Housing for the super rich approved, 8-3

Construction workers line up to promote 8 Washington. Guardian photo by Steven T. Jones

The progressive movement and the battle for housing balance and economic justice in San Francisco got walloped May 15 when eight supervisors sided with a developer who wants to build condos for the massively rich on the waterfront.

I watched it all, minus a few minutes while I was putting the kids to bed, all seven and a half hours of testimony and discussion, winding up with a series of pro-developer voters a little after midnight. It was stunning: Opponents of the project came out in droves, many of them seniors, others tenant activists and neighbors. Former City Attorney Louise Renne, who is by no means an anti-development type or any sort of economic radical, led off the arguments in favor of scrapping the environmental impact report and denying the conditional use permit that are needed for 8 Washington to move forward. They brought up so many points that by the end there was nothing more to say: This meets no housing need in San Francisco, further screws up the city’s own mandates for a mix of affordable and market-rate housing, caters to the top half of the top half of the 1 percent, is too tall and bulky for the site, offers the city too little in community benefits and is one of the great development scams of our time.

Then the other side spoke -- the city planners who defended the EIR and, briefly, developer Simon Snellgrove. His supporters lined up -- and almost all of them talked about the same thing: Construction jobs. I get it, we need construction jobs -- but is that a justification for such a bad project? As Sup. David Chiu pointed out, “apartment construction is booming.  There are 22,000 units under construction and 50,000 more in the pipeline.”

Both sides were organized, but only one paid people to show up: At least five people seated in the front row, wearing pro-8 Washington stickers, confirmed that they’d been paid $100 each -- in cash -- to show up. They didn’t even speak, leaving once they realized that they were misled about the project. One source heard a construction worker say he knew nothing about the project and had been bused in from Sacramento.

And after hearing all of that, the supervisors did what they clearly had decided to do long before a word of testimony was uttered.

The vote to overturn the EIR went like this: favoring the developer were Supervisors Mark Farrell, Jane Kim, Eric Mar, Christina Olague, Malia Cohen, Carmen Chu, Sean Elsbernd and Scott Wiener. Opposing the project were Chiu, John Avalos and David Campos.

Approving the conditional use went along the same voting lines. Chiu couldn’t even get a continuance after arguing that there was no report from the budget analyst and no financial information about whether this is a good deal for the city.

That’s the lineup: Eight votes for the 1 percent. Three votes for the rest of us. I haven’t seen anything this bad in years.

Some fascinating information came out of the discussion. Chiu made clear that the developer doesn’t need the height-limit increase to make a profit off the deal. He estimated that the total sales revenue from the project would be around $470 million and construction costs about $177 million. That’s a huge profit margin, even if you add in another $25 million for upfront soft costs.

Snellgrove’s lawyer, Mary Murphy, tried to duck the financial issues, talking around in circles. Evenutally Chiu got Snellgrove to respond, and he said the costs would be higher and his profit would only be about $80 million. “The capital markets require a high return on these projects,” he said.
Still: $80 million is a lot of money. And while Snellgrove and his allies love to talk about the $11 million in affordable housing money for the city, that’s about 2.3 percent of his total revenue. Which doesn’t sound quite as juicy.

Chiu raised another good question: “Should a condo that sells for $5 million pay the same affordable housing fees as one that sells for $500,000?”
Mar, who is usually a strong progressive, was the big surprise of the night, not only voting the wrong way but teeing up softball questions for the city planners to make the project sound better. It was as if he was reading from the developer’s talking points.

In the end, he said he saw “a lot of benefits from this project,” but promised to work with the developer to advocate for “less bulk and less height.” Olague said the same thing.

But even if it’s a little smaller, this will still be a completely misalignment of housing priorities, a project entirely for the very rich. That’s not going to change.

If anything, they should push for more affordable housing money -- a whole lot more. Because what we’re getting is enough for maybe 25 or 30 units, which means 80 percent of the new housing related to this project will be for multimillionaires and 20 percent for everyone else. Keep that pattern going -- and there are few signs that it’s about to change -- and imagine what this city will be like in 20 years.

It's not over, not yet: The actual development agreement and the height-limit changes still have to come to the board early in June. And if the mayor signs off on it, opponents are talking serious about a ballot referendum that would be before the voters in November -- just when Olague, Mar, Avalos, Campos, and Chiu will be up for re-election.

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