S.F. mayor calls for huge boost in affordable housing funds

S.F. Mayor Ed Lee's proposal would add about 1,400 city workers in the next two years. S.F. Mayor Ed Lee's proposal would add about 1,400 city workers in the next two years. Photo: Pete Kiehart, The Chronicle Buy photo Photo: Pete Kiehart, The Chronicle Image 1 of / 1 Caption Close S.F. mayor calls for huge boost in affordable housing funds 1 / 1 Back to Gallery

Mayor Ed Lee is proposing funneling $94 million in public money over the next two years into constructing affordable housing in San Francisco as the city grapples with stratospheric rents and increased evictions driven by a booming economy that is also causing a surge in tax revenue.

Lee, who will present his two-year spending plan to the Board of Supervisors on Monday, also proposes hiring about 1,400 city employees over that span, including 300 police officers and 96 firefighters. They would swell the ranks of city employees to 29,086 in fiscal 2015-16.

Over the next fiscal year, his budget also anticipates hiring 150 public health staff, many for a newly expanded San Francisco General Hospital to open in December 2015, and at least 196 Muni drivers, mechanics and other staff as the city increases Muni service by 10 percent.

The mayor, however, is not planning to fund that expansion at the Municipal Transportation Agency by putting a measure on the November ballot to increase the vehicle license fee as a transportation task force Lee assembled last year recommended, said his spokeswoman, Christine Falvey.

More cash for capital needs

Increasing the fee, which had been cut when Arnold Schwarzenegger was governor, from 0.65 percent to 2 percent of a car's value was projected to raise about $1 billion as the city tries to address $10.1 billion in transportation infrastructure needs through 2030. That includes repairing streets, improving the bike network and upgrading Muni's fleet of streetcars and buses.

Lee upped the amount of tax money going to roadwork and other capital needs by about $40 million in the next fiscal year and is supporting a separate recommendation from his task force: a November ballot measure for a $500 million general obligation bond for transportation. But he is backing off the vehicle license fee for now after it appeared deeply unpopular, said Falvey.

"He heard that loud and clear," Falvey said. "He's committed to the recommendation, but now is not the time."

All told, Lee's proposed budget is $8.6 billion a year for each of the next two fiscal years - a $700 million increase over the $7.9 billion spending plan for the current fiscal year, which ends June 30.

The city's budget has more than doubled in the past 15 years from $4.2 billion in 1999.

The budget includes recently negotiated raises for 27 of the city's unions, most totaling a little more than 6 percent over two years. That translates into an increase of $239 million in payroll over two years, according to a budget office memo, which is actually slightly less than the $250 million the city was projecting the raises would cost.

Those figures came before results were in on whether Transport Workers Union Local 250-A members would ratify their contract. According to the MTA, the contract called for Muni workers to get 11.25 percent in raises over two years, but they would pick up a 7.5 percent pension payment now paid by the MTA.

Renewable energy program

The mayor's budget, which now goes to the Board of Supervisors for weeks of wrangling, did not change Lee's decision to divert $19.5 million that had been on reserve for a renewable energy program the mayor opposes in favor of other efforts, including incentives for property owners to add solar panels.

The board sent the San Francisco Public Utilities Commission's budget back in protest, but Supervisor John Avalos, a main supporter of the embattled energy program, said a compromise was possible.

Lee's budget also included $135 million for public schools over two years, which his staff called "unprecedented" and added funding for 500 new slots for public preschool, bringing the total to 4,100.

The proposed spending on affordable housing is a huge increase: Last year the city earmarked about $14 million for affordable housing production, according to Lee's administration, although how much was actually spent is unclear. The $94 million includes $44 million from the city's housing trust fund and $50 million to be borrowed to jump-start construction.

"This budget will help expedite a number of those affordable projects that are just about at the point of shovels in the ground, but need help over that last hurdle, which in some cases can be financing," Lee said in an e-mailed statement.

Lee's budget also increases funding by 1.5 percent for nonprofits that receive over $500 million in contracts annually from the city to account for inflation.

'Very interesting problem'

Avalos, a former budget committee chair, welcomed those and other aspects of the mayor's spending plan but wants more details.

"Sounds like he's been paying attention," Avalos said. "As far as I can tell, the mayor has a very interesting problem. He's got lots of money and more things than he can spend it on. It gives him the opportunity to show what he really stands for."