PRO & CONS – Prop P – November 8, 2016

PROPOSITION P- COMPETITIVE BIDDING FOR AFFORDABLE HOUSING PROJECTS ON CITY-OWNED PROPERTY

Ordinance

Placed on the ballot by a petition signed by the City’s registered voters.

Requires a simple majority vote for passage.

THE QUESTION:

Shall the City be prohibited from proceeding with an affordable housing project on City-owned property unless the Mayor’s Office of Housing and Community Development receives at least three proposals; and shall the City incorporate into City law the most current criteria for selecting a developer for affordable housing projects on City-owned property? 

BACKGROUND:

According to the City Planning Department, San Francisco is projected to need 70,000 new housing units by 2030. In 2014 approximately 66% of the City’s voters passed Proposition K, making it official City policy to build or rehabilitate 30,000 homes by 2020, with at least one-third, or 10,000, being affordable to low and moderate income households.

The City has various programs that provide financing to developers to build new affordable housing and rehabilitate existing affordable housing (affordable housing projects). The Mayor’s Office of Housing and Community Development (Housing Office) administers most of these programs.

When the Housing Office has funds available for an affordable housing project, it posts a description of the proposed project on its website and invites developers to submit proposals. Under current practice, the posting describes the criteria used to select a proposal and sets a deadline for submissions. The Housing Office may then select a qualified developer to proceed with an affordable housing project even if it receives fewer than three proposals.

THE PROPOSAL:

This initiative would amend the City Administrative Code to require that the Mayor’s Office of Housing and Community Development (MOHCD) receive at least three bids for any affordable housing project using City funds before proceeding with that project.

Proposition P would also update City law with the most current criteria for selecting a developer for affordable housing projects on City-owned property.

A “YES” Vote Means: If you vote “yes,” you want to prohibit the City from proceeding with an affordable housing project on City-owned property unless the Housing Office receives at least three proposals and you want to make most current selection criteria part of City law.

A “NO” Vote Means: If you vote “no,” you do not want to make this change.

ARGUMENTS IN FAVOR OF PROP P:

  • This Proposition would save City resources. When the City’s affordable housing projects do not require three competitive bids, we may not be getting the lowest prices. Market-rate developments go through a competitive bid structure. As a result, the cost of building an affordable housing unit can exceed the cost of a private party building a luxury unit.
  • This Proposition would require three competitive bids for all Affordable housing projects, This will help prevent the City from developing favored, crony relationships, instead of those based on merit and cost, as well as prevent the City from being sued.

ARGUMENTS AGAINST PROP P:

  • Most Housing Office projects receive three bids. However, Proposition P could result in a long wait for the third bid, which may indefinitely delay the project and the much-needed housing. The Mayor’s Office of Housing stated that if Proposition P had been law, over 1000 housing units would have been blocked from being built.
  • This legislation incorrectly assumes that developers submit bids with all final costs. Instead, they create cost estimates for a project. The City conditionally approves the project, gives the Developer time-sensitive entitlements to proceed, and each part of the project is competitively bid. Also, this Propsition would require choosing the “best-value” housing bids, which could result in slum housing.

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