Developers and Affordability Advocates Seek Common Ground
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A panel of developers discussed potential solutions to San Francisco’s housing crisis in key neighborhoods like the Tenderloin and SoMa. Market-rate developers squared off against affordable housing advocates to debate thorny political and planning issues such as Prop C and gentrification. The panel concluded with a note of conciliation as both sides agreed solutions would be found in the middle and not on the political fringes.
Donald Falk (left, with Bradley Schnell) is CEO of the Tenderloin Neighborhood Development Corp. The organization has built nonprofit housing in San Francisco’s Tenderloin district since 1981 and is an advocate for inclusionary development.
Donald's objective is to foster the creation of more housing stock without displacing people. While the objective is clear enough to state, he acknowledged it was very challenging to align interests of for-profit and nonprofit organizations.
He cautioned other panelists to be highly intentional with their choice of language in describing the problem. The term “frontier” to describe the Tenderloin conveys the displacement of Native American populations from the American West during the 19th century, he said. Furthermore, he objected to the use of “workforce housing” as it implied affordable housing occupants don’t work when poorer workers spend longer hours for less pay.
The housing advocate ended his remarks wishing there was a “middle where we could meet to marginalize the fringes.”
Essex Property Trust EVP and CIO John Eudy (left, with fellow panelist Eric Tao) laid out the market-rate approach to tackling the city’s housing crisis. Essex expanded into San Francisco during the last recession and now develops across the city, citing high barriers to entry as a key feature of the market.
John stressed the key was removing impediments to increasing the number of available units. As evidence, John pointed to the report from the state’s nonpartisan Legislative Analyst’s office which read, “facilitating more private housing development in the state’s coastal urban communities would help make housing more affordable for low-income Californians.”
While he understands the humanitarian desire behind affordable housing requirements, John noted larger allocations for below-market rate housing would stall many projects that are “an eyelash away from non-economical.”
AGI Avant CEO Eric Tao also advocated market-rate solutions. He told the audience the narrative needed to change from the stereotypical evil developer fighting the noble nonprofit. Eric reminded the panel developers needed to work together to represent their interests.
Eric was the key negotiator for developers in their bid to minimize the heightened affordability requirements demanded by Prop C. While the 25% reservation was seen as too high by developers, he added finalized guidance will be provided in November.
Shorenstein Properties managing director Meg Spriggs (right, with Mithun’s Daniel Solomon) discussed some of the challenges in developing in the Tenderloin. Meg attended a hundred community meetings for a Tenderloin project, she said. She offered some encouragement to the panel, noting her experience with fellow developers in New York was not nearly as amicable as it is in San Francisco.
McGuire Realtor William Freeman took a nuanced approach, saying rising rents were a significant issue while adding development and construction were key in alleviating the housing shortage.
Forge Land Co CEO Richard Hannum said his company focused on workforce housing. By building on empty parking lots, he said new housing can be added and bring new life to the neighborhood without displacing existing residents.