HOUSING TRUST CHARTER AMENDMENT: Creates a Housing Trust Fund by setting aside general fund revenues to create, acquire and rehabilitate affordable housing and promote affordable home ownership programs. $20 million would be set aside in 2013. An additional $2.8 million would be set aside each year after that, for the next 11 years. NO.
With this measure City government is attempting to subsidize a much greater portion of residents. As always, the gains of those who receive subsidies are made at the expense of those who do not.
Most of the City’s construction projects were funded by the Redevelopment Agency, which received money from the state. The Redevelopment Agency was intended to combat urban blight. California dissolved the Redevelopment Agency December 2011. The Housing Trust is intended not only to continue the Redevelopment Agency’s efforts to eradicate blight, but also expands these efforts into funding middle income rental and ownership,
Who benefits from Proposition C:
1. Households earning up to 120% of the local median income (around $86,000 per year). The Trust will fund homeownership down payments; assistance to homeowners at risk of losing their home; help in making homes “safer, more accessible, more energy efficient, and more sustainable.”
2. Households including a first responder, such as fire fighter or police officer, “subject to Area Median Income Limits designated by the Mayor.”
3. Renters of low and moderate income. The Trust will authorize “private sponsors with financial assistance from any public body to develop, construct or acquire up to 30,000 dwelling units of low rent housing” to serve “low and moderate income” households.
4. Users of public spaces: The Trust will design and administer a “Complete Neighborhoods Infrastructure Grant Program,” which will provide public facilities such as streets and parks in project areas.
How will the Housing Trust Fund be paid for:
1. Transition over 5 years from the City Payroll Tax to the Gross Receipts Tax. The Gross Receipts tax is anticipated to provide more revenue than the Payroll Tax.
2. Recapture of the funding the Redevelopment Agency used – incremental increases in property tax.
3. Bonds. The Housing Trust Fund has bonding authority. “The Board of Supervisors may authorize the issuance, without limitation, of revenue bonds, lease financing, notes, or other evidence of indebtedness or other obligations.”
Why is Proposition C not the best solution:
1. Proposition C is a significant expansion of City government’s involvement in subsidizing housing. The uncertain economy seems to be here to stay; taxpayers need to be aware that proposals such as the Housing Trust Fund transfers financial risk from individuals to taxpayers in general.
2. First responders are selected to special treatment, prompting the anticipation that other public employees, such as teachers and nurses, will demand special treatment in the future, further increasing the obligations of the Trust.
3. Again, the Housing Trust expands the role of government housing from providing dwelling to very low-income families to subsidizing middle class families. Those funding this and other portions of the Housing Trust (property tax and gross receipt tax payers) are not necessarily “rich”, but could conceivably be home and business owners struggling to pay their taxes.
4. Although obviously streets, parks and other public structures kept in good repair are good to have, we would like to alert voters of the magnitude of the “Complete Neighborhoods Infrastructure” program, and the accompanying price tag to be funded from yet uncertain sources.
5. It is not clear at this time how any of the Housing Trust programs will be paid for. Incremental tax increase depends on voters approving tax proposals and on property tax assessments increasing as a result of property value increases; neither a sure thing. The Gross Revenue Tax proposal may or may not pass in November. It is not clear how new projects by the Housing Trust will be impacted by the existing development projects (Bayview Hunters Point, Mid-Market, Visitation Valley, SOMA).
6. Although revenue bonds are a tried and true method for financing projects, they are often issued to excess and used for on-going general maintenance. Inability to keep up with excessive debt obligations such as bonds is often the reason for serious financial difficulties.
What do we suggest instead:
Let the market (undisturbed by government interference) determine the supply and demand of housing. Let individuals find their own opportunities by taking their own risks. Focus on basic services for the “general welfare”, as mentioned in the United States Constitution, not on grandiose projects forever seeking to make more individuals dependent on government.