Our three-point plan to save San Francisco - Page 5

A radical new approach to affordable housing isn't just an option anymore — it's imperative

2. Find a new, reliable, consistent way to fund affordable housing. Just about everyone, including Newsom, supports the notion of inclusionary housing — that is, requiring developers to make a certain number of units available at lower-than-market rates. In San Francisco right now, that typically runs at around 15 percent, depending on the size of the project; some activists have argued that the number ought to go higher, up to 20 or even 25 percent.

But while inclusionary housing laws are a good thing as far as they go, there's a fundamental flaw in the theory: if San Francisco is funding affordable housing by taking a small cut of what market-rate developers are building, the end result will be a city where the very rich far outnumber everyone else. Remember, if 15 percent of the units in a new luxury condo tower are going at something resembling an affordable rate, that means 85 percent aren't — and ultimately, that leads to a population that's 85 percent millionaire.

The other problem is how you measure and define affordable. That's typically based on a percentage of the area's median income — and since San Francisco is lumped in with San Mateo and Marin counties for income statistics, the median is pretty high. For a family of four in San Francisco today, city planning figures show, the median income is close to $90,000 a year.

And since many of these below-market-rate projects are priced to be affordable to people making 80 to 100 percent of the median income, the typical city employee or service-industry worker is left out.

In fact, much of the below-market-rate housing built as part of these projects isn't exactly affordable to the San Franciscans most desperately in need of housing. Of 1,088 below-market-rate units built in the past few years in the city, Planning Department figures show, just 169 were available to people whose incomes were below half of the median (that is, below $45,000 a year for a family of four or $30,000 a year for a single person).

"A unit can be below market rate and still not affordable to 99 percent of San Franciscans," Welch noted.

This approach clearly isn't working.

So activists have been meeting during the past few months to hammer out a different approach, a way to sever affordable-housing funding from the construction of market-rate housing — and to ensure that there's enough money in the pot to make an actual difference.

It's a big number. "If we have a billion dollars for affordable housing over the next 15 years, we have a fighting chance," Sup. Chris Daly told us. "But that's the kind of money we have to talk about to make any real impact."

In theory, the mayor and the supervisors can just allocate money from the General Fund for housing — but under Newsom, it's not happening. In fact, the mayor cut $30 million of affordable-housing money this year.

The centerpiece of what Daly, cosponsoring Sup. Tom Ammiano, and the housing activists are talking about is a charter amendment that would earmark a portion of the city's annual property-tax collections — somewhere around $30 million — for affordable housing. Most of that would go for what's known as low- and very-low-income housing — units affordable to people who earn less than half of the median income. The measure would also require that current housing expenditures not be cut — to "lock in everything we're doing now," as Daly put it — so that that city would have a baseline of perhaps $60 million a year.

Since the federal government makes matching funds available for many affordable-housing projects, that money could be leveraged into more than $1 billion.

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