SF Affordable Housing Developers Side With Wiener Over Chan

When it comes to housing, the now-two-candidate runoff to succeed U.S. Rep. Nancy Pelosi in Congress is a proxy for the yearslong debate over how to address affordability — and affordable housing developers are taking a side.

San Francisco Supervisor Connie Chan, a supply skeptic, has regularly opposed state Sen. Scott Wiener’s embrace of supply-and-demand economics, which holds that more housing production of all types leads to lower prices in the overall market. Chan took 29.8 percent of the popular vote during the June 2 primary, finishing second behind Wiener’s 41 percent. She has argued that relying on for-profit developers to build affordable housing has failed, and that almost any new housing built in San Francisco needs to be subsidized if it’s going to be accessible for working families.

In a city where the median single-family home goes for $2.2 million, and a one-bedroom apartment rents for $4,000 per month, it’s true that new market rate housing won’t be affordable to low- and middle-income families, whose annual wages in San Francisco range from $97,250 to $162,100 for a four-person household. However, as congressional campaigns continue to elevate this debate, the nonprofit developers responsible for building San Francisco’s subsidized housing tell The Real Deal that solving the affordability crisis looks more like Wiener’s approach than Chan’s.

Matthew Franklin, president and CEO of MidPen Housing, one of the most productive nonprofit affordable housing developers in the Bay Area, agreed with Chan that the market, on its own, doesn’t reach down the income spectrum and that subsidized housing is needed to correct a market failure.

Yet, he argued that a balance was necessary, and as the Bay Area experiences an economic boom — thanks in large part to the artificial intelligence industry — the region needs to add housing as it adds jobs.

“If I thought we could build enough affordable housing as a first order of business, I’d be all for it,” Franklin said. “But we need an all-of-the-above strategy. If you believe in the laws of supply and demand, then you have to build more housing.”

Wiener’s tilt toward deregulation during his time in the state legislature has focused heavily on making affordable housing easier to entitle. Under his streamlining bills in 2017 and 2023 (Senate Bills 35 and 423), local governments can neither hold up nor reject fully subsidized housing projects if the proposals comply with local zoning and design standards. Other streamlining bills, enhanced housing mandates and forced upzoning passed in Sacramento over the last decade smoothed over the permitting path for mixed-income projects, and local governments have far less discretion in approving many new housing developments.

“It’s completely changed the timeline, and time is money,” Franklin said.

Yet, money has kept tens of thousands of subsidized housing projects from starting construction throughout California. Nearly 40,000 shovel-ready homes have been put on hold due to a lack of capital, according to Enterprise Community Partners.

“Deregulation won’t build the housing that San Francisco needs,” Chan’s platform reads. Central to Chan’s housing plan is an expansion of the federal tax credits low-income housing developers use to finance their projects.

Yet, one of the most prolific local affordable housing developers in San Francisco and throughout California told TRD that the city cannot wait for subsidies to unlock to start adding housing.

Affordable housing requires about $500,000 of public subsidy per unit, and “there aren’t those kinds of resources available at scale,” said the developer, who agreed to speak on the condition of anonymity so as not to publicly take a position against Chan, a sitting elected official.

The view on the far end of the left, the developer said, is that new housing increases housing costs in a given area. Yet, that might be changing. New York City Mayor Zohran Mamdani, a democratic socialist, has embraced supply and demand economics as part of the solution to the city’s housing crisis, and his new housing plan includes tailored upzoning in certain neighborhoods and along transit hubs. He recently said New York needed to be more like Austin, Texas, where a flood of construction over the last several years has led to an 18 percent rent decrease, according to a recent Realtor.com report.

Drafting off state legislation passed by Wiener, San Francisco passed its own citywide rezoning plan last year. Known as the Family Zoning Plan, it sought to allow for taller, denser construction in residential neighborhoods, particularly on the west side of the city that Chan represents in city hall. Chan has been a vocal critic of this plan, arguing that the upzoning would accelerate displacement and make the neighborhoods less accessible for working families and local small businesses. The zoning plan is currently held up in court by a pair of lawsuits.

Yet, affordable housing developers see the status quo as the real antagonizing force for middle and low-income families.

“If you don’t build market-rate housing, you’re going to see the exact kind of gentrification they’re concerned about,” the developer said.