tv [untitled] August 30, 2012 2:37pm-3:07pm PDT
model. if i get the overhead projector for just a second. thank you. not sure if you can see that totally, but the members i just called out in 2006 -- these are the same members who are on the working group. today, we have the spirit of cooperation, which unfortunately, we did not have in 2009. again, commissioners, thank you. commissioner fong: thank you. >> good afternoon, commissioners. department referenced seven projects in the summary that were submitted for development since the inflationary housing program was expanded to include the five to nine year project -- since the inclusionary housing
program was expanded. we concluded that only one project would comply. it would appear that since the program was expanded in 2006 to include the five to nine new projects, it has not provided one single on-site bmr unit. we have repeatedly requested a list of the 16 projects in the pipeline proposed to build the 107 units, and as of today, we have not received any information. staff did confirm that the only project proposed in the category were those in the mayor's office of housing register. i will now address what we see as the socio-economic impacts of the five to nine unit legislation. the five to nine unit builders are perhaps best categorized as comparable to small, traditional, mom-and-pop neighborhood businesses. unlike most of their large-scale counterparts, they employed locally, pickaxes locally, support local supply companies
and higher local tradesmen. they spend their money in local restaurants and grocery stores and send their children to local schools. they are part of the fabric of the city. -- support local supply companies and higher -- hire local tradesmen. the small to medium-sized builder is seldom perceived or treated with the same measure of support as small businesses. part of the american dream is to prosper, to climb the ladder, and at cheap. in the construction industry, people start out working for someone else on a job site. after winning their trade or skills, might move on to remodeling jobs. the five to nine projects are a crucial part of this latter, and by impacting this category, you are taking a critical wrong out of the latter, thereby prohibiting advancement in the construction field -- you're
taking a critical rung out of the ladder. thank you very much. >> good afternoon, commissioners. i am kevin birmingham. i am a realtor, but more importantly, i am a native san franciscan. i have watched many of my friends and people in my family moved out of san francisco because there is an affordable housing problem in this city. i am getting on the board of realtors, and i am on the housing authority board committee, and we are bringing money to groups such as home ownership sf because i do believe in it. i think you need to look at -- the way to keep families in san francisco is what your building, and what we are seeing a lot are either small projects or very
large projects. these large projects are on major transit corridors, and i do not know many families that want to live on van ness. the smaller projects would be in more traditional neighborhoods where families want to live, and that is what we need. another thing to take into consideration is with the inclusionary house a requirement, these projects do not pencil out. it is not that people dothe len- is still very tight throughout the nation. if housing does not fit it, it is not going to get built. if you want to help families, please drop this inclusionary housing requirement. it is set up to benefit large corporations from out of state, with wall street money. it punishes the small builders
who are trying to build homes for families. thank you, commissioners, and have a great day. >> good afternoon. my name is james. i am also a real estate broker and the owner of fingered properties -- vanguard properties. many of the buildings in question, which kevin mentioned, simply do not pencil. the lending requirement itself is so stringent. the way a small construction community-bank pop-up -- community-bang-type lender looks at this, the inclusion very housing makes it look tough. what otherwise would be profitable for the developer --
it cuts down to very, very little. they are simply uncomfortable with the project. we see that time and time again, for the only lenders doing these projects. even if a project is approved, and i know there are several grace mentioned, to get the financing from local community banks is almost impossible, and this is the reason. we are running an uphill battle, and it is not going to work. we need this legislation to pass. thank you for the consideration. >> good afternoon, members of the planning commission. i also work at vanguard properties. i have done this seven years, and things have changed. in the last two years or so, since this has changed, we do a lot of work with small developers. we go step-by-step, from the beginning to the end.
when they first get the lot, we look at what the cost is to build, the cost to sell, what the sales price will be, and the net profit to the developer. having fun inclusionary unit -- an inclusionary unit at five to nine does not pencil out. none of these have been built. we have a large development downtown and in the transit corridors. what this will do is to divide small builders, who give these to the planning department, the building department, sales transfers when they sell -- everyone benefits. we get new housing built in the neighborhoods where people want to live. i want to urge you to support
this legislation. thank you. president fong: i am going to go ahead and call some names. brett gladstone, paul driscoll, jim driscoll, and steve mcelroy. >> i am the president of west corp's -- westcorp construction. we are based in the mission district. we have been in business almost 25 years. in 2000, we did a five unit building on 25 page street. in 2004, we didn't 8 unit building -- did an a unit building. in 2006, we did a nine unit building on laguna streets. it was successful, barely.
our margin was small. since then, that is it. the new inclusionary housing has killed us in the industry. we have lost something like 40% of our capacity. all of our employees are here in the city. there are three of us together. we pay city taxes. we are not new york developers. we are small guys. this is something i urge. it really is a great idea. i urge you guys to pass this legislation, because obviously, it is not working. we do other projects, like james said. it does not cancel out. the banks will not finance these projects with inclusionary housing. thank you. have a nice day. >> good afternoon, commissioners. stephen mcelroy.
i cannot believe it was six years since we were here to talk about this issue before. i guess ti fun, here in the cit. it has really been a fun time for small builders, as you can see. i think this year is the perfect example of the straw that broke the camel's back. we were here. we argued against this. it just turned out that the economy took a huge dive on top of the legislation that was brought into play. we were all here. we all warned that none of these buildings were going to get built, the 529 -- five to nine unit buildings. none of them did get built. anyone who did look at one of these projects was forced to run
away from them, because there was no way you could make them work. let us move forward and try to get this sector of the industry going again. while we are at it, let's make sure there are no new fees added on to these projects. let us see if we can get them off the ground, and then talk about that. thank you very much. >> good afternoon, commissioners. i am with rba, and i have a small electrical contracting business here. since this ordinance was implemented in 2006, we have not even estimated on a project this size. as all the developers would tell you, it just will not pencil out. from personal experience, it has
been tough in the construction industry. this ordinance did not help, but you had the recession after that. this is not a freebie. it is just something that makes economic sense. if you can get these projects rolling, it will get people back to work. it is good for business and good for the city. it brings property tax and people in that range of income, gives them places to live in the city. when the group got together, there seemed to be a broad agreement to implement this. if we can do it, i think it will be good for everybody involved. thanks, commission. >> good afternoon, commissioners. my name is kieran buckley. i am a little developer in san francisco. we started out, a group of us,
and we set to remodeling houses. we put our money together and we grow over time. we got hit pretty bad when the economy turned barren. we are back to remodeling single-family houses. the next thing we would be looking at is moving up the ladder again, which would include these types of houses, if they pencilled out. with the way it is, it would be difficult to do that. i think it is unfair to compare us to the wall street guys downtown that do the 100 unit projects. a few years back, before this came out, we had an 8 unit pending.
in the last six years, we could not have built that same a unit building. -- eight unit building. thank you for your time. >> i am a small builder, an endangered species in san francisco. since the five to nine ordinance was put in six years ago, of the 10 units i have built, none were those buildings, because they do not pencil out. i was recently forced to walk away from a purchase agreement for five contiguous lots in san francisco, after planning staff informed me that despite being rh-2, there would be seeking
below market units. there will be nothing built in that area until such time as the ordinance is supported. the legislation in its current form does not work. the market has spoken. there have been none of these units built. it needs to be fixed so we can all get back to work and start producing responsible infill housing in our neighborhoods. commissioners, thank you for your time. president fong: we are about halfway through the cards that have been submitted by similar comments. of course, we want to hear everybody, give everybody the opportunity. but we are getting a lot of repetition in the comments of support. maybe i can ask those who share the comments of the last 14 speakers to raise their hands. if you want to speak, i will give that opportunity. there is a group consensus, and you want to demonstrate that consensus. thank you very much. we will keep going through cards
and keep calling them. suzanne greg, michael cassidy, steve coury, joe duggan, leo cassidy. >> good evening, commissioners. i am a residential builder and small general contractor in san francisco. i just want to add my name and support the elimination of affordable units from housing under 10 units. it has been a hard time. it would be great to do this to spur on the economy, and really help these builders, because they need it. thank you.
>> good afternoon, commissioners. i am a small builder with the city. sometimes, it hurts when you are right and it hurts when you are wrong. in this case, to explain that, we came here years ago and had the same kind of hearing, and explained it over and over. you keep adding more fees and more fees to the small builders. you are going to kill this part of the industry. and we were right, and it hurt us. the city did what they did, and they were wrong, and that hurt too. as for the wall street, it's, the only thing i know about the wall is builders have their backs against the wall now, because of stuff like this that
has happened. you have a great opportunity to change this and how the builders, who, in turn, will help the city with all the taxes they pay, with all the guys that work for them, with the trickle- down. i hope you will support this. actually, 10 is not my number. i would like to see 20, but that is not on today's agenda. thank you. >> good afternoon, commissioners. i am a small builder in san francisco. i support this ordinance. i think this is great for san francisco, the city, families, of the building community, as mike just said. i urge you to pass this ordinance. thank you.
>> good evening, commissioners. my name is leo cassidy. again, i am going to reiterate some of the same words that were already said a little bit. it will be short and sweet. we were here in 2006. we knew it was a bad idea then. this is about putting people back to work. it is very simple. it is what we need to do. i believe this was designed in 2006 for downtown developers to get a free ride, because there were so many units in the pipeline that would clutter the amount of units that would be for sale in the market. anyway, that is pretty much it. put people back to work. thank you. president fong: i am going to call a couple more names. pete brannigan, tom walsh, james warrow, and mr. ryans.
>> good afternoon. my name is redmond. i am a builder and developer in the city. i did some of those buildings in the early 2000's. to put it in perspective, we need to talk about economies of scale. when you do a sewer connection for a nine unit building, or you have townhouses like i did -- i had to do a sewer connections. you can do a sewer connection for a 60 unit building for the same price as a sewer connection for any of those buildings. i had put in a fire pump, because there was not enough pressure to go 40 feet up to the top floor of my unit. i have put in a fire pump, $35,000 to add to the line into the building.
in a fifth unit building, the same price. if you look at pg&e, there is very little difference. that is what makes the difference in those buildings. i didn't 8 unit building on south van ness -- i did an eight-unit building on south venice. if there had been an affordable unit, i would not have been able to do it, simple as that. look at what has been completed since 2006. that says it all. thank you for your time. >> good afternoon. my name is ciro hackett. i am here as a business owner and a tiny part of the construction business. i do not want to waste your time on what i have written here, since people have spoken today. i will say i am in the restaurant business. i see people here i have not
seen in my restaurant for many years, simply because they are not making money anymore. this is trickle-down economics. the money is not being generated in the community. it comes down to me and my fellow restaurant owners. it is a different aspect of it. we are suffering. we are not downtown, reaping the benefits from twitter and social media. we depend on the people in our neighborhoods, who work and spend locally, and educate their kids locally. i and the other people in my business hire many workers in this city, and they are all affected by this legislation. i urge you to support it, please. thank you. >> good afternoon. thank you. my name is john roche, with paragon realty.
i have lived in that -- in san francisco since 1976 and have been in the real-estate business since 1985. i support this legislation. basically, following up, i think the small builder is part of the fabric of the city, just like small business owners. on the consumer side, the renter and potential home owner field the smaller building is more conducive to their lifestyle. i think the new, bigger buildings are great. they will take pressure off the housing stock, and hopefully help with the pricing. i do think we need the small buildings to support the fabric of our local neighborhoods. thank you very much. >> good afternoon. my name is pete brannigan.
i work for a small real-estate company, and represent a few small builders in san francisco. i know that their business plans depend on growth, as do the number of jobs they provide to san francisco residents, and a living as they provide to families, companies that supply them, and subcontractors employed in the same project. like this gentleman said, jobs in san francisco are down from the average in california. i urge you to make building housing in san francisco affordable by passing this measure. thank you for listening. president fong: the commission
appreciated everyone's comments. because we have been sitting here for three and a half hours, we are going to take a little break, and resume in 15 minutes or so. >> you were in the midst of public comment for item number 14, threshold for application of inclusion mary -- inclusionary affordable housing program. i will ask the gentleman in front of the door to move to the other side of the room or find a seat. you create a fire hazard. thank you. president fong: i have one additional announcement before i call speakers. that is there has been a little more time needed, for technical reasons, on the item for 55 laguna.
so we will hear item 16 before items 15 a and b. [groaning] president fong: i knew that was not going to make you happy. i am sorry to hear that. we are going to call some names for public comment for item 14. tom walsh, and james warrow, suzanne greg, declaire dwan, and greg redstone. >> i will be the last speaker, actually, from our side. i want to reiterate a few points that have been made already. i was a member of the housing trust working group. i would like to reiterate -- in
1992, the threshold was 10 units. in 2006, it changed to five units. the report studied 100 units, which is 20 times larger than a five unit building. i would just like to make that point. one unit was built since the legislation was changed in 2006. the staff report alluded to the economy, but from july 19, 2006, through september 2008, when lehman brothers collapsed, there was two years of a housing boom in san francisco. i know project scott submitted. -- i know projects got submitted at that time. after all the information, i think it is time to approve this. i would say we need to give san francisco small builders and
equal opportunity, a level playing field, and not burden them with excessive fees, which make it prohibitive to build. i am opposed to the pro rated fee. look at the working group sheet, and let all of us roll up our sheets -- our sleeves and get this approved by the voters in november. let us get some housing built. thank you for your support today. president fong: thank you very much. any additional speakers? ok, the public comment is closed. commissioners? commissioner antonini: thank you. i agree with virtually everyone who spoke, and i think this is important legislation. i know we can opine on it today. it has been presented that it is hard for so many. it makes sense, logically, that
it is hard to absorb when you have fewer units built. it is easier when you have more units to spread the cost over. we had 50 leaders from the housing industry who came together, which was very impressive, because often these leaders are at odds with each other, and they were able to agree on things. i think that is impressive. also, this particular size, five to ten units, is very desirable for buyers, because you are in a group where, if there is a condominium unit, you have a smaller number of members and often have lower hoa fees. it makes it more attractive for buyers to have that variety to choose from. as has been pointed out, a lot of the