervisors unanimously supports both measures. The referendums are also supported by a broad coalition of San Francisco organizations including the Chamber of Commerce, the Building Trades and Labor Councils, and the Council of Community Housing Organizations. The Non Profit Housing Association of Northern California (NPH), an NLIHC state coalition partner, is campaigning actively for the passage of Propositions A and K. NPH is hosting volunteer phone banks, fundraising, and educating voters about the importance of affordable housing.
Proposition A provides for a $310 million maximum general obligation housing bond to build and preserve affordable housing. In November 2014, voters overwhelming passed a separate, nonbinding policy planning proposition to build 30,000 new homes by 2020, with at least one-third of the new homes to be priced as affordable to low and moderate income households. Proposition A is expected to benefit 1,500 households and will be followed by further bonding initiatives. Proposition A would:
•Construct, develop, and rehabilitate affordable rental housing near established transit corridors or within priority development areas,
•Acquire, rehabilitate, and preserve existing rental housing as affordable housing in order to prevent the loss of rental housing stock and the displacement of long-time residents,
•Repair and reconstruct dilapidated public housing developments or provide infrastructure improvements that allow for the repair or improvement of public housing sites,
•Create a middle income rental housing program,
•Create a middle income home ownership program to assist residents acquiring their first homes,
•Renew the Teacher Next Door Program to assist educators in purchasing their first homes, and
•Acquire, preserve, and develop affordable housing in the Mission Area Plan.
Proposition A does not specifically state which income levels will be targeted with the new revenue, but San Francisco’s Housing Bond Report has established guidelines. Nearly half of the bond revenue, $150 million, would be allocated for the creation of new, permanently affordable homes for low and moderate income households. These income definitions are expected to follow HUD standards: “low income” means households at or below 80% of area median income (AMI) and “moderate income” means households at or below 120% of AMI. An additional $80 million will be used for public housing revitalization. The final $80 million will be used to expand housing options for middle income households, meaning affordable at 150% of AMI and below.
Prior to Proposition A, San Francisco’s most recent municipal housing bond (for $200 million) was proposed to voters in 2014, but failed to reach the two-thirds supermajority necessary to pass, in part because it required an increase in property tax rates. Proposition A, however, will not raise property taxes to pay for the debt. While the primary funding for debt service on the new housing bond will come from the property taxes, it is estimated that the expected growth in the city’s tax base will cover the $310 million bond issue without an increase in tax rates. An earlier proposed bond of $500 million might have necessitated an increase in tax rates, leading to $310 million as the compromise amount.
The ballot measure is expected to face little opposition in November, and it has strong support throughout the San Francisco advocacy community. Still, advocates worry that low voter turnout in an off-year election could influence the results, especially given the two-thirds supermajority required to pass all bonding initiatives. The San Francisco Apartment Association opposes Proposition A, but it is not yet clear how active it will be in trying to defeat the measure at the polls.
Proposition K would authorize the development of new housing projects on surplus public land in order to expand the pool of housing affordable to low and middle income households. If approved, Proposition K will widen the target income levels for housing developments on surplus public property to include households ranging from the homeless or those with very low incomes to those with incomes up to 150% of the area’s median income.
At no additional cost to the city, this proposition would address one of the largest obstacles to building affordable housing in San Francisco, which is the high cost of land. According to Kate Hartley, Deputy Director of the Mayor’s Office of Housing and Community Development, it costs approximately $250,000 to build one unit of new housing in the city. By selling public land far below the average cost of comparable property, the cost of housing construction will be reduced and the creation of affordable housing would be more financially feasible.
San Francisco housing policy defines affordable housing as housing that is affordable to households earning up to 60% of the area median income. If the ballot measure is adopted, 33% of the total housing units built on surplus public land must be affordable, with 15% of the units in housing developments on surplus lands affordable for those earning 55% or less of the area’s median income and another 18% of the units affordable to those earning 120% or less of the area median income.
Proposition K is expected to pass. Because there is no bond component, this ballot initiative needs only a simple majority vote.
"These are critical measures needed now to address our affordability crisis and ramp up production of affordable homes in San Francisco,” said Michael Lane, Policy Director at NPH. “With a two-thirds vote requirement, we can't take passage of Proposition A for granted and are working hard to inform voters."
For more information about campaign efforts to pass Propositions A and K, contact Michael Lane, Policy Director at NPH, at email@example.com