Mayor Ed Lee acknowledged Monday that San Francisco is experiencing a housing crisis and widespread anxiety over daily expenses during the unveiling of his proposed $8.6 billion budget. To address the challenges, he said hundreds of below-market-rate units will be built during the next two years.
As the mayor has promoted the technology industry since coming into office in 2011, The City's unemployment rate has fallen from 9.5 percent to 4.4 percent. The strong economy has brought down the real estate vacancy rate but has also led to soaring rents and higher everyday costs, while tenant displacement and evictions have increased, too.
“This economic growth … has also led to rising prices for homes and other goods and services across The City,” Lee said during his budget address in the legislative chamber at City Hall. “I recognize that many San Franciscans are feeling anxious about how to make a living and a life in our great city.”
By using $44.4 million from the voter-approved 2012 Housing Trust Fund, along with borrowing $50 million in future revenue from the fund, Lee said that during the next two years “hundreds of new affordable-housing units” will go on the market. The money will fill funding gaps on projects and act as seed money for new ones. It remains unclear exactly what housing developments the mayor intends to fund initially, but announcements are expected in the coming weeks.
“The No. 1 issue I hear about when I am in the community is the affordability of housing,” Lee said. “The shortage of housing … has become a genuine crisis and demands solutions.”
Supervisor London Breed helped secure $2 million in the budget to rehabilitate 170 federally funded public-housing units for homeless families on the closed waitlist.
“This is something that has never been done,” Breed said of the initiative. “We are saying we are not going to let these units sit vacant.”
Supervisor John Avalos wondered how much above and beyond the call of duty the mayor was going to address the challenges of many residents.
“He hit the right notes on rollout,” Avalos said, “but I'm still waiting to see if Mayor Lee is dressing up as his own initiatives expenditures that the charter clearly mandates The City to make on affordable housing and education.”
The Board of Supervisors Budget and Finance Committee will begin its review of the budget proposal and make changes beginning next week.
San Francisco's workforce has grown from 27,669 in the previous budget cycle to 28,497. The ability to spend more is attributable to a strong tax base, including property, sales and business taxes.
The budget proposal notes that the San Francisco Center for Economic Development's 2014 report found that city-based firms received $1.3 billion in venture capital investments in the fourth quarter of 2014, comprising 15 percent of all such investments in the nation over that time.
That level of investment is also evident by the fact that technology has surpassed the banking and finance industry as the top job creator.
At least 18 technology companies — Uber, Weebly and Xoom, among others — signed leases to expand in The City last year.