SF Corporate Controlled SF Mayor Ed Lee To Raid City Workers Pension Fund stoplhhdownsize/Affordability_Mayor_Housing_Bait_and_Swtich_April_2014.pdf April 2014 On the Mayor’s Seven-Point Housing Plan Affordability Mayor: A Housing Bait-and-Switch? by Patrick Monette-Shaw Turning to the DLAP component for non-first responders, the Mayor’s Office of Housing and Community Development dawdled for the first year, and it only belatedly launched the non-first responders DLAP program in March 2014. It’s unlikely that any loans for non-first responders will close in the next three months before the end of the current fiscal year. For the second and third years, the non-first responder’s DLAP proposed budget stands at $2 million each year, suggesting a total of twenty $200,000 loans may be made across Year 2 and Year 3 (ten loans in each year). If Year 4 and Year 5 also stay flat-funded at $2 million each year, another twenty $200,000 loans may be issued to non-first responders. If that happens, it may bring the total of non-first responder loans to just 40 loans. Between the first responders and non-first responders, that may bring the total DLAP loans across five years to just 64 — not the 100 loans blabbed about in the Mayor’s March 17 press release. Unless the Mayor starts using bloviated fish-and-the-loaves, he stands no chance that 100 DLAP loans will be issued in just five short years, as his March 17 press release misleads the public. Page 13 After all, the Mayor’s March 17 press release indicated that between the first responders DLAP program and the non-first responders DLAP program, it would help “at least 100 household buy their first home” within the next five years. two DLAP component budgets during the next five years. In Years 1 through 3, only a combined total of $8 million has been presented in proposed budgets for DLAP loans. If the Mayor really expects to divide the fish-and-loaves, he’s going to have to come up with another $12 million in Year 4 and Year 5 to reach a $20 million goal for the DLAP loans. On January 17, the major media reported the Mayor claimed in his State-of-the-City address that 2,500 DLAP loans would be issued within six years — $500,000 million not even remotely available in his bank. Following numerous public records requests placed about the DLAP programs in January and February, Hiz Honor now seems to have changed his tune. Just three months later, Mayor Lee’s March 17 press release reduces DLAP loans to just 100 loans over five years — not 2,500 — still unsure whether he even has $20 million in this bank to cover such a commitment of funds. Unless Google and Twitter — and airBnB, Uber, Lyft, and “Tech Inc.” — stop donating money to fund free MUNI rides for kids, and start kicking in “corporate giving” towards helping out the Mayor’s troubled DLAP program to help solve the housing problem that has resulted from the Mayor’s focus on “jobs, jobs, jobs” (mostly “tech” jobs), the Mayor’s housing goals will fall flat on his face. five-year period, Flannery inappropriately answered with a one- word “No,” to what was an either-or question. So it was unclear whether the Mayor plans to add $15 million to the Housing Trust Fund in new money beginning July 1, 2014 beefing up the pot, or whether his social media spin meisters are merely double-counting the annual $2.8 million increase in each of the next five years already required by Prop. “C” that will yield almost the same $15 million. When Olson Lee was asked about Flannery’s inappropriate answer of “No” to a clear either-or question, Mr. Lee had his deputy, Maria Benjamin, Director of Homeownership and Below-Market Rate Programs, reply on his behalf. Ms. Benjamin further clamed up, saying that the Brown Act, California’s Public Records Act, and Proposition 59 — and by extension, San Francisco’s Sunshine Ordinance — only require public agencies to provide existing documents. Not explanations. Let’s do simple math. One hundred households who could each qualify for $200,000 would require the Housing Trust Fund to have $20 million available in these This probably isn’t going to happen, because in Years 2 and 3, only $3 million has been allocated across both DLAP components. If Years 4 and 5 are flat-funded at the current $3 million level each year, Mr. Mayor is likely to be short-sheeted $6 million of the needed $20 million. “In Years 1 through 3, only a combined total of $8 million has been presented in proposed budgets for DLAP loans. If the Mayor really expects to divide the fish- and-loaves, he’s going to have to come up with another $12 million in Year 4 and Year 5 to reach a $20 million goal. This probably isn’t going to happen.” Asked of Olson Lee on March 18 whether the Examiner’s article was reporting a new $15 million increase over and above the already-pledged $20 million-plus annual allocation increases, or whether the so-called “new” $15 million increase is simply the same dollar amount increase of $2.8 million previously authorized to be accumulated during the same “On January 17, the major media reported the Mayor claimed in his State- of-the-City address that 2,500 DLAP loans would be issued within six years. Just three months later, Mayor Lee’s March 17 press release reduces DLAP loans to just 100 loans over five years — not 2,500.” Page 14 In other words, Ms. Benjamin, Mr. Flannery, and Mr. Olson Lee collectively appear to be unwilling to simply answer either-or questions, implying they will produce only specific documents requested, not any explanations to simple, specific questions involving elaboration about the Housing Trust Fund. So much for the “trust” side of the “in the public trust” equation. Instead, we appear to have an Office of Housing and Community Development hell bent on hiding from the public, just how it is spending hundreds of millions of dollars meant to spur affordable housing development. Housing in the Wild, Wild West Although the mainstream media have reported Mayor Lee wants to issue up to 2,500 down-payment assistance loans of up to $200,000 each loan over the next six years — which may require funding as high as five-hundred million (yes, a half-billion in “loans” — nobody’s talking about the fact that issuing just four loans per year (as the City did in the first year of the program), it will take 2,500 applicants a total of 625 years to perhaps receive loans, given the glacial speed of the Mayor’s Office of Housing. But the second two-year Housing Trust Fund budget this columnist received just as the Westside Observer was going to press for this edition, shows that through Fiscal Year 2015-2016 there is no new portion of a $15 million increase in the next two-year budget, suggesting that the $15 million increase being creatively spun as “new money” by the Mayor’s press staff is actually the same pot of money from the $2.8 million increase times five years already budgeted. Bumping it up to even forty $200,000 loans per year will take the Mayor’s Office of Housing a full 62.5 years to issue 2,500 loans, not six years. After all, if the Mayor really plans to issue 2,500 down-payment-assistance loans during the next six years, his Office of Housing will need to process, approve, and issue 417 loans each year, not four each year. “Bumping it up to even forty $200,000 loans per year will take the Mayor’s Office of Housing a full 62.5 years to issue 2,500 loans, not six years.” “So it was unclear whether the Mayor plans to add $15 million to the Housing Trust Fund in new money beginning July 1, 2014 beefing up the pot, or whether his spin meisters are merely double-counting the annual $2.8 million increase in each of the next five years already required by Prop. ‘C’.” The Mayor would have to quickly come up with $500 million within six years that he hasn’t explained to the electorate where such inflated spending will come from. And he may have to explain why the mainstream media have been reporting that DLAP loans appear to be restricted only to market-rate homes. The Mayor’s Seven-Step Plan reported in the media in January claims that 30 percent of the total housing goal would be reserved for lower-income residents, for example a family of four earning less than $50,000 annually. There’s no mention in the program manuals provided by Flannery that the Housing Trust Fund will dedicate 30 percent of its total funding for four-person households earning less than $50,000 annually. The media also reported in January that 25 percent of Lee’s Seven-Step Plan housing goals targets middle income families of “ four earning between $100,000 and $150,000. That brings the lower- and middle-income beneficiaries to just 55 percent of the housing goals. Creatively, the major media made no mention of the remaining 45 percent of the housing goals in Lee’s Seven-Step Plan. Presumably, fully 45% of the remaining housing goals will be targeted to four-person (or other) families earning more than $150,000 annually, presumably to upper-income residents.” Presumably, fully 45 percent of the remaining housing goals will be targeted to four-person (or other) families earning more than $150,000 annually, presumably to upper-income residents. In fact, there’s no mention at all in the documentation Flannery provided — and no mention in the enabling legislation in the legal text of Proposition “C” passed by voters in 2012 — on how the Housing Trust Fund may be permitted to split percentages between lower-, middle-, and upper-income residents. Five years ago, the San Francisco Bay Guardian carried a story titled “Lennar’s housing scam, redux,” reporting misrepresented promises by Lennar to build 32 percent affordability into its 10,500 homes being built in Bayview Hunter’s Point. Observers noted back then that the main rationale for building so much market-rate housing is callously This reporter also noted back in May 2008 that there was nothing in the legal text of the 2009 Proposition “G” ballot measure awarding Lennar the development rights in the Bayview that guarantees any precise percentage of housing that will be designated as “affordable.” Indeed, Lennar’s development plan for Parcel “A” in the Bayview had initially promised low-income rental units. Lennar single-handedly changed the composition of the first 1,600 units to be built, all of which will be at market rate — with no low-income rental units. We’ve been warned: Lennar may end up building only market rate units. Page 15 for the property taxes they will bring to the City’s coffers. “Voters appear to have been snookered in 2012. Voters weren’t offered any opportunity to have an Oversight Committee established to monitor use of the Housing Trust Fund.” The first 1,600 units are expected to each sell for San Francisco’s then median price of $836,000 in 2008 dollars. That will net Lennar $1.38 billion in homes and condos on Parcel A. Every day of delay by Lennar is designed to drive up the median prices of housing in order to increase Lennar’s profits. Given apparent early failures of the Mayor’s Housing Trust Fund, one wonders whether the Bay Guardian might now, five years later, write another article, perhaps titled “The Mayor’s housing scam, redux.” After all, the 2012 voter guide indicated that the Housing Trust Fund would include “uses” for rental housing. Given that approximately 64 percent of San Franciscans are renters, it’s troubling that the Mayor’s Office of Housing and Community Development’s first-year proposed budget for FY 2013–2014 and FY 2014–2015 included just $200,000 (or of $20 million) for rental eviction defense, and nothing from the Housing Trust Fund itself for rental unit rehabilitation. In the second year in FY 2014–2015, the Housing Trust Fund is budgeting to add $200,000 for rental unit rehabilitation, and will double that to $400,000 in FY 2015–2016. Adding the $600,000 the Housing Trust Fund has budgeted for rental eviction defense across the three-year budget periods between FY 2013–2014 and FY 2015–2016 to the total of $600,000 budgeted in the second and third years for rental unit rehabilitation, the Housing Trust Fund appears to have budgeted just $1.2 million — just 1.75 percent — for any sort of rental assistance, out of the total $68.4 million that will be appropriated during the first three years of the Trust Fund budgets. In a City where over 64 percent of the residents are renters. Despite City Hall’s bleating that the Mayor would beef up rental eviction defense funding (following the 2013 Ellis Act eviction of Poon Heung Lee and Gum Gee Lee and their disabled daughter debacle), the eviction defense and prevention budget in the Housing Trust Fund’s budget appears to be flat funded at $200,000 in each of the first three years. How many more Poon Heung and Gum Gee Lee evictions will there be, before the eviction defense fund is actually beefed up, not simply flat-funded? This is despite a San Francisco Examiner article on October 1, 2013 that Mayor’s Office of Housing had increased funding for tenant counseling services “by 63 percent, to $700,000, bringing the total to more than $2.3 million in eviction prevention services.” How do you inflate just $600,000 in Housing Trust Fund monies in public-record budgets for renter eviction defense programs, into $2.3 million? Is this more bloviated bread and fish, and infused wine? Playing Voters for Suckers Typically, San Francisco voters are a pretty savvy group. Voters appear to have been snookered in 2012. After all, we passed a ballot measure in March 2002 creating the Citizens General Obligation Bond Oversight Committee to monitor use of hundreds of millions in general obligation bonds earmarked for a variety of capital infrastructure improvement projects. Voters also passed the same year in November, a measure creating a Revenue Page 16 Bond Oversight Committee to monitor issuance of Revenue Bonds for the San Francisco Public Utilities Commission, given the billions at stake in various Hetch Hetchy, water system, and sewage system projects. Although both oversight committees created in 2002 have had only marginal success, riddled with political appointees to both bodies, there is at least a perception of oversight. Not so with the Housing Trust Fund, which has no oversight. Voters were played for suckers when Proposition “C” was put before them creating the Mayor’s Housing Trust Fund. Without clearly being advised that the Housing Trust Fund would be managing upwards of $1.3 billion for a whole host of housing programs, voters weren’t offered any opportunity to have an Oversight Committee established to monitor use of the Housing Trust Fund. Not only do voters have no oversight of use of the Housing Trust Fund, they also have no oversight of the $1.34 billion in cuts that will be made to the City’s discretionary General Fund that will then be diverted to fund the Housing Trust Fund. Did Flannery, Olson Lee, or someone else at City Hall suddenly realize that bloviating 2,500 loans was just too far over the top, even using spin control, and that’s when they de-blovitated expectations by re-christening 100 DLAP loans as the new 2,400 DLAP loans three months later, perhaps after a flash of oversight dawned on them? This just adds insult to injury, since not only have voters been excluded from overall decision-making on how the Housing Trust Fund’s money will be spent, they also appear to have been excluded from any decision-making regarding who the eligible applicants will be. They’ve also been excluded from any decision-making regarding how the trust funds will be split between low-, middle- and upper-income applicants, among other decision-making exclusions. “Did Flannery, Olson Lee, or someone else at City Hall suddenly realize that bloviating 2,500 loans was just too far over the top, even using spin control, and that’s when they de-blovitated expectations by re-christening 100 DLAP loans as the new 2,400 DLAP loans three months later?” Although we’re told checks and balances of government are necessary to defend our democracy, there’s no provision for any sort of checks-and-balances over this Housing Trust Fund. How do you provide the citizenry with trust regarding Housing Trust Fund trustees, when there are no checks or balances over the trustee’s decision-making? If I were a betting man, I’m not convinced I’d wager the Mayor’s seven-point “housing affordability” plan will come to fruition. P.T. Barnum — or whichever con man came up with the aphorism — provided fair warning about not being played for a sucker. Not One Penny for “Old Friends” into moving back into the City, the City, meanwhile, is not lifting a finger or spending any of the Housing Trust Fund in order to help our “Old Friends” — seniors, the elderly, and people with disabilities — being forced into out-of-county displacement (read: discharged from Laguna Honda Hospital or SFGH and dumped out-of-county, or are being “diverted” from admission to LHH and are also diverted out-of-county). Up to $1.34 billion is being promised for a wide variety of housing under the Housing Trust Fund. But not a penny of it is being earmarked to help our Old Friends continue residing as San Franciscans, in-county. Why not? This, from a Mayor who started his career in public service as an advocate for affordable housing, and the rights of immigrants and renters at the San Francisco Asian Law Caucus, including the elderly. In 1989, Lee was subsequently appointed by then-Mayor Art Agnos as the City’s first investigator under the city’s Whistleblower Ordinance. Lee has While the Board of Supervisors and the Mayor are scrambling to divert $4.5 million from the City’s General Fund Reserve account to rescue non-profit organizations facing out-of-county displacement due to the hot housing market, and are trying to entice public safety first-responders to snap up $200,000 down-payment assistance loans hoping to lure them “The City, meanwhile, is not lifting a finger or spending any of the Housing Trust Fund in order to help our ‘Old Friends’ — seniors, the elderly, and people with disabilities — being forced into out-of-county displacement.” Page 17 led a charmed life of subsequent appointments to various City departments, then was crowned Mayor. Providing affordable housing to our Old Friends may no longer be his primary focus — or of any interest to him. After all, Christine Falvey, the Mayor’s spokesperson, intoned in the Chronicle on April 8, that “It’s very well known that the Mayor’s approach is to do things with people, not to them” [emphasis added]. Falvey was spinning the myth that Lee is the “consensus mayor.” Just ask 9-1-1 dispatchers how much they’ve gained so far in consensus concerning “housing affordability” under the Mayor’s Housing Trust Fund. Has the Mayor been doing “to,” not “with,” with dispatchers, without their consensus? Ask your Old Friends the same questions. Their answers may go a long way toward explaining why our Old Friends are being driven out-of-county. Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: monette‐shaw@westsideobserver. Postscript On April 9, the Chronicle published an article reporting that District 6 Supervisor Jane Kim is pushing to boost affordable housing. She has introduced legislation requiring developers to justify their projects to the City Planning Commission if affordable housing dips below 30 percent of “ housing in her district. She believes that at least 30 percent of new construction should be earmarked “affordable,” to prevent further displacement and help San Franciscans who want to live in the City have a fighting chance to stay here. The Chronicle article quotes Gabriel Metcalf, the Executive Director of the extremely conservative non-profit urban planning agency, SPUR. Metcalf reportedly said, “The only limits on affordable housing are the subsidies to pay for it [sic]. Policymakers should be focused on coming up with more subsidies.” (As an aside, SPUR has been erroneously described recently in the mainstream media as being a “watchdog” agency, which it is not. It is an arch-conservative urban planning outfit that meddles in City planning and policymaking, and is a strong advocate for market-rate projects for its developer allies.) SPUR’s Executive Director, Gabriel Metcalf, reportedly said, ‘The only limits on affordable housing are the subsidies to pay for it [sic]. Policymakers should be focused on coming up with more subsidies.’ Really? More subsidies? How much more in ‘subsidies’ does Metcalf want policymakers to cough up, after voters approved raiding $1.34 billion from the General Fund to divert into the Housing Trust Fund?” Really? More subsidies? After voters (however unwittingly) approved at the ballot box diverting $1.34 billion in General Fund cuts over the next 30 years into the Mayor’s Housing Trust Fund — which is budgeting upwards of 66 percent of its funds in the “Affordable Housing Development” sub-component — how much more in “subsidies” does Mr. Metcalf expect “policy makers” to cough up? While he claims that the “only limit” to affordable housing is a lack of “subsidies,” there are plenty of limits and roadblocks being introduced by the Mayor’s Office of Housing. Given that the Housing Trust Fund is heavily skewed toward only market-rate housing — and fully 45 percent of which the Mayor’s Office of Housing claims may be reserved for upper-income earners making more than $150,000 annually — why does Metcalf believe that these upper-income applicants just need more “subsidies” created by “policymakers”? Metcalf ignores that once General Funds are deposited into the Housing Trust Fund, all accountability and oversight of how the funds will be used for affordable housing all but vanishes. He also ignores that the Mayor’s Office of Housing and Community Development has “sole discretion” to administer the fund. Take for example the 16-month delay between passage of Proposition “C” in November 2012 and the March 2014 release of the non-first responders DLAP program manual. The Mayor’s Office of Housing limited access to affordable housing for 16 months dragging its feet developing the program guidelines. Page 18 In a separate Chronicle article on the same day regarding Ellis Act evictions, Mayor Lee tried to bolster the call in his State-of-the-City speech last January to build or rehabilitate 30,000 homes over the next 30 years. His proposal in January contained scant information on whether he was talking 30,000 “homes” for purchase, or whether he was planning for some mix of the 30,000 to be rental units. The Mayor now claims in the Chronicle article that while adding more housing must be part of the plan, “part of our strategy must be to protect existing [rental] units.” There’s just one small problem with the Mayor’s new claim. And that’s that the Housing Trust Fund does next to nothing to protect — let alone add any new — rental units that are “affordable.” And so far, Mayor Lee hasn’t proposed or created a comparable “Rental Trust Fund” — akin to the Housing Trust Fund — endowed with $134 billion. AlthoughtheMayor’sOfficeofHousingandCommunity Develop claims it’s budgeting for “Affordable Housing Development,” and the Mayor touts his “affordability agenda,” the City Controller — in charge of the City’s purse strings — deposits the affordable housing development funds diverted from the General Fund into a sub-account titled the “Housing Development Pool,” which remains sub-titled as a “Loans Issued by the City” component program. “Although the Mayor’s Office of Housing claims it’s budgeting for ‘Affordable Housing Development,’ the City Controller — in charge of the City’s purse strings — deposits the affordable housing development funds diverted from the General Fund into a sub- account titled the ‘Housing Development Pool.’ Noticethattheword‘affordable’ went missing by the City Controller. Also notice how Flannery and the Mayor’s Office of Housing appear to have no program manual describing how ‘pooled money’ will be divvied up.” Notice that the word “affordable” went missing by the City Controller. Also notice how Flannery and the Mayor’s Office of Housing appear to have no program manual describing how “pooled money” will be divvied up. As observers know, once money is “pooled,” it can then be diverted (and often is) to almost any purpose, including upper-income households, and perhaps only for market-rate — not “affordable” — housing, not assistance to renters. Given that there is no oversight body for the Housing Trust Fund, we’ll have to see how the Mayor’s Office of Housing, in collaboration with the City Controller’s Office, ends up allocating funds in the housing “pool,” and to what types of housing. “Over the next six years, as the City drags its heels on the Housing Trust Fund, how many more thousands of San Franciscans will no longer be living in the City, displaced by the bait and switch in the Mayor’s ‘affordability agenda’.” Over the next six years, as the City drags its heels on the Housing Trust Fund, how many more thousands of San Franciscans will no longer be living in the City, displaced by the bait and switch in the Mayor’s “affordability agenda” and the glacial inaction in the Mayor’s Office of Housing?
Posted on: Sun, 18 Jan 2015 18:49:22 +0000