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Show us the Money

March 20, 2015

By Ted Redmond : 48hills – excerpt

Or rather, developers should show us how much they’re going to make on a  project — and then we can talk about fair affordable housing and community benefits.

MARCH 19, 2015 — There’s a little-known provision of the San Francisco Sunshine ordinance — written back in the days when big developers were constantly asking the city for tax breaks, free land, or other handouts – that says those goodies have to come with a price.

Here’s the language of Section 67.32:

The city shall give no subsidy in money, tax abatements, land, or services to any private entity unless that private entity agrees in writing to provide the city with financial projections (including profit and loss figures), and annual audited financial statements for the project thereafter, for the project upon which the subsidy is based and all such projections and financial statements shall be public records that must be disclosed.

In other words, if you say you can’t make a project work without public subsidy, we want to see the numbers.

We probably could have raised the issue during the Twitter Tax Break discussions, but it would have been tricky: The mid-market tax abatement wasn’t for a specific project. And these days, what developers tend to ask for – which we (foolishly, in hindsight) didn’t put in the law – is favorable zoning.

Now what we get is demands for special height-limit exemptions, greater density, changes of use – the sorts of things that are often far more valuable than cash subsidies. I’m not a lawyer, and nobody has argued, as far as I know, that Section 67.32 ought to apply to spot zoning or other special land-use treatment (including change-of-use designations). Maybe that’s a legal case to be made.

But there’s a larger public-policy case to be made for this piece of San Francisco statute, and it comes into play with projects like the 16th and Mission development… (more)

The developer, of course, wants to turn a profit, this being a capitalist world. And Maximus representatives have made it clear that an alternative with 100 percent affordable housing doesn’t work financially.

Why not? What would it cost? What would, say, 50 percent affordable cost? What about 60 percent, which the city’s General Plan says ought to be the standard? How much has Maximus invested? What’s the expected return? At what price could the city, the San Francisco Land Trust, or a coalition of community-based housing organizations buy the land?…

I don’t think this project is going to get approved in its current form. Sup. David Campos is pursuing a moratorium on new development in the Mission, and now that Scott Wiener has set something of a precedent for neighborhood housing controls (although he says the two approaches are totally different) there’s a good chance Campos can get six votes. That would halt the project in its tracks.

At the very least, Maximus is going to have to offer a lot more affordable housing – and every time a developer says that affordable housing doesn’t pencil out, or resists calls for community benefits, why doesn’t the city say:

Show us the numbers?

(more)

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