From urban renewal and displacement to economic inclusion: San Francisco affordable housing policy 1978-2014.

• Author: Rosen, Marcia

INTRODUCTION I. THE EVOLUTION OF SAN FRANCISCO'S AFFORDABLE HOUSING PROGRAMS AND POLICIES A. The Birth of the Affordable Housing Movement B. 1970s: Neighborhood Preservation and Tenant Protection 1. Redevelopment and Urban Renewal 2. Residential Hotels 3. Rent Control and Condominium Conversions 4. Shifts in Development Perspectives and Funding Opportunities C. 1980s: Equitable Development, Neighborhood Preservation, and New Financing 1. Community Development Block Grant 2. Office Housing Production Program 3. Limiting New Office Construction 4. Protection of Downtown Housing and Residential Neighborhoods 5. New Resources: Federal, State, and Local Funding D. 1990s: Inclusive Redevelopment, the Dot-Com Boom, and Housing Preservation 1. Inclusive Redevelopment Plans: South of Market, Mission Bay, and Hunters Point 2. Preserving Federally-Assisted Affordable Housing 3. Affordable Housing and Home Ownership Opportunity Bond 4. The Dot-Com Effect and Challenges for the Next Decade E. 2000s: Increase Affordable Housing, Remedy Past Losses of Housing, and Address the Demise of the SFRA 1. Jobs-Housing Linkage and Inclusionary Housing 2. Remedy Past Housing Losses 3. Demise of the SFRA and Birth of the Housing Trust Fund F. 2013 to the Present: Re-Envisioning Public Housing, Responding to Decreased Affordability and Rising Displacement, Reinvigoration of the Tenants' Movement 1. Re-Envisioning Public Housing 2. Condominium Conversions and TICs Yet Again 3. Stemming the Tide of Ellis Act Evictions 4. New Housing Plans and Agendas 5. Organizing Tenants and Community Organizations CONCLUSION INTRODUCTION

Once notorious for urban renewal that diminished housing affordability and displaced residents, the City of San Francisco is now renowned nationally for its best practices in housing and community development. (1) Since the 1970s, San Francisco's housing programs, laws, and policies have created more than 200,000 units of price-limited housing, constituting more than 53% of its existing housing stock. This includes at least 26,000 permanently affordable housing units for very low-income families and seniors; 170,000 market rate multifamily rental units with limits on yearly rent increases for existing tenants under the Rent Stabilization and Arbitration Ordinance; and more than 2600 units of permanently affordable ownership and rental housing for low-and moderate-income households created through inclusionary zoning and jobs-housing linkage programs. (2) How did San Francisco, which consistently has amongst the nation's highest housing costs, (3) counteract destructive redevelopment practices and market interests to preserve and enhance housing opportunities for low-income families and create inclusive communities?

The answer is not simple. San Francisco's housing challenges are rooted in its severely constrained development potential. The city occupies about forty-seven square miles on the tip of a peninsula and is largely built out, with no ability to expand through bay infill or annexation. With minor exceptions, "new development in San Francisco, residential or commercial, means the demolition and displacement of what was there." (4) With each proposed development in San Francisco being a battle between existing and new land uses, protecting low-income residents from displacement is paramount as urban renewal, private development, and market interests seek to transform and gentrify the city. In a city in which 65% of households are renters (the reverse of national trends), ensuring these households have a "voice" adds to the challenge.

Producing affordable housing in what is often the most expensive housing market in the nation also takes substantial financial resources. Spurred on by, and in partnership with, nonprofit developers and housing advocates,

the city has implemented revenue strategies that have provided significant funding for the preservation, rehabilitation, and development of affordable housing. (5) Between the 2002-2003 fiscal year and the 2010-2011 fiscal year, more than $725 million was applied to affordable housing from city and locally-controlled funding sources, over $356 million from state sources, and over $829 million from federal sources, all totaling just under $2 billion dollars. (6) As state and federal sources of affordable housing financing shrink, local funding initiatives and resources become even more critical. (7)

Because of these multiple forces, one must look beyond the local codes and ordinances, policies, and development requirements to understand the successful evolution of affordable housing programs in San Francisco; the whole is greater than the sum of its parts. The overall success of San Francisco's housing programs and policies results from the interaction of three key factors: (1) dedicated community advocacy and strong coalitions; (2) development of and access to substantial funding sources; and (3) constantly evolving housing programs and policies that address new challenges and recognize opportunities. Combined, these factors have allowed the city to recognize and take advantage of ever-changing market and political forces to maintain and develop strong local communities.

This Article describes the development and interaction of these three components of housing program and policy development since the 1970s and how they have created the current dynamic affordable housing and community development system in San Francisco. We begin by discussing the birth of the community housing movement in San Francisco, followed by the policies and programs developed within the economic and political climate for each decade from the 1970s through the 2000s. These periods start with the formation of the San Francisco Redevelopment Agency (SFRA) (8) and the influence that its early "blight removal" policies had on shaping the community housing movement. We discuss how this movement then helped refocus the SFRA, such that it became the largest local contributor to affordable housing production and preservation in the city, while also working within the context of market and political forces to develop programs and policies to preserve, produce, fund, and create inclusive neighborhoods. We then discuss the demise of the SFRA in 2012 and the birth of a new housing revenue source, marking a new era for housing and community development in San Francisco. Finally, we discuss how this history of strong advocacy has carried forward into current problems with quickly rising housing costs, increased tenant evictions and reinventing public housing to improve its housing stock, and services to very-low-income residents. We conclude with a call for San Francisco to continue rising to the shifting market, political, and economic challenges to address new housing needs and retain inclusive communities.

1. THE EVOLUTION OF SAN FRANCISCO'S AFFORDABLE HOUSING PROGRAMS AND POLICIES

San Francisco's community housing movement began in the 1970s and has since evolved in response to the predominant economic, demographic, and political forces affecting the city. Prior to 1970, San Francisco's dedicated affordable housing stock consisted of public housing and federally funded housing developed as part of the city's urban renewal program. The market-rate housing affordable to low-income families consisted of older homes, thousands of which were either lost to or threatened by "slum eradication" redevelopment practices of the city. No state or local funding sources were available for housing rehabilitation, preservation, or development, and no community-based infrastructure existed to support this work. This all changed once neighborhood residents and community housing advocates came together and brought community housing needs to the forefront of the city's development and redevelopment decisions. This Part describes the birth of the affordable housing movement and the more significant victories and unique sources of revenue that the movement has helped achieve within each decade, beginning with the 1970s.

1. The Birth of the Affordable Housing Movement

   The community-based affordable housing movement in San Francisco developed roughly between 1968 and 1978, a time during which the city's economic base was substantially transformed. (9) Office workers had displaced industrial workers, and residential real estate had climbed in price, propelling San Francisco from one of the cheapest places to live in the Bay Area to among the most expensive. Several significant events led to this transformation. First, containerization of the maritime industry between 1960 and 1966 contributed to the economic downfall of the Port of San Francisco, resulting in a significant loss of industrial jobs, particularly for the African-American community. (10) Thousands of industrial jobs were again lost in 1974, when the Hunters Point Naval Shipyard was decommissioned and, with it, the economic base of the neighborhood. (11) Second, the Bay Area Rapid Transit (BART) system ran its first train in 1972, linking much of the Bay Area with San Francisco and increasing the pool of suburban workers to fill jobs in the city. Third, as part of the plan to position San Francisco as the "corporate headquarters" of the Pacific Rim, explosive growth in commercial office buildings occurred. With BART bringing suburban workers from neighboring counties into San Francisco's downtown, white-collar jobs in retail, office, and financial sectors became the driving force of the city's economy. (12) Fourth, by 1978, ten neighborhoods were designated for urban renewal to revive blighted areas of the city, resulting in the SFRA's demolition of 14,207 low-income housing units and the consequent displacement of residents. (13) Finally, in 1974, gas prices rose to over one dollar per gallon, encouraging suburban office workers to return to the city in search of homes. This spurred a significant rise in housing prices, exacerbated by the focus...