Pro-Development Moderates Lead in San Francisco Elections

If the current vote leaders hold their positions, the Bay Area’s real estate industry is looking at a much friendlier political climate after Tuesday’s election.

“Real estate should feel very, very good about these results,” said Jay Cheng, executive director of moderate political group Neighbors for a Better San Francisco and a former deputy director of government affairs for the San Francisco Association of Realtors. “This should be considered a huge boost to the real estate community.”

Levi’s scion Daniel Lurie had an early lead in the San Francisco mayor’s race, as did moderate challengers looking to unseat progressive incumbents in two hotly contested Board of Supervisors races. Cheng believes those leads will hold because the approximately 160,000 ballots left to count are mostly mail-ins, which tend to lean more moderate, he said.

Neighbors had endorsed both Lurie and former Interim Mayor Mark Farrell ahead of current Mayor London Breed in the city’s ranked choice system. Farrell has conceded but Breed is still holding out hope. In the 2018 race, she also came back from a deficit to win days later when all the votes were counted and ranked choice accounted for.

The next vote-count announcement from the city’s Department of Elections will come Thursday afternoon, but as it stands Lurie has about 108,000 votes to Breed’s 84,000. Cheng called that a “dominant lead” that “seems hard to overtake in any scenario.”

Corey Smith at the Housing Action Coalition, which endorsed Breed, was less certain, however.

“The remaining S.F. ballots don’t lean to any one candidate or philosophy, so all these tight races are still very much in the air,” he said.

SF YIMBY also endorsed Breed, but San Francisco Organizing Director for YIMBY Action Jane Natoli, said she was “optimistic” the pro-housing group would be able to work with Lurie as well.

“Lurie has engaged well with YIMBYs throughout the election and put forth a strong housing platform. He has not made as many strong specific statements as someone like Breed, but he has shown a willingness to engage on housing issues,” she said. “There is a lot still to be determined, of course. Does he surround himself with good housing people, are those the folks who get in his ear?”

She agreed with Cheng that he was the most likely winner.

“Maybe he hasn’t mathematically won yet, but it looks tough,” she said of a possible Breed victory.

“As we have seen beyond San Francisco, there is a lot of anti-incumbency energy that’s animating voters. Lurie ran a great campaign to capture that energy, and had the resources to ensure that he got his name out there,” she said. “Political insiders underestimated the average voter’s desire for change, and he tapped into being outside of our system.”

Board takeover?

The results thus far in the Board of Supervisors races also “show some of the same energy towards anti-incumbency, which I think is an expression that people feel like San Francisco needs new leaders to take them in a different direction,” Natoli said.

Moderate Bilal Mahmood’s lead over progressive incumbent Dean Preston in District 5 is unlikely to be undone, Cheng said, when you consider that many of the votes in areas that are strongly pro-Mahmood, like the Western Addition and the Tenderloin, are “underweight” in the turnout count thus far and are probably in the stack of mail-in ballots left to be counted.

The same is true of moderate candidate Marjan Philhour’s much closer lead over progressive incumbent Connie Chan in District 1, he said.

The “core of her support” around the intersection of Lake Street and Park Presidio, which he called the “Marjan T,” is also below expected numbers right now, which “suggests that there are a bunch of ballots in the mailstream that should be Marjan ballots, but they haven’t been counted yet so they’re not part of the math.”

Flipping these two seats to more moderate candidates would have a huge impact on the makeup of the board, he said.

“Connie Chan and Dean Preston are notorious for being anti-real estate, anti-housing,” he said, citing their support of rent control measure Prop. 33 as a recent example. “The fact that they’ve been taken off the table by itself is a huge victory for the real estate community because you have folks on the board now who take housing production seriously, take housing development seriously and take the idea that something has to pencil seriously.”

Cheng said that even District 7 Supervisor Myrna Melgar, who is currently in the lead against her more moderate challenger, could be overtaken once the votes are all counted, which will likely take through the weekend.

Natoli added that in addition to the “pretty strong upswell of people who want someone different in D7,” moderate candidates also have the lead in Districts 3, 9 and 11, where they do not face incumbents.

“If that holds, we have a very different looking, and frankly, inexperienced board,” as District 2 Supervisor Catherine Stefani won her Assembly race, Natoli said, and will also be departing, along with progressive board members and unsuccessful mayoral candidates Asha Safai and Aaron Peskin.

“We will likely have a board and mayor learning on the job together,” she said. “Now it looks like that board could be favorable to housing and Daniel Lurie seems receptive to more housing, so I think there are opportunities there to advance housing priorities.”

Cheng disagreed that the new moderate board members were inexperienced, citing Philhour’s experience as an advisor in both the governor’s and the mayor’s office and Mahmood’s statewide advocacy on climate change.

Even with many votes left to count, Smith said that the fact that the races with incumbents are so close shows that “it’s clear the electorate wants change in City Hall.”

“No matter how all these races end up, we know the price of housing and overall cost of living is a huge deal in S.F. and around the country, and has been highly motivating to voters,” he said.

If moderates end up taking the majority of the board, Cheng said, it won’t just be housing that motivates them but also the same public safety concerns that led the city to recall progressive District Attorney Chesa Boudin two years ago and replace him with Brooke Jenkins, who easily won her election yesterday with nearly 68 percent of the vote. That, as well as “serious solutions on homelessness,” should help “revitalize downtown, which so much of the commercial real estate industry is dependent on.”

East Bay recalls

Across the bay, the same public safety sentiment gave recall efforts for Oakland Mayor Sheg Thao and Alameda County District Attorney Pamela Price a clear lead in early results. Both recalls had received about 65 percent of the vote thus far, with 50 percent needed to pass. The D.A. recall in particular had broad support from commercial real estate interests.

Just as in San Francisco, the votes are not all counted yet, but Oakland-based Lakeside Group developer Isaac Abid, who led one of the groups behind the district attorney recall, said the message from voters is already obvious.

“The passage of these recalls by 2-to-1 margin by a largely Democratic electorate is a clear reinforcement of the efforts of many over the last year to seek a change to the status quo with respect to public safety and local governance,” he said.

He noted that that electorate includes merchants, office workers and residents that fill Oakland’s buildings and said their “call to action for the situation to improve will necessarily impact the real estate community.”

Just as moderate San Francisco groups like Neighbors will not end their efforts after this election, Abid said the “broad coalition” that came together to oust Price was “built for long-term political engagement and action.”