Late last month, as part of budget negotiations, Mayor London Breed agreed to spend $112 million on affordable housing, calling to use money from debt financing to pay for new housing projects and fund repairs to existing buildings.
It was part of a late-night budget deal that preserved most of the mayor’s priorities, but also added money originally requested by Supervisor Dean Preston as part of a “social housing” package, and in line with recommendations from the Housing Stability Fund Oversight Board. That board was formed to help figure out how to spend revenue coming from Proposition I, a real estate transfer tax that feeds into the city’s general fund.
So what does social housing actually mean? Let’s break it down.
What is social housing?
Social housing, a type of public housing used in parts of Europe where government plays a larger role in providing social programs, aims to use private money to subsidize government-run housing where rents are capped for tenants based on their income level.
“The idea of producing social housing is not new,” said Sulaiman Hyatt, the lead public housing organizer at the Housing Rights Committee of San Francisco. “But doing it at the city level is new.”
The part of the city’s administrative code that established the Housing Stability Fund Oversight Board (HSFOB) after the passage of Prop I does define social housing using two criteria: It must be permanently affordable, and the average income across all tenants must not exceed 80% of the local median income.
At the state level, State Assemblymember Alex Lee made a similar proposal with the California Social Housing Act, which aims to create the California Housing Authority to oversee the production and maintenance of social housing. The bill stalled out in committee this year, but Lee plans to reintroduce it next year.
Alex Lantsberg, who serves on the HSFOB, said the board is motivated by a belief that the private market won’t be able to meet the city’s affordable housing needs by itself—so the public sector needs to step in, too.
“We’re not talking about inventing the wheel or even reinventing the wheel,” Lantsberg said. “We’re literally talking about picking up tools that are laying at our feet being used in other parts of the country and other parts of the world.”
How is it different from public housing?
Public housing is state-run housing that caps housing costs to 30% of a resident’s income, and is only available to low-income renters who make less than 80% of the median income in the city. Social housing would institute a similar income-based rent cap but would not use income levels to restrict who can live there.
Today, San Francisco’s public housing is already partially privatized. That’s because most of the city’s public housing has been turned over to private landlords and nonprofits to manage after the city took over the state-run San Francisco Housing Authority in 2019 due to financial mismanagement that resulted in a $30 million deficit in the agency’s reserves.
The major difference between the two concepts is where the subsidy for lower rents is coming from, Hyatt said. In public housing, it’s 100% from the government, while social housing would also use high-income rents or taxes to make up the rent gap for lower-income tenants.
Where else is this being done, and what’s different about SF?
Social housing advocates cite Singapore and Vienna as examples of where different versions of social housing has worked abroad. They also point to Montgomery County, Maryland, which is building housing for people with a range of incomes using $50 million in public bond money placed in a revolving fund that would be paid back through profits from the development.
What’s different about what San Francisco is taking on, Hyatt said, is that it would be city-run and financed through taxes.
Where will the money go?
The final spending plan for the $112 million, which will be administered by the Mayor’s Office of Housing and Community Development, is yet to be determined and would still require Board of Supervisors and Office of Public Finance approval, Communications Manager for the MOHCD Anne Stanley said.
But her office’s spending promises align closely with the HSFOB’s recommendations, Stanley said, although the department doesn’t use the term “social housing” internally. She said MOHCD will look to leverage state and federal funds, too, to help finance future projects.
“We as a city agency cannot finance the entirety of these projects,” Stanley said. “It’s just too much money.”
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