Affordable Housing Bond Cost Analysis

According to San Francisco’s Controller, if the proposed $310 million Affordable Housing Bonds measure, Proposition A, is passed this November, the estimated average cost for the bonds, collected in the form of a property tax surcharge, will be $8.09 per $100,000 of assessed property value through 2039.

The benefits of the proposed bond includes $50 million to acquire existing rent-controlled buildings in the Mission and make them permanently affordable; $80 million for down-payment to first-time homebuyers who are public school teachers or earn less than 120 percent of the Area Median Income; $80 million for the rehabilitation of existing public housing units; and $100 million for the rehabilitation and construction of affordable housing for low income households across the city.

If adopted, landlords would be allowed to pass 50 percent of the tax increase through to tenants.

And for those wondering how the Mayor can be touting that the proposed bond will not increase taxes despite the costs outlined above: “The City’s current debt management policy is to issue new general obligation bonds only as old ones are retired, keeping the property tax impact from general obligation bonds approximately the same over time.”

Comments from Plugged-In Readers

  1. Posted by Brian

    So… this will allow the city to buy up to 50ish units worth of housing in the Mission? Yeah, totally worth it!

  2. Posted by wc1e

    Im really more of a lurker here, so maybe someone can answer this for me: If rent control is this amazing thing that is keeping housing in SF affordable, then why does it only apply to some buildings and not all? The whole thing seems so arbitrary.

    • Posted by Snowbored

      The idea was that if you make it apply to all housing, even new construction, you reduce the incentives to build new housing, further constraining supply and raising prices. So it only applies to buildings that existed when the law was passed. This makes sense. It ignored the longer term more subtle but much worse problem of supply constraint caused by people never moving, however.

      • Posted by wc1e

        Thanks that makes sense. I have nothing against a housing subsidy but it doesn’t seem fair that basically building owners and anyone new to the city has to subsidize the rent of their neighbor. And Im guessing that in some cases people who are living in a rent controlled unit actually make enough money to afford a higher rent, thus taking away an affordable unit from someone else.

        Shouldn’t affordable housing be a burden that we all bare?

        • Posted by SFrentier

          “Shouldn’t affordable housing be a burden that we all bare?”

          Yes but people and especially politicians in this town like free rides.

        • Posted by sfgwf

          Same logic applies to Prop 13. Those who have bought within the past decade pay significantly higher property taxes than those who have inherited or owned their properties for 20+ years. The latter is essentially having city services (fire dept, police, infrastructure, etc) fully subsidized by the former.

          • Posted by BayviewSF

            California’s property tax is a fixed percentage on sale price, that’s absurd. Most states assess the property tax valuation based on inflation. If housing price doubles in 5 years, do you expect to double the property tax and double the government spending? On the other hand, if the housing price drops 50% in 3 years, do you expect to halve the property tax and halve the government spending?

            Prop 13 is a correction to California’s absurd property tax assessment scheme. It is not perfect, but it has effectively avoided runaway government spending.

          • Posted by SFrentier

            Yeah but at least prop 13 is statewide. RC is a ridiculous carve out that exists in very few CA municipalities.


          • Posted by cleverpunhere

            Sorry, BayviewSF, I have to strenuously disagree. The point that you are making goes to the rate of property tax, not the assessment on which it is based. Prop 13 has resulted in a system that is profoundly unfair and often absurd in its results.

            The house across the street from mine is similar in value to mine, but I literally pay 40x the property tax they pay. They are nice people and everything, but in what universe does that make sense?

          • Posted by folderpete

            I have this belief that Prop 13 helped fuel housing inflation.

            My solution to taxing seniors out of their homes would have been to assess-but-defer collections. So, freeze the collection (say $1200 for a $100k home back when), but reassess every year. When that homes finally sells, the owner must pay off the accumulated RE taxes in escrow. So say they sell for $1000k. Their taxes should be $12000/, so clip $12k-1.2k= $10.8k-defered in escrow (times the number of years held). Then that $100k home would only have an estimated appreciation of – not $900k but more like – $600-800k. It will cut the owners Cap Gains for CA & US and give it to SF where it belongs. Of course that will affect what the owner can then afford. But maybe this is one way to stem housing inflation.

            Limiting Govmint spending is, or course, a whole nuther animal.

          • Posted by SFrentier

            Bayview SF actually makes a very valid point- gov spending can’t be tied directly with the RE market! So when prices are high you get gov doing inane things like spending $888,889 per unit for subsidized housing, which is a pathetic waste of taxpayers money. And then when times are lean and homes drop in value, we won’t even have basic services covered, since assessed values will go down.

            Prop 13 helps insure that gov doesn’t artificlly benefit from rising PRIVATELY OWNED asset values. People that invested early on should not be on the hook for ever increasing property taxes. This is especially true for the majority of property owners who are basically working families.

          • Posted by cleverpunhere

            SFRentier: Let me ask again–does it make sense for my well-off neighbor to pay 1/40 the property tax bill that I do? You can make grand generalizations about “working families” all you want, but Prop 13 isn’t limited to such families–it isn’t even limited to residential property. My family is “working,” too–why should I pay for schools and sidewalks, when the neighbor doesn’t?

          • Posted by SFrentier

            Because they made that investment years before you did, so they reap that benefit. Just like you will benefit from it as future buyers end up paying more in taxes.

            If you own a home already, why on earth would you be against prop 13? It only benefits you in the future. No comprende.

          • Posted by cleverpunhere

            I am against prop 13 as an owner for the same reason I was against rent control back when I was a renter–bad policy hurts everyone. For example, there is a place on my block that is essentially abandoned, totally neglected, and an eyesore. The owner uses it to store his junk while he lives elsewhere. Without prop 13, the owner would sell. With prop 13, his carrying costs are microscopic, so he lets it rot. And those nearby (not to mention those who would like to buy it and restore it to use) pay the price.

            Your argument about those who bought early seems entirely circular to me:

            “They bought early and therefore shouldn’t pay taxes!”

            “Why not?”

            “Because those who bought early should reap the benefits!”

            If you support the policy because it benefits you, that’s fine. I won’t agree with you, but I can hardly argue with voting your interests.

          • Posted by SFrentier

            Your circular argument is flawed. It’s not as if they don’t pay taxes. They pay less taxes, according to their purchase price, which is different. I don’t think it’s bad policy and it’s entirely different than rent control. Prop 13 helps those that took a personal risk and purchased a home. Homeowners are also often assets to their community as well, as they have a stake in it. Renters OTOH often (not alway, just often) don’t show the same commitment. Nor did they make any financial investment in their housing. So policy wise renting should not be subsidized, especially when that subsidy comes from private property owners- pay market rent or get the F out. But personally I don’t mind RC in SF, cause I found ways to deal with it. So sure, I like the resultant constricted supply and super high rents. Works for me. Just like the housing moratorium in the mission- I think it’s horrible housing policy yet it’s a personal benefit for me. So yeah, I’ll reluctantly vote for it 🙂

            As for the dilapidated house, there are laws against egregious cases. Is this in Frisco? I suggest you call 311 and place an anonymous complaint, if it’s really that bad. Otherwise, it’s kind of a dickish move.

          • Posted by cleverpunhere

            SFrentier: Thanks for the note about the abandoned property options. I’ve looked into this but for a number of reasons it isn’t likely to help my situation (even though this property would clearly qualify), and as you say turning in your neighbors in that way comes at a cost, too. But I appreciate you mentioning it because until quite recently I didn’t know that it was an option at all.

            Probably time for us to agree to disagree re: Prop 13. I don’t agree but your perspective is interesting and certainly a lot more thoughtful than most.

  3. Posted by Mike

    The City at first said there would be tax increases unless the bond was capped at $250M. Then it grew to $310M.

    I’m voting “NO”. The “affordable” homes from this bond are going to cost the city well over $1M/per to create, and will benefit a small number of people who win a “lottery”. The same people who want us to support this bond are the people who are fighting tooth and nail the market rate housing that is the REAL solution to the housing crisis.

    • Posted by Jayjay

      If you knew the circumstances “these people” who win the lottery ticket live in, you’d be less judgemental. You live in a progressive city. Have sympathy for those less fortunate.

      • Posted by moto mayhem

        i think his point is that the city could be a little smarter with the money and buy more units for the same overall cost, thus creating benefit for more of “these people”. the city is paying $1M /unit to pander to a certain district to stem protests and make it look like they are actually doing something. I have a 3bdr 2000 sq ft unit that I bought 3 yrs ago, and I didn’t pay this amount. this city could buy cheaper housing on the open market.

  4. Posted by anon

    And the city once again milks small landlords … to milk small landlords, to milk small landlords, to milk small landlords. Notice a theme? Is there a “f*** NO on A” box?

  5. Posted by Snark17

    Shocking waste of public money that would benefit a lucky few– looking forward to voting NO.

    • Posted by oh yeah

      I’ll be voting a big ‘ N O ‘

  6. Posted by Snowbored

    I like how they threw “who are public school teachers” in there before “or who make less than 120% of the median” which is sort of misleading. I for one would support things like down payment assistance for teachers, police, and firefighters, if that was all this is. Instead they are using teachers to sell normal bmr policy in a blatant play for support. No.

    • Posted by anon

      firefighters get paid, dude. why do people keep throwing firefighters in there? and police too. amazing benefits. stop lumping teachers in with police and fire. it’s a complete mistake to do so. seriously. it is offensive when people lump teachers in with police and fire. there is a real problem in our society, and it is not because police and fire don’t get paid enough. it is because teachers do not get paid enough. wake up, and stop perpetuating ridiculous misinformation, so that other people read your misinformed words.

      • Posted by moto mayhem

        most teachers get paid enough too. crappy teachers get paid too much, mediocre teachers are probably paid fine,. the great teachers are the ones who are really underpaid because of the compensation system. i have 2 research associates who work for me for 5 yrs . One is mediocre and his currently salary is $78K. The other is phenomenal and his salary is $167K. the have the same job title, but I ahve the ability to reward and pay for performance. unfortunately, thats not the way teacher salary works. i do think some teachers should be paid $150K, but some should make <$50K. On average, its a pretty decent salary. My mom and sister are both teachers, and they work shorter days, less on the weekend, have 11wks off in the summer and have way more holidays than private companies. the per hour pay is pretty high.

        regardless of these comments, we shouldn't be targeting a profession to subsidize. teachers dont deserve to get a lottery anymore than muni drivers

        • Posted by wc1e

          If anything we need a “key workers” fund/tax break/subsidy or whatever for SF emergency personal to live within city limits. If there is an emergency that requires all hands on deck, having our firefighters and police and nurses living across the bay doesn’t make sense.

  7. Posted by Just My Opinion

    Please vote NO. This is window dressing that is pandering to a few but not solving any problems in a real way.

    The only part I like has to do with helping teachers, HOWEVER, the way to do that appropriately, IMO, is to raise teacher salaries to be commensurate with the importance of their role in society. For that, we should all be willing to pay higher taxes.

  8. Posted by Mark F.

    NO, NO, NO, NO. Hell NO. NOPE. NO WAY.

  9. Posted by SFrentier

    I sincerely hope there are organizations out there planning to campaign against this waste-of-money-housing-lottery-ticket. Mailers? Good written responses on the ballet pamplet? Op eds in newspapers? Whatever you political types do, I hope there is strong organization to go against this POS.

    Kinda like that (was it) prop G last year, the housing tax. Certain groups went ape sh*t on that. Tons of flyers, signs in windows, going door to door. The Asian community really put a lot of effort into helping defeat that legally questionable legislation too.

    Hope a similar effort goes out against this.

  10. Posted by Charlie in SF

    Affordable for whom?? At north of $500K/unit, certainly not the Taxpayer. That’s why I’m voting NO.

    • Posted by baybay78

      You can’t afford 8.09 a year to house people much less fortunate than you. You should really reconsider, if you can give up 2 latte’s per year to give members of your community a chance to be part of it.

      • Posted by moto mayhem

        i would be happy to pay this amount if the city didnt pay $1M/unit for “affordable housing”. I was in full support of this bond prior to that, but the city has recently actioned me out of it.

  11. Posted by alberto rossi

    So less than a third of the total goes to create new supply? And 40% to create more demand?

  12. Posted by anon

    A fair proposal would be that all property owners sit this one out. All renters, means tested, who make over the median yearly income, pay in.

  13. Posted by San Francisco

    Can we build affordable housing on the city land next to the jail in San Bruno?

  14. Posted by castroresident

    I would actually volunteer on a NO campaign against this POS.

    • Posted by Jayjay

      You’d spend your time more widely spending a day or two in the shoes of those struggling in SF.

  15. Posted by SF_Landlord

    I’ll be voting a big fat no on this. This is not a sustainable approach to building “affordable” errr subsidized housing. This is imposing an additional tax on everyone else so a few lucky lottery winners can live here for cheap.

  16. Posted by moto mayhem

    i am sympathetic to the need for more BMR housing, but the city proved with its new Mission purchase that it cannot be trusted to make good financial decisions with our money. I will defintiely vote no. Even if i were in favor, this should come out of sales tax, and not on the backs of current homeowners. Everyone should have to pay if we want to do this. will happily volunteer support against this.

    • Posted by baybay78

      last time I checked, lots weren’t selling for pennies on the dollars.

      • Posted by moto mayhem

        there are plenty of 2bdr units in SF under $1M/unit and they are already built. if they built market rate on this lot, they can turn enough profit to buy 2x as many affordable units on the open market and place people right away. wouldn’t you prefer more affordable housing at a more reasonable cost than fewer affordable housing units at luxury prices.?

  17. Posted by Colgate

    Anytime the City proposes a bond, someone has to pay. I vote no on all bonds the City puts up because it does not benefit me one cent. Grated 80-100 $ increase in property taxes for most home owners is nothing but it is the principal of it all. They do it today and you can guarantee they will be back next year for another hand out.

  18. Posted by Amewsed

    No for me. I doubt any of my present tenants are in support of this either. It is such a bad deal that they needed to throw some teachers into it to make it supportable. We’ll find out how right we are come election results.

  19. Posted by BayviewSF

    It is better to improve transit and let people live outside SF and commute into the city for work. For non-working people with lower income, it seems reasonable to move to a place they can afford on their own income. Right?

  20. Posted by soccermom

    Here are the historic registration/voting numbers.

    I’m going with 450K registered voters

    200K turn out (in person & mailed combined).

    80K Solid No.

    40K Undecided

    80K Solid Yes

    I think it fails but barely so. Hopefully someone on the ballot for/against arguments will highlight how absurd the $1mm per unit the city is willing to pay for the Mission project.

    • Posted by baybay78

      Absurd? Have you checked how much it cost to build in SF. Stop being so selfish. Yes, it’s absurd how much it costs to build a unit in SF, but this is not about what you think it should cost to build a unit. The fact is that there is a very impoverished community in SF, that if you’re part of this community, you should consider they neighbor instead of wondering how expensive it is to house a member of your community. Don’t be so selfish.

      • Posted by Charlie in SF

        No one has a right to live in San Francisco, just as there is no law that San Franciscans have to pay for universal free public housing (thought it often feels like it).

  21. Posted by Flash

    I’m voting HELL NO on this for all the reasons others have posted so eloquently above me.

  22. Posted by simms3

    I would vote yes under normal circumstances. But the city’s decision to buy that land in the Mission and build 100% affordable housing at that site, now, in 2015/2016, as a pure emotional play to pander to the crazy sentiment the political system of this city allows to be catered to, turned me completely off.

    There has to be land in this city that’s less than half as expensive as that, even now (and no, it won’t be in the Mission and so the city/politicans won’t be able to pander, but it’s somewhere). And frankly, if the city is going to spend to develop new housing, then it should densify. The per unit land cost there is absurd because the city will only allow some smaller 5 story building with 50-70 units to be constructed.

    Housing policies in this city do not make any sense. Too many academics way overthinking every single facet of housing development, design principal, and economics, and as a result we have a city with the worst modern day architecture in the country and the highest housing prices with the most dramatic housing shortage. Not saying go all Houston or whatever, but let’s take a little academia out of this and inject some common sense.

    • Posted by Jayjay

      You’re thinking way to much. Sometimes those who ponder into too much thinking, beging thinking like morons. Just ask, pay 8.09 to help families in poverty in your own city. Is that too much to ask of you?

    • Posted by Jayjay

      Also, nlless you actually own anything in SF, you have nothing to worry about in your pocketbook

  23. Posted by BayviewSF

    We need to vote out bad supervisors and vote in good supervisors. Someone should study each supervisor’s history so that we can elect the best supervisors and reject all the bad candidates.

    • Posted by moto mayhem

      we need citywide elections for supervisors. right now, all supervisors have to do is pander to their base like campos is doing in the mission. we could get a much more moderate group of supervisors.

      the challenge in November, but most important item, will be to get every homeowner to the polls.

  24. Posted by Jayjay

    Paying 8.09 per year to provide funding for affordable housing?!?!? I’d be willing to pay at least $100 more per year to multiply the housing bond by 11 x’s more funding. This is nothing on the pocketbook. We can do better than that, come on. I’m all for at least this minimal amount. I’m voting YES

    • Posted by sparky-b

      Do you think the bond says $8.09 per year? Where is your $100k house? You will lay $100 more but for zero more funding.

    • Posted by SFrentier

      Oh wheee….and what do we achieve? We will be able to house a few dozen less fortunate folks from a much larger population of them. It’s literally like a lottery ticket that will make most of this population feel dejected cause they didn’t win.

      And why should they be entitled to stay in 7×7? What’s wrong with looking a bit beyond and trying to find a solution where they can put 3x amount of housing for the same price? This insistence that they stay in the mission, to the tune of $1 million per unit is irresponsible, when that money could be providing good housing for 3x the amount of people. People like Campos need to pull their heads out and get a little perspective.

    • Posted by Wai Yip Tung

      You need to work on your math more. It is not 8.09 per year. It is 8.09 per year per $100,000 assessed value. For a million dollar house, it comes out to be 80.9.

      And I will gladly pay $100 more per year if this help makes San Francisco housing more affordable. But instead a big chunk of this going to spend on just 50 lottery winners. This is dumb dumb dumb way to burn tax payer’s money.

  25. Posted by brooder

    Interesting that the report uses a typical house of $500k as an example. Surely not typical for a property that changed hands in the past decade.

  26. Posted by Mark F.

    To all you Bernie Sanders supporters: Let’s just impose a 95% income tax surtax on the 1% to pay for luxury housing for every San Franciscan, and everyone who want to move here.

  27. Posted by BayviewSF

    NO on affordable housing bond!

    NO on mission housing moratorium!

  28. Posted by SFParent

    As a parent with two kids in SF public school, I can tell you with certainty that teachers do not get paid enough. We continuously lose good and great teacher to suburbs because the cost of housing is too high in SF. They absolutely need higher pay or a mechanism to make housing affordable for them. On the other hand as “anon” said, I have seen no problem retaining firefighters who earn enough to live in SF but prefer to buy in Brentwood and other far-flung places. I don’t think Prop A is the best solution but something needs to be done so I’ll probably hold my nose again and vote for it.

    • Posted by Amewsed

      I thought the SF public school system is a union system. So you have some less competent teachers earning a lot of money who can’t be fired. Then you have the newer more enthusiastic teachers who are paid a paltry sum and eventually see the major disparity, get demoralized and leave the system.

      • Posted by JR "Bob" Dobbs

        Not the real issue. New SF teachers are actually paid pretty well for their experience and not very competitive degrees, especially with very generous benefits and only a 3/4 work year factored in. Problem is that salaries don’t go up a whole lot after that, even with 10-15 years of experience. So the older, better, more experienced teachers leave.

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