After the bubble - Page 3

Eastern Neighborhoods Plan limps toward final approval as activists question its assumptions on housing and fear the mayor's veto pen

"Metering gives the Board of Supervisors full power and takes the executive out of the mix," he said of the plan as it stands now, adding that it should be viewed as a long-term protection. "This is not about Mayor Gavin Newsom. It's about Mayor Mirkarimi or Mayor Peskin."

The "use it or lose it" requirements are designed to reduce speculation by mandating that a developer with a project that has received a green light from the Planning Department must procure a building permit within three years, after which they have one year to break ground. Currently, there's no limit to the amount of time a developer can sit on a property, which becomes more valuable after receiving city approval.

Elsbernd said, "Three years is just not fair," but again, he said he thought there was a middle ground and would like to see project developers given opportunities to make cases for extensions. However, if the developer has one of those grandfathered projects that doesn't have to meet the new, stricter inclusionary housing regulations or pay public benefits charges, they should "have to pay full fare, full affordability, full fees," said Elsbernd.

A second vote on the plan and its amendments is scheduled for the Nov. 25 Board meeting, after Guardian press deadline, but Elsbernd expressed optimism about a compromise as part of last-minute dealmaking. "I would say there's a possibility, as colleagues realize the potential mayoral veto."

Still, Welch pointed out that resistance to a "use it or lose it" protection is proof that San Francisco's real estate market is in no way immune to the economic crisis afflicting the rest of the country. "The assumption built into the Eastern Neighborhoods Plan was this robust growing market for condo development and I think the bubble has burst," said Welch. "If that isn't the case, then why would developers care about a requirement that says you have to build in three years? The Mayor's Office told me the phones were melting after Monday night's amendments passed."

But Welch said one of the great ironies of a market-rate housing crash is that it makes nonprofit housing development even more competitive. "That's why we pushed so hard for 'use it or lose it.' It forces developers to say to the city 'we'll do it,' or 'would you like to buy the site?'<0x2009>" He said the city should be poised to buy those sites in order to build affordable housing and suggested the city lobby Barack Obama's administration for the funds to do it as part of the large infrastructure improvements planned by the president-elect.

"I think the way housing is financed is going to be totally transformed and the federal government is going to play a bigger role," said Welch. *