Follow by Email

Sunday, October 27, 2013

You can park in the bus stop if you go to church

I've been pissed for years about the rules that allow church-goers to park in the middle of the street on Sunday morning, while people who engage in secular activities (yoga? the gym? brunch?) get tickets.

But it's getting worse.

I was riding my (secular) bicycle down Valencia this morning and I saw a car parked right in the bus stop next to a "church parking only" sign. That's normally like a $250 ticket. It's a BUS STOP. You can't park there. But yes you can, apparently.

And there was a parking control office right across the street, giving out tickets, as he should have been, to people who didn't feed the (secular) meter.

I asked why the people who park in the bus stop don't get tickets Sunday morning, and he said he was as frustrated as me. But his supervisors have made it clear that anyone going to church gets a pass on the tickets that the rest of us have to pay.

This would never stand up in court.

If we want to suspend parking rules Sunday morning, fine: Let everyone park in the middle of the street and in the bus stops. But how can we possibly decide that a religious service gets a special privilege? 

Check it out.

Free parking, if you

Friday, October 25, 2013

Tenants agenda will dominate local politics

A coalition representing every major tenant group in San Francisco released a set of proposals yesterday that will become a major political test for the mayor, the city attorney, and every member of the Board of Supervisors.

It's been quite a while since we've had such a clear litmus-test issue, one that will force local officials to side with an organized, effective tenant movement and an increasingly angry public fed up with rent hikes and displacement -- or to show that they're unwilling to go up against the well-funded real-estate lobby.

The ideas coming out the tenant groups are strong, and would have the effect of making Ellis Act evictions more expensive and, perhaps, impossible. They're the best sort of creative thinking, ways that the city can use its local power to limit a state law that's destroying communities.

Among the two most critical: A proposal to significantly increase the mandatory relocation costs of an Ellis Act eviction (which I suggested here) and a proposal to reclassify tenancy-in-common units as rentals -- making evictions for TIC conversion illegal.

The landlords and speculators are going to howl. They're going to say this is illegal and threaten to sue. They'll bend the ear of every official who they've given money to in the past. They'll try to line up the tech types like Ron Conway to argue that this would hurt job growth in the city's tech sector. (Actually, the conversion are hurting the city's biggest industry, hospitality and tourism, by driving its workers out of town. And the new arrivals don't have any special right to live here.)

And so, the battle lines will be drawn.

I laughed when I saw David Chiu talking about how he prefers Tales of the City to A Tale of Two Cities because the Armistead Maupin book is about "San Francisco’s new and established residents finding their way and addressing the challenges and the possibilities of living in this city." You can't "find your way" if the real estate speculators catering to the new residents are forcing you out of town. There's no way I want to get along with and find my way with the people who are evicting elderly Asian families and people with AIDS just to make a fast buck.

No: We have to fight back, and the mayor and the supervisors are going to have to tell us which side they're on. There's not a lot of room for compromise here; the evictions have to stop, the Ellis Act has to be defanged, and we need six votes and a mayoral signature to do it.

We also need the support of City Attorney Dennis Herrera, who will have to be willing to be as courageous about tenants rights as he was about same-sex marriage. Anything that puts a serious obstacle in the path of the Ellis Act will almost certainly lead to litigation. But he's got a talented staff of lawyers who have shown in the past a remarkable ability to find ways to make the law work for us. We need nothing less on this one.

There will be multiple elections in 2014. Chiu and Sup. David Campos will square off in the first round of a state Assembly election in June, and most likely will both be in a runoff in November. Districts 2, 4, 6, 8, and 10 will be up in November. And in the middle of all of that, one of the most important battles for the city's future will take place.

Here's the detailed press release with all the information:

A Policy Agenda to
Halt Housing Speculation and Preserve Housing for Working People and Seniors

October 24, 2013

Asian Law Caucus, Causa Justa Just Cause, Chinatown Community Development Center, Community Tenants Association, Housing Rights Committee of San Francisco, San Francisco Tenants Union, Tenderloin Housing Clinic

The fight to save the Lee family has brought renewed attention to the eviction and displacement crisis in San Francisco. While that one family’s eviction may ultimately be resolved, our challenge now is to address the growing number of others who face a similar threat to their homes.

Since the Lee family received their eviction notice in May of 2012, more than 280 other apartment units have been the subject of formal Ellis Act notices. Hundreds more have been or in the process of being evicted through other means. And those who have been displaced are finding a housing market in which only the very wealthy can afford an apartement.

The evidence is clear. We are facing not only an eviction crisis but also a crisis associated with the loss of affordable rental housing across the city. Speculative investments in housing has resulted in the loss of thousands affordable apartments through conversions and demolitions. And the trend points to the situation becoming much worse. We need action now by the Board of Supervisors and the Mayor to halt this crisis before we lose the diversity and character that makes San Francisco strong and vibrant.

What follows is an agenda seeks to address this crisis:

1. Control the unregulated conversion of apartments into condo-lite ownership units.

Background: Thousands of working, senior, and disabled San Franciscans are being pushed out the City via the Ellis Act loophole to just cause eviction protections. By and large, Ellis Act units removed from the rental market are converted into tenancy-in-commons (TIC's) and sold to individual owners via a fractionalized loan product. These fractionalized TIC units walk, talk, and quack like a condo but are not subject to the stringent consumer protection and health/life safety controls placed on condo conversions. As we learned during the debate around TIC / condo conversion last spring, a large number of TIC purchasers are "trapped" in a product that they cannot afford to retrofit and/or upgrade because these TIC purchasers have stretched the limit of their credit to purchase their TIC unit. This places TIC owners at financial and physical risk and reduces the resiliency of San Francisco's neighborhoods in event of catastrophe's. The current lack of regulation over fractionalized TIC's also forgoes San Francisco's last best chance to upgrade our neighborhoods while simultaneously preserving their physical form/character.

Legislative Proposal: To protect the resiliency and long term future of SF neighborhoods and to protect TIC consumers, San Francisco should amend the Planning Code to create a use category to capture TIC's formed through a TIC agreement and fractionalized loan product (FRACTIC). San Francisco should require that as a condition of changing from any existing use into a FRACTIC, that the project sponsor must seek a CU, for which a condition of approval be that the underlying building be brought up to the then existing State and City building code standards (as opposed to building code standards at the time of construction).

Precedent: San Francisco regulates non-physical changes in use with some frequency. Most recently, the city created a category of use for conversion into institutionally controlled student housing and CU requirement to effect any change of use into that category. San Francisco frequently regulates building health and safety through numerous mechanisms . Most notably, the city typically requires building code upgrades as part of the condo conversion process - to enhance life safety protections of purchasers.

Policy Outcome: This proposal is similar in nature to the numerous "value capture" mechanisms placed on new development. In new construction projects, the city consistently imposes community benefits requirements, thereby capturing a portion of the value conveyed on the project sponsor by the increase in use. In this way, the City gets a benefit from the bargain. Currently, there is no similar benefit of the bargain with regard top FRACTIC creation. While FRACTIC's generate enormous additional value for the real estate speculators who create them, these speculator are not required to contribute any of this value back to the City (note that the increased property tax base resulting form FRACTIC creation is born by the consumer, not the speculator). By requiring FRACTIC project sponsors to commit to significant building upgrades, the City captures back value in the form of increased health and life safety, resilient neighborhoods, and consumer protection.

• Require approval by the Planning Department of conversions of apartments into condo-lite individually for-sale units
• Close the loophole that allows ‘new’ ownership units, created through conversions, to evade building code upgrades

2. Stop conversions, mergers, and other discretionary city approvals of projects facilitated by non-fault evictions.

The wave of speculative evictions results in the demolition, conversion and merger of rental units. In order to increase the profits from the resale of buildings, speculators purchase buildings with long-term rent controlled tenants, evict them through the use (or threats to use) the Ellis Act, and then demolish, merge or convert the rental units to more lucrative “luxury” housing or commercial uses. The Avalos Amendment to the Planning Code being considered at the Planning Commission this afternoon would prohibit the approval of a demolition, merger, or conversion of a residential dwelling unit if one or more of the units had been subject to a no-fault eviction within the last ten years. 

Often speculators simply try to drive the tenants out by conducting extensive and harassing construction in the building while the tenants are in place, hoping that they will just move without having to invoke the Ellis Act. The City should increase building inspections of buildings where there is construction with tenants in place, and adopt standards to protect against constructive evictions during construction. The City should also restrict non-essential building permits where no-fault evictions are pending, such as during the one-year eviction notice period during an Ellis Act eviction. This would protect tenants from speculators turning their homes into a construction zone in order to force the tenants out and discourage fighting their eviction.

• Pass the Avalos demolition and merger control legislation to prevent the loss of existing housing
• Increase building inspections of buildings with construction with tenants in place – adopt standards to protect against constructive evictions during construction
• Restrict non-essential building permits where no-fault evictions are pending.

3. Strengthen rent control protections for tenants to the fullest extent allowable under law.

The wave of Ellis Act evictions that are driving San Francisco’s long-term senior, disabled, and working class tenants of color from their homes follow the same basic pattern time and time again: (1) a real estate speculator targets a rent-controlled building, (2) invokes (or threatens to invoke) the Ellis Act to evict all tenants, and (3) after displacing the tenants and removing their units from the City’s shrinking stock of affordable rental housing, sells the empty units as TICs to the highest bidder. The City can and should strengthen the protections afforded to vulnerable tenants under the San Francisco Rent Ordinance and curb the ongoing abuse of the Ellis Act by the greedy speculators who target our most vulnerable tenant population. 

The City should take steps to protect vulnerable tenants from speculators by defining “tenancies in common” agreements as lease agreements so as to maintain the City’s limited housing stock and discourage abuse of the Ellis Act by speculators. TIC agreements provide each owner an exclusive right to occupy a unit, just like a rental and, therefore, should be treated as rentals. 
The City should also increase the relocation assistance available to displaced tenants so that the relocation reflects the full costs of displacement in San Francisco’s unforgiving rental market. The City should investigate and prosecute abuses of the Ellis Act, including the illegal rental of apartments. And the City should require and publish additional reporting on the use and status of Ellis Act buildings, so the full magnitude of the damage caused by greedy speculators is transparent and easily accessible to the public. 

The Real Estate speculators driving out our most vulnerable long-term tenants have no interest in being a San Francisco “landlord” or in contributing to the City in any meaningful way. To these speculators, the longest-tenured tenants are the least desirable. Because these speculators desire to renovate and flip their properties as soon as possible for as much profit as possible, they have no interest in acting as a landlord any longer than the law requires. As a result, tenant abuse and harassment through bad-faith capital improvement evictions, unsolicited buyout offers, unending construction, and a disproportionate devotion of resources to vacant, rather than occupied, units are the norm now in San Francisco. The City should prohibit these abuses and, where already prohibited, vigorously enforce the tenant harassment provisions of Rent Ordinance 37.10B. 

• Define ‘tenancies in common’ agreements as lease agreements
• Restrict capital improvement evictions where there is an intent to Ellis
• Increase relocation assistance to reflect the full costs of displacement
• Require reporting on status of Ellis Act units 
• Investigate and prosecute illegal rental of Ellised apartments

4. Support victims of Ellis Act evictions to find alternative housing

Actions to restrict future conversions of housing will help slow or even halt future evictions. But with many evictions already in process, the city needs to also assist the most vulnerable victims of our present crisis. The proposal to provide a limited and targeted preference for the city’s affordable housing program is an important first step towards addressing that need.

• Pass the Chiu, Breed, Campos, Kim, et al. Ellis Eviction Displacee Assistance Ordinance

Monday, October 21, 2013

A different perspective on the BART strike

So much -- so much! -- of the news about the BART strike has been tinged with blame-the-workers headlines, quotes, and rhetoric. But if you look around a bit, you can find some really interesting perspectives that show there's a lot more to the story than the "overpaid" workers who don't have or need any particular skills.

I've been doing pretty much the same thing as union leaders, and not trying to draw much more than a terrible human tragedy out of the recent fatal train crash. But Bob Gammon at the EB Express does a sensitive, but compelling, job of explaining why this accident ought to be a part of the contract discussion:

the killing of two transit workers provided strong evidence that union officials have been right all along about two major aspects of the current labor dispute: Being a BART train driver is a highly skilled position and that BART workers sometimes toil in dangerous conditions. Moreover, union members were right to warn before the strike that BART managers should not attempt to drive trains in the event of a shutdown, because it’s too risky.
BART trains are pretty highly computerized, but the operators are the ones who prevent accidents. A computer can't tell you that there's someone up ahead on the tracks. And the main BART control room is also staffed by union workers, and when they aren't there, lots of things can go wrong.

I also like this analysis by Dylan Tweney at VentureBeat:

What's more, it took a tragedy to drive home the fact that the BART strike is not about a bunch of entitled people demanding more. Well, BART workers are demanding more -- but, for all the system's dysfunction, most of them are not what you'd call "entitled." They're hard-working people who put in long hours to move thousands of people safely from point A to point B. And for some of those people, their jobs are in fact a matter of life and death.
 And Davey D explains why this is about more than just the BART strike.

The media narrative has been to interview people and paint a story of how the average commuter is inconvenienced by the ‘evil BART workers’ who are striking… Now corporate owned news outlets are running around with cameras in hand asking how you feel..Now they are expressing concern.. This is the same news outlet that went nowhere near an unemployment office, WIC lines or into your poor neighborhood to ask how you felt when the government was shut down for the past two weeks.

In fact, there's been precious little coverage of the computer malfunction at the Employment Development Department that left 158,000 people without benefits (or the fact that the private contractor got paid -- many, many millions -- while people were unable to feed their kids or make rent.)

I hope they settle today. But the BART Board is going to have a lot to account for after the trains start running again.

Friday, October 18, 2013

More details emerging on BART strike

So we're getting more details on the reasons for the BART strike, and it seems pretty clear to me that management is at fault.

The economic stuff is done. Wages, benefits ... settled. The remaining issue is work rules.

There are places where work rules are a bit crazy. (Check out the California prison guard's union rules.) But it doesn't seem that anything at BART is that over the top. At least, not worth this strike. Not unless I'm missing something.

The Chron lays out its account the disputed rules, and they go like this:

BART wants all electronic paystubbs. Some workers want paper. Someone has to hand them out every two weeks. Takes four hours. This is absolutely NOT worth shutting down Bay Area transit over.

BART wants workers to actually work 40 hours before they can collect overtime. The workers want to be able to collect overtime if they're sick one day and then work a schedule day off. This doesn't seem like that huge a deal. Hell, there are substitute prison guards who have a deal where they get a call in the morning to come in to work, and if they say they're sick they still get paid for the day.

The other issue seems to be scheduling. Management wants to be able to tell someone who's already worked 40 hours (many BART employes work four ten-hour days) that they still need to come in on the fifth day. The union wants predictable schedules.

The union even offered to take the work rules to binding arbitration. They'd win some, maybe lose some.

And management refused.

For this -- not money, not pensions, not health care costs -- we have a shutdown. Orchestrated by a labor negotiator with a history of problems. Sorry, I put this one on the BART Board.

Thursday, October 17, 2013

Behind the (ugh) BART strike

It looks as if BART workers are going to strike at midnight. And if it happens, I fear that BART management will try to turn public sentiment against the workers.

Here's what I know at this point:

The two sides were pretty close, essentially settled on wages and benefits. But management wanted the unions to give back on some work rules, and union negotiators say the membership would never go for those changes.

I just spoke to BART Board president Tom Radulovich who said, for example, that the two sides were arguing over a current rule that allows a worker who calls in sick one day, then works on a scheduled day off, to get overtime. BART wanted no overtime unless you actually work more than 40 hours a week.

There were some discussions, he said, and BART agreed that if a worker misses a day because of a scheduled vacation or because of military leave, he or she would get overtime for working an extra day. "But not the people who just don't show up," Radulovich said.

Now: I'm all for running a system efficiently, and I'm sure there are some work rules that ought to be changed. But this one? Well, think about it: A sick day is a day you're getting paid as if you were at work. That's in the contract. If you called in sick one day and worked four more, at 8 hours each, you'd get paid for 40 hours. You get a limited number of sick days a year, and those are, in essence, days you are getting paid not to work. (We all know you shouldn't take a sick day unless you're sick. Is there any employee anywhere in the world who gets paid sick days and hasn't called in to extend a vacation, apply for another job, or sit in the backyard in the sun?) You EARN those sick days; it's part of your pay.

So you take a sick day and work beyond your scheduled 40, and put in for overtime? Somehow, that doesn't outrage me.

Then there's the story of the pay stubs. Apparently, according to Radulovich, one BART worker gets paid to hand out pay stubs to the other workers, even when most got their money through electronic banking. That takes half a day, every pay period. "We can't do anything to modernize the system," he told me.

There has to be more at stake than that. I can't believe either side would engage in a costly, damaging strike over one worker taking four hours once every two weeks to hand out pay stubs. It's insane to think BART would be shut down over that.

At any rate, Roxanne Sanchez, the president of SEIU Local 1021, said that the unions asked to submit the work rule changes to binding arbitration, but BART refused. Radulovich said that wasn't true, although the general manager, Grace Crunican, said that management wouldn't submit just one part of the contract to arbitration. "They want the money on the table but they don't want the work rules on the table," she said on Channel 7.

Of course, it's tough for reporters at this point to know exactly what the details are, since both sides have agreed to keep the negotiations confidential. But it will all come out, and we'll be able to evaluate pretty quickly how reasonable or unreasonable management has been.

But for now, this is looking bitter -- and it's an odd place for Radulovich, who has long been considered the most progressive voice on the BART Board. If this strike happens, labor -- always among his biggest supporters -- is going to be furious at him, and a lot of the rest of the left in the city is going to go along.

That goes double if BART tries to demonize the employees. The Right has been trying for years to create the perception that people who work for the government are lazy and overpaid and that they cheat the system. Some do. So do private-sector workers. But most BART employees show up every day and do difficult jobs (you like cleaning shit out of elevators? I'd be taking sick days all the time). You can argue wages and benefits and what's appropriate, but BART management has an obligation not to play into the anti-public-employee handbook.

Why can't the Twitter IPO winners live in Stockton?

Pretty much everyone agrees that the Twitter IPO is going to drive up housing prices in San Francisco to even more atrocious levels. Gabriel Metcalf, the director of SPUR, thinks the solution is to build at least 5,000 units of new housing a year (although the city's planning director seems to agree with me that building vast new housing developments might not do anything for affordability.)

It's an interesting question, and we'll be talking about it at a special forum Nov. 7 sponsored by the San Francisco Progressive Media Center, Urban IDEA, the SF Information Clearinghouse and San Francisco Magazine. We'll have a debate on the central issue: Can we build our way out of this housing crisis? It's at 6 pm at the LGBT Center.

It features Doug Engmann, who runs Engmann Options; Calvin Welch, from the San Francisco Information Clearinghouse, Michael Yarne, of Build Inc., Tim Colen, from the Housing Action Coalition, Farhad Manjo, a writer at San Francisco Magazine, and Christina Olague, Past Planning Commission President. Fernando Marti, from the Council of Community Housing Organizations, will moderate. 

I'm not on the panel, so I get to put out my idea right now. I think we have to find ways to regulate our way out, by treating housing as a public utility. If we could do that -- in essence, bar evictions for anything but just cause and extend rent controls to vacant apartment -- we could protect the vulnerable populations in the city, protect the character and diversity that makes San Francisco such a world-class city.

And what would happen to the Twitter millionaires? Well, a lot of them couldn't live here.

There aren't enough vacant rental units in this city for all the newcomers attracted by tech jobs (jobs in SF, but also on the Peninsula.)  So for a while, until somebody voluntarily moved or a new unit was built, they'd have to live ... on the Peninsula. Or in the East Bay. Or in Stockton, where the longtime San Franciscans who are getting evicted are winding up.

In other words, the long-time residents, who have already put in the time and energy to build community, get to stay here. The recent arrivals, no matter how much money they make, have to live outside of town, somewhere else, for a while. 

It's the reverse of current policy: Now, the newcomers with money get to force existing residents to live far out of town, in a place that isn't as exciting or fun as SF. Under my theory, money doesn't allow you to force out an existing resident. So you wait your turn.

Sure, if you want to offer an existing homeowner some insane amount of cash to sell you their place, you can do that. Because if I own a home and I don't want to sell, I don't have to. And if developers want to build new units for the new arrivals, that's great. Do it. Let the tech workers who just got here live in the sterile towers downtown. Just as long as they don't force anyone else out of the Mission.

That has to be the starting point for any housing discussion. The people who are here now get to stay if they want to. After that, we can talk about development.


The latest attack on pensions (and why it makes me crazy)

The reason a proposal like this one makes me so crazy is that it may get some traction -- because the news media as an institution has done a horrible job of explaining what pensions really are.

When employees at a unionized shop, public or private, negotiate pension payments, they're accepting deferred compensation. That's what a pension is. So instead of, say, a five percent raise as part of a contract, the union agrees to take a three percent raise, and have two percent (or the equivalent) go into a pension fund.

Social security is, in essence, a deferred compensation plan: I pay into it every month, and when I'm 65, I get it back. (Of course, if I die before I'm 65, I don't get it at all, and if I die at 67, I only get a little, and if I live to 104, I get more than I paid in, maybe.)

And since nobody wants that pension money to sit around in a bank, it gets invested in the stock market, and when the market does really well, then the employers figure they can get away with better pensions without paying for it. That's what happened for much of the 1990s and 2000s -- politicians who didn't want to make tough calls (higher pay for workers might mean higher taxes) promised nice pensions instead. And they thought they'd get away with it because the stock market would keep rising, at least until (as in the case of someone like former Mayor Willie Brown) term limits kicked in and it became someone else's problem.

But this is how union negotiations work. You bargain for a better pension and healthcare deal instead of higher wages? Hey, that's the deal you took. But it's your money either way: You paid into that pension system whether you contributed directly or not. You paid for your health insurance whether you pony up $92 a month of $250 a month. Because if the health plan cost more, you'd demand higher wages.

And that's what the BART workers are saying now: You want to pay us less, by reducing the amount you spend to underwrite our health care? Then you have to pay us more in cash every week to make up for it. Seems entirely reasonable.

Again: Health insurance -- the employer contribution-- is part of the pay that you earn as a worker. Pensions are your money, in deferred compensation, invested in a stock market that goes up and down.

The Republicans would like us all the have defined contributions but not defined benefits; that's what a 401K plan is. You put in your money, you take your choices with the stock market.

Unionized employees, with better bargaining ability than individuals, have been able to demand defined benefits. But that's part of the pay package; if you work for BART, your pension is your money.

Now: If BART or any other employer wants to change the contract in the future, and the unions agree -- say, paying more into their pensions or paying more for healthcare, and balancing that with a larger cash wage -- that's fine. That's called collective bargaining.

But you can go backward, and say: Hey, We promised you a pension as part of your pay, and now we're going to retroactively change the deal. That's like going to a group of workers and saying: We paid you $40,000 last year, but now we're broke so we've decided you were only worth $35,000, and you owe us $5,000. Pay up.

Doesn't work that way.

Monday, October 14, 2013

The Mission displacement march

It was festive at times at the Saturday march against displacement in the Mission, with drums and dancers. But underneath it was an air of frustration and anger.

I counted about 250 people, but it was hard to be sure; still, a solid turnout. The demands -- including a rent freeze for the Mission -- were in some cases beyond the ability of the city, and probably the state, but they showed how furious people (particularly younger people) have become at the destruction of their neighborhood.

The march started on 24th Street, which is the new epicenter of the displacement battle, a place where longtime family-owned businesses are facing eviction to make room for more Valencia Street-type upscale restaurants. It's scary.

I don't know what's going to happen next. I have some ideas, and tenant groups are meeting to talk about how local government can respond. In the meantime, the people facing the threats to their future and their communities are taking to the streets. And the protests are just going to get louder, and bigger, and angrier.

My photo editor seems to be acting up, but there are some great pictures here.

And more great pictures here.

The cost to taxpayers of mid-Market displacement

Fascinating hearing last week on the displacement of nonprofits from mid-Market. Sup. Jane Kim asked the Budget and Finance Committee to look into the problem, and a long list of speakers pointed out how rents have soared in the area -- and the mission of service providers is at risk.

When you're running a nonprofit, you can't just raise prices to cover the increased rent. And you can't always move to cheaper space -- for starters, there isn't much cheaper space anywhere in the city, and more important, most of the nonprofits in the area say it's important to be near the communities they serve.

So if there's a fixed amount of money, and more of it goes to a landlord, there's less to spend on providing human services.

But beyond all the stories -- and the clear evidence that the tech boom set off by the Twitter tax break and the mayor's policies is causing serious problems for the non-profit sector -- the numbers are what got to me.

See, a lot of these nonprofits are city funded. San Francisco in essence outsources a lot of its social services, contracting with community-based organizations to provide everything from substance-abuse treatment and counseling to eviction assistance. Almost everyone agrees those services are desperately needed -- and the nonprofits, by and large, get high marks for their work. And in the end, if rents go up, either services are going to be cut (which nobody wants) or city funding will have to increase to cover the higher costs.

How much are we talking about? A lot.

According to information released at the hearing, there are 1,425 nonprofit organizations that have contracts with the city. The total tab for those contracts: $528.8 million a year.

The average nonprofit budget is $4.8 million, and the average rent is $224,000 -- that's about 4.6 percent of the budget currently going for office space.

In the past year, the average rent increase has been 33 percent.

Okay, let's play that out. If 4.6 percent of $528.8 million goes for rent, that's about $24.3 million a year in public money that goes to private landlords. Hike that by 33 percent and you're looking at a bite of about $8 million. A year. In taxpayer money. To make it possible for nonprofits to stay in mid-Market, Soma and the Tenderloin in the middle of a real-estate gold rush set off by Mayor Ed Lee.

Yes, mid-Market was (and in some areas, still is) rundown, and needed economic development. But there are costs to a policy aimed at attracting tenants who can pay high rents; there are impacts on the tenants who are already there. (Same goes for housing.) And the city has done nothing at this point to mitigate those impacts -- that is, to protect the existing population of nonprofits (and small businesses, too) that need affordable space.

I keep repeating my refrain, but the facts bear it out: When you do this sort of economic development planning, first you have to figure out how to protect the existing vulnerable populations. We don't bother with that in San Francisco. Not under Ed Lee.

By the way: I texted Kim after the hearing with a simple question: How much of the problem that she so effectively exposed at her hearing was caused by the Twitter tax break (which she supported)? No answer.

Monday, October 7, 2013

The West Oakland gentrification problem

The Chron today ran an entirely predictable story about gentrification in West Oakland. I say entirely predictable because West Oakland is the next front in what's happening to San Francisco: You drive up housing prices enough in one area and you're going to get spillover into adjoining areas. San Francisco may be a peninsula, but it's not an island.

Now, some of the people interviewed in the story pointed out that the new influx of people, many of them white and better off financially than the existing residents, is not all bad: The new arrivals are repairing crumbling buildings and bringing money into the neighborhood.

Which is fine, as far as it goes. The danger is, as always, to existing vulnerable communities.

That happens two ways: Higher housing prices may help longtime homeowners sell for a nice profit, perhaps enough for a decent retirement. But they make it impossible for the next generation of working-class people to say in the community.

And higher housing prices give landlords more incentive to evict tenants and rent or sell to someone who has a lot more money. The Ellis Act hasn't been a big issue in Oakland --yet. But at this rate, it will be soon.

Oakland has rent-control, but that along won't protect West Oakland. In fact, that part of the Bay Area is directly in the targets of the ABAG planners who want to see higher density -- without giving cities the tools to prevent displacement.

Friday, October 4, 2013

Will the evictions never end?

There was this. And then this. And now this. And those are just the people who have made it into the newspapers. Every month, more than 100 new Ellis Act evictions are filed as the city's affordable rental housing stock (that it, the existing rent-controlled housing where people have lived for years) is getting decimated.

Rule number one of urban housing: In a crisis, the cheapest and best way to protect affordability is not to build but to protect existing housing. The best way to avoid displacement is not through approving new market-rate housing but by protecting existing vulnerable communities.

Rule two, in California: The state Legislature has taken away from cities the exact tools that they need to follow Rule One. The Ellis Act and Costa-Hawkins have essentially outlawed effective rent control and eviction protections.

And right now, housing is so valuable as a speculative commodity in San Francisco that no tenant anywhere is safe. The Ellis Act is almost a guarantee of high profits for any landlord. It's almost irresistible. And unless there's a second tech bust and another real-estate bubble (or an actual earthquake that shakes up the housing market) it's not going to change. We're going to lose more than 1,000 rent-controlled units every year, and quite possibly more. There is no greater threat to San Francisco today.

So what can tenants and concerned residents and the city do? Well, I've been thinking about options.

It's not easy for tenants to get anything out of the state Legislature, although there's an opening: The state has mandated that local and regional agencies make plans for increased density to handle population growth -- and I could certainly argue that the places impacted by those mandates have the obligation to ask Sacramento to restore the tools they need to manage growth without displacement. Randy Shaw points out, correctly, that if all the big city mayors pushed the local-control issue, they might get somewhere. On the other hand, he dismisses most local efforts (anything that might smack of controlling the growth of tech jobs seems to be a non-starter for Randy and his friend the mayor) except for controlling tourist conversions, which is a fine idea. But none of those units will ever be rented at affordable rates.

Building more affordable housing is a top priority. It's also expensive and new construction can't possibly keep up with the need. Some17,000 new high-paid tech workers have moved into the city in the past couple of years, and most of them want to live in "cool" neighborhoods like the Mission, so you'd need massive development to keep displacement in check. Building enough affordable housing to keep up with the need -- thousands of units a year -- would cost hundreds of millions of dollars.

So what can we do to discourage Ellis Act evictions? Because that's the only way right now to save the city.

Public pressure clearly matters. The protests over the Lee family eviction got the sheriff to back off, then the mayor got involved, and the couple and their disabled daughter have a short reprieve. They still don't have a place to live, though, and the landlord hasn't agreed to halt the eviction. So we'll all be back in the streets next week when the stay expires.

And if it were possible to organize hundreds to protest every single Ellis Eviction, and sheriff's deputies had to get through crowds of people doing civil disobedience, it might slow things down. A lot of landlords don't care; they aren't the ones who have to haul the renters out and throw their stuff on the street. They can sit in their fancy cars and watch the deputies do it. But a virtual war in the streets over evictions is going to get a lot of attention. Maybe even enough to convince Ed Lee to organize his colleagues in LA and San Jose, and make a fuss at the California League of Cities, and go to Sacramento.

Noisy protests in front of landlords' houses and businesses has, in the past, at least brought some pressure to bear. And if everyone doing an Ellis eviction knew he or she would be subject to public exposure and shame, some might think twice. But greed's a powerful motivator.

It seems to me one of our only choices locally is to find ways to make Ellis evictions less profitable. Limiting condo conversions is a great step, but as we're seeing on Nob Hill, people are willing to buy long-term TICs.

There's another approach, though. The city -- the Board of Supervisors and the Rent Board -- control the mandatory relocation fees.

Right now, it costs $5,210 per tenant to do an Ellis eviction. That's what the city requires in relocation fees. The fee, which is supposed to help tenants find other housing, has gone up 4 percent since 2009, while the cost of housing has been going up 30 percent a year. Just to keep pace with increased costs, the fee ought to be tripled. (In fact, a lot of landlords will offer $15,000 or more to get tenants to leave voluntarily, just to avoid the legal hassle of an Ellis eviction.)

But in today's market, $15,000 gets you what? Five months rent in a one-bedroom apartment? For a family like the Lees, $15,000 is almost worthless; it buys them nothing close to a replacement home.

There's an old legal standard about "making the victim whole," that is, replacing what it is a wrongdoer has taken away. We ought to apply the same to Ellis evictions.

How about this: The supervisors raise the fee to whatever level is necessary to allow the tenant to remain in San Francisco, in the same neighborhood, for five years at existing market rents.

You pay $750 for a flat and your family faces eviction? Fine: The landlord has to pay the difference between $750 and the median cost of a comparable flat for five years. These days, that's probably around $250,000. Suddenly, Ellis Act evictions aren't so profitable.

Of course, there's a legal issue: The city's not allowed to put "roadblocks or barricades" in the way of the Ellis Act, Ted Gullicksen, who runs the Tenants Union, told me. There's some level of relocation fee that a court will find so onerous that it won't pass muster. But Gullicksen said there's no case law on that issue; nobody knows how much the city can mandate before the fee becomes a "roadblock."

It can certainly be a lot higher than it is. A LOT higher. Since we know plenty of cases where landlords have offered as much as $25,000 for voluntary move-outs, that much is clearly not a "roadblock." How about $50,000? $100,000? Let's push it and see what we can get away with.

Higher fees would both help tenants survive and discourage evictions. It might drive the landlords to Sacramento to do away with all relocation fees, but that might re-open the whole Ellis Act issue (the law was never intended to be used for evictions and condo conversions) and we might get some reluctant mayors involved. A court could strike down all relocation fees (unlikely) -- but at this point, the $5,000 makes so little difference to a typical tenant that I think it might be worth the risk.

Anybody got a better idea?

Wednesday, October 2, 2013

The taxi lawsuit could be serious

When the BizTimes reported that taxi industry leaders were gearing up to sue UberX, Lyft, and Sidecar,  it didn't get a lot of support on my Facebook feed. I get it -- the cab companies in SF aren't anyone's favorite consumer-service outfits. But this is serious stuff, and a lawsuit could shine some light on the downside of these ride-sharing startups.

You've all heard my rant before: Taxis are, and should be, part of the city's public transportation infrastructure. They are, and should be, tightly regulated. You want to drive a cab, and pick up strangers (many of whom may not know the language very well, and certainly don't know San Francisco streets very well) and take them places? First there's a criminal background check, then there's a mandatory training course, and if you screw up, you lose your permit. You are required by law to pick people up regardless of race or age; if a senior citizen needs a ride from the hospital to here public housing unit in the Bayview, you can't refuse her.

There are limits to the number of taxis on the streets. Those limits may be too low, but if you let just anyone drive a cab without a permit or controls, none of the drivers can make enough money to survive, so the quality of drivers goes down.

(That's my bias, by the way: I am not an ally or supporter of everyone in the industry, but I am on the side of the working drivers.)

The new folks, who are geared toward younger, better-off people with smartphones, don't have to follow the same rules. That's what gets me -- not that someone has found a better way to dispatch a taxi, but that companies that don't have the same regulatory requirements because they've created a loophole that nobody can seriously believe is real (the fares are called "donations" for a "shared ride") are competing unfairly with companies that have to follow (reasonable) city rules.

I don't know what the lawsuit will look like in the end. I do know that it could force the private startups to come clean about every detail of their business practices (including the fact that they would never be able to raise venture capital if fares were really voluntary donations and the exact status of the insurance the drivers and the companies carry).

The city let the state set the regs for these new types of services. That was a mistake; City Hall needs to treat all cab companies alike, under one set of requirements. In the meantime, I can see some fireworks here -- and a fascinating discussion of the legalities of the new "sharing economy."