Prop K

City-Owned Affordable Housing

Ordinance

Affordable Housing Authorization

Authorizes the City and County of San Francisco to construct up to 10,000 units of municipally owned affordable housing.

Vote YES
 

What the Measure Would Do

This measure would specifically allow the City and County of San Francisco to acquire, build or rehabilitate up to 10,000 units of subsidized affordable housing. Prop. K would also allow the city to enter into contracts with private developers to develop, construct or rehabilitate affordable housing projects on city-owned land. 

No revenue source is tied to the housing authorization in this measure. However, the author of Prop. K, Supervisor Dean Preston, has proposed that the city create a Social Housing Program Fund funded by half of the revenue collected from the transfer tax increase (Prop. I, also on the November ballot); the fund would finance a range of affordable housing units, including city-owned affordable housing authorized by this measure. 

The Backstory

In 1950, California voters approved the creation of Article 34 in the state constitution, which requires that any “low rent” housing development be approved by voters in the municipality in which it was proposed. The article defines low-rent housing as any subsidized affordable rental housing project that is developed, constructed, acquired or financed by local government. 

Article 34 is considered a vestige of California’s racist land use and planning history. The law has delayed low-income housing development across the state and weakened efforts to integrate some of the most exclusive suburban communities. A number of attempts have been made in recent years to repeal Article 34 at the state level, without success. 

Voters have periodically authorized affordable housing under Article 34. Most recently, voters approved 30,000 units of privately developed affordable housing in 2012. The Mayor’s Office of Housing and Community Development estimates that about 5,000 units of the approved capacity have been constructed. Prop. K is distinct from the 2012 measure in authorizing subsidized housing that would be developed, constructed or acquired by the city and county. 

Earlier this year, a group of housing activists began circulating a petition to create a social housing program in San Francisco, arguing that housing is a fundamental necessity and should be taken out of the private market and provided by the public sector. (“Social housing” is a term more commonly used in European countries such as Denmark, Austria and Germany to describe both housing that is financed, owned and managed by the government and housing that is financed by the government but owned and managed by nonprofit entities or by cooperatives of tenants themselves.)  The COVID-19 pandemic forced the local housing activists to abandon signature collection, and the proposal was split into several pieces. The authorization piece has moved forward as Prop. K. 

Supervisor Preston introduced legislation to create a Social Housing Pilot Program, which would fund the creation, operation, development, construction or rehabilitation of housing owned by the city that would serve households making less than 80% of area median income.1  

Supervisor Preston also introduced a resolution to split the revenues from the proposed transfer tax increase (Prop. I), should it pass, into two funds: the COVID-19 Rent Resolution and Relief Fund and a Social Housing Program Fund. The rent resolution fund would partially compensate landlords who waive rent payments for their tenants. The social housing fund would finance the Social Housing Pilot Program fund and a range of affordable housing units.

This measure was placed on the ballot by a unanimous vote of the Board of Supervisors. As an ordinance, it requires a simple majority (50% plus one vote) to pass. 

Equity Impacts

To the extent that Prop. K could result in the construction of new units of affordable housing, it would directly benefit low-income San Franciscans, who have struggled with the city’s rising rents and displacement pressures. People of color are overrepresented in this group and face intersecting barriers and structural inequality in the housing, education, employment and criminal justice systems, among others. 

Pros

  • This measure would authorize new affordable housing units, which are an important and needed part of the city’s housing stock. 
  • In authorizing the development, operation or acquisition of municipal affordable housing, Prop. K would take a necessary step toward creating a social housing program for San Francisco, should the city decide to pursue it.

Cons

  • San Francisco enjoys a surfeit of authorization to build affordable housing units but faces a number of more significant barriers to the actual construction of this affordable housing. Prop. K would only authorize potential housing and could send a false signal of success without addressing the zoning, permitting and financing challenges that stand in the way.

SPUR's Recommendation

Given the affordability crisis in the city’s residential housing market, SPUR recommends that San Francisco voters approve this measure to increase the city’s capacity to develop additional affordable units. SPUR also recognizes, however, that San Francisco currently has an abundance of authorization to build subsidized affordable housing units and some of the most sophisticated and high-capacity nonprofit housing developers in the United States. Authorizing public entities to build affordable housing does not solve the challenges of actually building it, and SPUR urges the Board of Supervisors to pair its enthusiasm for more affordable housing with the needed reforms to deliver this housing more quickly and at less cost.

Prop. K raises the possibility of a social housing program at some point in San Francisco’s future. This is a worthy goal; SPUR has called for housing to be treated as necessity of life,2 as it is in a number of social housing models around the world.3 However, SPUR encourages the city to carefully consider the capacities, authorities and resources needed for this program to succeed over the long term.

Vote YES on SF Prop K - City-Owned Affordable Housing
Footnotes 

1 For the text of this legislation, see https://sfgov.legistar.com/View.ashx?M=F&ID=8606754&GUID=99BC3BBE-84CB-4783-87E0-B0F74D2AD627

2 SPUR, “One Idea for Economic Recovery: Treat Housing as Infrastructure,” 2020, https://www.spur.org/news/2020-06-16/one-idea-economic-recovery-treat-housing-infrastructure

3 SPUR, “From Copenhagen to Tokyo: Learning from International Housing Delivery Models,” 2020, https://www.spur.org/sites/default/files/publications_pdfs/aecom_spur_from_copenhagen_to_tokyo.pdf

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