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BIG MONEY REDUX: Foes of S.F. homelessness-aid tax funded 2016 tent ban
Same Donors Opposed Homelessness Funds, Backed 2016 Tent Ban
Venture capitalists and PACs pushed their business interests
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Photo by Judith Calson // Public Press
Sean Pico (right) helped move a friend’s box dwelling in Potrero Hill in 2017. Pico became homeless after coming to San Francisco to take care of a friend who had cancer.
PROP C from Page 10
decline in the homeless population,” the report stated. “To the extent that these policy objectives are achieved, the economic impact could be better than we project.”
Further, increased spending on housing part because it “has no detailed plan for
and related services “will stimulate those sectors of the economy, leading to positive multiplier effects on other industries.” But the controller’s office said it was “unable to quantify the fiscal or economic benefits of these expected improvements.” Officially, based on the most recent biennial point-in-time headcount in 2017, an average of about 7,500 people reside on the city’s streets or in shelters. That figure certainly underplays the SOLVING HOMELESSNESS number of people experiencing homelessness, however. Jeff Kositsky, ness and Supportive Housing, has said that his office serves about 20,000 people per year, many of whom are marginally housed during part of any year and need services to prevent them from losing a roof over their heads.
For the previous fiscal year, which ended June 30, the homelessness department spent about $250 million, according to documents provided to the Public Press. The controller’s analysis of Proposition C said total spending on homelessness services for all relevant departments reached $380 million over the same period.
HOW MANY MIGHT BENEFIT?
Friedenbach, who headed the Yes on C campaign, said she drafted the measure earlier this year while consulting with the heads of the city departments that would spend the tax revenue if voters approved it. She asked for data that would help her craft the language, which she offered them for feedback. These conversations enabled her to estimate the number of people who might benefit from the measure’s funding.
She said she spoke with Kate Hartley, director of the Mayor’s Office of Housing and Community Development; Kositsky, of the homelessness department; and Barbara Garcia, the former director of the San Francisco Department of Public Health. Garcia resigned in August.
Hartley declined to say whether she and Friedenbach discussed the measure. “I can’t really speak to this, because the mayor has taken a position on it, and that speaks for itself,” Hartley said.
Kositsky confirmed that Friedenbach reached out to him. “Yes, Jenny asked for budget and other information that I would provide to anyone who would ask,” he said. “How she used it, I don’t know.” Kositsky did not state a position on Proposition C, although he donated $500 to the pro-C campaign in June.
Garcia confirmed that Friedenbach had talked to her about “the amounts of dollars they were looking for, the types of oversight, the services.”
“It was a significant amount of dollars for services,” Garcia told the Public Press. When asked if she had an opinion about that level of spending, and what it might let the health department accomplish, she
Photo by Noah Arroyo // Public Press
At least 50 percent of Proposition C funding is targeted for getting homeless people like Elizabeth Strommer into permanent housing.
Photo by Judith Calson // Public Press
Jonathan Mesa (left) and Edwin Marangco were residents of “Box City,” a Potrero Hill encampment dismantled in 2017. Mesa previously stayed in temporary shelter, but went back to the streets when permanent housing did not become available.
said, “I’m not going to go into details about that. I’m not in a position to say, since I’m not at the department anymore.”
Friedenbach later told the Public Press that Garcia provided the estimate of the number of times a year the health department could render mental and behavioral health services: 4,000 to 5,000. Garcia did not respond to Public Press attempts to verify the exchange, which Friedenbach said occurred via text message in late July.
The controller’s office projected that Proposition C would create “$60-$75 million in new funding, annually, for outreach and mental health treatment.” That range corresponds with scenarios in which the tax earned the minimum and maximum annual revenue. Therefore, using Garcia’s estimate of services rendered, health care recipients would cost the city about $15,000 per person.
But that calculation might actually be very low, a confidential source with knowledge of homelessness and mental health programs told the Public Press. If correct, and the per-client cost were higher, then spending on mental and behavioral health would help fewer people.
The health department would not provide an estimate on the basis of averages over all services.
“We don’t calculate per patient/client costs for any of these programs,” communications director Rachael Kagan said in an email to the Public Press. “There is extensive variability in the type of services each patient requires, including the type of staffing, duration and frequency of treataverage, so we don’t have that information available.”
QUESTIONING ACCOUNTABILITY
With the city’s current annual homelessness outlay of more than a third of a billion dollars, how that money and future funds would be spent was one of the opposition’s biggest talking points.
The No on Prop C campaign argued that the measure lacked “accountability,” in director of the Department of Homeless
how the money would be distributed.”
Although that is a matter of interpretation, the proposition’s text does outline an oversight structure. The measure does not mandate that each type of tax-funded housing and social service go to specific quotas of recipients. Instead, it requires that proportions of revenue go toward general categories of assistance:
• At least 50 percent for getting homeless people into housing. This would primarily include acquiring, creating or rehabilitating permanently affordable housing where the tenants receive social services on site, though up to 12 percent of this money could go toward the city’s rapid rehousing program — rental subsidies lasting up to five years, for people who have recently become homeless. • Of all the beneficiaries of these types of spending, at least 25 percent must be families, and at least 20 percent must be
“homeless youth” — adults 18 to 29. (See the spring 2018 Public Press special report on rapid rehousing, “Most Homeless
Families Helped by City Rent Programs
Move Out of S.F.” Find it online: sfpr.es/ i24-rehousing.) • At least 25 percent for mental and behavioral health services. This could include street-based care, substanceabuse treatment and medications, and intensive case management. • Up to 15 percent for programs designed to prevent homelessness, such as legal assistance or help paying a security deposit or utility bill. • Up to 10 percent for temporary beds, likely in shelters or navigation centers, as well as for public bathrooms or programs to improve hygiene.
All new revenue would go into a dedicated fund, not the city’s general fund.
The Board of Supervisors could shift these proportions by pulling funds from the other categories to bolster spending on housing or mental health programs. The board’s political alignment changed Nov. 6, with progressives gaining solid control of the 11-member body. It’s not yet clear how that shift might affect funding decisions when they take their seats in January.
The board would receive spending advice from a nine-member oversight committee, as mandated by Proposition C. The board would appoint four members, the mayor would appoint four and the city controller would appoint one.
These expenditures could only supplement, not replace, the city’s other homelessness spending. Opposing Proposition C (from left): venture capitalists Michael Moritz and Matt Cohler, and San Francisco Mayor London Breed.
By Andrew Perez // MapLight
Donors that opposed a ballot measure to fund more homeless services in San Francisco with a new tax on the city’s wealthiest companies previously bankrolled a successful 2016 initiative to ban tent encampments in the city.
Proposition C, which San Francisco voters passed Nov. 6, will almost double the city’s annual homelessness budget by increasing the gross receipts tax by an average of 0.5 percent for businesses with more than $50 million in annual revenue. Supporters contend the initiative will provide housing and new shelter beds for thousands of homeless people over 10 years. It also will fund mental health and addiction programs. Some financial services companies could pay a higher tax than other businesses under the proposal and came out against the measure.
The campaign against Proposition C received almost $550,000 from the San Francisco Chamber of Commerce’s political action committee; the Hotel Council of San Francisco PAC; venture capitalist Michael Moritz; and the Committee on Jobs Government Reform Fund, which represents business interests in the city. Those same donors contributed almost $600,000 to support Proposition Q, a 2016 initiative that allows the city to clear homeless encampments from sidewalks as long as residents are offered a bed at a shelter or a bus ticket to leave San Francisco.
“Proposition C opponents can easily be described as wealthy, tone-deaf, selfinterested, and heartless, even if they have been longtime donors to homeless causes,” Moritz, a billionaire, wrote in a recent Wall Street Journal column. In 2016, he donated $49,999 in support of Proposition Q.
California is one of the wealthiest states in the country and has the highest poverty rate in the United States when cost of living is considered. The disparity is especially pronounced in the Bay Area, home to the nation’s booming tech industry and a spectacular housing shortage. Despite San Francisco’s reputation as a liberal utopia, a United Nations special report published in September found that the city’s efforts to criminalize homelessness and break up encampments constitute “cruel and inhuman treatment” and violate human rights.
Although Proposition C’s proponents significantly out-raised their opponents, the measure has split San Francisco’s business community. Marc Benioff, the CEO of Salesforce, a major San Francisco employer, donated more than $2 million to support the initiative, and his company gave $5.9 million. Local payment processing comIn support of Prop C: Salesforce CEO Marc Benioff panies Square and Stripe opposed the initiative, arguing they would be hit hard because the city classifies them as financial services companies — which would be taxed at higher rates — and not as tech companies.
San Francisco Mayor London Breed said Proposition C “puts the cart before the horse and then sends both down a dead-end street.”
Several top Breed supporters also opposed Proposition C. Progress San Francisco, a super PAC that supported Breed, received $335,000 from investor Paul Graham and the Committee on Jobs Government Reform Fund. Graham and the committee donated $260,000 to a committee opposing Proposition C.
Venture capitalist Matt Cohler, who donated $80,000 to Progress San Francisco, contributed $5,000 to fight the measure. Safe & Affordable San Francisco, a PAC that gave $20,000 to Breed’s campaign, also contributed $7,500 to the anti-Proposition C effort.
MapLight is a nonpartisan, nonprofit organization that reveals the influence of money in politics, informs voters and advances democratic reforms.
