The Affordable Housing Disaster

And many observers say the nonprofit developers are most often the initiators of affordable housing here; when they don't propose, the city government simply does not embark on affordable housing projects.

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  The 1998 implosion of Geneva Towers -- the towers collapse.

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  The 1998 implosion of Geneva Towers -- the towers collapse.

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Read the feature story sidebar: The High Cost of Housing.

Of course, the affordable housing problem cannot be laid wholly at the feet of the nonprofits. Even the Mayor's Office of Housing acknowledges the city's own bureaucracy has been ineffectual in attaining affordable housing goals. And some of that ineffectuality has nothing to do with nonprofits.

(For example, in response to public pressure for affordable housing, the Planning Commission required developers of market-rate multifamily housing to set aside 10 percent of their project's units as affordable housing, to be leased at under-market rates. Under that policy, some 1,400 units of affordable housing should have come on line since 1990. For a variety of Byzantine political reasons, however, they agreed to waive the affordable housing requirement for all but 112 affordable condominiums and 27 affordable apartments during that time.)

By and large, however, San Francisco's nonprofit-based approach to affordable housing has simply not built anywhere near enough of it to serve the numbers of low-income people who need places to live. What does get built often winds up being too expensive for the poor people it was meant to serve.

For all its faults, Geneva Towers was affordable. The families of Geneva Towers made $9,000 a year, on average; they paid $275 in monthly rent, on average.

When they are completed, most of the new apartments at Heritage Homes and Britton Courts, however, must be rented to families who enjoy annual incomes of, on average, $33,000. The "target" income for a four-person family in the new housing is $44,000.

A two-bedroom apartment at Heritage Homes will rent for a bit more than $1,000 a month, which is a fabulous price in San Francisco -- and entirely unattainable for the 50,000 local families who earn under $15,000 a year.

The average live-work loft in San Francisco costs about $180,000 to build, not counting the cost of the land under it. Such lofts are aimed at an upscale clientele -- composed mostly of the widely mocked class known as young urban professionals -- with income of well above $100,000 per year.

The average unit in the developments meant to replace Geneva Towers is costing about $240,000 to build, excluding land costs. Such units are aimed, by and large, at families with incomes of less than $44,000.

In other words, luxury housing in San Francisco is being built for 25 percent less than our housing bureaucracy pays for apartment/town houses for the poor.

Comparing the costs of affordable and market-rate housing is a very inexact science; the nonprofits that produce low-income housing have overhead costs -- hiring expensive consultants to broker the complex financing, for example -- that market-rate developers do not. And for-profit developers are not a quick and dirty answer to affordable housing shortages, says national housing expert Judy Reed, president of a Seattle-based consortium of lenders.

"Affordable housing cannot just be left to capitalism, even though private developers tend to build it more quickly and for less money," she says.

Still, Reed does suggest that San Francisco's nonprofit developers begin to partner with generally more efficient for-profits. In that way, the nonprofits can focus on their strengths -- accessing government money and grappling with neighborhood politics -- while for-profits manage the design, construction schedules, and, above all, budgets of affordable housing projects.

There are, of course, exceptions to the general failure of San Francisco nonprofits to build affordable housing efficiently. The Tenderloin Housing Development Corporation, another arm of the Roman Catholic Church, appears to be getting a housing bang for the city's bucks. The Mission Housing Development Corporation has its community supporters, and some for-profit developers, such as the Emerald Fund, are piggybacking affordable apartments into fair-market developments.

But it seems to be time to begin holding the public-private housing bureaucracy accountable for its longstanding failure to perform, and to begin acknowledging that nonprofit organizations -- even those sponsored by people of God -- may not always be the best way to minister to the housing needs of the disadvantaged.