Bay Area Mayors Talk Housing and Transit

SAN FRANCISCO—The mayors of the Bay Area's three largest cities tackled crucial topics of housing, transportation and regionalism last week at the ULI Fall Meeting. Moderator Bill Witte of Related California kicked off the discussion with the biggest concern for most people: housing. San Francisco Mayor Ed Lee quantified the need, citing his city's goal of adding 30,000 housing units by 2020, which will require a boost in the construction rate to 5,000 units per year from the current 3,000.

"And we need the right balance of guaranteed affordability to meet the demands at all levels," low-income, middle-income and luxury sectors, he said. A November local ballot measure aims to raise $300 million for affordable housing development. He mentioned efforts to go beyond the use of developer fees to fund housing needed to meet demand created by large-scale layoffs during the Great Recession.

With San Jose experiencing the fastest-growing metropolitan population in the country, Mayor Sam Liccardo pointed to his city's 4,500 units of housing permitted last year—still not nearly enough to meet demand.

"We need new solutions, regionally," he said, such as redistributing money dedicated to housing programs to pro-housing cities—those trying to build more housing rather than the NIMBY-driven cities that are not.

Use of developer fees to fund housing, transportation and other needs continues to increase, but other tools need to be introduced, according to Oakland Mayor Libby Shaaf.

"Be forewarned: we will have a new process within the next few months," including a housing impact fee, she said.

With UBER moving its headquarters to Oakland near the 12th Street BART station, Shaaf noted that the East Bay offers a more affordable housing option for San Franciscans. She also touted a state tax incentive program that gives developers significant financial benefits for developing housing that is kept affordable for 35 years.

"I'd take that deal, for a developer to retain ownership after 35 years," even though it does not constitute providing housing that is permanently affordability, she said.

Developer fees should be put back into the infrastructure and amenities that make a city attractive in the first place, said Lee. He said new tools are needed to promote construction of affordable housing. He applauded San Francisco's development community, which asked the city to increase density bonuses and raise height limits so they could increase the amount of affordable housing in their projects.

"And we're adding 30 to 40% in affordable housing components as a result," he said.

Transit is the second most challenging issue for cities, the mayors said, and state and federal support will be key to long-range improvements in this area. BART, which is soon expanding to five counties, was designed for the nine-county region, said Jim Wunderman, president and chief executive officer of the Bay Area Council.

"Packed BART trains and potholed roads are signs of our overloaded, aging system," he said. It could be improved if there were one regional planning entity addressing transit rather than the current approach, which is plagued by competition, he said.

"It's clear we need a single planning agency, and it should be folded into MTC," Liccardo added. He is a member of the board of the Metropolitan Transportation Commission (MTC), which oversees spending on Bay Area transit.

Regional planning is a linchpin for the dozens of cities that make up the Bay Area, concluded Lee.

"Our overall challenge, as three cities and one Bay Area, is competing with Paris, London and Shanghai," he said. "We are collectively going to press even harder in Washington for the federal government to do its part, so that we continue to be a global center of innovation," he concluded, while noting the cooperation displayed in the mayors' joint ULI appearance.