SF may ask voters to support $300M bond for affordable homes

Proposed measure comes four years after approval of a record $600M housing bond

SF May Ask Voters to Support $300M Affordable Housing Bond
From left: Mayor of San Francisco London Breed and San Francisco Board of Supervisors President Aaron Peskin (Photo Illustration by Steven Dilakian for The Real Deal with Getty)

Four years after San Francisco voters approved a $600 million housing bond, the city wants them to kick in another $300 million.

Faced with a state mandate to build 46,000 affordable homes by 2031, San Francisco officials proposed putting a $300 million bond on the March ballot to pay for affordable homes, the San Francisco Chronicle reported.

The proposed bond comes out of a deal between Mayor London Breed and the Board of Supervisors this summer that would cut a requirement for affordable homes in market-rate projects from 20 percent to between 12 percent and 16 percent.

It also comes as San Francisco struggles to build new homes. Approvals can take years, driving up costs. A single unit of affordable housing can cost up to $1.2 million, pushed up by land, labor and material prices.

The proposed bond measure would require a two-thirds vote.

Board of Supervisors President Aaron Peskin told the Chronicle the board will introduce the bond on the March 2024 ballot.

“There’s no lack of need or use,” Peskin told the newspaper, saying the bond won’t boost property taxes.

The money would go toward reaching a state-mandated goal of approving 82,000 homes in eight years, of which 46,000 must be affordable to low- and moderate-income households.

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Peskin said he’d like the new bond to pay for 1,500 new affordable homes. He would also like it to support fixing up the city’s stock of affordable homes, buy new sites to build more housing and help first-time home buyers with their down payments.  

The Mayor’s Office of Housing and Community Development said 10,717 housing units are in the city’s development pipeline, with few market-rate projects under construction.

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In 2019, more than 71 percent of voters approved the city’s largest housing bond, at $600 million, not including interest. Voters approved a similar affordable housing bond in 2015 for $310 million, which led to 1,613 affordable homes created or preserved, according to Bloomberg.

Some 3,000 apartments will be built with money from the record-setting bond at a cost of around $200,000 per unit, a spokesperson for the mayor’s housing office said. Of those, 1,699 units are under construction. 

It’s not clear how the anticipated $200,000 cost per unit squares up with overall city construction costs that can now exceed $1 million per unit.

“The $300 million will allow us to keep building out our pipeline,” Lydia Ely, deputy director of the mayor’s housing office, told the Chronicle. “We have more of a need than ever before for affordable units.”

— Dana Bartholomew