By Steven T. Jones
Would the partially completed One Rincon and other stalled luxury condo tower projects move forward if the city reduced their front-end fees, and is the cost worth benefit?
In order to encourage the development of more market-rate housing projects in San Francisco, Mayor Gavin Newsom and his administration are trying to let developers pass a third of their affordable housing fees onto the buyers of their homes, who would eventually pay them though a 1 percent transfer tax – a change that the Controller’s Office says would delay collection of those fees an average of 16 years.
That’s the most controversial component in the package of pro-development proposals that’s headed to the Planning Commission on Thursday. Consolidating the collection of various developer fees within the Department of Building Inspection makes sense to many observers, and there’s some left-of-center support for another proposal to let developers delay fee collection until after the building is nearly complete, as long as they pay the city an additional surcharge.
But affordable housing advocates are howling about letting the developers of projects that don’t pencil out and can’t get bank loans avoid their obligations to help the city meet its urgent affordable housing needs, in the process exacerbating the growing imbalance between homes for millionaires and those for the working class. They say it’s the latest example of Newsom’s perverse belief in discredited trickle-down economic theories.
“This is the world as viewed by (Newsom economic advisor) Michael Cohen, that the way out of a real estate speculation bubble is to blow as hard as you can to re-inflate that bubble,” affordable housing activist Calvin Welch told us, noting that many of targeted property were bought at the height of that bubble and are aimed at buyers that are now in short supply because of the recession. “They have to fail and reset, then there will be development.”