Lee shows his pro-biz chops, but how is his balance?

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Mayor Ed Lee has business booming, but can he solve the city's other needs?

Mayor Ed Lee is on the roll these days, with a string of recent pro-business successes capped off by today's announcement that the Golden State Warriors are moving to San Francisco and building a new arena at Piers 30-32. But Lee faces a series of tricky balancing acts in the coming weeks as he tries to compensate for his strong economic development focus, which is driving up residential and commercial rents and threatening the city's diversity and livability.

Lee has been overly enamored by tech companies since taking office, from pushing through last year's tax breaks for Twitter and Zynga to his announcement a couple weeks ago that Yelp was expanding into a 100,000-square foot space in SoMa. “Yelp’s lease brings the total tally for technology leasing to more than two million square feet,” his office boasted in a press release. “Comparatively, this milestone was reached in the fall of 2011, indicating that the technology industry is increasing their role as a key driver in the office leasing marketplace and job creation in San Francisco.”

That's great for residents who work in tech companies that are awash in venture capital from Ron Conway or the other billionaires who funded Lee's mayoral campaign, or for the commercial landlords taking advantage of the latest tech bubble. But it's not so great for the nonprofits and small businesses who are having a hard time with making rents that are being steadily driven up -- or even for the cultural cache of a city being steadily overrun by boring Google-busers.

Contrary to right-wing fairy tales, policies that favor wealthy investors don't really help the average San Franciscans much, and they need to be balanced by policies and taxes that see to the common good. That's been crystal clear for a long time when it comes to San Francisco's housing policy, which is why Lee today is submitting his proposal for a Housing Trust Fund to be placed on the November ballot.

Details are still being worked out even as I write this, but the Chronicle reports that it proposes to initially generate $20 million per year by slightly increasing the real estate transfer tax, diverting a bit of the city's hotel tax, and then trying to set aside some future property taxes, with the goal of eventually reaching $50 million per year.

Unfortunately, that would barely put a dent the affordable housing needs identified in the city's Housing Element, which says about 60 percent of all new housing construction should be affordable to prevent gentrification and its associated problems (more commuter traffic, loss of diversity, etc.), which the Board of Supervisors already exacerbated last week by greenlighting the 8 Washington project for the super-rich.

And Lee's compromise with developers and the business community on his housing trust fund makes things even worse by diverting $15 million into a down payment assistance program for middle-class homebuyers (in a city where two-thirds of residents rent, and in a country that should have learned not to lure more families into overextending themselves to buy houses) and actually reduced the number of below-market-rate units that developers are required to build.

Granted, these are tricky problem fraught with complicated politics, particularly as we approach the deadline for submitting ballot measures for a fall election when only a simple majority is needed to pass revenue measures, a once every four year anomaly. As we reported last week, Lee is currently in the throes of final negotiations for his business tax reform measure, with labor and progressives putting the pressure on to back off his insistence that it be revenue-neutral.

That will be an important indicator of whether Mayor Lee will be content with simply catering to corporations and staying focused on his neoliberal economic development agenda – or whether he is serious about maintaining this city's socioeconomic diversity (being a “city for the 99 percent,” as he said in his inaugural address) and taking a more balanced approach to governance.

Lee seems to understand the situation better than his predecessor, Gavin Newsom, who wasn't willing to risk any political capital to solve the city's most vexing problems or to make any big asks of downtown (or even to keep the 49ers in town). Whereas Newsom was willing to basically give Piers 30-32 away to Oracle billionaire Larry Ellison to secure the overhyped America's Cup, Lee allowed that real estate deal to wither without losing the race and found what at first glance seems like a better deal for Piers 30-32: an arena built with private money.

But in the housing fund, business tax reform, CPMC's massive hospital and housing project, and budget fights that will unfold in the coming weeks (the mayor's budget is due June 1), Lee will demonstrate whether he has the political skills, the long-term vision, and the populist perspective to do right by all San Franciscans, or whether he'll cling to his belief that a handful of business elites should be trusted with the future of this great city.

Comments

I am quite disheartened that Lee isnt driving the city straight into the ground so that poor people have an easier go of things.

Posted by Greg2 on May. 22, 2012 @ 3:42 pm

Unquestionably believe that that you said. Your favourite reason seemed to be on the internet
the easiest factor to be mindful of. I say to you, I certainly get irked at the same time as people think about concerns that they
plainly don't know about. You controlled to hit the nail upon the top and outlined out the entire thing without having side-effects , people can take a signal. Will probably be back to get more. Thank you

Posted by BBC iPlayer abroad on Oct. 10, 2012 @ 3:39 am

I think Lee's "housing trust fund" proposal faces a couple big hurdles. It incorporates a tax increase, and along with the payroll tax reform measure, Jerry Brown's tax, and Molly Munger's tax, that's 4 tax proposals on the San Francisco ballot. People might vote no to all.

Second, the Chron reported that the gist of the plan is to give down payment assistance to people. A lot of voters aren't going to like the notion of handing out money like that. And it could have the unintended consequence of raising property values further.

Posted by The Commish on May. 22, 2012 @ 3:51 pm

SF residents who just bought a home the hard way, by saving and making sacrifices.

But maybe adding in all these tax increases is a clever and shrewd way of ensuring that they all fail.

I like to see Lee thinking about this issue but I'm voting NO on it.

Posted by Guest on May. 23, 2012 @ 4:52 am

like any of these vague statements like "transit first" and the "20 in 20" bike thing - it's a statement of ideals, not reality.

20 million might only make a dent but it's better than nothing and it shows that Lee already has "balance" (not that "balance" is necessarily good - he wasn't elected on a platform of balance but on a platform of being pro-business and pro-jobs.

The simple fact is that we can't be one of the most desirable and prosperous places on the planet AND have cheap housing. That's a nonsense.

And luckily we have Oakland right next door, where housing costs half what it does there, but with great train and raod access to SF. So everyone really can win.

Posted by Guest on May. 22, 2012 @ 4:15 pm

This is almost the identical deal to the America's Cup proposal, except for how that one would have upgraded several piers also in need of private investment.

Ellison pulled the plug after looking at the cost, it's too bad because it would have been a far cooler development - at basically the same (non) investment by the city.

Posted by Guest on May. 22, 2012 @ 4:35 pm

It fits exactly Tim Redmond's demands on how a private-public partnership would work as modeled on AT&T Park - meaning the SFBG is boxed in on this and, though grind its collective teeth it may, it has no grounds to oppose building the new arena on piers 30-32.

I didn't vote for Lee last time but if he keeps coming up with cool ways to get shit done in this town I may vote for him the next time.

Posted by Troll II on May. 22, 2012 @ 6:39 pm

>"which the Board of Supervisors already exacerbated last week by greenlighting the 8 Washington project for the super-rich."

I have read just about everything printed in SFBG about 8 Washington, but I don't recall any accounting of the number of non-profits, and mid/lower range housing that will be lost because of the project.

Could someone at the SFBG please clarify as to how 8 Wash exacerbates anything? I went by the site the other day and all I saw was a tennis club and a surface parking lot adjacent to the super expensive Embarcadero Center and the million dollar condos of Golden Gateway Commons.

Thanks in advance for the clarification, SFBG.

Posted by Troll on May. 22, 2012 @ 7:11 pm

"a city where two-thirds of residents rent"

This is a problem in itself and should not be held as a justification for maintaining the status quo. We live in a type of feudalism where distressingly few have real property rights.

Encouraging opportunities for home ownership is a desirable city policy.

Posted by Guest on May. 23, 2012 @ 9:35 am

But the problem with a scheme like this is that only a few can be helped, and so the process becoems discriminatory or random - effectively a lottery for who wins.

The real solution to SF's housing needs is a relaxing of building codes and planning principles, and to build some significant number of new homes. These could include some slender high-rises as well as conversion from industrial space.

The rest is just tinkering.

Posted by Guest on May. 23, 2012 @ 10:11 am

issues, and shows independence, diversity and inclusiveness in so doing, you criticize her for non-progressive votes, and claim she is betraying her constituency.

Yet now you call for the same from Lee - that he temper his pro-business decisions with some progressive policies

So which is it? Do you want true balance, as when Kim supports the Twitter tax break, Mar supports 8-Wash, and so on.

Or do you want knee-jerk, party-line votes, where Avalos always votes left, and Lee never does?

You can't have it both ways. Voters rejected Avalos's "party-line progressiveness" and chose instead Lee's pragmatism and pro-business stance. Are you saying that doesn't matter?

Posted by Guest on May. 23, 2012 @ 10:22 am

It isn't ideological balance that I'm talking about, and certainly not the betraying of ideological values for the sake of political expediency. I'm talking about mitigating the damage that Lee's relentless focus on pleasing corporations is causing and will continue to cause in this city. If the working class can't afford to live here, that hurts San Francisco in myriad ways. If the small businesses that Lee regularly praises can't afford to be here, that hurts San Francisco. As uber-capitalist Warren Hellman once told me, "Capitalism won, now we need to save the world from capitalism," and he was right. Someone has to mitigate the messes and inequities that capitalism creates. Anyone who thinks that simply catering to corporations and wealthy is going to produce sustainable, widely shared benefits is either a right-wing ideologue, a fool, or both.

Posted by steven on May. 23, 2012 @ 10:52 am

consistently adopt moderate, pro-business policies because "I'm talking about mitigating the damage that the Progressive's relentless focus on pleasing unions and tenants is causing and will continue to cause in this city."

You're still arguing that moderates should be "balanced" while wanting Avalos to stay "pure". That's a double standard.

And given that there really aren't any right-wingers in San Francisco, then the real balance is to be found in someone like Lee, and 60% of voters agree, apparently.

Posted by Guest on May. 23, 2012 @ 11:02 am

I must say, as a small business owner in San Francisco: sales have been picking up. Naturally, I don't attribute it entirely to Lee, but his overall approach gives me optimism.

Posted by Guest on May. 23, 2012 @ 12:35 pm

If you want there to be more housing in San Francisco, encourage developers to build more of it, instead of standing in their way.

How hard can that be to understand?

Posted by GlenParkDaddy on May. 23, 2012 @ 12:38 pm

The SFBG and a hoard of anti housing advocates have made their living off making sure housing is not approved in San Francisco. Sue Hestor has devoted her entire adult life to suing SF to prevent development. SF is the most anti new construction large city in the US, and has been for decades. Even in the face of evolved thinking on dense urban living, the SFBG continues to tout decades old anti high rise propaganda that they themselves bought and paid for that says the high rises are the worst thing in the world.

Posted by Greg2 on May. 23, 2012 @ 1:50 pm

... I can guarantee you that none of the tax breaks or economic development in the Twitter-Zynga-Caltrain triangle, where I work, is trickling down. And I make barely over SF minimum wage at my job which does not hire people full-time. Heck, the new Twitter 47 Express Bus won't even be stopping near my job. I look forward to Mayor Lee's initiatives to improve the jobs that people already have. In lieu of that, I guess my co-workers and I will have to unionize and work for the election of other people.

Posted by Guest on May. 23, 2012 @ 12:43 pm

do what for you exactly? You expected a higher salary because they moved in next door? Without you changing anything or producing any more?

Where does this massive sense of misplaced entitlement come from, exactly?

Posted by Guest on May. 23, 2012 @ 1:00 pm

I had absolutely ZERO expectations that there would be any public good from Twitter moving next door. ZERO. I didn't think there would be any public benefit or a personal one. I was against the tax break and remain so. Let Twitter go to Brisbane. As it is, we are already robbing from Peter to pay Paul, creating an express bus route to serve Twitter and like companies.

You complain of my massive sense of misplaced entitlement -- yet say nothing about the misplaced entitlement of the well-paid Twitter CEOs and employees who happen to be getting the benefit of the tax break and the special express bus. I remain underemployed and underpaid. I'm just pointing out that the benefits that are accruing to Twitter and Zynga are not trickling down and probably won't. Ask. Just go ask the people who work at Trader Joe's, or Bed, Bath, and Beyond, or Nordstroms in SoMa. Go ask any of the people who work at the Big Box stores in the Twitter-Zynga-Caltrain Triangle.

Posted by SoMa employee on May. 23, 2012 @ 9:05 pm

wondering how long Steve's corporate masters will put up with this phony, 90s-era leftist "psuedojournalism" and opinionated bullcr@p before they fire him and Tim and make the paper into fishwrap for the entertainment business.

as it stands, the Guardian is an out of touch political pamphlet for the losers. Progressves LOSE and that's why they are LOSERS and why Ed Lee and Willie laugh all the way to the Bank with Rose. Progressives get their asses kicked, Daly is now mopping up bar vomit, Peskin could give a shit, and after 10 years, the progressive bowel movement is flushed.

Sucks to be on the losing side, BOYS (and you're all white boys despite your anti white nonesensical rhetoric) you lost. The Guardian got pwned in the lawsuit. You bet on suing VVM and lost. Now you don't even have a home. BYE!!!!!

Posted by Guest on May. 24, 2012 @ 6:36 pm

"...as it stands, the Guardian is an out of touch political pamphlet for the losers."

That includes you, correct? (since you live on this site, like a fungus).

"BYE!!!!!"

Are you for real? Do you mean it? That means you're going elsewhere to troll? You're going to go to a right-wing site where everyone agrees with you and shares your hate and trolling addiction?

If so, I would imagine that the server for this site is sighing and saying, "finally that pathetic troll is gone."

Posted by Guest on May. 24, 2012 @ 7:25 pm