After much back and forth on the subject, and despite acknowledging it may not be financially feasible any time soon, the South San Francisco City Council indicated it is now ready to place a question on November’s ballot that could allow the city to own and operate public housing.
The measure, spearheaded by Councilmember James Coleman, would permit the city to build or buy low-income housing with public dollars, something that requires voter approval as a result of Article 34 of the state Constitution.
Coleman’s argued the move could not only allow the city to bypass the 1950 amendment that’s been widely criticized as racist, but allow the city to more efficiently provide below-market-rate apartments. The prevailing method in the state is for jurisdictions to subsidize nonprofit developers to carry out the task.
During previous meetings, however, his colleagues have been less enthusiastic, both pointing to untenable cost projections and lost funding for schools that would not receive property tax revenue from city-owned developments.
But while those concerns were largely maintained this week, the council appeared swayed by impassioned input from residents, many of whom pointed to the state law’s beleaguered legacy.
“If we want to move forward with progressive, inclusive and equitable [policies] … it starts with changing laws that were just unjust, that were not supposed to be,” Councilmember Eddie Flores said. “These numbers, right now, don’t pan out, I’m fully aware of that, but we’re not building right now.”
The ballot question will request permission to add the equivalent of 1% of the city’s housing stock, roughly 225 units, annually over the course of the next eight years. The numbers would roll over and not expire, meaning the city could build all 1,800 units at any point in the future.
However, Councilmember Mark Addiego said the housing may not be built within the current council’s tenure, the measure, more importantly, would gauge public interest and allow the city to be ready to build if state funding became available.
“Even if it’s not right for today, things change,” he said.
A city study found that in current conditions, a 150-unit apartment building, with rents set at $1,713 to $2,375 depending on bedrooms (considered affordable for “very-low income” residents, per the state) would cost the city roughly $84.8 million to construct and operate. That cost could be reduced to $47.1 million with the use of low-income housing tax credits — federal and state assistance for which the city would need to compete.
The council also looked at the potential of a mixed-income project, with half the apartments affordable and the others set at market rates. That project wouldn’t qualify for the state assistance, and would still cost the city $53.8 million, according to the report. The market-rate units would also cost $463,000 in lost property taxes, $320,000 from school district earmarks (The below-market rate units would similarly not pay taxes, though, it was noted that would be the case even if provided by a private developer) .
“The taxes that would not be going to the school district, those are the things that scare me,” said Vice Mayor Buenaflor Nicolas, who also conceded her support after recognizing the “racial tone.”
At the time of its passing, Article 34 was backed heavily by the real estate industry, with proponents arguing taxpayers should have a say on low-income housing projects, as they were publicly funded. But ads at the time also played heavily into fears of neighborhood integration and socialism. The law also came on the heels of a 1949 federal law that outlawed segregation in public housing.
Constitutional amendments require two-thirds voter approval, a threshold not met during at least three attempts to change the rule, most recently in 1993. While there have been efforts more recently, it’s unclear when repeating the rule could again land on the state ballot.
A bill that would create a state authority for public housing, however, made its way to the Senate, where it fell one vote short of passage out of the Governance and Finance Committee. Assembly Bill 2053, authored by South Bay Assemblymember Alex Lee, would not repeal Article 34, but would support public housing construction. It will likely be reintroduced.
“There has been an unprecedented amount of movement in the state Legislature to pass pro-social housing bills,” Coleman said. “If South San Francisco passes Article 34, guess what, we’re first in line to access that funding.”
The council will ultimately vote on whether to place the question on the ballot during a future meeting, ahead of an Aug. 12 deadline for items to make it to the Nov. 8 election.