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tv   Government Access Programming  SFGTV  October 26, 2019 7:00am-8:01am PDT

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housing market and impacted directly by our failure here as a city to build adequate housing for them. these are workers janitors people working cafeterias, office workers, who are being forced to live further and further away from their jobs and in some cases forced to leave their jobs altogether because of a lack of housing. these are folks in the district that i represent who are in sros, who are waiting for years and years for permanent housing. these are seniors who are at risk of being homeless. or the over 8,000 people living on our streets who we are failing as we saw in that report not building adequate housing particularly at the lower level. we do have with this legislation, an opportunity to take an important step towards addressing this failure and beginning to write this
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mismatch between the number of jobs that are being created and the housing particularly affordable housing that's needed to meet that demand. we are also helping here to meet a need that i've heard again and again from the mayor's office of housing one of the meetings i had early on was to go through the pipeline of housing project affordable housing projects in my district. one of the most frustrating things was there were a number of projects where we already have the land the city owns the land, and i was told that we can't even begin to build on these sites for in some cases six seven eight years from now because we don't have the funding, because we don't yet have enough money available for the mayor's office of housing in order to start these projects. so with that, this legislation which i'm very proud to have introduced and cosponsored, with supervisors mar ronen, peskin
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brown walton fewer and i'm hopeful that we'll have the support of this committee and of the entire board. as you saw in that report, since 2010, the city's population has grown by ten percent. our job base has grown by 38 percent. by our housing production has only grown by 6 percent. for every new office development, a full one-third of those new employees are making under $100,000 a year. and for every tech sector job created five additional low and middle income jobs are created. yet what we know is that we are not building housing for most of those folks. we have the highest jobs to housing ratio in the bay area. over that time period, we were only building one unit of housing for over
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8.5 jobs. and only 20 percent were affordable. this is a dangerous trend we cannot afford to continue. the situation on our streets and the outmigration of low income residents is the worst it has been in a long time. and we are forcing people out of our city at alarming rates. we must work toward a higher cityerhousing to jobs ratio and update the fee to spur affordable housing development is one important step. i want to thank the planning commission which actually endorsed this legislation unanimously. i want to thank the over 50 people who showed up at the rally we had this afternoon. many of whom had to leave, some of whom thank you for still being here. the community counsel of housing organizations, affordable housing developers, jobs of justice the many workers who have been involved and the most impacted communities who have been advocating for this change for a long time, including
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some were who are here and have been a close partner on this legislation. i also want to thank cortney from my office, the community counsel housing organizations. i'm not going to say too much more because i'm sure we are going to get into this a bit. but i want to add some specifics on what we are doing here. and i do have some amendments which i can put forward after the public comment. this is a fee that is meant to be updated periodically but hardly matched inflation since the 1990s. new office developments are paying per square foot a rate set a decade ago from outdated housing and construction costs. community members have been asking for this update to the fee for years. and it has been anticipated for years. after nearly 25 years
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this summer they released an updated jobs housing nexus that analyzed the impact of new office development on housing demand. the total demand per square foot of office by looking at the density of employees in a new office space new worker incomes and what it costs to build affordable housing. it quantifies the needs of new low and middle-income workers. it shows for new office development to meet the demands it creates on affordable housing and if we were to fully mitigate the impacts of new office development on affordable housing for new low and middle-income workers we would set this at $193..33. these new findings are a wake-up call for us to increase our investment in affordable housing and spur production of housing units. this legislation will change the fee amounts for office to $69
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and to $36. it also aligns the indexing of the fee with other fees. it changes in some significant ways how the fees are allocated to specify the ten percent of funds with acquisition and preservation of affordable housing. 30 percent of new funds to new construction to permanent support of housing which will create the first dedicated stream of funding for that use. and to specify that 60 percent is contributed to the city wide affordable housing fund. this is consistent with area plan impact fees set at 36 percent of the maximum allowable fee on average. it takes into consideration the recommendations from the study and from the economic feasibility study that the city prepared. as i mentioned, the study justifies charging much higher fee rates than those in our proposal. this new fee would generate $500 million for the next ten years which would produce close
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to 2,000 units for the next decade. these should be union jobs and the construction will have a strong positive impact on our economy. we have been in -- we introduced in five months ago. we've been in conversation closely with community organizations and impacted developers and oewd for some time. and we believe we are at a point where we have a compromise set of amendments which i'll put forward in a minute that inga allow us to bring in a significant amount of funds for affordable housing while also allowing office development to continue. but to do it in a way that is much more well aligned to our needs when it comes to affordable housing. this is as far as i can tell, smart planning effective planning, common sense planning. when we do it the other way and we
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don't actually look at the affordable housing that needs to be built, we have what we saw in this jobs report that was just released, which is a huge strain on particularly middle and low income residents a massive displacement of those residents and one of the most expensive housing markets in the country, and one that is getting worse every day. so this is an important step. it's not the only thing we need to do. but it's one that will address this massive crisis that we are facing as a city in a smart way, in a way that, to be honest, is overdue. so with that, i don't think he did his -- oh.
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>> good afternoon supervisors. ted from the controller's office. we released an economic report on this item. if you don't have a copy i will pass it out for you now. just one clarification i misspoke on my cosponsors here. they are supervisors yee fewer, ronen walton, peskin and moore. supervisor brown is not a cosponsor. >> on behalf of. >> for the jobs housing linkage fee,
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i have haney, fewer ronen mar, peskin, walton and yee. i was going to ask you about brown. >> yeah, i just stated those are the correct ones. supervisor brown is not a cosponsor. >> okay. >> so from the office of the economic analysts the floor is yours. >> thank you chair peskin. as i said today our office issued an economic impact report on this item. i'm not going to walk you through the full report but i will discuss some of the highlights and i'm happy to answer your questions. of course our report is charged with assessing the economic impact of legislation. in this case the fee increase which is approximately $40 per square foot on office we determined might have a significant impact on office development in the city in the future as well as raising new funds for affordable housing. as you know, there's a couple of studies that have already been done
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on the impact of this item, the nexus study and feasibility study. the feasibility study found a $10 square foot fee might be viable in the future. but office development at present is not feasible even without any fee increase. for us, that's not really sufficiently specific to be able to get to the economic impact. so we worked with an outside consulting group that we've worked with before, the blue sky consulting group. and we asked them to work with the city's his coric office permits to see if we could build a model that tests how sensitive office development is in the in the city to changes in things like construction cost fees and rent. and essentially the model works by looking at every parcel in the city that could potentially develop office. nonpublic parcels are excluded. and looks back over the period of 2001 to 2018 and looks at where
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office did and did not develop and makes a function of that as a function of parcel specific factors, what's the zoning, what's the capacity on the site as well as market variables at the moment including the price in the construction costs. we provided the full details on the model in the appendix to our report. i'll say here the model did find significant impact of construction costs and negative impact of construction costs on office development. so when development costs increase we do see a holding everything else constant a decline in office development in the city. so that is the finding that we used to simulate the impact of the proposed increase of the fee on office development. the legislation does also increase the fee on laboratory development. we don't have enough data to do a model for laboratory. and we believe most of the impact will be on offices in any event. so with that out of the way to focus on the economic impact factors,
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we are really looking at a combination of positive and negative factors. as i mentioned the higher fees will likery make some office development infeasible. that has an impact on the number of office workers in the city. that has negative multiplier effects. there's also less construction if less office is being developed. on the positive side, the fee increase should increase and we project does increase funding for affordable housing per the uses specified in the legislation that will go to construction of permenantly affordable housing. that is a positive impact on theon the city's economy. so just walking through how we use the model we basically determined that given prevailing construction cost of $40 square foot fee is a 6 percent increase in nonland development costs. the model projects that would lead to a .2 percent decline in overall office
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space in the city. that's equivalent in a reduction between 125,000 to 140,000 square feet per year on average. the range is because there's a range of construction costs out there. >> you mean a decline in potential future development, not -- when you say decline. >> no one is going to be taking existing office off the market because there's a fee on new office, bewe will have less office in the future. so the decline is relative to the expected growth. >> so you are saying that 98.8 percent of what is expected would be built. is that what you just said? 2 percent decline. >> no, i would say after a year after this goes into effect, we would have 99.8 percent of the total office space in the city we already have. and that's largely because we are not adding a lot of new office space. but that is still true. in each year, we are looking at a decline. the 125,000
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to 140,000 which is kind of the direct impact on this, that's about .2 percent of the office space in the city. >> say that again ted. >> after a year of this one year of this going into place we will have in the city, 99.8 percent of the office that we would have had if this legislation does not pass. in other words there's a .2 percent haircut in the city's overall office space as a result of this, if this legislation were to pass. >> i'm a liberal studies major. so let's be clear. we currently have however many million. 70 million square feet of office. presumably none of that is going away. >> right. >> but we would have had 70.5 million next year. and we are projecting instead you'll have maybe 70.35. and each year going
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forward you'll have 125,000 to 140,000 square feet less than you otherwise would have. because on the margin, that share of the new projects would be rendered infeasible by the cost increase. >> got it. i am old and i am slow. but what you are saying is we are going to have new office but less of it. >> that's right. >> thank you. >> the other thing that would make it more complex and i'm not getting into it is this is an average number. of course, at the moment, we are ten years into a very strong economic cycle. there's a great deal of office demand. we are not projecting the business cycle. so this is a model that looked at over a long period of time, we are intending this to be a long term projection. we are not saying every year you should never expect more than 125,000 to 140,000. but that is a useful number for us to get to the impacts that are directly meaningful for our economic model. the nexus study uses
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an employment density of 238 square feet. that seems to be reasonable to us. so the loss of the office space again the slower growth of the office space translates into slower growth of office jobs of 520 to 585 jobs based on that employment density. and we also determined that loss of office space leads to a decline in office spending of about $71 million a year. >> it's not a loss of existing jobs. it's a slower amount of future jobs. >> yeah. it's just a decline relative to what we would have in the future, we would expect to have in the future, assuming continued historic trends in office demand or development for office. >> yeah. i would just say it's not a loss, it's less. and there's a big difference between losing and getting less.
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>> yeah. >> meant i had 17 million and now i'm going to have 15 million. >> that's right. >> one of the reasons we try not to say it that way is because in recession it could be going down for reasons that have nothing to do with this legislation. so we're never saying it's relative to the way things are at that moment. we know it's going up or down. we are always talking about relative to the world in which you don't do the legislation. >> i totally get it. i read read the study that said don't rely on for this or that and don't use it for anything but here's the number. i get it. >> okay. as i alluded to earlier this also has a positive impact on jobs housing linkage fee revenue. we project a growth of 8 to 9 million in annual revenue as a result of that. this estimate is sensitive to a baseline projection of office base from new construction of 430,000 square feet
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per year. that is not wildly off what the city has done over the past 17 or 18 years. but it is subject to uncertainty. what we are more confident about is the difference between the baseline and what would happen with the proposed legislation. so we would project a growth of 12 million a year. under the proposed legislation that would rise to 20 to 21 million a year. so we reconcile the direct and indirect economic impact of the factors that we study using the remi model. given the different construction costs that are out there, we developed a high and a low impact scenario that are quite close to each other. the low scenario just adds in the loss of the office jobs at the low end of 520. $61 million in construction spending and $9 million in fee revenue and the high impact scenario is 585 jobs, $82 million
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loss in construction spending and $8 million in fee revenue spent on construction. the net effect of this is a decline in the city's jobs by a decline relative so to what we would otherwise have of about 1500 jobs. this represents .1 percent to .2 percent of all jobs in the city. and we did this over a 20-year average a long-term average. the impact on the city's gdp is projected to be negative to the tune of $280 in today's dollars. the job losses are spread across the economy but about 60 percent of the job losses are in the office-using industries that are directly impacted by the fees. this both accounts for direct job losses, the ones in the offices that wouldn't get built as a result of the fee and others that are lost because they depend on those employees and
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those companies for customers. about another 25 percent of the losses are in construction and the remainder are spread in other industries. the model also projected a slight decline in housing prices as a result of the legislation. it's due more to a proportional loss of income and population and not because housing is broadly more affordable. of course the major benefit of the legislation is the expanded affordable housing programs. so both the direct beneficiaries of those and also others who are not direct beneficiaries but compete for housing low-income folks who compete for housing in the private market will also benefit likely because of reduced competition at the low end of the private market. >> are you saying if you don't exacerbate the jobs housing imbalance it actually creates an economic environment that's more or slightly more affordable? is that what you just said? >> if you don't exacerbate by reducing
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the number of jobs. >> you just said, and by the way, none of us have had the benefit of reading this report. i've read everything in the file but i have not read this. the second-to-last statement you just made was there was a slight positive effect on housing price by virtue of a lack of office development. >> yes. we are projecting housing prices would be lower than otherwise. but the caveat is they are only lower because there are fewer people employed fewer people living in the city, and the people in the citying having less income with which to build up housing prices. so while prices would be lower the denominator of affordability which is how much income have goes down as well and that's why we make the statement that housing would not become broadly more affordable
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even though housing prices are lower if that makes sense. >> so my question to you was -- and i heard what you said, i'm not sure if i understand it but what i positives think is by building more office the actual cost of housing went down. and your answer to that is yeah but everybody is going to have less money. >> that's basically right. the growth of jobs in the city, for example so look at the other way does lead to higher housing prices. it aalso leads to higher incomes. if you look at the trends, for example this decade in the city in terms of housing prices they have grown extremely rapidly. if you look at the trends in income, they have also grown rapidly. if you look at the trends in housing affordability for the low-income
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people they don't really improve but for sort of everybody at 100 percent of ami and above, housing is quite a bit more affordable than it was several years ago. >> so basically what you are saying is that by building more office, we are exacerbating income inequality in san francisco because the rich are getting richer, housing prices are going up, they remain un, the poor people are getting screwed. >> the data we have on income inequality doesn't show a dramatic increase. i understand the logic of your statement. i'm not there yet because there's other data that suggests other things. that for example the census tells us what the income inequality is in san francisco every year it's been going down most of this decade. not dramatically but it has been. i don't know why. because i look at it the way you described it, that
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we've had a large growth in upper income jobs. the upper 40 or 50 percent of the labor market has had really rapid growth in wages. their housing costs have been relatively stable particularly if they are not moving a lot. so they are certainly better off every year. the low income folks particularly people who move a lot have not seen the same level of raises. if they have moved they've not had stability in their housing prices and they are exposed to the rapid growth in housing prices on the market. and they are worse off. so i understand that argument, it's just not every data that i'm looking at kind of confirms that story. >> i've got a few things. one is to clarify and reiterate when it says something like the projected legislation would result in a job loss of 1,500 jobs, it's actually
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talking about over time -- it's not a job less, it's that the growth will be that much lower. it's a very confusing and some ways misleading ways to think there's a net job loss as though 1500 people are going to lose their jobs. >> that's not what we intend to say. it is likely that based on past trends, the city economy will grow more than that. so we are talking about having fewer jobs or slower growth than you otherwise would. however it isn't true that everybody's job will be secure if this goes into effect because what's really going to happen is it's going to inflate office rents higher than it is. and some businesses will be able to sustain those rents including existing businesses and other businesses won't be able to sustain those rents including existing businesses. so it's lower than what we expect san
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francisco's job growth to be. but i wouldn't say everybody's existing job is going to be untouched by this just because existing office buildings don't have to pay it. >> but you are even under your own projections here, which i think are very conservative based on what we already know about the pipeline is there would be an annual 300,000 square feet of new office space. so that's a lot of job growth. >> that's right. >> way above the number that you are saying of 1,500 jobs lost. so it's a net job loss over what the expected, very large amount of growth. >> that's right. the only thing i'm saying is we are not saying the city is going to add jobs every year, because we are going to have a recession at some point. but your point is absolutely right. the amount of office space we are projecting the city to grow,
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even if this legislation passes is more than what that difference between that's a result of the legislation. so the city would continue to add office space with this legislation. >> so with the projected development, this is done on models that are based on past office growth. it's not at all connected to or analyzing the pipeline that we already have. because we know that there are very large projects that are jumping all over each other to try to take what's available under prop m which is expected to at least in the next few years, in the near term, be a lot higher than much closer to the full prop m. i think the challenge we have now is having enough, year over year, because there's way more than the 950,000 that we have available. so
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i want to be clear the analysis is not connected to the actual pipeline that is existing now. >> it's based on the past and tends to be a long term forward look assuming the city's economy is as favorable as it's been over the past 20 years for office. and to the extent that we bump into the prop m limit, the impact of projects being infeasible above that limit or rendered infeasible by this increase would not have any impact. they would simply be punted into the next year or at some future point when market conditions would improve as they would be outwithout the fee because of prop m. so i would agree the fee increase in prop m at this point in time kind of work together. >> the capacity for the market is already constrained by prop m. so if in one year you
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had 1.5 million square foot that wanted to go forward and because of this, we knock that down by 200,000 it has zero impact on that. >> that's exactly right. >> because you still can only go forward with 950. so the other question that i had was about the jobs impact and economic impact of building affordable housing. obviously this is -- do you take into consideration those construction jobs, the positive impact on how many jobs for the millions of dollars spent on affordable housing. >> we are assuming that all of the fee revenue increase goes into constructing multi-family permenantly affordable housing. the issue is that because office is so much more expensive to build, there are so many dollars, again, foregone when office
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development is less than it otherwise would have been. so the construction is also kind of a seesaw. you are building more affordable housing. you are building less offices. so from the impact of the construction industry it's actually a net negative. >> got it. and obviously there's a lot that's hard to measure here. i mean, having people who are working in these buildings who are commuting from further and further away, the impact on their ability to fill positions in the city when people can't live here, obviously the human impact of people being displaced and people on the lower income and their lives. so i think i take some of these. i take it with a grain of salt. because as i said, they are going to continue to be very significant office growth and what this is intended to do is have a little more balance in terms of how we provide for the workers
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who are either connected to those office developments or who are impacted by them. >> supervisor safai, do you have -- i'm sorry, supervisor mar questions? >> it's not really a question but i wanted to sort of echo the point that chair peskin and supervisor haney made around some of your key findings and in your analysis. in the way you present them in the report. i would agree that it's very misleading in the way that you talk about a negative impact and up to 1500 jobs lost as a result of this, the legislation. and a negative impact of up to $330 million on gdp when in fact, again as we discussed it's really a slight reduction in job growth and gdp growth in the future, especially in consideration of the
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report that we just heard from the dla office where it showed we are expecting tens of thousands of jobs to be added over the next seven years in our city. and also just almost rampant job growth has been a key part of the problem and driver of the housing affordability crisis for low and moderate income workers. and the fact that we've only created one housing unit for every .5 -- for every 8.5 jobs created. so in the future if you would consider more objective language in your findings and economic analysis. >> i think the only thing i can respond is we are always trying to talk about the difference between the situation in which the legislation passes and the situation in which the legislation doesn't pass. sometimes
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depending upon the legislation you get more economic activity if the legislation passes, and sometimes like in this case, you get less economic activity. so i'm always open for ways to describe that difference in what feels like a more objective way. but that's the task we are always trying to set for ourselves. it's very hard to project what's going to happen tomorrow. but what we are more confident of being able to say, well, this makes the economy this way relative to the baseline or a different way relative to the baseline. >> if i can hop in relative to what supervisor mar said. i appreciate what your mandated role pursuant to what the voters voted relative to what you are supposed to discharge consists of. but when you are looking at bullets on the page, and you welcomed to me constructive suggestions. if every phrase at the top of the page
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it said relative to what would be without this ordnance or potential future growth. when you read these bullets and we are involved in the business of politics. somebody will flash up on the screen, eric mar -- excuse me, gordon mar and peskin voted to lose 1500 jobs. well actually that's not true. there would have been less job growth over time. so i just think the way these things that people like you are doing your job produce can be misused. if the whole phrase allows the consumer of this information to know precisely what it means, which is less job growth which may be objectionable, i think that's -- you are looking for constructive criticism, i think that's the best way to lay it out. and this is maybe not a question
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that i'm posing to you it's more of a policy question for all of us. obviously this board is deeply committed to providing housing for people who cannot afford it. extremely low low, moderate. we are doing great on goals as to market rate, luxury, super luxury. this is all fact. but the question that i'm wrestling with relative to the data and modeling, which i totally understand, it goes up and goes down and is a backward looking science because that's what it is. i'm not interested in development for development's sake. i'm interested in development because it's going to make people's lives better. so what you basically told this panel is that we are going to make stuff more expensive
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but to what benefit? i mean yeah, there will be some short term jobs relative to the development of office. but i don't understand -- let me ask you this question. if we don't have any development at all, which is not the proposal that is before us by any stretch of the imagination, and costs don't go up, that's what you are saying. >> right. >> is the world a better place or not? >> if all development is curtailed, how would that happen? >> well, you are saying that the more office we develop people get more money but stuff is more expensive. >> that's right. >> so why are we doing this? >> let me go back and explain a little more this process of how more development makes people wealthier. i think people are used to thinking about a housing market in which there's a certain amount of housing and there's people are different levels
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of income chasing that housing. the same thing is going on in the labor market. there's a bunch of people who are housed in a way that enables them to work at jobs in san francisco. and there are companies who are willing to spend $90 a square foot a year to a developer to occupy new office space to try and hire people in an economy where the unemployment rate is less than 2 percent. that injection of demand into the labor market is going to force those companies to drive up wages. and those wage increases will ripple throughout the economy through the multiplier effect. if you, as a san francisco resident, are stable in your housing situation, you have a nice rent controlled apartment or you own your home and you are in the labor force you will be better off as a result of that office development. if, on the other hand, you are not in the labor force or in a low wage job that doesn't get the multiplier effect and let's say you are a growing family
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and need to find new housing every year or two and you are looking at housing prices going up ten percent per year, you are worse off. so the reason what i'm saying is that it depends kind of how you sit in the situation. there are a lot of people who are better off because of the way the san francisco economy has grown this decade, with i think we can all agree, a lot of job growth and not a lot of housing growth. and also a lot of growth on income on average and a lot of growth in housing prices. but there are a lot of people who are worse off and they tend to be lower income people. so i'm not minimizing the policy challenge. but if you are asking the question how is it possible that office development can benefit people, that's how. because your housing costs are stable. and that office development is going to lead employers to drive up your wages. >> ted, that was really good. thank you for that. and i guess my response, not to you this is also backwards looking. is
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that's how the job housing linkage evolved right? which is we wanted the impacts to pay for themselves. i assume. i was not around when this happened. >> nor i. yeah, i mean we speak about the value of the nexus study in our report. and i don't have anything to add to that. >> thank you. are there any other questions? i would like to ask -- supervisor safai. >> we didn't really have the opportunity to look at this. we just got this. i know you were trying to get it done by the time of this hearing. but there's a couple things i wanted to ask. i appreciate all the clarification. i understand people's response to some of the language in it. and i understand what you are trying to do. you are meant to be the objective one looking at this. one of the things i wanted to ask for you put some bullets in here is the
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question of the fact of the nexus study is different than an economic analysis right? can you talk a little bit about that just for the record? >> well, i think it's fair to say the study is looking at one way in which office development affects the economy. that there will be nor workers and they will need to be housed and it implies a situation in which they are housed in san francisco according to to their incomes. one of the things it doesn't consider which limits its value for us is it doesn't consider the growth in jobs. so some people are unemployed but become employed or there's this wage effect i talk about so people might have more income and that might affect housing affordability for some people. >> why do they come up with a number in their study? they use numbers up to $200
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square foot. what's the basis for that? >> i think i understand the basis for that. i mean i think it's not a complex methodology. they are looking at what are the types of jobs that are in offices or different types of land use. what level of income are the households those workers are in, what do they have. how do they slot in terms of low moderate very low income. what's the city's funding gap for a housing unit per household for that. and that's sort of the logic. for every job or every thousand square feet of space, you are going to have this many worker households in each income level to produce that level of housing units per thousand feet of jobs, this is the city's current funding gap. and the totals come from there. >> okay. what about the part about you had -- you did some samples and even without the increase some of these office developments
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were not feasible. and then you talk about that once market conditions improve, that there would be room for modest fee level increase? >> that was the eps study. that was not eagan. >> we were just reviewing that study as inputs to our work. but that is eps's conclusion. >> okay. >> and it's in reference to the original $10 per square foot increase. >> right. did you take any time to look at what the planning department? they came up with their own numbers. did you look at their numbers? >> i reviewed a feasibility memo from the planning department. but i'm not aware of any specific numbers that you are speaking of. i'm sorry. >> okay. so if you are not aware of that you don't need to comment on it. that's fine. okay. that's pretty much it that i have. >> thank you supervisors. >> thank you mr. eagan. and just to my colleague supervisor safai, i mean
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san francisco and many -- most, all municipalities in the state of california because of changes to the state constitution are fee-driven. and because of the nolan decision and other decisions and the mitigation fee act a nexus study is required. so the nexus study clearly established a much higher nexus than what is being proposed by supervisor haney. that is satisfying a legal nexus requirement pursuant to the law which has nothing to do with eps's study and findings of what is fiscally feasible. >> that was kind of my point. i just wanted to get it on the record. because the economist looks at pure numbers. the nexus study looks at kind of variables that can make an argument. but they are not necessarily backed up by economics. and so just trying to get to a happy medium. i know
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that supervisor haney is not proposes what the nexus study did. >> if it keeps ongoing i might. >> before we go to public comment supervisor haney said earlier he wanted public comment and then he was going to introduce amendments. i have asked him if we can actually speak to the amendments prior to public comment so the public can speak to the amendments. so supervisor haney, if you could regale us with your concept on page 19. >> sure. you have the amendments in front of you. they are on page 16 to 20. as i mentioned we've been in conversation with different stakeholders and particularly over the last week or so. so we are bringing forward some amendments that reflect some of the things that came out of those conversations. a big part of this is that we
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would be phasing it in over the next two years. this is taking into consideration the fact that there are some projects that have already received planning approval and others that have already completed environmental evaluation applications. and this fee is coming granted somewhat late in the process for them. so for -- i will say that there's been an understanding that this fee was going to be changed for some time now. for office projects that received their planning approval before this, this is what the amendments say. for office prompts that receive their approval before this ordnance was approved with condition of approval they would pay the new fee these amendments assessed a $57 fee which is double the current fee. for any project that is submitted incomplete environmental application before september 10, 2019 and has not received its site permit as the
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date of this ordinance also double the current fee. and projects filed between september 1 and january 1, 2022 a $63 fee would be assessed. for projects that file after january 1 2022, it would be the full $69.60 fee which is the one inordnance. this would give projects time to plan. we also agreed to have a provision that allows for regular review and analysis of the fee. but that's not before us today. i would be adding that before we go to the full board. i also say that the amendment similarly phase in the fee for lab use. so they would start at $38.05 per pipelines in the project and rising to $46.43 after
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january 1, 2022. >> supervisor, i totally get that and understand that. and i think support it. but you said that -- you just said when you introduced it on september 10, because when i saw this when you handed it to me, thought what is magical about september 10 other than it's the day before september 11. and you said you introduced it then but you introduced it back in may. so what's magical about september 10? >> i believe september 10 was when we introduced the new version with the current. >> oh, when we did the substitute. >> the subcutaneous substitute. we did introduce it before the nexus study and then we reintroduced it the substitute, on september 10 with the new numbers. >> got it. okay. is it okay if we open it up for comments? >> yeah.
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>> we open it up for public comment on items 6 and 7. [calling names] first speaker please. >> i object to that demonstration. that's top class, professional bull shit. demonstrations pertaining to my schematic that i demonstrated on a nonprofit developer built in the 27-story tower to house the homeless people is proof that you use a nonprofit developer, and you won't have this kind of problem. is that clear? you're demonstrating a high level incompetency by overlooking
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my demonstrations where i demonstrate if you build 188 unit apartment building complex for $57 million, it's the best damn deal on any apartment building that's being built in the city and county of san francisco god damn cisco. he's making his estimates from a developer. you're using a measurement on office building complexes with a nonprofit developer like i demonstrated compared to nonprofit developer on building apartment building complexes here in the city and account of san francisco you will have a multimillion billion dollar difference in the amount of money being spent. and you talking about that property that's owned by the city and takes years and you don't have money to develop it, that's a god damn lie. you have billion dollars in your budget
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because of donald trump. then the following year you had $12 billion in your budget. after you say you don't have the money that's an insult on people's intelligence and by the same response to last year, you had $88.2 million negative cash flow because your poor supervision and management and gives multimillions of dollars to the high-tech company twitter and nine other high-tech companies and have the audacity to wonder why you have the negative cash flow. that guy don't know what he's talking about. >> thank you sir. next speaker please. >> my name is hannah schwartz. i work for spur. thank you for the opportunity to provide input on the jobs and linkage fee. we urge you to weigh the information on financial feasibility that you have in hand as you consider this item. san francisco's jobs and housing linkage fee is one of
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several important sourceses of funding for housing in san francisco. it is not surprising the recent nexus study update justifies a higher linkage fee than in the past. however we would challenge the assumption that all new workers in new commercial buildings will live in san francisco which has long been part of the regional labor market. it is important to consider financial feasibility when setting impact fee levels. given construction costs and other dynamics it is already difficult for new development to make sense. an increase of $40 per square foot of office is aggressive and will render some office projects infeasible. this may seem appealing to some but does not serve the city's purposes. with office space in high demand, if developers choose not to build more, it will make office space more expensive pushes expenses higher and potentially displacing them to inconvenient or suburban locations.
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this further reduces the diversity of san francisco's economy. further, generating affordable housing funding is the goal then commercial development needs to happen to be able to occur in order to trigger that. spur agrees it is important for san francisco's commercial uses and employers to contribute to the city for affordable housing. updating the fee by some amount should be appropriate but it should not be a total that will have an impact on san francisco far beyond developers who will look elsewhere for opportunities. we urge you to consider this item for further discussion. >> ms. schwartz, do you know, and i honestly don't know, has spur at any point since 1997 when this was last updated, advocated for an increase of jobs housing linkage fee or been
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radio silent? i've been in and out of this job for 19 years. but i do not ever recall spur coming down here and saying hey folks do nexus study and raise it a bit or a little bit or index it. do you know? >> i'm not sure if that's been official spur adopted policy. but i don't have a record of all the letters like this that we've made. >> thank you. next speaker please. >> good afternoon supervisors. i'm getting two minutes so i'll try. one of our members had to leave so i'll give my and her comments. my comments are about local 2 who supports this legislation. i want to add by the way that as a 20 year resident of oakland which has seen residents rise 9.8 percent every year for the last three years the response by the city of oakland has been to build condos so the idea that oakland could be building its way out of affordable
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housing crisis it's actually building its way into one. so speaking of of this city, it's hard to get a living wage but they are shut out of housing. stack ton sacramento, watsonville that's where our workers commute from. the report states that 96 percent of the housing target goal for high income households has been met and 15 percent for the lowest. our members, lower income and moderate income households. our members work in the hospitality industries, a critical source of revenue and they can't afford to live in the city they have built. we need to increase the amount of resources that go to building houses for basically everybody but the liest income households. the fee is based
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on charging developer fees for their projects and this is 22 years old. we need to raise it. we support raising this fee and those who support the legislation currently i hope you are bolstered by the facts of the stories you have heard here. if you have not come around yet i hope you will hear us and support it as well. thank you. >> thank you. next speaker please. >> hi. good evening supervisors. i'm the planning and policy manager at the tenderloin development corporation. i'm here to support the update to the jobs housing linkage fee. it's a common sense way to pay for affordable housing that we know that we really need. even though some of the data we heard just pretty depressing it's heartening to see this momentum around the report being released, around the fee being updated so at least there's something to feel optimistic about in this conversation about housing in the city. in the tenderloin which is where we
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are focused it's been a microcosm of what can happen when you invite a lot of high-paying jobs in without doing much to provide more housing or secure the housing that's already available. so we've seen how painful that's been for low income folks living in our neighborhood, even people living in rent controlled housing hasn't been enough to protect them. and so just from what we've seen there we know that's true throughout the city as well. and i know everybody knows how expensive it is to build housing in this city. but i think just the numbers they are repeating and hopefully we don't get too jaded, it's about 7 the radio thousand -- $750,000 to build one unit of affordable housing. we ask the city to do everything they can to support the development of affordable housing. thank you for supporting this legislation. thanks. >> thank you. next speaker, please.
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>> good afternoon. i'm tracy at jobs and justice in san francisco. so we all know there's a huge housing crisis in san francisco and we aren't able to house our workers. we know this is most severe for the city's low and middle-income workers. and we all know who ultimately bears the brunt of this. it's development tally black and brown workers who get pushed out of their homes and san francisco. we already heard over the next six-years san francisco will be short more than 15,000 units for low income workers and their families. where are these hard working people supposed to live? this didn't happen by accident. we have a housing crisis but it's a crisis of our own making. for too long the planning department and city agencies have been chasing the holy grail of job growth and allowing endless office development while turning a blind
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eye to workers. supervisor haney, thank you. your legislation is important. we need resources to build housing that addresses the problems in san francisco. the fee covers only a small part of the cost of affordable housing that development makes necessary. developers must do their part and pay this increase so we can house low and middle-income workers in san francisco. this legislation is a really important continued step towards housing workers, homeless people and helping organizations acquire more land for affordable housing. so thank you to the supervisors who support it and we urge you to continue finding more resources to build affordable housing for people in san francisco. >> thank you. next speaker please. >> supervisors. shannon. we are crazy enough to cry try and build both office and housing in this city. from a housing standpoint
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we've been 1500 units of market rate housing, 600 units of affordable housing. and we have another 2,000 units in the pipeline. we've done projects at 25 percent, projects at mission rock at 40 percent affordable. jobs housing linkage fee needs to come up. but we need to do that in moderation. we failed to build enough housing in this city both at market rate and affordable housing. but to increase this fee too much or too quickly will drive jobs to oakland and to the peninsula. i live in the 2700 block of california and every morning the buses are idling outside my house to take workers who live in san francisco to other jobs. do we really want to push the fees where we push the employers out of san francisco where we get none of the benefits. the projects in central

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