A new proposal to change The City’s Inclusionary Housing program is threatening to make it even more difficult for lower-income San Francisco workers to find homes.
While it is hard for many households to find housing, the challenge is most acute for The City’s low- and moderate-income workforce. In San Francisco, almost a third of these households are what the government describes as “severely rent burdened,” paying more than half their income in rent. That means little money left over for transportation, food, childcare, school and other necessities. On the other hand, almost no households above this moderate income level — individuals earning up to $90,000 per year or families of three earning up to $116,000 per year, or in more technical language, those who earn under 120 percent of the area median income (AMI) — can be described as severely rent-burdened, though in this over-priced city it’s no doubt some are paying more than 30 percent of their income in rent or mortgage.
What do we do for our “missing middle,” the low- and moderate-income workforce who have high housing cost burdens, yet who earn too much for The City’s federal and state-subsidized, very-low-income housing? Over the years, our affordable housing advocates have worked hard to create new programs to serve this low- and moderate-income workforce, including the largest first-time homeownership down payment program in the state, an acquisition program for small mixed-income apartment buildings, and The City’s Inclusionary Housing program, which is one of the most important workforce housing opportunity policies in The City’s toolbox. This program requires market-rate developments to include a certain percentage of permanently affordable units within their projects, and with last June’s Proposition C, this program was thoughtfully expanded to truly meet the housing needs of The City’s middle-income workforce.
Now, however, Mayor Ed Lee and several moderate board members appear to be launching a new proposal to change up The City’s Inclusionary Housing policy. Announced with a splashy news conference last week, this proposal would be a huge step backwards, pitting higher-income workers against lower-income workers who are all part of the same “missing middle.”
Currently because of Prop. C, which was overwhelmingly supported by San Francisco voters, developers are required to build onsite inclusionary units to serve households at two critical tiers: rental homes at 55 percent AMI and at 100 percent AMI, and homeownership opportunities for workers from 80 percent to 120 percent AMI. It was a “both/and” approach that expands the pie to create housing for the full range of residents caught in that missing middle and is truly a “Housing for All” policy. But the new proposal from City Hall eliminates the lower-income tier of the Inclusionary requirement, instead concentrating on only the higher moderate-income tier: 85 percent AMI average for rentals and 120 percent AMI average for condos, far more that The City’s unionized workforce earn, such as grocery store or hotel workers, janitors or paraprofessionals in our school district.
The core idea of last year’s Prop. C was to add to our pool of housing opportunities, not cut affordable housing for some workers to create housing for other higher-income workers, like this new proposal would. The San Francisco Realtors Association tried that approach with last November’s Proposition U, proposing to take away the low-income portion of The City’s Inclusionary Housing requirement to subsidize middle-income households, and the measure failed miserably — it only got 36 percent voter support.
All this begs the question: If we know who is being hardest hit by the affordable housing crisis, then why is this proposal cutting out low-income San Franciscans who are severely rent-burdened and also deserve the opportunity to live in mixed-income “inclusionary” housing?
There’s another catch as well. Prop. C also mandated that the City Controller do an analysis of the maximum feasible inclusionary, that just culminated two weeks ago. However, City Hall has come back with a proposal that then raises the household income levels to be served from what was assumed in the City Controller’s process. The City Hall proposal would equate to an increased profit of about $2 million to developers for a typical 100-unit development project with inclusionary rental units, and even more for a condo project. This way, the new proposal as a matter of optics can claim to hit the “maximum feasible inclusionary” that the Controller’s Office has recommended, and still save a nice chunk of change for private developers. Some might call that a real windfall!
Instead of making inclusionary housing about class politics and giveaways, we can and should continue to be bold with this city housing policy as it evolves forward. But first and foremost, leave the basic purpose of inclusionary housing policy as it is, for both low-income and moderate-income workers — the full “missing middle” of San Franciscans.
Fernando Marti and Peter Cohen are co-directors of San Francisco’s Council of Community Housing Organizations.