Ideas that work: a plan for a new San Francisco - Page 2

With its own public bank, San Francisco could begin to fund and promote more community-centered forms of economic development

In particular, the bank could prioritize businesses and enterprises that represent alternative models of ownership such as worker co-ops and worker collectives, and smaller, community-serving, locally-based, social enterprise-type businesses.

To ensure that the bank's lending activities reflect the need for more democratic modes of credit and finance, governance and oversight could include representation from social groups and constituents normally excluded from corporate governance. The bank's member-owners would elect the board of directors.

Municipal bank funds would be completely separate from the city's general fund, with strict firewalls imposed to assure that lending activities do not become intermingled in any way with the annual appropriations process.

By creating its own bank, San Francisco would be a national model for community-based development and economic democracy. It would be a national first, and has the potential to transform how cities think about local economic development. (Beitel)


Since the beginning of the dot-com boom, San Francisco has seen displacement of low-income families from rent-controlled housing in alarming numbers. Much of this displacement has been happening through conversion of small residential apartment buildings (between four and 12 units) into tenancy in common units. Small-site displacement tends to target seniors, disabled people, and working class families — and many of the units that were converted were, under rent control, de facto affordable housing.

In addition, over the past 15 years the city has lost 4,370 units due to Ellis Act evictions. At the same time, the city's housing production model favors larger projects because of the economies of scale possible for new construction of big projects, with 70 or more units. While these projects are important in adding to the city's affordable housing stock, sites to accommodate giant developments are in short supply.

So how do we address San Francisco's chronic affordable housing crisis. First, stabilize low-income communities and preserve diverse neighborhoods by encouraging the city to invest in developing a small sites acquisition and rehabilitation program that could help nonprofits take over and operate affordable rental housing for low-income tenants. That property could also be converted to limited equity housing cooperatives and community land trust properties.

Next, the city should ban all TICs from becoming condos. The city can give landlords and speculators a choice: If you want your property to be eligible for condo conversion, with all the economic benefits that come with that designation, then you need to follow the process and abide by tenant protections in the condo law. If you want to ignore the condo law, then you're stuck with a TIC.

To further protect renters, prior to sale of a renter-occupied unit, the city could require the owner to offer tenants the right to buy the unit, at a price based on the last best offer from a bona fide purchaser.

The Rent Board also needs reform. The panel, which oversees rent increases, consists of five members: two landlords, two tenants, and one homeowner. All are appointed by the mayor. We suggest three tenants, two landlords, and two homeowners — with the appointments split between the mayor and the supervisors.

There also must be a permanent, local source of funding for affordable housing development. A progressive increase in the real estate transfer tax could generate $45 million annually.

We further support Sup. Ross Mirkarimi's proposed legislation that would protect resident's rights during relocation and ensure their right to return to buildings that have been redeveloped. (Amy Beinart and the Council of Community Housing Organizations)



This is a great article and vision but I would offer one important caveat.

You wrote:

"Fifth, depoliticize the request-for-proposals (RFP) process by moving it out of city departments and into the Controller's Office."

This would be very dangerous. The Controller's office is the product of the Mayor's office and can be highly politically compromised.

To give one example, in recent years the Controller has helped undermine the City's fledgling citywide clean energy program, Clean Power SF, by cooking up totally ridiculous, false economic analyses, which purposely and cartoonishly skew numbers to make the program appear financially nonviable.

The RFP process should instead be shifted to a truly independent body which cannot be politically manipulated by future mayors.

Posted by Eric Brooks on Aug. 11, 2010 @ 10:00 am

While the idea of using public money to fund a public bank (as opposed to bailouts of private banks and institutions) is an initially appealing idea, in practice it would seem that it would substantially reduce the transparency of how public moneys are utilized by moving the decisions from a democratically elected person or body to individual loan officers, and as private business loans, it is questionable if the results of these individual decisions could be made public.

In addition, the commingling of funds suggested by seeding the bank with public money and then encouraging additional private investment would appear to create a conflict between the bank's purpose of promoting San Franciscan's ideals and it's fiduciary responsibilities to those investors.

Finally, if it is a member-owned credit union in which members elect the board, what would prevent capture of the bank's loan policies by those private investors? Would it be one investor, one vote, or one dollar invested, one vote? Is the former even legal?

I have frequently mumbled about how, if the Federal TARP funds did not result in the anticipated increased lending, then the Feds should have just started their own bank and lent the money directly. However, either of these feel-good ideas would seem to create a big new can to put worms in.

Posted by Guest on Aug. 13, 2010 @ 3:35 pm

But it will never happen because voters lack confidence in government to do this, hell progressive activists, including many in City Hall, lack confidence in government to do this.

This idea will never see the light of day because it will require a tremendous level of organizing that proponents have proven unwilling to engage in after City funding for the nonprofits materializes.

To the contrary, efforts at structural reform to rebuild confidence in the ability of government to deliver core services have been sandbagged by the nonprofits who prefer to "raise more revenue" than to address the structural corruption that governs how existing dollars are spent because they benefit from it.


Posted by Guest on Aug. 13, 2010 @ 5:40 pm

I think that only states can charter banks

Posted by Guest on Aug. 14, 2010 @ 1:36 pm

The City could use its authority to go into business (Redevelopment or a new agency) to apply to the state for a banking charter.

Not sure if it would be possible to federally insure SF's bank; the Bank of North Dakota, the only public bank in the US is not FDIC insured.


Posted by marcos on Aug. 16, 2010 @ 12:32 pm

Re: the Housing proposal put forth by Amy Beinart. Well written proposal. Starts off with a nice, comfy name-dropping of every San Franciscan's favorite boogyman: the Dot-Commer. Never mind that they all left town years ago, it's a hallmark of good propaganda to begin by reminding everyone how it's all Snowball's fault. Then on to a wonderful idea about stopping that scourge of "low-income families", the evil T.I.C. Have you ever considered that so many multiunit buildings get broken up into Tenancy-In-Common sales because of the wrongheaded belief that anyone who dares to own property is inherently evil as well as the many punitive and draconian codes dealing with landlords? You've made it untenable for anyone to own more than one residence in SF and you act dismayed at the glut of T.I.C.'s on the market? I'm all for insuring renters are treated with dignity and respect, and that their rights are strictly guaranteed to the full extant of the law (I was a renter for last 22 years after all), but balance is needed in order to bring about the desired results: lower rents and more families. This lack of balance is essentially what has happened of late with the Unions and their unfeasibly high benefits and wages. Oh wait, let me guess. Miss Beinart has a Boogyman culprit for that mess as well? No doubt.

In any case, her proposed solution of allowing "Nonprofits" to "take over" and run housing for people with a low income (i.e. - all renters in SF) is nothing less than a undisguised first step to outlawing all privately owned residential rental units. So, under Beinart's wonderful, completely fair, and totally not communist plan, people would no longer be able to apply for apartments based on their references and credit, but rather they would go downtown and wait in line and some bureaucrat working for a "Nonprofit" would decide where they were going to live and when and if they could move into another apartment. Sounds really great! Now, who can we get to run this for us? Hmmm.... any ideas Amy? What? You could do it? Awesome how that all worked out!

Next we have a proposed law which would require owners to offer tenants the right to buy the unit they occupy at a price "based on the last best offer from a bona fide purchaser". What does that even mean? Are you saying that whatever price the unit sold for when it was last on the market is the same price that the current owner is now required to offer to the current renters of the unit before it can be placed again on the open real estate market? Why would anyone ever buy a property if that was the law? Owning the unit would just mean that you would be responsible for the outrageous San Francisco property taxes as well as the upkeep of the unit, only to be able to sell the property with no gain (not even a nominal increase to reflect inflation/cost of living), whereas renting the place leaves you with no responsibility whatsoever and a low rent written in stone for eternity. But let's say the renter does want to own. And he/she buys the unit fro the evil landlord. What about their subtenant? You know... their roommate? Everyone in SF has at least one. What about the roommate? Doesn't that now make the newly anointed owner of the unit officially an evil landlord? And what ridiculous laws are you going to come up with to regulate that? And where does it end?

All in all, this was a typically hare-brained fantasy for a town where "Nonprofit" means that you don't have to prove what you're doing is producing positive results because it's being paid for by the very people you're determined to run out of town. In other words, it's brilliant! Keep up the good work!

Posted by Guest on Aug. 16, 2010 @ 9:40 pm

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