Special to the Vanguard
Sacramento, CA – In an effort to replace lost affordable units from decades ago, Senator Scott Wiener this week has introduced SB 593, the San Francisco Replacement Housing Act.
If passed, SB 593 would remove barriers to replacing more than 5,800 units of low- and moderate-income housing that were demolished in the 1950s-70s period of redevelopment, also known as “urban renewal.”
It also provides a narrow and tailored funding source through the Redevelopment Property Tax Trust Fund, a limited continuation of existing tax increment financing that will not impact other priorities, like education, that draw from the General Fund.
“Decades after the injustice of redevelopment, we still have a 5,800-home hole in San Francisco’s housing stock,” said Senator Wiener. “The loss of these homes devastated the Black community of San Francisco and contributed to the crisis of affordable housing costs that continues to make the City unlivable for so many. SB 593 sets San Francisco on a path to right this wrong and meet its affordable housing goals.”
Beginning in the 1950s, the former San Francisco Redevelopment Agency (SFRA) used a significant amount of federal urban renewal funds to implement locally adopted redevelopment plans. Though the goal of these plans was to create vibrant, mixed-income communities, the result was the authorization of widespread clearance, mass demolition, and relocation of communities, particularly lower income communities and communities of color.
In San Francisco, the urban renewal process resulted in a net loss of 6,709 affordable housing units. In 1976, the state amended the Community Redevelopment Law (CRL) to require the replacement of affordable housing lost through redevelopment activities. The CRL mandates a one-for-one replacement of the total number of units, as well as an equal or greater number of bedrooms.
Despite this clear mandate, in 2000, the California Legislature enacted special legislation acknowledging that the Former Redevelopment Agency had an unfulfilled replacement housing obligation resulting from its pre-1976 destruction of affordable housing (SB 2113, Burton, 2000). In adopting SB 2113, the Legislature made several significant findings, including that San Francisco’s housing situation is unique, as median rents and sales prices are among the highest in the state.
In 2003, the California Department of Housing and Community Development (HCD) certified a net loss of 6,709 affordable units. The former SFRA financed the construction of 867 units under SB 2113, but the agency was dissolved in 2012.
The result is that the 5,842 units of low- and moderate-income housing were never replaced. In addition, the affordability restrictions for some of the replacement housing units that were constructed have expired, or are in danger of expiring, and may need additional assistance to ensure that the properties continue to provide affordable housing.
The housing crisis certified by the legislature in 2000 has only worsened since then. According to the Regional Housing Needs Allocation for 2023-2031, San Francisco must produce over 46,000 units for very low-, low- and moderate-income households in the next 8 years.
San Francisco’s Successor Agency to the Former Redevelopment Agency has taken seriously its charge to replace the remaining 5,842 affordable units, and has documented both the scope of the obligation and the need to allocate property tax revenues over time in order to fund the necessary construction. Tax increment financing will cover approximately one-half of construction costs and will leverage other public and private sources to complete affordable housing funding needs.
SB 593 will allow the Successor Agency to the Redevelopment Agency of the City and County of San Francisco to replace all of the housing units demolished prior to 1976 as well as preserve affordability of the replacement housing built in the 1970s. Specifically, it will:
- Create a limited funding source through the use of property tax revenues (former tax increment) to fulfill the replacement housing obligations using only the City and County of San Francisco’s share of property tax revenues that remain after all pre-existing commitments are funded;
- Allow the Successor Agency to bond against property tax revenues exclusively for the purpose of fulfilling the replacement housing obligations subject to the same strict standards and procedures for review and approval by the oversight board and the State Department of Finance as other bonds under dissolution law;
- Dedicate the revenues to the development of affordable housing within the City and County of San Francisco for households that earn up to 120% Area Median Income (AMI);
- Extend tax increment authority for affordable housing purposes while protecting school revenues from property taxes and not placing the State’s general fund at risk from a reduction in school funding;
- Limit revenues to the amount necessary to fund the fulfillment of the identified, documented, and certified replacement housing obligations;
- Require compliance with the standards under Redevelopment Dissolution Law for review and approval of bond issuance by the oversight board and Department of Finance.
SB 593 is sponsored by the City and County of San Francisco and the Freedom West Homes Corporation.
“This important legislation by Senator Wiener would provide San Francisco with a critical tool to fund new, affordable housing in our community, and to begin reversing the harms of mass displacement of lower-income black and brown families that occurred during the era of urban renewal,” said San Francisco Mayor London N. Breed. “It is long overdue for San Francisco to make amends for the destruction of these neighborhoods and for contributing to our housing crisis. As we work to implement the promise of Housing for All in our City, this legislation is a creative solution that gives San Francisco the ability to right past wrongs and provide much needed housing for our vulnerable families.”
“Urban renewal displaced more than 20,000 residents and over 800 businesses in my Fillmore / Western Addition neighborhood and contributed significantly to the decline of the Black Population in San Francisco from 13% in the 1970s to only 5.3% today. The continued lack of affordable housing in the City further exacerbates this decline,” said Mattie Scott, president of Freedom West Homes Corp. “This legislation will right the wrongs of the past by funding the preservation and rebuilding of affordable housing while also sparking the economic revitalization needed to create an equitable and sustainable future for our current and future residents of color. I want to thank Senator Weiner for his bold leadership in authoring this legislation and to commend Governor Newsom for his unwavering commitment to equity and housing for our community.”
Freedom West Homes Corporation is one of the largest and oldest nonprofit housing cooperatives in California, established in 1973 to provide affordable housing and the socio-economic stability needed to achieve home ownership for low-income families of color after the destruction caused by Urban Renewal.