Stimulating Debate

S.F.'s employment rate is relatively good, but city leaders can still create more jobs. Here's how.

Last month, Mayor Gavin Newsom, still fresh off his abandoned governor campaign, held a press conference at the upscale hot-dog restaurant Show Dogs, packed it with press and midlevel bureaucrats, showed up late, and then led an endless platitude-fest about his plans to promote jobs in San Francisco. This bit of baroque puffery seemed pathetic, even for a man known as Mayor Photo-Op.

Newsom seemed out of touch: San Francisco voters are notoriously deaf to talk of promoting jobs. Hip leftist members of the Board of Supervisors were at that time pushing for a ballot measure that would have killed jobs-generating downtown high-rise projects in the name of preventing buildings from casting shadows over recreational space.

Meanwhile, the mayor has been beat up by left-wing supervisors over a proposal to waive the city payroll tax for all new private-sector hires for two years. A Controller's report suggested this was an inefficient way to generate jobs; supervisors allied with unions representing city workers said cutting tax revenues would mean sacrificing public-sector jobs.

Besides, the city has been doing relatively well with regard to jobs. December figures released in late January showed San Francisco's unemployment rate at 9.4 percent, compared to 12.1 percent statewide. And the counties of Marin, San Francisco, and San Mateo had actually added 5,700 jobs from the previous year.

But Newsom's current thrust of emphasizing jobs growth seems savvy when you take into account that the San Francisco unemployment picture is roughly the same as the rest of the country's 9.7 percent.

This dismal situation is more serious than local politicians, save the mayor, have acknowledged.

In San Francisco, privately financed construction has all but frozen over during the past year. "The carpenters are telling me they are forced to live in their cars," said Michael Theriault, secretary treasurer of the San Francisco Building and Construction Trades Council. "And now their cars are being towed. I've had individuals come in my office and say, 'I'm out on the street, and I don't know how I'm making my next meal.' It's hard to genuinely starve in a city with soup kitchens. But the situation is not far short of that."

By making jobs creation the theme of his mayoral twilight, Newsom may have put himself on the correct, pro-jobs side of several impending political debates that pit those who would increase the number of jobs available in this city against obstructionists. Maybe last month's weenie roast wasn't as foolish as it seemed.

Whereas America has to incur historically unprecedented debt to produce jobs, San Francisco is blessed with latent stimulus projects that largely won't involve public debt to initiate. These are stalled development plans that could be jump-started by merely generating sufficient political will. Here's a list of some of the low-hanging fruit.

Let the music play at the Nob Hill Masonic Center.
Residents of the upscale Nob Hill neighborhood are fighting a plan to revamp the old Masonic Hall so that it can accommodate more types of concerts. According to backers Live Nation and the California Freemasons, the $6 million construction project would employ 30 workers for four months. Once the revamped facility is up and running, the hall would employ between 50 and 70 people during events.

During the past week, however, residents have been distributing flyers titled "Protect Nob Hill" and warning of a future when "3,500 intoxicated fans spill into the neighborhood after events," and then possibly continue drinking "on the steps of Grace Cathedral? In front of your home?"

According to project spokeswoman Evette Davis, a mayoral staffer was dispatched last week to meet with neighbors in hopes of ameliorating their (ridiculous-seeming) concerns. If Newsom succeeds, that's more points earned for our now job-focused mayor.

Facilitate construction financing.
All over town, real estate parcels that were once supposed to be bustling with cranes and hard hats are now still, thanks to a credit crisis that has made banks loath to issue construction loans.

In response, the mayor's office of economic development has been working on legislation to make it easier for some construction projects to obtain financing. The proposed measure would allow developers to postpone paying so-called impact fees aimed at subsidizing civic amenities such as park benches, sidewalks, public transit, and subsidized housing. Development impact fees typically now run $80,000 per apartment, according to the Housing Action Coalition, a construction advocacy group. On a typical project, such as a 308-unit apartment building proposed at 333 Harrison Street, affordable housing impact fees can add up to more than $11 million, with other levies adding on more than $5 million, putting fees at around 18 percent of total construction costs.

"Now, anyone who wants to get in permitting has a big price of entry," said Newsom staffer Michael Yarne, who is developing the legislation. "Before there's a single shovel in the ground, you have to pay all of our impact fees, with the exception of a few, and then find either equity money or borrow it commercially." For some projects, the fees are enough to drive a project over the edge — or postpone the day when a builder might eventually get financing. Newsom's legislation would allow developers to delay payment of one-third of the affordable housing fee until a building is actually occupied by residents, who would then pay the remainder in the form of a transfer tax.

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