What it does
This proposition asks voters to approve a $250 million general obligation bond issue, proceeds of which will be used to subsidize affordable housing. 75% of the bond would be used to create rental housing through new construction or rehabilitation of apartments. 25% of the bond would be used for down payment assistance for first-time, low-income home buyers.
Why it is on the ballot
This bond issue represents an expansion of the City's use of general fund resources to support affordable housing programs. The first stage of this effort was the $100 million affordable housing bond (Prop A) which voters approved in November 1996. $85 million was used to build or rehab low-income rental apartments, and $15 million to provide down payment assistance for first-time low-income homebuyers. SPUR has published an in-depth study of the results of the 1996 bond issue that can be downloaded at SPUR's website at www.spur.org/hsgarts.html. Our overall conclusion is that the Prop A bond worked as intended.
Because this measure involves a tax increase, state law requires that it be passed with a 2/3's majority.
Those who support Proposition B state:
- Given the growing inequality of wealth in the United States, public subsidies are essential.
- The federal government has cut funds for affordable housing. It is up to cities (and states) to take responsibility for housing
Those who oppose Proposition B state:
- The city does not have an unlimited capacity to issue general obligation bonds; other funding sources should be used for housing.
- The overall housing need in the city dwarfs this proposal. Over the next five years we need approximately five times as many affordable housing units as this bond will fund.
Assuming no change in housing costs, the program would produce 3,700 rental units and as many as 1,000 down payment assistance loans.
The rental component would provide for permanent affordability through non-profit ownership and regulatory agreements with a 50-75 year affordability restriction.
Despite dramatic increases in land costs, the Mayor's Office of Housing has historically managed to select projects that have lower cost than market rate development. Average development cost per unit for the 1996 bond has been about $262,000. A sampling of recent market-rate projects indicates an average per unit cost of $325,000.
Bond monies would be used to leverage federal low-income tax credits and other funding sources in order to increase the number of affordable units than would provided by the bond issue alone.
The program's experience to date has been excellent. SPUR also believes that the use of general obligation bonds to subsidize low-income housing is legitimate use of public funds and should be seen as part of the effort to address the problem of homelessness in San Francisco. SPUR encourages voters to approve the state affordable housing bond measure which will also be on the November ballot, because it will allow city money to be better leveraged and help San Francisco get more housing for its dollar. While we can't spend our way out of the housing crisis with public subsidies alone--increasing the overall supply is also essential--a subsidized housing program must be an important component of the city's overall housing strategy.
SPUR recommends a "Yes" vote on Proposition B.