Michael Theriault headshot

The many tower cranes weathervaning in off hours in the winter winds give no indication of it, but we in the Building Trades are entering a dangerous moment for our work in San Francisco.

The San Francisco Business Times reported 9 December that rents asked for a one-bedroom apartment in the City, while still highest in the country, had dropped 4.6% recently, and then 10 December that more than half the housing experts in a recent Zillow survey believed housing prices here were either in a bubble or at risk of entering one.

At such a moment we should not underestimate the propensity of Capitalists to stab each other in the back, and to call this “doing business.”

No doubt residential landlords and some developers who have residential projects that either have completed or are near completing the entitlement process at City Hall are contemplating the Business Times reports and looking for ways to curtail construction of new units that could compete with theirs and perhaps accelerate rent decreases.

This is what happened in the office market when Catellus sought an exemption through 1990’s Proposition I to 1986’s Proposition M. Proposition M limited office construction. Proposition I would have allowed Catellus to build in Mission Bay without Prop M’s limits.

In 1990 we were entering a recession and a decline in office demand and rents. Walter Shorenstein, who owned much of the Financial District’s office space, did not want competition from new space to reduce the rents he could ask, and so he funded the campaign that defeated Prop I. The Mission Bay project, which is honored in this month’s Organized Labor, was delayed more than a decade.

Many Building Trades workers lost homes and families in that recession. Likely not much would have been built in Mission Bay during the recession even if Proposition I had passed. Anything built there, though, would have been a godsend to us.

In the middle of the last, “great” recession, we were campaigning for approval of the condominium development at 8 Washington, which had a real prospect of being built even in that downturn. Boston Properties helped fund a ballot measure that killed the project. 8 Washington would have blocked views from offices on the lower floors of Boston Properties’ Embarcadero Center. In a recession, this could have meant lower rents and even vacant offices.

I would not hesitate to call the late Walter Shorenstein and Boston Properties friends to the Building Trades. Shorenstein always built and performed tenant improvements exclusively with union-signatory contractors; so, also, has Boston Properties for as long as I can remember.

Faced with challenges to their profits, however, both bankrolled efforts opposing development and our work.

The election of Aaron Peskin has returned to the Board of Supervisors a supposed “Progressive” majority – that is, one more inclined to challenge new development, for better or worse, than accept it. We may see current developers who are our friends and some who are not join in efforts to limit new housing construction, whether directly or through new requirements so onerous as to have the same effect. Developers may even court “Progressives” and quietly suggest possible actions.

One way this might play out is through a ballot measure revising the “grand bargain” of 2012’s Proposition C, which amended the City charter to allow repurposing of debt capacity from retiring Redevelopment bonds for new bonds to fund affordable housing in exchange for reducing requirements for contributions of affordable housing by new development.

Few among us in the Trades would argue against requiring developers to contribute the maximum possible for affordable housing while leaving them a reasonable profit and preserving the financial feasibility of their projects.

But how is this maximum to be figured? Can it be the same for all types of construction and sizes of project? The same for mixed-use projects as for projects more purely residential? The same in all neighborhoods? How will site conditions – a high water table, say, or steep slope – affect it? How much will be allocated to housing for the poor, and how much for working-class wage earners such as ourselves? What is a “reasonable profit”? How much transparency can we require of developers?

The mayor’s office is assembling a committee to work through questions such as these with an eye toward a charter amendment revising and updating the “grand bargain.” I have been invited to participate.

It would be far too easy, however, for someone ambitious in the “Progressive” majority to ignore all this complexity and name a high requirement that plays well for voters, that puts his or her fellow Progressives in the position of going along or being labeled (God forbid!) “Moderate,” that can be tagged with a punchy campaign slogan, and that kills not just our work but the production of housing that will allow us and our families to remain in the City.

If this can be done in a way that protects some developers at the expense of others, we should not be surprised to glimpse the flash of knives. Business, after all, needs to be done.

Organized Labor


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