City leaders get earful on housing, extend pot tax holiday

Tuesday saw a frustrated Board of Supervisors dragged kicking and screaming into a sobering four-plus-hour hearing on San Francisco’s plan to meet state housing targets. The board also introduced legislation inspired by the marathon housing hearing and, separately, resolved to create a new cultural district.

The board unanimously agreed to create a Pacific Islander Cultural District in the Visitacion Valley and Sunnydale neighborhoods, reflecting the historical settlement of people from Hawaii, Samoa, Tonga and other Pasifika nations in those parts of the city. 

The district will help steer resources into preserving the neighborhoods within its boundaries, promote cultural events and support Pasifika-owned businesses. 

In appreciation of the board backing the new district, community representatives presented supervisors with candy leis—the chilly weather likely ruling out the plumeria kind. Board President Shamann Walton offered to trade some Three Musketeers bars in his lei for some Snickers. 

The marathon hearing on the city’s draft Housing Element—a blueprint for San Francisco to comply with state law that requires it to add 82,000 units to its housing stock by 2031—predictably left supervisors and observers frustrated and looking for more answers. 

Testimony by the Planning Department and advocacy groups didn’t get into enough detail to satisfy supervisors, which naturally left a lot of room for the board to air its anxieties. The result was a rehash of entrenched positions on what kind of new housing needs to be built, and where to put it.

The Planning Department outlined a framework combining equity goals and public outreach with shorter, more predictable approval timelines and rezoning in more affluent neighborhoods (such as on the city’s density-averse westside). That said, much new housing will still need to be built where the city has been concentrating it, in San Francisco’s southeastern neighborhoods.

Advocacy groups, including the Council of Community Housing Organizations, through its new director, former Supervisor John Avalos, urged the city to prioritize public input. Avalos said the city shouldn’t rely too much on housing subsidized by fees on market-rate projects and should invest more in stand-alone affordable developments along with buying property to build on or to protect from displacement. 

This led a number of supervisors who have long made arguments along those lines to repeatedly ask where the extra money was going to come from for the housing projects—especially the additional units mandated by the state.

Supervisor Dean Preston—the board's most visible booster of what proponents call “social housing”—echoed Avalos’ calls for public acquisition of property, as well as using revenue from the Proposition I real estate transfer tax to invest in below-market-rate housing. 

Supervisor Hillary Ronen deflected blame for San Francisco’s housing woes. “Shame on you state of California for not providing the money to build more affordable housing.” 

Other board members took a more pragmatic stance, but were still vexed. District 7 Supervisor Myrna Melgar pointed out that little to no nonprofit housing is being planned in her district except the Balboa Reservoir complex.  

District 2 Supervisor Catherine Stefani noted the slow pace of project entitlement in her district and pointed out that any housing plan will be futile if cost and procedural barriers aren’t removed. “You can’t force people to build housing if they can’t afford to build it,” she said.  

District 6 rep Matt Dorsey, whose constituency has borne the brunt of new housing construction for decades, used his question to highlight how running afoul of the plan could cost the city hundreds of millions of dollars in state funding. 

After more than an hour of public comment, Preston accused Sacramento of serving the will of real estate interests, and described the state’s affordable housing targets as “window dressing” as it tries to deregulate market-rate housing. 

Melgar pushed back on that narrative, noting that “some districts have been more successful at holding off development than others.” 

Supervisor Ahsha Safaí concurred, arguing that funding extra affordable housing is possible, and that the city should step up efforts to fund both subsidized and market-rate housing. Dorsey urged “moving boldly” in that direction, hinting at legislation to do just that. 

For more on what transpired, check out Sarah Wright’s report, here. 

Supervisor Rafael Mandelman’s planned extension of the tax holiday for cannabis businesses survived an attempt by members Aaron Peskin and Connie Chan to trim the suspension to one year. The item passed 9-2 with Peskin and Chan dissenting. The amendment proffered by Peskin failed 7-4, with Board President Walton and Supervisor Gordon Mar joining Peskin and Chan in the minority. 

In discussion, Mandelman reiterated points he made in committee about the vulnerability of the legal pot market in the face of competition from illegal sellers, and the continuing need to support the industry until it can bring cannabis consumption “out of the shadows.” Peskin noted that the ballot measure that established the tax “contemplated the need” for periodic review and that a three-year extension “diminishes the opportunity” for that oversight. 

Supporting the original legislation, Ronen noted that the recent City Controller’s Office review of cannabis legislation found the illegal market for pot “still much larger” than its above-board counterpart. Concurring, Dorsey offered that the full three-year tax holiday was needed “to provide certainty that businesses could plan for.” 

Supervisor Stefani requested a hearing on the state of Jail Health Services and, in particular, the state of drug treatment programs behind bars. 

Stefani said the issue was brought to her attention by a recent double-dipping scandal that implicated the Department of Public Health’s head of Jail Health Services, Dr. Lisa Pratt.

Supervisor Dorsey asked the City Attorney’s Office to draft two items of legislation inspired by the proposed Housing Element: One to remove government constraints on project entitlement in the plan, and another to create districts where affordable and higher-density units could be built in more affluent and largely single-family-home neighborhoods.  

Preston also introduced items related to several sites eyed for below-market-rate homes, including one that would grant a height increase for Related California for 98 Franklin St. in exchange for the developer giving the former McDonald’s site at 600 Van Ness Ave. to the city for affordable housing. 

Preston also introduced a resolution urging the state to turn the parking lot at the Hayes Valley DMV into affordable housing.