Proposition F, the ballot initiative that would require 50 percent of new housing built in Hunters Point Shipyard to be below market rate, could become the affordable-housing blueprint for all of San Francisco, residential builders fear.
While the proposition would only directly affect Lennar Corp.'s plans to redevelop 721 acres in the southeast section of the city, developers worry the measure could embolden anti-growth activists to seek a 50 percent below-market-rate requirement in other redevelopment areas across the city.
"If people think it can be done, I don't see why it wouldn't become a prototype," said Oz Erickson of Emerald Fund, which has developed thousands of housing units in San Francisco and the East Bay. "It is not possible to do a 50 percent affordable project unless you have very heavily subsidized financing."
On June 3, San Francisco voters will choose between two competing measures, propositions F and G. Prop. G would give Miami-based Lennar the green light to begin work on its redevelopment plan, which includes 10,000 units of housing, shops, parks, industrial and commercial space, a rebuilt public housing project and a new football stadium if the 49ers stay in the city.
While Lennar has vowed to make 32 percent of its housing below market rate, the developer has said that the entire $8 billion Hunters Point redevelopment would likely be killed if Prop F's 50 percent requirement passes. Prop F will prevail if both measures pass, regardless of their respective vote totals.
"If F passes, the likelihood of trying to continue to press forward on an integrated development at Candlestick Point and Hunters Point are remote," said Kofi Bonner, Lennar's regional vice president. "My recommendation would be for Lennar not to pursue the development any longer."
Are we next?
Activists pushing Prop. F acknowledge it may only be the beginning. Julian Davis, spokesman for the Yes On F campaign, argues that ultimately the city should be meeting the goals of the Housing Element of the General Plan, adopted by the city in 2004, which states that 64 percent of all new housing should be affordable to working families at below market rates. He said the redevelopment of Treasure Island, where Lennar is part of a team looking to build 6,000 units, including 30 percent below market rate, could also be ripe for the 50 percent requirement.
"We ought to be looking for ways on Treasure Island and other redevelopment areas to catch up to our city's stated policy goal of 64 percent," said Davis.
Tim Colen, executive director of the San Francisco Housing Action Coalition, which advocates development of transit-oriented housing for all income levels, called the 32 percent below market rate Lennar is offering "very generous" and said the Housing Element goal was never realistic.
"They said '64 percent' without any guidance on how to fund it," said Colen. "Prop. F will scotch anything happening in Hunters Point for at least the next decade. It doesn't make sense."
Chris Meany, a principal with developer Wilson Meany Sullivan, said the ballot is not a good place to determine complex land-use issues, which are the result of years and sometimes decades of negotiations and compromise by planners, environmentalists, residents and elected officials.
"It's likely to be decided based on who had the better advertising campaign," said Meany.
Meany, whose firm is a partner in the development of Treasure Island, also worries whether initiatives like Prop. F will continue to drive out the middle class by turning San Francisco into a city split between homes worth over $1 million and below-market units. Under Prop. F, half the units at Hunters Point would have to be priced to be affordable to people who earn at most 80 percent of the median annual income for the region -- $64,000 for a family of four in San Francisco.
"An affordable, below-market-rate home doesn't come free -- it has a negative cost," he said. "Somebody has to pay hundreds of thousands of dollars to make an affordable home and that hundreds of thousands gets put into the market-rate homes."
Michael Cohen, the director of the Mayor's Office of Housing and Workforce Development, said the advocates of Prop. F, led by District 6 Supervisor Chris Daly, are holding the city's poorest southeastern neighborhood to a higher level of affordable housing than has been required in other areas.
"If I'm a member of the Bayview community and an affordable housing requirement that has never been applied anywhere else in the city gets in the way of creating real jobs and parks and amenities and opportunities, I'm going to be pretty angry," said Cohen. "It's a legitimate concern that if F passes, the horrible precedent it sets is going to spread. I think the larger real estate community in San Francisco is watching this issue."