"From Urban Renewal and Displacement to Economic Inclusion: San Francisco Affordable Housing Policy, 1978-2012,"by Marcia Rosen & Wendy Sullivan November/December 2012 issue of Poverty & Race
Once notorious for urban renewal that diminished housing affordability and displaced residents, the City of San Francisco is now renowned nationally for its best practices in housing and community development. How did this “hot market” city with limited land for development, extremely low rental vacancy rates and high demand for housing move from archaic urban renewal practices to thoughtful policies designed to preserve and enhance housing opportunities for low -income families, prevent displacement of low-income families, and create inclusive communities?
The answer is not simple. In a city that consistently places amongst the highest in the nation for its housing costs and is largely built out, production and preservation of homes affordable to its residents is an ongoing challenge. The successful evolution of affordable housing programs in San Francisco cannot be understood by simply looking at the local codes and ordinances, policies, development requirements and restrictions separately; the whole is greater than the sum of its parts. Moveover, the overall success of the housing system and policies employed is the result of an interaction of four key factors: dedicated community advocacy and strong coalitions; development of and access to substantial funding sources; a holistic vision of building “not just housing, but communities”; and constantly evolving housing programs that meet new challenges and opportunities. The interaction of these factors has allowed the City to take advantage of ever-changing markets and political forces to maintain and develop strong local communities. This article describes the development and interaction of each of these four key components of housing program and policy development since the late 1960s and how they have resulted in the current dynamic affordable housing system in San Francisco.
San Francisco’s Affordable Housing Movement and Community VisionSan Francisco’s affordable housing and community development policies largely evolved during the late 1960s through the present day, spanning periods of rapid economic and demographic change, wide-scale commercial development, dramatic changes in land use, and exploding housing costs, which continue to threaten displacement of low-income residents. Prior to 1968, San Francisco’s affordable housing stock was limited to public housing and other federally-funded housing that was developed as part of the City’s urban renewal program. While there was private market-rate housing affordable to low-income families, thousands of such units had been lost to urban renewal. No state or local funding sources were available for housing rehabilitation or development, and no community-based infrastructure existed to undertake this work.
Geographic limitations further exacerbated the housing problem. San Francisco has severely constrained development potential: It has limited land capacity; is roughly 47 square miles on the tip of a peninsula; and has no ability to expand through Bay infill or annexation. It is “built out,” with almost all its available land developed. Consequently, as stated by Calvin Welch, San Francisco housing activist, lecturer in development politics, and former Co-Director of the Council of Community Housing Organizations, “development in the City is a zero sum game, with winners and losers. [With minor exceptions], new development in San Francisco, residential or commercial, means the demolition and displacement of what was there.” With each new proposed development in San Francisco being a battle between competing land uses, a strong community movement was needed to protect low-income residents from displacement and enhance neighborhoods as urban renewal, private development and market interests sought to transform the city.
Extensive changes in the economic base and escalating housing prices in the city during the 1970s spurred formation of neighborhood and tenant organizations, bringing resident housing needs to the City’s attention. These groups were originally focused on maintaining housing affordability in their communities and preventing the displacement of families from neighborhoods disrupted by the City’s urban renewal programs and private development interests. Their focus later expanded to include a community development mission—the preservation and development of affordable community housing and resident services to meet the changing demographic needs of families, maintain the city’s diversity and mitigate the exclusive effects of the rising cost of market housing within the city.
Funding San Francisco’s Affordable HousingPivotal to the efforts and effectiveness of the community housing movement was access to significant financial resources. In San Francisco, affordable housing is primarily produced by three sectors: nonprofit housing developers who are funded in part by the (former) San Francisco Redevelopment Agency (SFRA) and the Mayor’s Office of Housing; the San Francisco Housing Authority; and market-rate developers operating in accordance with the inclusionary housing program or the jobs-housing linkage program. Spurred on by, and in partnership with, nonprofit developers and housing advocates, the City has implemented revenue strategies that have provided significant funding for the preservation, rehabilitation and development of affordable housing. Between FY 2002-03 and FY 2010-11, more than $725 million was applied to affordable housing from City- and locally-controlled funding sources, over $356 million from state sources and over $829 million from federal sources, totaling just under $2 billion. Community organizations were also instrumental in ensuring that, since 1990, up to 50% of local tax increment revenues and bond proceeds were allocated by the SFRA to affordable housing. As a result, over $600 million of tax increment financing has contributed to the development of more than 10,000 units of affordable housing for low- and moderate-income households throughout San Francisco. Other local initiatives established additional funding streams: changes to CDBG allocations that ensured community development organizations and other creators of new affordable housing opportunities received their fair share; a permanent City hotel tax was instituted to help fund housing; and San Francisco voters passed Proposition A in 1996, a $100 million general obligation bond dedicated for affordable housing. In total, almost 40% of housing funding in San Francisco has come from local sources. This exemplifies the concrete impacts that strong local advocacy can have on the development of housing policy and on the creation of available funding streams necessary to put policies into action.
San Francisco’s Affordable Housing Programs and PoliciesDedicated and zealous community advocacy, strategic development and allocation of funding sources, and responsiveness to market changes and political opportunities have resulted in a system of strong housing preservation and production policies, programs and organizations in San Francisco. By ensuring the creation and retention of a range of housing to serve diverse resident and community needs within the city, these forces have counteracted the detrimental effects of gentrification caused by market forces and have kept affordable community housing in the forefront of the City’s development and redevelopment decisions.
In fact, by 2012, the housing and community development corporations that were formed in the early decades have developed, rehabilitated and preserved more than 26,000 permanently affordable housing units, mainly for families and seniors earning less than 50% of the city’s median income. The community housing movement also influenced the adoption of key affordable housing policy and financing legislation, including the enactment of San Francisco’s Rent Stabilization and Arbitration Ordinance in 1979 that now covers some 170,000 rental units. The movement also served as a catalyst to the City’s inclusionary zoning ordinance, which has resulted in over 1,500 units of permanently affordable ownership and rental housing, as well as the Jobs-Housing Linkage program, which has contributed to the development of an additional 1,100 units. The more than 200,000 units of “price controlled” housing constitute approximately 53% of San Francisco’s entire housing stock. Other substantive achievements include:
ConclusionSan Francisco continues to face tough challenges in providing the affordable, quality housing that its residents and workforce need, but the City is demonstrating a solid commitment to addressing those challenges. A significant blow to financing opportunities occurred earlier this year when California dissolved all 400 of its redevelopment agencies, including the SFRA, to redirect redevelopment revenues away from housing and toward the $25 billion deficit in the state budget. An assessment of housing needs in San Francisco by the regional planning association, Association of Bay Area Governments (ABAG), also shows that the City did a good job meeting its very-low-income and market-rate housing needs between 1999 and 2006, but fell woefully short in meeting its housing needs for low- and moderate-income households—those earning between about 50% and 120% of AMI. In response to these obstacles, a proposed Housing Trust Fund, which has broad community, government, and business support, is being placed before the San Francisco voters in November 2012, which, if approved, will more than replace the lost redevelopment revenues. Also, the Mayor’s Office of Housing has been exploring options to produce housing for low- to moderate-income households through various programs and funding modifications. Despite the quick response, however, it is evident that San Francisco will continue to need to be inventive and its housing advocates strong in order to meet the challenges ahead.
San Francisco must continue to evolve its policy to fill in the gaps in its housing needs and find creative and substantial sources of funding to develop and maintain affordable housing in one of the nation’s most expensive housing markets. By also ensuring that the needs of local residents are heard, San Francisco is demonstrating that the early urban renewal and displacement days are gone and have been replaced with a vision of creating the housing, jobs and services required to maintain and build thriving, diverse and inclusive communities within the city.
This article is adapted from a longer report published by PRRAC and the National Housing Law Project, available at www.prrac.org/pdf/SanFranAffHsing.pdf and www.nhlp.org/file/SanFranAFFHSING.pdf
Marcia Rosen is Executive Director of the San Francisco-based National Housing Law Project (NHLP), former Director of the San Francisco Mayor's Office of Housing, and former Executive Director of the San Francisco Redevelopment Agency.
Wendy Sullivan is an attorney and planning consultant. email@example.com
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