Cities like San Francisco Under Pressure from California AG to Create More Housing

With an estimated 150,000 homeless Californians and another 700,000 facing evictions, the state’s homelessness crisis is worsening and the need for safe shelter growing.

California Attorney General Rob Bonta said the state will begin a new push to penalize cities that fail to provide adequate housing.

The Attorney General’s Nov. 3 announcement that a Housing Strike Force would be launched in an effort to ensure access to housing for all means that cities will need to ramp up measures to acquire supportive housing or face serious legal consequences.

“Housing is going to be a human right. There must be enforcement mechanisms to make it real and to deliver that right to people who deserve it,” Bonta said.

Under the state housing laws that Governor Gavin Newsom signed in September, every city and county in California is obligated to plan and zone for their fair share of housing.

The new laws increase Bonta’s authority to file lawsuits against cities or local governments that are not doing enough to plan for the creation and purchase of sufficient options for California’s homeless population.

The strike force will issue guidance letters to local governments to ensure cities and towns are meeting their housing requirements.

With an estimated 150,000 homeless Californians and another 700,000 facing evictions, the state’s homelessness crisis is worsening and the need for safe shelter growing. Hotels, in particular, have been of particular value in this effort.

Russ Heimerich, a city official with California’s Housing Agency, emphasized the value of repurposed buildings or units. Hotels are both a huge money- and time-saver for the government.

“The average cost to build affordable housing in California is somewhere near half a million dollars per unit,” Heimerich says. “This is a very, very cost-effective way of funding affordable housing by using structures that already exist.”

Between March 2020 to June 2021, close to 4,000 homeless people were housed in empty hotels and trailers across the state.

Project Roomkey was touted as a massive success and Newsom’s short-term project was extended into a long-term initiative. Officials announced Homekey, otherwise known as Roomkey 2.0, in July 2020, expanding the program in September 2021 with an additional $2.75 billion.

To date, the program has created close to 6,000 units and housed over 8,000 individuals.

“We do believe that constructing a lot more homes and buying hotels and having affordable housing are key pieces of the puzzles,” said Matthew Lewis, communications director at California YIMBY, the largest statewide movement for housing reform.

But the hotels have proved to be a source of contention, with communities fighting acquisition attempts. And as businesses start to reopen and travel resumes, the city is facing pushbacks from communities who are dependent on income generated from those hotels to support their local economies.

One such example was surrounding Japantown’s Hotel Kimpton Buchanan. The 131-room hotel was being used as a temporary “shelter-in-place” hotel for unhoused people during the pandemic. And in August, news began circulating that city officials were offering the hotel $57 million to purchase the property and permanently convert the building into assisted housing.

Following months of pushback from members of the Japantown community, KHP Investments, the private equity firm that owns the hotel, decided not to sell the property. They cited the community response for the reason behind their decision.

Japantown community members said they couldn’t risk losing the hotel. Hotel Buchanan reportedly brought in 45,000 guests to Japantown a year, generating an estimated $13 million. According to Sandy Mori, Japantown Task Force President, the hotel had a 90% occupancy rate prior to the pandemic.

“We’re really happy that the hotel will stay here because most of our customers are tourists,” said Sharon Ku, who owns Japantown’s Uji Time. The hotel has done a lot to support the local economy, Ku adds, including sponsoring events and promoting businesses.

The community rallied together to stop the sale of the hotel, organizing meetings, making calls, and writing countless e-mails and letters to various city officials. Over 7,600 people signed the petition.

The pushback in Japantown was not unique, with residents near the Panoramic SoMa at Ninth and Mission Street – one of the three other properties San Francisco had made efforts to purchase – expressing strong resistance at a community outreach meeting.

“There’s pushback every single time. Housing for poor black and brown people is proposed in the neighborhood. I’m sorry, but it’s everywhere,” Jennifer Friedenbach, executive director of the Coalition on Homelessness, said.

Yet, Japantown community members rejected the NIMBY criticism.

“This is not a NIMBY issue or Japantown. This is an economic impact on the businesses and on the neighborhood,” Mori said.

Department of Housing Director Gustavo Velasquez is skeptical of the economic argument in the hotel debate. According to Velasquez, the state has yet to hear of any “imbalance in economic activity” following the creation of over 6,000 permanent and interim units of housing under project Homekey.

“Housing is an infrastructure that creates a lot of jobs, creates a lot of incentives for people to thrive in those communities. So I believe the local jurisdictions investing in producing more housing is going to result in a much, much better economic outcome overall,” Velasquez said.

However, as Heimerich notes, San Francisco is starting to face a hotel and property shortage and with renewed pressures to find adequate housing, paired with community pushbacks, officials will start to need to look elsewhere.

“Hotels are good, but you know, the inventory of empty hotels isn’t what it used to be. So, you know, there are other things that we can maybe use Homekey dollars to fund,” Heimerech said.

The city is expanding their program to consider other vacant properties for acquisition, such as empty apartment buildings and commercial spaces that can be converted into residential spaces, Heimerach adds.

Senator Scott Wiener, a State Senator representing San Francisco, agreed with Bonta’s comments that housing should be a human right, but noted that California’s serious housing shortfall will be a hindrance to enforcing this.

“We also need to be very clear that a right to housing only has meaning if you have enough housing for everyone,” Wiener said.

States need to create housing to make the right to housing meaningful, he says. Laws that enforce that creation, will ensure that the human right is met.

“Because over the years there has not been nearly enough enforcement, there are a lot of cities that think they can get away with it, and ‘I’ll just do it, so sue me.’ But now that’s changing,” he said.

These serious repercussions and tightening of the rules, highlight how important the issue is to California and its officials.

“There’s going to be consequences to follow the law, fulfill your obligations, your responsibilities to build your fair share of housing,” Bonta said.

He added, “It’s a fight I won’t back down from. As attorney general, I’m committed to using all the tools my office has available to advance Californians’ fundamental right to housing.”

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