San Francisco would more than double its annual contribution to an affordable housing trust fund under a charter amendment proposed by Supervisor Myrna Melgar with the support of Mayor Daniel Lurie.
The charter amendment, slated for the November ballot, would boost the Housing Trust Fund contributions from $52 million a year to $125 million to build and preserve more housing.
The proposed charter amendment comes as the Lurie administration and a group of supervisors have introduced an ordinance to cut the percentage of affordable housing units that market-rate developers are required to include from 15% to 5% for projects that are 25 or more units. The change was recommended by an advisory committee made up of housing experts and affordable and market-rate developers. Developers can alternatively pay an in-lieu fee, dedicate land or provide off-site affordable units equivalent to 10% of the project’s total units.
The idea is to get more housing under construction at a time when very few homes are being built in San Francisco.
The charter amendment and the ordinance also have the support of Supervisors Shamann Walton, Danny Sauter, Stephen Sherrill and Matt Dorsey.
The Housing Trust Fund was established in 2012 to support creating, acquiring and rehabilitating affordable housing and promoting affordable home ownership programs. The fund, set to expire in 2043, increases each year at the rate of growth in the city’s overall general fund. Under Melgar’s proposal, the annual contribution would be extended through 2058 and increase the city’s annual contribution by allocating a portion of future property tax growth every year, until it reaches $125 million. After that, the fund would grow at the same rate as general fund discretionary revenue up to 3% per year, through 2058.
The measure includes fiscal guardrails, including the ability to freeze or reduce the annual appropriation in years with large budget deficits or during a recession.
The mayor and Melgar also announced an additional $70 million revenue bond to be issued next year, specifically for affordable housing preservation through both reinvestment in existing affordable housing buildings, and the acquisition and conversion of private rental housing to permanently affordable housing.
“Right now in San Francisco, housing is not getting built at the pace we need, and the consequences are all around us. Families don’t know if they can stay in the city they love. Young people are questioning whether they can build a future here. Workers are getting priced out of the communities they serve,” Lurie said in a statement. “We must take bold action.”
Melgar said “the affordable housing shortage is the biggest crisis in San Francisco.”
“It keeps families from setting roots, young people from staying, workers from living close to their jobs, and our neighborhoods from remaining diverse,” she said in a statement.
Rudy Gonzalez, San Francisco Building Trades Council secretary-treasurer, said that “expanding the Housing Trust Fund while updating the city’s inclusionary requirements is about keeping housing production moving and keeping union members on the job.”
Longtime developer Eric Tao, interim chief executive of TODCO Group, called the expansion of the trust fund “a historic commitment to fund housing and to make the city we love more affordable for its residents.”
“At the same time, the changes to the inclusionary requirements will stimulate the delivery of additional homes, jobs and tax revenue to help fund the Housing Trust Fund,” he said.
Saki Bailey, executive director of the San Francisco Community Land Trust, called the $70 million revenue bond “the difference between rent-controlled buildings that stay in community hands and buildings that get flipped to the highest bidder.
“For tenants living in those buildings right now, it is the difference between stability and displacement,” she said.