Low income housing

On Tuesday , in a dramatic one-two punch, the state Department of Housing and Community Development announced that it was initiating a review of San Francisco’s housing approval and permitting process, an intervention meant to cure the city of its addiction to the endless debate, legal wrangling and community process that has made the city dead last in California when it comes to approving projects in a timely manner.

In a related matter, HCD also told the city it had to go back to the drawing board on its so-called housing element, that once-every-eight-year residential development plan every California city must provide as a road map to reaching state housing goals. The housing element must be certified by Jan. 31 of next year.

While the investigation of the city’s housing practices will likely take more than a year, the housing element is more pressing. San Francisco planners have five months to sell state housing officials on one simple idea: that the city has a realistic plan to build 82,000 housing units by 2030.

That effort will in part succeed or fail based on the city’s ability to convince the state that the 72,000 units in San Francisco’s pipeline can be converted from architectural plans to actual apartments.

In other words: How real is the plan to redevelop Parkmerced, slated for 5,600 apartments, which sits dormant more than a decade after it was approved? Will the dream of the 12,000-unit community at the Shipyard and Candlestick Point — stalled due to economic downturn and a scandal involving the clean-up of toxic waste — ever get back on track? What about the 1,700 unit at Schlage Lock, on the Brisbane border?

While the HCD had kind words for much of the city’s housing element — saying it “proposed bold and meaningful actions to reduce barriers to higher-opportunity neighborhoods” — it suggested that city planners were perhaps over-reliant on the pipeline.

In a letter to the city HCD said city planners must come up with a Plan B in case those mega-projects don’t work out. The element directs the city to come up with “alternative actions” — including additional rezoning — “if assumptions are not realized.”

Laura Foote, executive director of YIMBY Action, said HCD had “poked a hole in the city’s pipeline capacity claim.”

“San Francisco is claiming credit for 35,000 units that are in the pipeline but functionally dead,” she said. “HCD is saying, ‘No the pipeline is imaginary.’ ”

Chris Elmendorf, a professor at UC Davis who focuses on housing law, said San Francisco planners are not being realistic about how many of the approved units will materialize.

“The city is using really far-fetched projections to avoid to committing to rezoning,” he said. “The reality is a constellation of city requirements and fees and mandates have cumulatively made development economically infeasible in most of the city.”

Elmendorf said the city should “analyze the accumulative effect of all these development restrictions and come up with a plan” to make projects work. That could involve deferring fees or lowering affordable housing requirements.

Planning Director Rich Hillis said the notion that the pipeline is imaginary is misleading. Big, multi-phased projects require years of planning and infrastructure, but once vertical construction starts — actual buildings rising from the ground, as opposed to streets or sewer lines — production can be rapid. That was the case with Mission Bay, which went through decades of debate, multiple economic cycles and doubts about its viability, before taking off. That neighborhood has produced more than 6,000 housing units.

And some of the city’s most complicated and long-stalled mega-projects have finally started rolling. On Treasure Island as many as 1,000 units should be complete or under construction by the end of the year. Infrastructure work is under way at Pier 70 and the adjacent Potrero Power plant. And 537 apartments are under construction in two towers at Mission Rock, a multi-phased development across from Oracle Park.

Even without the pipeline, plans to rezone transit corridors around the city would add about 20,000 units.

“Pipeline or no pipeline, we are being aggressive in our housing element to add capacity, particularly in high-resourced areas that have not seen much housing,” Hillis said.

Rudy Gonzalez, secretary treasurer of the San Francisco Building Trades Council, said that he doesn’t have a problem with the state’s aggressive stance but said the city should force property owners to act.

“I’d like to take it one step forward and put a timeline on breaking ground,” Gonzalez said. “Cracking down on approvals sounds good, but let’s be clear that entitlement doesn’t equal production.”

Meanwhile, the state’s push to force San Francisco to speed up approvals and plan for a lot more housing is an unwelcome intrusion for city progressives who have long used the politicized process to squeeze developers for more low-income units, open space and funding for nonprofits.

Lee Hepner, an attorney for the American Economic Liberties Project and former aide to Supervisor Aaron Peskin, said the state is “beholden to developer interests who are maximum profit at any cost.”

“They would be better off directing that energy to cities like Milpitas and Cupertino that are way less dense and adding thousands of jobs while failing to build the housing to house those workers. That burden is put on San Francisco.”

He added: “We are exceeding our market rate housing goals by a long shot, but that doesn’t seem to be enough for the state. It’s frustrating.”

In a letter to HCD, Supervisor Dean Preston criticized the state for appearing to “conflate all forms of housing, a favored framing of the luxury housing developer lobby, but not what one would expect from an affordable housing agency.”

“There is certainly a discussion to be had about luxury housing development in an expensive city like San Francisco, but it would seem strange if that were your priority at a time when most of the working class cannot afford a roof over their heads,” he said.

Preston called the state’s approach “neo-liberalism at its worst.”

While San Francisco will always receive heightened scrutiny as the economic center of the Bay Area, its housing production — affordable and market rate — has actually been significantly better than other parts of the region.

In the current housing cycle, San Francisco exceeded requirements “above moderate rate” goals by 39%, producing nearly 18,000 units of market rate housing. On affordable housing, the city fell well short of its goals, producing 4,700 units of “low income” and “very low income” units. But that output — 33% of its very low income goals and 58% of its low income goals — far outpaced other regional hubs. San Jose, for example, produced 4% of its low income goals and Oakland came in at about 12%.

If the city doesn’t get state approval for its housing element it risks losing billions in state affordable housing money. Supervisor Ahsha Safai said that his fellow board members will have to recognize that.

“We have supply-side deniers in our city, and many on the board of supervisors, who believe at the end of the day there will be no consequences for our actions,” he said. “And now the state is saying, ‘There will be consequences.’ ”

“This is a fabulous bill we’re going to pass,” House Speaker Nancy Pelosi, D-Calif., told The Washington Post in an interview Thursday before the vote. “It’s not anything that anybody, three months ago, would have said is a possibility. But it is, and we’ll have a good strong vote, send it to the president . . . and the clock will start ticking.”

The bill, known as the Inflation Reduction Act, includes the largest-ever single investment in combating climate change. Democrats say the roughly $370 billion burst in spending will allow the United States to lower emissions 40% below 2005 levels by the end of the decade. The proposal also includes new programs to cap and lower seniors’ drug costs while sparing about 13 million low- and middle-income Americans from increases in their insurance premiums that otherwise would take effect next year.

“We’ve been fighting for decades – for decades – for the ability for the [government] to negotiate for lower prices,” Pelosi said, referring to the efforts to make seniors’ medicines more affordable.

“We cannot undervalue what this legislation does [over] what it does not do, and families will be very affected. The kitchen table issues are about the cost of health care.”

Democrats hope to fund the package through changes to tax laws, including a new minimum tax on some billion-dollar corporations that currently pay nothing to the federal government. They also seek taxes on companies that buy back their own stock, and money to help the Internal Revenue Service pursue tax cheats. Party lawmakers say the measures are enough to cover the costs of their bill and reduce the deficit by about $300 billion, though they have yet to furnish a final fiscal analysis.

Democrats need only band together in the House to overcome fierce and likely unanimous Republican opposition, having prevailed in a successful, party-line Senate vote on Sunday. The bill itself was forged in that chamber, after Majority Leader Chuck Schumer, D-N.Y., brokered a long-elusive deal with Sen. Joe Manchin, D-W.Va., last month.

Rep. Rosa DeLauro, D-Conn., the leader of the House Appropriations Committee, described the economic package ahead of the House vote as “historic legislation that really deals with issues that haven’t been dealt with for years.”

But House Republicans have sought to mount a stiff, united front against it anyway. They have attacked it as a tax increase on families, even though the bill does not raise individuals’ rates. And they have said it will worsen inflation while resulting in intrusive IRS audits, even though some of the money is focused on improving the agency’s well-known deficiencies.

Some Republicans have suggested they could weaponize the House’s procedural rules to slow the debate on Friday. GOP lawmakers did that in November, when Democrats considered their larger package known as the Build Back Better Act. While the House ultimately adopted the bill, the vote came after Minority Leader Kevin McCarthy, R-Calif., seized on the speaking privileges afforded to party leaders – and held up the chamber floor for more than eight hours.

“Right now, we’re trying to defeat the bill,” said Rep. Steve Scalise, R-La., the House minority whip, in an interview before debate began. “If they vote for it, they know good and well it’s going to hurt low- and middle-income families.”

Reacting to the GOP opposition, Pelosi said the looming vote would offer Democrats a “big contrast” with their political foes entering this year’s midterm elections. She later added: “This is the path we’re on. The Republicans want to take us off this path.”

The House vote Friday marks the culmination of a long and winding debate that began last spring with the release of Biden’s blueprint, dubbed the “American Families Plan,” which marked the start of a broader Democratic effort to rewire the economy in the wake of the pandemic. The party’s proposal eventually would become known as the Build Back Better Act, borrowing from the president’s 2020 campaign slogan.

House Democrats adopted the roughly $2 trillion measure in November, despite months of warfare between the party’s own members. Liberals had sought a vast piece of spending legislation that greatly grew the role of government in Americans’ lives, while moderates urged more fiscal restraint. The tension at one point prompted Biden himself to intervene in October with a rare appearance on Capitol Hill, during which he urged unity around his economic agenda.

Yet their bill would never even see a vote in the Senate, where Manchin said last winter that he could not support spending so much given economic and geopolitical uncertainty. The moderate West Virginian’s opposition infuriated liberal lawmakers, who felt the party’s agenda – and in many ways its political prospects – had been hijacked by a single member who did not reflect the party’s broader views.

Even in its more scaled-back, renamed form, Democrats this week have hailed the Inflation Reduction Act as urgently needed and immediately beneficial to families in financial need. Pelosi said in the interview Thursday that she had emphasized to members that they should “respect the bill for what it does” rather than “make judgments about it for what it does not.”

The House speaker said the bill belonged to a longer line of recent legislative accomplishments, including the passage of a $1.9 trillion coronavirus relief package last year, the $1.2 trillion bipartisan infrastructure law approved months later, and action to deliver new restrictions on guns approved after the school shooting in Uvalde, Texas, in May.

“There’s been a stranglehold of the gun industry, the pharmaceutical industry and the fossil fuel industry on Congress,” Pelosi said. “And right now, we have changed that dynamic. The leverage is now with the people’s interest, not the special interest.”

‘She was living on sugar water’

The bill contains billions in incentives for clean energy — while also offering renewed support for traditional fuel sources such as coal and natural gas — as well as big boosts for national parks and health care for low-income people and coal miners with black lung disease. That’s no accident. Most provisions were included as the price the Democrats had to pay to win the all-important support of Sen. Joe Manchin of West Virginia, who says they will help folks back home.

John Palmer, a 67-year-old retired coal miner from Monongah, says it’s about time.

“We ain’t had too many people care about us,” Palmer said. “We’re always out there fighting for different things. Everybody’s got an agenda, and our agenda was for working-class people. That’s what everybody’s agenda should be, but it’s not.”

Manchin, a conservative Democrat who chairs the Senate Energy and Natural Resources Committee, was a key vote needed to pass the spending package in the 50-50 Senate and send it to the House, where lawmakers are expected to take it up Friday.

The bill invests nearly $375 billion to fight climate change, caps prescription drug costs at $2,000 out-of-pocket for Medicare recipients and helps an estimated 13 million Americans pay for health insurance by extending subsidies provided during the coronavirus pandemic.

If those subsidies are not extended, West Virginia is among the states that will lose the most support for people paying for health insurance, according to the Urban Institute, meaning thousands of people could lose coverage.

Kelly Allen, executive director of the West Virginia Center on Budget and Policy, said the provision in the bill to cap insulin prices at $35 a dose for seniors will make a big impact in the state, which has the greatest number of people living with diabetes per capita in the country.

“There are people who ration insulin, or who have to make decisions between getting groceries and paying for a drug cost, or paying rent and paying for drug costs,” she said.

But Manchin, who has received more campaign contributions this election cycle from natural gas pipeline companies than any other lawmaker, won concessions on the climate front. The bill includes money to encourage alternative energy and to bolster fossil fuels with steps such as subsidies for technology that reduces carbon emissions. It also requires the government to open more federal land and waters to oil drilling.

In a statement, Manchin said he worked with colleagues to craft the “most effective way” to help West Virginia. He declined to be interviewed for this story.

Manchin also has proposed a separate list of legislation to speed up federal permitting and make energy projects harder to block under federal acts. As part of an agreement with Democratic leadership, he specifically asked that federal agencies “take all necessary actions” to streamline completion of the Mountain Valley Pipeline, a project long opposed by environmental activists.

The 303-mile (487-kilometer) pipeline, which is mostly finished, would transport natural gas drilled from the Appalachian Basin through West Virginia and Virginia. Legal battles have delayed completion by nearly four years and doubled the pipeline’s cost, now estimated at $6.6 billion.

Chelsea Barnes, legislative director for Appalachian Voices, an environmental organization that sued to stop the pipeline, said there’s a lot to be excited about in the legislation. But she deemed Manchin’s concessions to the fossil fuel industry “unacceptable.”

“We’d really love to just be celebrating,” Barnes said, “but we know that there’s so much in the bill that is also going to hurt communities.”

Barnes said the bill contains many provisions her organization has wanted for a long time, such as extending and increasing tax credits for clean energy projects, with bonus credits for low-income communities and for communities where a coal mine or power plant has closed.

That means there’s going to be a higher incentive for clean energy developers to set up shop in Appalachia. She said many people she’s worked with on clean energy projects are not excited to see coal jobs disappear but are excited to be part of “the energy economy of the future.”

“They like the idea of retaining that energy-producing heritage, and I think there’s a lot of pride in continuing that role in our society, in our culture,” she said.

Still, she’s concerned about support for carbon sequestration and storage projects in the bill, saying they haven’t been cost-effective compared with clean energy alternatives. She fears that might prolong the life of power plants.

She also said permitting reform in the bill amounts to “permitting destruction” that would damage the environmental review process and silence residents’ voices.

The bill also contains millions of dollars for tourism, long seen in West Virginia as a way to boost the state’s beleaguered economy. West Virginia is home to multiple national parks, including the New River Gorge National Park and Preserve, which opened in 2020.

The National Park System would receive at least $1 billion in the package to hire new employees and carry out projects to conserve and protect wilderness areas.

The bill also permanently extends the excise tax on coal that pays for monthly benefits for coal miners with black lung disease, which is caused by inhaling coal dust.

Since the program’s inception, more retired miners in West Virginia have received black lung benefits than any other state, with 4,423 people receiving benefits last year. But the fund is $6 billion in debt.

For decades, the tax has required annual legislative approval. Twice in recent years, federal lawmakers failed to extend the tax, most recently for this year. That cut the tax by more than half — a windfall to coal companies that put benefits in jeopardy.

The fund is needed more than ever, United Mine Workers of America Chief of Staff Phil Smith said, with miners being diagnosed with black lung at younger ages than before because of higher amounts of silica dust in mines — something that’s not regulated.

Palmer worked underground for 40 years at the Federal No. 2 Mine in Monongalia County, which went bankrupt and shut down shortly after he retired a few years ago. His father, a coal miner, died of a lung disease, and his younger brother also has black lung. He said knowing the money will be there is a “relief” and that miners earn the benefit — an average of just over $700 a month — when they risk doing dangerous work.

“We went down in these holes that kept the lights on for everybody,” he said. “We’re the ones sacrificing our bodies.”