THE BAY GUARDIAN has long urged City Hall to demand that developers whose projects reap untold millions of dollars in profits pay for their impacts on San Francisco, particularly on vulnerable low-income populations, roads and other parts of the infrastructure, and the city services we all use.

So, even though we oppose the rapid gentrification of SoMa that is now underway, we were happy to hear about the deal that Sup. Chris Daly and the South of Market Community Action Network cut with the would-be developers of five high-rise, luxury-condo towers proposed for the Rincon Hill area. The arrangement gives the city $25 per square foot beyond what developers are normally required to pay, thus creating an affordable housing and community-improvement fund of $50 million if all two million square feet are built.

Since then, political squabbles have broken out over how much of that money should stay in SoMa and how much should be made available to other parts of the city, all of which were scheduled to come to a head at the Aug. 2 Board of Supervisors meeting, after our press time.

Regardless of the final percentage split, there's an extremely important and unsettling issue that is getting lost in this debate (not to mention being hopelessly obscured by the mainstream media, with their self-serving "growth is good" myopia). And that is the fact that San Francisco is in real danger of becoming a place that drives out the poor and others who give this city its vibrancy and diversity.

If greedy developers are allowed to build whatever type of housing they want in exchange for what amounts to multimillion-dollar extortion by a cash-strapped city, then even well-intentioned officials will become unwitting accomplices to a drastic remaking of San Francisco.

You wouldn't know it from listening to the city's "pro-business" political establishment, but San Francisco is in the midst of a housing boom, albeit one comprising mostly luxury condominiums and other high-end housing.

The San Francisco Planning Department spelled out what's going on last month in a report titled "Housing Inventory 2001-2004." Annual housing production in each of those years exceeded any of the past 20 years, and the total of 8,389 new housing units represented a 40 percent increase over the previous four years. Most of that new housing was concentrated in SoMa and Rincon Hill, and 70 percent was in the form of large projects of 20 or more units.

Yet the city's inclusionary housing laws, which are supposed to get developers to build some affordable housing along with the pricey units, produced just 514 such units in those four years. And of the 2,284 total constructed units deemed "affordable," only half were rentals available to residents with "very low" incomes.

In other words, a system designed to maintain a good housing mix and prevent poor people from being driven out of the city simply isn't working. Yet the report promises more of the same in the coming years given that a whopping 13,568 housing units had been submitted for approval by the start of this year – just 2,000 of those being affordable to even middle-income San Franciscans.

Which leads us back to SoMa and Rincon Hill, where most of these projects are proposed and which, for now, still is home to many of the city's poorest residents. Simply put, five more towers of luxury condos is too many. No matter how lucrative the payoff, when the projects come through for final approval, city leaders should reject at least two of these towers.

Only developers willing to build a significant number of rental housing units in this same neighborhood (rather than exporting them to the Bayview, the Mission, or other lower-cost neighborhoods, as most of these developers propose to do) should even be considered. In language they can understand, we have an oversupply of developers wanting to build high-end housing and we should begin making even more demands.

It is laudable that Daly is helping the city share in the astronomical profits that towers of condos for the rich will produce. But that virtue becomes a vice if too many of these deals get cut, changing the city's sociopolitical makeup in exchange for a huge slush fund that will understandably become the object of political infighting (fights that progressives will find themselves losing more and more once Daly's District 6 begins to look and vote more like the west-side districts).

The Board of Supervisors and the Mayor's Office must ensure that every penny wrung from these developers goes back into the poor communities that will be hit hardest by the gentrification – and that means SoMa should get the lion's share. But in the process, they must make sure that decisions based on our short-term cash needs aren't perpetuating long-term changes that will fundamentally alter our unique, world-class city.