>> good afternoon. this meeting will come to order. welcome to the january 10th 2022 -- january 31st regular meeting of the land use and transportation committee board of supervisors. i am chair of the committee, joined by vice chair supervisor jean preston and supervisor erin peskin. the committee clerk today is erica major. i would also like to acknowledge the good folks at san francisco government t.v. for staffing this meeting. do you have any announcements? >> thank you. the minutes will be happening through videoconference to the same extent as if they were physically present. the board recognizes that public assets to city services is essential and invite public participation. public comment will be available on each item on the agenda.

san francisco government t.v. are streaming the public caller number across the screen. each speaker will be allowed to minutes to speak. comments are opportunities to speak. these are available via phone by calling the number on your screen. if you are interested in making public comment, please dial star three to be added to the speaker line when the item is called. when connected you will hear the meeting discussion but you will be meet -- muted and in listening mode only. when your item comes up, you will just need to press starve three. press it once and you will be added to the queue.

best practices are to call from a quiet location, speak quietly and slowly and turned on your television or radio. you may submit public comment in the following ways. you can e-mail myself and my e-mail address is... if you submit public comment via e-mail it will be forwarded to the supervisors and made part of the official file. comments may also be sent via the postal service. items acted upon today are expected to appear on the board of supervisors' agenda, unless otherwise stated. >> thank you so much, madame clerk. will you please call item number 1?

>> item one is motion adopting findings pursuant to the california environmental quality act otherwise known as ceqa. the guidelines improving -- including mitigation measures and adopting a mitigation monitoring or reporting program. members of the public who wish to provide public comment on this item should call the number on the screen. press pound and pound again. if you have not don't so already, you can press starve three to line up to speak for item number 1. >> thank you very much. this is in items that are being fostered by supervisor -- president walton, but he is not here today. we have chief janine nicholson from the fire department and staff for public work.

i think he is here from public works. we also have several staff on standby to answer any questions that we may have. with that, welcome chief nicholson. >> i don't have chief nicholson here. >> is anyone here from the fire department? or perhaps we can bring up brian dolph from public works first. [ indiscernible ] i was asked to provide a few opening remarks. would this be appropriate? >> i am a regulatory specialist with regulatory affairs with public works. >> supervisor tang: thank you. >> supervisor tang: so the reason this project has come about is that it is expiring

with the fire department's training facility on treasure island. this is a problem and it opens up the opportunity of consolidating the various training facilities that the fire department has. there is one south of market as well. the fire department had identified a parcel in the far southeast of the city on the coast. the owner of the parcel, however had a very short timeline for selling. they wanted some information about the beginning of this year and whether this city could be purchased. you cannot actually make a commitment to purchase without them taking care of it first. we basically did a rush job on getting the mitigation out in

six months, which is humiliating. it is a third of what it usually takes. we have a lot of pulling together of public works and planning staff and good consultants to thank for that. what we have now is the document and the findings before you, which has asked that you review the document and if you deem appropriate adopt the findings before approving the project. do you have any questions? >> thank you. supervisor peskin has a question. >> i do. i think this is probably for council. i have read the s. -- the ff md and the findings that are before us in this item and looked at

all of the things that are less than substantial and can be mitigated. i'm fine with all of that good work. my question is, it is very rare that the board adopts these findings. they are generally adopted by planning. we usually adopt them when we do -- when we take an action, we incorporate and find a new the findings that have previously been found by the planning commission. the planning commission did improve -- approve the final mitigated negative declaration. why is this here? is it because of the acquisition action? why is this a standalone? i am curious. i am cool. >> me too.

>> i have the exact same question. so i spoke with a number of other people. there is nothing in chapter 31 that prohibits this. i think this is just convenience. the idea is to keep all of the cake pieces moving. it is more typical as you stated to have the adoption happen at the same time as the project approval. the board will be taking the project approval for this project and this is the body that does need to adopt this. there's nothing in chapter 31 that says you can't adopt it. separated from the project approval either. >> i was wondering, i was trying to figure out. i found a brilliant lawyer

through the chair is the reason for this, we wanted this to be the first action to trigger the appeal, but i don't think that works. the appeal period runs for the adoption. it's not like someone has to take an action that starts in appeal period. you are correct. it is not start the cloth sooner. it is about taking care of this because you can.

it is changing the order. and if other folks start doing this, i'm not sure. go ahead. >> good afternoon, chair and supervisors. i'm the director of real estate. thank you for giving me the opportunity to respond and speak to the item in your question. the city attorney is absolutely correct. we are taking this item to the board for environmental review and approval as a practical matter. first off, i would like to say that this project will be coming to you for your consideration of the full board in march. as you may or may not know or recall, we have a purchase option to acquire this property that runs out at the end of may. one of the reasons we acquired the purging's option is only to give you time, but also give us

time to pursue the port property, which is adjacent and part of the project. the state legislation that is needed for the port acquisition has lagged a little bit. and having the board approve these findings, we believe would be helpful and moving state legislation along. there is somewhat of a synergy in showing the state legislature that the city is committed to this project and to the property, and does put a little bit of pressure on them to do their part to move forward with the acquisition of the port property because we need both the private property and the port property in order to move forward with the project. we are egging your indulgence to put the cart a little bit before the horse by a couple of months for the environmental, but the project approval will soon be coming to the board for that's

-- for its consideration. i add the environmental review does not bind the hand of the board when you consider the project as a whole. >> thank you. that makes more sense. supervisor peskin? >> when i raised my hand, i just said what i was going to say or ask, which is the adoption of the findings does not tie the board's hand. that is fine. >> thank you. i want to note that chief nicholson is here. welcome. i see you there and you're standing up desk. >> thank you for being late. i was in back-to-back meetings. i know you guys have no idea what that is like. anyways, i really appreciate the opportunity to speak and this is such a critical project for us. we are in dire need of this

facility. i really want to thank the director for doing everything he possibly can for getting the state to move on this, as well as keeping you apprised of it. we need to be out of treasure island in 2025-2026 the latest. we really need to ensure that all the pieces are in place to get it moving forward. thank you very much for your consideration. >> thank you so much, chief. okay. if there are no other comments or questions from colleagues, madame clerk, let's take public comment on this item. >> thank you. we are checking to see how many callers we have in the queue. if you have not done so already, please add -- please press start three to be added to the cue.

for those on hold, continue to wait until the system indicates you have been on muted. we have matthew supporting as today and we have six listeners. >> no speakers, madame chair. >> okay. thank you. with that, public comment is closed. colleagues, does anyone want to make a motion to send this out with a positive recommendation?

>> thank you, congratulations. that motion passes. >> i appreciate your time and attention to this matter. >> thank you. please call item number 2. >> it is an ordinance to create the housing innovation program to develop, finance and support additional housing opportunities for low income and moderate income residents including loans and technical assistance for certain low income and moderate income property owners to access dwelling units or other new units on their property. members of the public who wish to provide public comment should call the number on the screen. the meeting id today is... press pound and pound again. if you have not done so already, please press start three. >> thank you so much.

colleagues, i introduce this legislation with supervisor marr to help provide parameters to the $10 million in funding that was approved by this board during the previous budget cycle. the intent of these dollars was to invest in ideas for housing that are currently not being financed. particularly for residents and geographic areas that have not been traditional. this legislation establishes a general program, but provides funding guidelines and eligible uses to help inform the project -- the process. the funding is intended to be managed by an outside entity like a community development financial institution or studio five are nonprofit organization,

but it is fuelled in this time -- this type of work and has connection to historically disenfranchised communities, which is what we are trying to reach. we have been making some progress in building up our affordable housing stock in san francisco, the portfolio that the city manages to the mayor's office of housing and community development is limited. i also want to think my colleague -- thank my colleagues for the work they have been doing with the proper i committee and the work that they are trying to put together to elicit ideas and innovation for the broader community in san francisco to build social housing. this particular pot of money is not for social housing. it is mostly geared towards house rent and cash for homeowners. the problem we were trying to

solve for is to include all of the displacement and gentrification that is happening in lakeview, ingleside, sunset, areas where there has traditionally been low income homeowners, folks who are aging who have more house than they need but have very few options. they want to stay in the community where they are involved and they love. the status quo right now is not going to cut it for our neighborhoods. we keep hearing concerns over a few laws that are coming out right now, which really gives the advantage of the value being created to folks who have the capital to invest in capturing that value. it is often not homeowners who are on fixed income or seniors or people who don't have access to the banking institution they

have limited options to age in plates and their assets would usually be lost to the community or their family, black and brown communities that have been completely devastated by government's action, redlining, and what we saw happening during the foreclosure crisis, the problems that we have have not really targeted those communities, nor did they support building generational wealth in the communities by allowing units to be passed down. and the equity that has been built up over the time who moved here from the south through the 1950s about a home in the bayview or lakeview, and don't have the option to pass it on to

the heirs, the easiest thing is to move up. we are trying to address those constituents. and the next couple months, this committee will be deliberating on a number of proposals, allowing for plex is in san francisco and my hope is that with this program, we can start piloting some proofs of concept. that we can see what works on the financing side, which is not the zoning side, which is a whole different issue. my hope is that we can come up with a good project, abe would -- a good pilot project that we can move forward on. in summary, what this program could find -- fund are the following things. the first is grants to the organization to create marketing and educational material about homeownership.

there could be construction design prototypes that could be approved for smaller scale buildings and offer zero interest, zero payment loans for an low income and moderate income homeowners to construct 80 use and other units on their homes on their property with the built -- goal of supporting multigenerational living and aging in place. down payment assistance loans to low and moderate income tenants. for the acquisition of a licensed childcare provider. this is folks who would be buying a resident -- resident as a first-time homeowner and have

a home-based daycare there as well. that is a double bottom line of adding childcare slots and also providing the homeownership opportunity to a largely female low income workforce. and last, but not least, co-op conversions for existing land trusts buildings that are converting from rental occupied co-ops to owner occupied co-ops. it would be not for the acquisition of the building, but for the share loans of each individual owner occupant. so to be eligible, the properties must be owner occupied. the folks who are worried about landlords or property owners, they are not eligible for this fund. and in exchange for these loans, and the loans are not subsidies or grants, the loans will be

deed restricted and must be under rent control if they are creating new units. we have put a considerable amount of thought in establishing these general guidelines, and i think that they can be strengthened if we select the correct provider who has experience with this population and trust. i want to add that earlier, about an hour ago we received a letter from the coalition of tenant groups who were worried about some of the provisions in this legislation and we are asking for a continuance. i do have some nonsubstantive amendments to clarify some of the provisions and they must be repaid. even though there nonsubstantive, i will support a continuance of the items we can have a chance to meet with the tenant groups and get their

feedback and make sure that the legislation reflects our intent, which is to support low income homeowners and folks who want low income homeownership and not providing any avenues for displacement of tenants. in fact,, what our legislation intends to do is to add tenant provisions or rent control to the adu under the state way -- the state program that aren't under rent control right now. with that, i will -- supervisor peskin, did you have a question before i bring up the mayor's office of housing to do the presentation? >> may be we can ask them now, but they might have some answers to some of it.

we did want to nitpick on page 5 and appreciate, and this is something the board has been doing for a number of years. properties where there are certain types of evictions that would not be eligible, but i want to suggest that the language could be a little bit tighter because the way it is written is that within five years prior to property owners' application, the property owner has not engaged in one of those types of evictions. i think it should be the property hasn't had those types of evictions. we want to discourage a buyer

from buying a property with that history from then applying. >> if you could just hold those and ask in the presentation. i would be happy to take all of the suggestions of the committee. that is what the process is for. we did sing quite a bit on the -- think quite a bit on that issue. if we would indulge me, if we could go to the mayor's office of housing, we have sheila here. welcome. you could remember sheila from her planning department days. now at the mayor's office of housing. who has a presentation on this? >> wonderful. good afternoon. let me pull up the presentation right now. what i want to do with the presentation is give you an

overview of our understanding of the program and how it alliance with some existing programs and other opportunities that are out there. this is, as you described, the housing program has a four has for problematic areas. the second is around providing loans to low-income owners to construct the a.d.u. the third is down payment assistance for low income residents and the fourth is around loans to low-income owners to build limited equity co-ops. now i will jump to our programs and i will bring them back together and talk about what is in the housing innovation program and where there is some alignment there. broadly speaking, they provide programs in three areas. community development, homeownership and new construction. and mostly what this program do

would do is fit into the second bucket with homeowners, which currently we have programs for lending. bmr ownership, bmr rentals. there is a dream keeper initiative, which we want to highlight and we also do monitoring and compliance around that. since i mentioned the dream keeper's, and i want to emphasize this, there's a lot of potential alignment and synergy. the dream keeper initiative is investing a hundred $20 million over the next two years in san francisco black and african-american communities. it is seeking to increase opportunities for black communities through programs a focus on education, economic mobility, homeownership, and health and well-being. it is currently providing half a million dollars in down payment assistance and loans. every -- offering wealth building grants and working closely with communities to help achieve these goals. and just to provide a snapshot, they did talk about how mohcd's

portfolio is where the programs and housing opportunities are. these are, as you can see, concentrated in central and eastern san francisco. they are affordable opportunities on the western side of the city. these are our state and federal funded systems. same concentration pattern where we have housing opportunities really concentrate in the central and eastern parts. our pipeline does show that there are new projects coming out on the western side of the city, which is great, but clearly not as much as we see in other parts of the city. i want to provide a snapshot on the demographics. i hope you can see this. this is our bmr ownership in the past year by race and ethnicity. the darker blue's current

owners, and then the lighter blue is low and moderate income san francisco residents. you can see where there is proportionality between the number of folks in the population groups. in this large data bar is where we have so many bmr folks that have been in residences long before we started collecting data. we don't have data on those. this is what we want to highlight. there is a huge discrepancy between black bmr owners and our population of black," and income -- low and moderate income residents in san francisco. that is specifically what the dream keeper's' initiative is focused on. here is another one where we will be talking about the down payment assistance. we want to highlight the assistance loan program. you can see that there is some alignment here. it does look better for the black population in terms of those who are purchased.

mohcd partners with homeownership s.f. which acts as a one-stop shop to provide education, technical assistance and research to homebuyers, homeowners, renters, and educators. and in partnership it was attended by a thousand people. it has been virtual for the past two years and we hope to bring it back to in person soon.

the dream keeper's initiative is focused on education for african-american san franciscans to make the gap in serving the population. in 2018 with three for -- african-american households participating in homeownership programs, and with the dream keepers there are 250 black households working towards homeownership. dream keepers and mohcd are working together with home ownership s.f. to provide capacity building to housing counciling agencies focused on implicit bias training and building competency. in the area prototype design, they can simplify the production of new units. the planning department does have a detailed handbook that covers partial and sole garage conversions as well as backyard a.d.u. and the state has useful handbooks as well. for the backyard a.d.u., the private market is offering a range of modular a.d.u. options. we need companies to offers -- offer permitting processes as well. there maybe interesting examples for the program to build off

of. in the program area two, which would be loans for low and moderate owners to add the a.d.u., there are no public programs that provide this. this would be a brand-new thing for the program to offer. in the third programmatic area, it is down payment assistance loans for low and moderate income tenants, we do have a few examples. they have a suite of down payment assistance loan programs including those open to any applicants and programs targeting specific populations. the dream keepers are focusing on african-american homebuyers and we are also supporting educators and first responders and homeowners purchasing bmr units. all of these programs are designed for the purchase of homes or condos. they are not meant for the co-op. and for homebuyers who offered childcare, the regulation is designed for the designated childcare unit that could be applicable. that is currently for rentals,

but it could be an interesting model. in the fourth category of loans for low and moderate income tenants to form equity cooperatives, the san francisco community land trust currently operates similar equity co-ops where they held -- told found leases and there's the operation of the properties. that could be a model for this as well. lastly we want to offer a preliminary timeline of what issuing an r.f.p. is to have an organization operates these funds. and r.f.p. go out this spring. the notice of funding would be later this spring which we review in the summer and hopefully have a program launch in august or september. and with me here today is maria benjamin who is the director of homeownership and bmr programs. we are here to answer any questions you may have. thank you.

>> thank you so much, sheila. annika, do you have a presentation as well or are you here to answer questions? >> just answer questions. >> thank you so much. welcome and thank you for being with us. sorry about that. thank you for taking the time. i want to check, is supervisor mar here? >> i do not see him. >> okay. he told me he would come but he must have been delayed. thank you so much. with that, thank you, colleagues for considering this. i am excited to be supporting some new ideas. some are in alignment with the mirror's office of housing. it already has existing programs. some of it is totally new. i am excited to start this

conversation for how we can innovate and serve populations that have traditionally not been served in the existing programs that we have i heard from black and latino families constantly how the program compliance issues just didn't work for the hopes and dreams of families who have felt excluded by our system and how it keeps homeownership and wealth putting opportunities from some. thank you so much. i will turn it over to you

before we take public comment. and we can do some of edmonson do whatever we need to do. supervisor peskin, did you have any further questions or issues before we go to public comment. >> i did. what do you do about bankruptcies. >> we don't. the mirror's office of housing has existing policies around that. >> all of the affordable housing covenants got wiped out by the bankruptcy and we had to buy back the affordable housing covenants. that wasn't real good. what did we learn from that? >> this is a deed of trust.

the properties are not restricted. the loans are supposed to be paid back. this is a very similar model. i know that she let put it in the same category, but there are two very different models. the bmr program is a deed restriction on the property that puts an income cap while the down payment is a stuck in loan after the mortgage that is meant to be paid back. it doesn't falter the property. with a bankruptcy, you know, which is actually pretty rare for down payment assistance program, and perhaps miss benjamin can talk about it, i would imagine it would follow the same. >> good afternoon, supervisors. i'm happy to talk about it.

it is very rare. we are absolutely right. it is very rare that a bmr homeowner goes into foreclosure. and even during these tenuous times we are in right now, it is very rare. we do have systems in place to assist them prior to losing the problem that didn't exist before. >> as to my earlier comment, totally open to whatever we all land on, but it shouldn't run with the property owner. it should run with the property as to whether or not it is a so-called dirty property with a bad eviction history on it.

as i said at the beginning, this is all good stuff. the one thing i am concerned about is this notion that the co-op units or units that are subject to rent control could be turned into ownership stock and i want to tread carefully there. that maybe why the displacement coalition asked for a continuance. i don't know. i have the same letter that we all have, but definitely there -- it is worth policy exploration there. those are my comments. >> that was not our intention. we are happy to work with the tenant's coalition and clarify

what our intentions are. as for your first point, the thing about the five-year look back, these loans are income taxes. they are for people who are house rich and cash poor. it is extremely unlikely to purchase a single-family home in san francisco. and it would qualify for this pot of money. so even if we made it back 10 years -- i understand your point. we don't want to open this up to folks who would buy a property and then take advantage of the funding to give even more value. that was not our intent. thank you. supervisor preston, did you have any comment or feedback? go ahead, please. >> thank you.

thank you for bringing this forward. i think we are all looking at ways that we can address the affordability it needs of folks in san francisco. i appreciate all efforts to move that conversation forward. supervisor peskin's committee earlier today was speaking earlier on that.

maybe starting with the chair, i think it is a two-part question. i look at the slides presented about the program. there's nothing there about the $74 million that are in the stability fund and potentially more revenue in future. i wanted to ask mohcd about that. but more broadly to look at the relationship between the two. maybe that is because it is discrete and separate. as i read through, there is a number of types of housing that you are trying to create through this. some seem separate and distinct and some seem to overlap with what may be considered by the house of civilian oversight.

>> if i could go first, if that is okay, i think there is a little bit of overlap in what i understand is prop i. most -- by the definition of social housing, that the proper by folks are using housing that is owned by nonprofit and the government. that is the working definition. this type of investment that we're talking about today is all privately owned.

it is geared towards low-income homeowners. and if we are adding units, those units will be rent-controlled or they wouldn't have been before. going from single-family homes to two units. that is the bulk of this is for privately owned property. and where there is an overlap, they get loans to buy their share owns. the land trust raise all this

money to secure the property when it comes to them creating the ownership co-op in each individual unit that will have to come up with $10,000. that is what this money would be for. it is for the shared cost. eventually it will end up in the financing and the building to help the co-op. it is complementary. it is not an overlap or substituting in any way. i turned it over to sheila. the housing innovation program is focused on those who already owned their homes but don't have

the financial ability to leverage the equity, which then puts them in a position currently where they have to cash out in order to get anything. this is looking for ways to stay and build additional housing stocks simultaneously. where this other pot of money will be publicly owned housing. >> i don't know if you wanted to go to supervisor more. >> if that is okay, supervisor preston. >> thank you. i'm sorry i'm a little late. i hope i am not too late. i really wanted to thank you for all of your work on the housing immigration program. this really aligns with a lot of the work that i have been doing through the sunset forward community-based planning process in district four and also with our a.d.u. pilot program in

district four that we have worked on with the planning department. i think this is an example of how we can do our low-density neighborhoods in san francisco. it is not a problem. so many have tried to frame it, but our lower density residential neighborhoods, there is a tremendous amount of opportunity to expand housing in our neighborhoods and through new approaches, and particularly to create affordable housing for families and moderate income households. so having innovation programs is going to provide a really important new framework for us to expand affordable family housing in our low-density residential neighborhoods, and even to stabilize a lot of the low-density residents --

residential neighborhoods that are predominantly working class communities of color, like many of them are and to help preserve their neighborhoods by preserving homeowners to build equity and expand their homes i am looking forward to working with you, caramilk are and the planning department. we have also been working with the planning department and aging income is one of our community partners. we have been working with them on a.d.u. -- creating affordable a.d.u. housing. >> thank you so much. if it is okay if we don't have more questions or comments, colleagues, go ahead, supervisor peskin. we can go to public comment. >> just a housekeeping issue,

which is it will be part of the file. it is great if we actually see these when we read them over the weekend or i will go on the internet. i generally only look at my board packet on the internet and i can absorb the powerpoint and ask questions rather than have to absorb it here. >> if we could -- if you could e-mail that to us, or the rest of the colleagues because it has some really good data on the investment of the mayor's office of housing. it is something i haven't seen before. thank you so much. with that, colleagues, there's a couple of amendments that i have on page 5, section d. i wanted to clarify that now it reads as long as the borrower is not in default, repayment shall be deferred until the earlier of five years after the first

certificate of occupancy is issued for the new unit or seven years after the deed of trust for the loan is recorded on the home. on the residence or a new unit. and also undersea, line 11, if the new unit is sold separately or in conjunction with the sale of the residence prior to the maturity date, instead of the end of the five-year term. so thank you so much. like i said, i will support a continuance of this until last -- until next week to allow us to meet with the tenant advocate and get it all straight. and with that, madame clerk, let's go to public comment. >> to the chair, i believe it supervisor preston put it in on the roster. >> go ahead, supervisor preston. i didn't see you. >> thank you. i just wanted to continue and thank you for your comments. on the relationship, and i

appreciate the comments on the relationship between the innovation fund and the housing stability fund, i think there are some things that, i can see there are things in here that are clearly different. there'll working with a low income homeowner to build and i'd -- and a.d.u. and that kind of thing, clearly i think they are outside. we can agree there outside the scope. but there is quite a bit, like the acquisition, the land trust model, things like that that to do, at least from my read, on the -- unleased -- at least -- unless they aren't intended to be, that are things that the stability fund oversight board has identified that we have provided the funding for, and as far as i can tell, it is the definition here too. if we were talking about a situation where we were adequately resourcing all of these things, it would kind of be a nonissue. we may have talked about that

this is more is better in some sense in terms of both and in terms of doing that. may be i want to inject the political reality a little bit into the conversation, which is that, you know, in the last budget cycle, the housing stability fund was funded despite proper bypassing. this was funded at $10 million when we have not yet moved forward in an ordinance and i think, my hope is that we are working towards a time where both of these endeavours, with the ordinance, you know, amended in whatever ways emerge during the continuance, but we are hoping both of those things -- it is concerning to me, especially with the infrastructure that exists on the oversight board, if it is an area that the oversight board is looking to fund, where does that leave this? one of the questions i did have about this is in the

decision-making. they set up a body of stakeholders and it is a very public process. people can call in and see what the recommendations are. here i am not clear what the innovation fund -- like if this passes and then the funds are there, what do you envision as the process for figuring out what gets the use of the funds? what gets funded and how can stakeholders weigh in on that? >> thank you, supervisor preston. this is not the proper i fund. it is a very different process. i think that we had envisioned that it would be a very similar operation of the fund as was the nonprofit displacement fund

where one that had existing relationships and know-how in lending would be able to create an r.f.p. and put out a set of qualifications that people would answer to their mission driven by definition. they support low income people. they are nimbler. it just happens more quickly than it does through the mayor's office of housing. let me address the issue of the overlap with the community land trust. because the mayor's office of housing currently is supporting

the acquisition of properties of by the land trust through the small sights program, which now, hopefully, will have more. i do know that it is a need. it is an urgent need that they have and i am hoping that it will also help support the mayor's office of housing knowing how to operationalize that and support the land trust in making that happen. it hasn't quite happened yet and i'm hoping that it will. >> thank you. and i think following up on some of the comments that i was making before, and may be

planting the seed. it is unfortunate when we have legislation pending. the committee can't sit down with each other and brainstorm on these things. i will do that here in public hearing, but i want to propose -- i don't know if it would be a friendly -- i don't want to propose the amendment, but the concept to you, which is linking this to funding of the housing stability fund we have a problem, also a disagreement between the board and the administration around funding for the housing stability fund. i think i will just tell you, from one supervisor's perspective that my level of enthusiasm for a new fund, when

we are not funding the one that is there, it certainly impacts that. i would love to send a message and figure out how we sent a message as a board that these things will go in tandem and that the fund will come -- become operational or move forward when we are also using the funds as intended on the housing stability fund. there is considerable override. but there are also areas that this innovation fund gets that that are different from some of the others. i would love to see both being funded moving forward in tandem. [please standby for captioner switch]

. >> i hoping that you will support this. i think there isn't a small area of compliment under limited equity co-ops. it is very small in proportion to the entirety of the program

area of the fund. it is actually very different to have a homeowner occupied home and social housing that is owned by nonprofit or government entity. they have very different models. for whatever it is worth in my district 7 it is two-thirds homeowner occupied. many neighborhoods that are low income one of the last african-american home ownership that is what we were trying to address, and obviously we are not restricting to just district 7 and 4. my hunch is that is where it is used the most because this is the most of this type of housing, community in district 4, 7, maybe 11 and 10 as well, but i can't imagine that we are going to have a lot of take up

in district 5, for example. they are a different set of needs. i think it is okay to address those. >> thank you. with that let's go to public comment, madam clerk. >> clerk: thank you. we are checking to see how many callers are in the queue. press star 3 to speak. those on hold continue to wait until the system indicates you are unmuted and you may begin your comments. we have 15 listeners with nine in the queue. first caller, please. >> caller: good afternoon, supervisor melgar and committee members. i work at children's council of san francisco i am a district 3

resident. i am calling in support of supervisor melgar's housing innovation program. >> i am assuming for now, no. >> i am pausing. i have someone that needs to be muted. there we go. sorry about that. let's restart. go ahead. >> thank you. hi, everyone. i am nina charles, district 3 resident calling in support of supervisor melgar's program to offer new ways to support low and middle income residents in purchasing their own home. family child care providers are often facing high risk of displacement if they are

renters. most family child care providers are women of color. in san francisco we only have enough capacity to serve 50% of the infant and toddlers. this would allow more women of color to become homeowners and small business owners. we are in support of down payment assistance for family child care and long-term tenant occupants as this will help them stay in san francisco. we have the opportunity right now to move forward with the piece of legislation. i believe we must do so in order to protect family child care and expand for the needs. thank you so much for this time to speak. >> supervisor melgar: next speaker, please.

>> caller: this is anastasia. i am part of the anti displacement coalition. we would like to work further with you to make sure that there are no tenants who live in these buildings are displaced. also, one suggestion is to make these things instead of loans, turn them into grants so that these low-income people can build wealth into their homes. thank you. please continue. >> supervisor melgar: next speaker, please. >> caller: good afternoon, supervisors. i am mamie underwood in district 10.

child care provider. i am calling to support supervisor melgar's initiative program. some child care providers are so much at risk of losing homes, family placements and the continuity of care with the children due to the high rent in san francisco. many providers have been not able to keep their homes or their livelihood, their jobs due to the high increase in rents in san francisco. not only do they lose homes, businesses are gone, they lose the connection between neighborhoods and friends and support of families and the children they have been taking care of. i truly hope that you continue to move forward on this

initiative. it will truly bring more people to low-income people, the last people that are involved. increase wealth. it increases the number of african-american and brown people to live in san francisco where the numbers are dwindling as we already know. thank you so very much. i look forward to the outcome. thank you. >> supervisor melgar: next speaker, please. >> caller: supervisors this is lorraine district 5 affordable housing for seniors and people with disabilities. i support supervisor melgar and mar's housing innovation if amended. it is moving us in the right

direction but doesn't go far enough to help homeowners and renters who need the most help and suffer the most obstacles. if we encourage greater density in residential housing it must come with greater ownership and rental opportunities for low income and vulnerable populations and guaranteed protections. any density program must have read de-access to owner occupiers on fixed incomes. we have a hard enough time securing food not adding major debt. the frightening prospect of managing construction. this could be great for low income renters if their current status and return is ironclad protected. any newly built units are truly affordable. a program based on loans is not adequate to overcome obstacles.

i propose grants rather than loans to low income owner occupiers continuing in the residence after the construction. to guarantee low a.m.i.ren betals for the 50 year period. grants could be administered through the public bank with enforcement assistance from the housing rent registry and board. protection for current residents must be expanded and guaranteed with provisions regarding the tenant co-op members definitely need further scrutiny. it must be re-examined before any amendment. >> supervisor melgar: next caller. >> caller: good afternoon, supervisors. i worked as early childhood

educator 27 years. i am calling to support the housing initiative program. i learned two important facts in child care. first that fcc educators provide safety. reality most of the fccs don't own their own homes. we make the home away from home for the children and families. second fact i have learned children become part of our own families. this initiative prevents future displacement be providing financial needs to secure housing and give communities and neighborhoods across san francisco generational housing and continued care. i ask you to support family child care now and in the future. please continue to advocate for more ways to support early kay and education in san francisco.

thank you. >> supervisor melgar: next speaker, please. >> caller: i am director of the family child care association. i am a constituent of supervisor mar, district 4. i wanted to express my gratitude for this initiative. i think it will help provider in the city. it is an important step but i agree that there is definitely more that could be done for low-income people who may not afford alone. maybe there is more room for grants for those in existing, existing homeowners to expand and provide more income. this is a fabulous event listening to your conversations about this. i learned so much throughout this thing. thank you very much, supervisor

melgar and mar. thank you. >> next speaker, please. >> caller: good afternoon, supervisors. i am liz. i work for low income investment and cpac chair. i support the housing innovation program to offer support to purchase their own homes which is much needed in the city. this will help family child care providers who face high risk much of displacement as renters. when they lose their home they lose the child care business and the neighborhoods they are serving and lose the child care spot that are much needed. we hope up support this program and we look forward to ways to support the early child should

educators in san francisco. thank you so much. >> supervisor melgar: next speaker, please. >> caller: good afternoon, supervisors. corey smith on behalf of the housing action coalition. i will echo the comments of previous speakers. i want be to extend appreciation to supervisors melgar and marfor leading these efforts. the name says it all. when we are innovative in creating more homes for middle and low-income people in san francisco especially those boxed out of the opportunities we commend you and look forward to this process. this was certain for supervisor melgar to create these

opportunities given the economic realities. anytime we can put generational wealth and put money in family's pockets from the one generation to the next that is a fantastic outcome. i know melgar and marare aware there is an architect in san francisco who has been talking about a program. the six-story apartment building designed to house middle income and think this could be a good fit. any conversations around this legislation and if there are opportunities on incentivize homeowners to get low income housing and create generational house. absolutely love the way this is

headed. it seems like an all options and ideas on the table. that is fantastic. let us know how we can be helpful. >> supervisor melgar: i apologize for cutting you. next speaker. we have 13 listening and four in the queue. press star 3 to speak. >> caller: i am mary thomas, district 11. child care provider for 40 years. it is so important for us. we appreciate supervisor melgar for bringing this out. we have those losing providers and we are one family and we work together and we are essential workers. we want to let you know we are teachers, educators like you to

fight the district. we are responsible to take care of these families. i thank you right now for your time. >> next speaker, please. >> caller: good afternoon. i want to echo what a lot of folks have said in supporting supervisor melgar's housing innovation program. new ways to support low and middle income residents to purchase their open be homes. child care providers face high risk of displacement as renters. they lose their home, business in these much needed child care help in the neighborhoods are gone. we need this now more than ever. i urge your support.

i look forward to ways to support you in the future in san francisco. thank you so much for your time. >> next speaker, please. >> caller: good afternoon, supervisors. i am calling in support of the continuance. we definitely need more time to discuss some of our concerns as part of the anti displacement coalition. there are many concerns. i appreciate the continuance. i also look forward to amendments. i think there are a lot of great things in this legislation. again, seeing a lot of what has happened here in north beach with developers actually speculators coming in to buy up rent controlled buildings and

delays construction or stopping and starting over a three year period where there have been constructive evictions. then when three a.d.u.s are added to see the prices right now at $4,700 a month per one bedroom units is a little scary. to avoid unintended commences to this i look forward to some serious discussions. thank you so much. >> that was the last caller in the queue. hell hell thank you, madam clerk. supervisor mar. closing mark remarks. >> i do want to thank the folks that called in especially the child care providers. i think it is exciting how the

housing innovation can help support family and child care providers being able to stabilize facilities and operations. i think that also the tenant rights and anti displacement advocates appreciate your concerns and you sept an e-mail. the coalition sept an e-mail also. i want to emphasize that i and chair melgar are committed to censuring the housing innovations created through this program have the strongest possible protection for tenants. i believe that the legislation is good. we will have time for dialogue with you over the next week. thanks again. thank you, chair melgar.

>> supervisor melgar: thank you. madam clerk tells me there is one more public comment that popped up. we will take that caller. >> caller: i am from the mission economic agency. we support this initiative and appreciate chair melgar and marraising a continuance. it sounds like you have ongoing conversations. it is important to the key provisions that we would like to see go forward. tenant protections. i will mention the owner moved

in and bought out withdrawn units and strengthening those in every way possible. we think this is a major step forward to mark increasing the overall participation among our low income families across the city. who have not historically not had access to participate in the growth that occurs. we know that there they talk about those facing the most likely possible displacement in that circumstance along with the family child care providers. those are critical areas that we would like to see this implemented and grow that piece of the pie and making sure we like this idea of making sure we have a community serving implementation partners as part of the cultural ecosystem

stabilization lens towards the whole maximizing impacts of the program. we strongly support those provisions going forward. we would like to bring the legislation we are seeing and making sure we have these ongoing conversations what are the impacts. >> madam chair. there is one more caller. quick announcement. we are on item 2. administrative code ordinance. press star 3 to be added to the speaker line. let's take the last caller. >> caller: i am nancy. resident of district 2. former appraiser for affordable housing nationally. i also.

[indiscernable] i did not mean to speak on this call. i was here nor the vacancy coming up. i want to bring up i hope the language, i am very much in support of supervisors mar and melgar. i lived in nine states. the lack of hispanic and black people in san francisco county is horrifying. i have multiple latino and native-american friends who moved out of the bay. please tie the language be to this based on very low income and low income. i am hearing a lot of the cash poor moderates. if i look at any of the districts, all is 11 the majority of ownership is white male. asian or caucasian or white,

whatever you want to call it. i hope you can focus on very low income and low income homeowners of color. they have been so affected by the gentrification in the greater area. additionally, to make it proportional based on representation in each district. i didn't see that spoken of fully. as i was pulling up the data from the survey coming out because of the census in 2020. i look forward to seeing how much it changed in the home ownerships. that my district 2 i am grateful for my supervisor. melgar and marthank you again for doing the work and going to

bat on this. >> thank you to all of those who came out to comment including the advocates who i will meet with and work with to make sure that there are no unintended consequences for any of that language to negatively affect tenants. that is not what we want to do. i will make a motion we continue to the call of the chair. i do intend to bring this back soon, however, i want to give us enough time to have all of these conversations, including with my colleagues to make sure the language reflects our intention. let me add since a couple folks

called in from low income investment fund that we drafted this to make sure we can leverage other funding as well. with the child care providers we have a child care facility fund that right now cannot -- is not usable. it should be. this is why we are having this open innovation fund to be able to have more flexibility around this requirement so we can leverage other funding that is available to this population and low-income people as well. with that i look forward to your partnership and creating something that is useful and practical and can help people. madam clerk, if there is no other comments from my colleagues. did you have something to say supervisor peskin. let's take roll call on the motion to continue to the call of the chair, please.

>> we will close public comment. >> yes, public comment is now closed. thank you. >> clerk: there was a motion to amend. >> supervisor melgar: let's amend it first. >> clerk: on the motion to amend item 2 as stated by supervisor melgar. is there a mover? melgar. >> supervisor melgar: yes. >> clerk: supervisor peskin on that motion. >> aye. >> clerk: supervisor preston. >> aye. >> supervisor melgar. >> aye. >> clerk: there are three ayes. on the remaining balance to continue to the call of the chair as amended supervisor

peskin. >> aye. >> supervisor preston. >> aye. >> supervisor melgar. >> aye. >> you have three ayes. >> supervisor melgar: thank you, supervisor mar for joining us. madam clerk, please call item 3. >> clerk: hearing to learn more about pacific gas and electric company and the san francisco public utilities commission rolls in providing power to the city projects and affordable housing and about the impact of pg&e requirements on proposed fine lines, budgets and power sources decisions. call 415-655-0001.

if you would like to speak to this item press star 3 to be added to the queue. >> supervisor melgar: we are now joined by the sponsor and supervisor ronan. thank you for being here today. the floor is yours. >> supervisor ronen: thank you for hearing this hearing today. san francisco and pg&e have had a long and complicated history back to 1913 federal act to creator a public plow were system. over the years the negotiated agreements and court decisions. san francisco and pg&e settled into a truce tolal lou san francisco to use the power on

municipal projects on the infrastructure. it is important to note that the energy produce is reliable and safety. pg and be e has interrupted that and raised roadblocks without justification to powering new projects. pg&e is requiring expensive large equipment to power projects that don't require large amounts of energy. pg&e did not require similar equipment for their projects or any other customers they serve. last week the court of appeals cited against pg&e and federal energy regulation when it found that by extension did not provide sufficient justification for demanding san francisco purchase this wildly expensive

and unnecessary equipment to connect public facilities to pg&e's grid. the appellate court cited the untie competitive practices. while pg&e may site generic safety and reliability concerns for bogus and expensive requirements the dc appellate court called their bluff stated the corporations is holding san francisco host table to deny new customers. it is no coincidence that san francisco moved to broader use of public power and good faith efforts to purchase the distribution infrastructure. pg and e is increasingly difficult to work with. this should concern all of us. from affordable housing projects to community repcenters, tombs,

the safety and infrastructures. baths rooms for muni drivers. the actions delayed construction on the most critical projects in the city during a worldwide pandemic increasing costs $18 million over past three years. i wish i could say was unusual behavior. as we are acutely aware. it will finish the criminal behavior related to to pipeline explosion and facing criminal documents for the wildfires. if this company post bankruptcy to turn over a new life shining attention on what it is doing reveals it is the same anti

competitive dangerous practices in san francisco as it is throughout the state. some of is enough. i introduced a resolution that my colleagues joined urging pg and e to cooperate and calling the department to provide quarterly reports on the tat susof projects preparing to use city plow were. we have hoisted meetings where we crack projects along the city department staff we worked out one off and add hock agreements to move the projects along or more affordable housing in december. the quarterly reports continue to tell the story of outrageous

delay and expanse. they inflict by our resident bees. there were of of 68 projects in the 2021 report. every district is affected. the report how manies how pgae has unjessie electrical equipment to each and every traffic signal in the city which could take up norms amounts of public space that is not feasible. i look forward to this hearing today specifically from the san francisco public utilities commission to help explain these developments in more detail. for the sake of time we invited two of the many city departments whose projects have been meg

fill enclosed. we invited t g&a as well. i believe the vice president is here to present and answer questions. if there isn't any additional open remarks i will turn it over to sfpuc general manager for opening comments. >> thank you for calling this and thank you supervisors preston and peskin for allowing me to join you along with our assistant general manager for power who will speak later. thank you so much, supervisor. you summed it up and identified why it is we are here. unfortunately, we are here today about an ongoing problem. this body is too much where.

continued obstruction here in refusing to connect to the electric grid unless unnecessary and wildly expensive equipment is added. these projects include styles home less abtheir's museum. in june 2018, 31 projects faced the roadblocks. since then 1200 pro jets. there are 68 active projects that need to be connected to the grid. you will hear from barbara heal. outside the rare agreement with several affordable housing the

behavior has showed few signs of improving. they have delay the healthcare facilities now to muni shelters. one goal here. time me competition -- sometime styme competition. we are fighting to protect consumers. there was a recent bright spot. last week a federal appeals call over p.g.e. in two years that p.g.e. is using to delay or limit the city's ability to serve long time customers. one you serve small power loads.

long time customers we have served for decades. that other aspects later. the court sided with san francisco that they filed at attention to what they were doing so it was anti competitive. that decision was a clear victory in fair mess. it is clear they are holding public housing and public projects hosing this requires careful scrutiny which it doesn't get. it also underscores why we should own our own local electric distribution network rather than regulators who is a convicted felon. the issues before the court

centered on the pg&e whole same service under rules adopted by the federal agency committee. >> pg&e $20 million to serve facilities providing city services. pg&e is to stymie competition that been obstructing public projects for decades. the contractor limited the ability to serve customers. now demanding unnecessary equipment before hooking up to pg&e electric grid. one example. pg&e equipment would have required 30 by 20 by 12-foot feet of space to serve the san francisco genhospital to power a

light and hand drier for muni praiseters on van ness avenue. the cost was $500,000. appropriate electrical equipment costs $5,000. in fairness. pg&e backed down on that project. it doesn't dispute the fact that is their position at least initially. pg&e is demanding the city construct equipment for high voltage power connections. we maintain secondary connections with lower voltage are appropriate connection types for these projects. that is used for these customers all over pg&e. we appeal to the dc circuit court which ruled in the city's favor. you may hear from pg&e this

equipment for high voltage power is needed for safety. that is one argument they made to the court and the court reconvicted because it wasn't backed up by evidence. in fact, the court found the orders on the issue do not reference any specific risks to safety re rely ability with to the san francisco request. similarly, you may hear p.g.e. hear the high voltage standards are standard between utilities. the court also rejected that. san francisco connects to pg&e at numerous small.s of inter connection rather than large points as typical for utility inner connections. the court found in favor of pg&e didn't explain why the industry norms reasonable and why the san francisco geographic

configuration which differs from other utilities. close quote. the court found that they did not provide sufficient justification for the conclusion. i will note one more observation from the court on this topic. the court wrote. quote. this presents a troubling problem to potential anti competitive effects of administration of open access tariffs. more than a cents tree ago the congress authorized the system to provide the cheap power but also to ensure competition in its retail power market. faced with claimed that pg&e was frustrating that by treating its own retail service preferentially and refusing customer service it fell short of muting the duty to ensure that rules or practicing

affecting the whole says rates are just and reasonable. it is those anti competitive effects serious concern to us. i think should concern all of those in san francisco. residents win when they get clean power from safe reliable utilities. that is what the san francisco public utilities commission is. pg&e has shown itself to be something different. i will hand off to my assistant general manager barbara hale on the specifics of the projects. barbara. thank you, supervisors. >> thank you, supervisors, for hearing this matter today. i am barbara hale, assistant

general manager at the p.u.c. we operate clean power and meche power and the pedestrian lighting services. 70% of the electricity in san francisco as clean power. we serve 380,000 electric accounts. under the state's community choice aggregation model. under be that model we provide electric spry and program services. this is a partnership. pg and e provide the rest and customers pay the bill. the program which is the focus of the hearing today provides retail electric service to 4600 customer accounts as san francisco's public reowned utility. they get a heche bill.

we fund and operate our street and pedestrian lights. here is the basics how it works. we generate power putting water supply to work in the sierra. you see the clean power over the transmission lines we own and to what i will refer to as electric highway operated by california independent system operator and to distribution system pg&e opens and to customer. we pay pg&e $20 million per year for use of distribution. red on the slide. part of our cost that is included in the he t.c.h.y power bills. rates are in the files. the wholesale service.

the federal regulatory commission is responsible for the rate and certainlies of service are reasonable. the requirements are not necessary for safety re rely ability. i need to check. i am still seeing the first slide. are the supervisors seeing the slides change? >> we are. this map on slide 3 was presented at the hearing in juno report on these issues.

each icon is a project dispute with pg&e at that time. you can see the legends. civic institutions randall museum, recreation facilities like the pool, the senior housing renovation and infrastructure like the p.u.c. west side recycle project. city facilities providing service. by inconsistent process and equipment requirements. that was june of 2018. next slide 4. it shows the latest report. number of projects affected by pg&e obstruction has increased. we have 68 projects in dispute more than double june 2018 impact. next slide gives detail among the examples.

sf unified school districts. cleveland elementary is undergoing renovation. exciting times for the school district. pg&e requires oversized equipment. additional $500,000 in costs though that program. rec and park and s.f.m.t.a. are here to speak to their projects and i will hospital down to the mohpd programming area. here is an area of progress. pg&e and the city agreed for affordable housing to move forward. this is limited. only applies to new development with no existing rehab that the city is funding. 100% affordable. no mixed income projects. it must be on city land.

finally, some p.u.c. projects. where to avoid further delays we invested in primary equipment to add 500,000 cost. fingers crossed we make our opening. we can begin to provide service to the community there. we have recycles water pump station. if pg and e did not complete we will have to install primary switch care. this is important to offsets the use of drinkable water to irrigate golden gate park when is important in this drought period. these are examples of pg&e's obstruction to the city meeting the priorities. we are talking delays in priorities more affordable housing, medical facilities,

recreation centers. the de carbonization projects are at risk as they require unnecessary oversized equipment. this wayses dollars and time as we redesign the changing rules. we are talking $19 million in the last three years. you can see the details in the report we submitted. pg and e updated the tariff with a filing that went into effect april 2021. just exacerbates the issues. rates are significantly increasing. an $800 per month bill for distribution service under the proposal would be a $4 million bill. thankfully together with other parties we got that knocked back to $1.6 million per month. we see the pg&e no longer want

to include new secondary connections and new connections to the downtown would be prohibited. longer timeline for inner connections with the april 2021 filing. p.g.e. is no longer allowing unmuted load. this is significant impact to the city. we will dive deeper on this one with slide 8. the new filing prohibits all unmetered loads including existed connected loads by being served by the city. that includes streetlights, trafficnals, wi-fi, pg&e requires all unmetered loads to be served by primary equipment. this wouldry choir as make or

construction project, extensive work that would cost over $1 billion. not a good investment of city dollars. we still needy electricity service to these loads. they would become pg&e customers, not he t.c.h. y customers. they asked to make the determination effective februar. results for the city again increased electricity cost, loss of city revenues and reinvestment dollars. decreased control over city infrastructure. result for pg&e? more new customers, more revenue, less competition. we protested that december filing and asked for the maximum five month suspension. pg&e asked to let it move

forward irrespective of our protest and further consideration. pg&e said request should be subject to refund not in our view a business like approach. it is an approach that maximizes disruption. today was an or suspends matter of determination. we encourage efforts to reach settlement before hearing procedures commence. we have attempted to sit down with pg&e on these matters and continue in the about to do so. we have a small window of time for productive conversation. we hope pg&e come to the table to be fair and reasonable distribution service provider for san francisco. i am happy to answer any questions. greg is with me from our power

team to assist me. thank you very much for your attention. >> supervisor melgar: i want too leave this slide up to make sure i understand. this is unbelievable. pg&e is saying that the only way they will allow san francisco to continue to provide he t.c.h. y power to streetlamps something we have been doing forever we would have to put one of those boxes where? one of those boxes or how many boxes on the streets? >> what pg&e proposes is for every point of connection of unmetered service to their grid we would need equipment like this. at each point of connection we

may have one, three, six streetlights behind that point of connection. this equipment would be placed based on the existing connections. >> what does that mean in reality? does this mean one box for every industry streetlamps is that what we are talking about? >> yes, yes. >> we have 25,000 of those? >> 25,000 streetlights, yeah. >> i want be to do the math sheer really quick. >> you understand the streetlights are you there out san francisco. >> supervisor melgar: they are saying the only way we will let you continue to provide clean reliable safe energy which you have been doing for the past hundreds of years to the streetlamps you own on your city streets is to put over 8,000 of

these boxes that are massive all throughout the streets of san francisco? that is unbelievable. we can't do that. we don't have that much land to put 8,000 of those boxes. >> supervisor ronan and that we generate the electricity for from hetchy. >> it was outrageous enough when they were requiring us to put the boxes to power affordable housing unit and it took away one unit for families desperate to have that. to now power the streetlights? unbelievable. couple more questions. i will turn it over to my colleagues.

can you explain a little more what the decision today did. basically pg&e was says that decision on our streetlamps was was going into effect tomorrow. did they prevent them from doing that starting february 1st? >> yes. they granted our request to suspend the notice of termination. they said, yes, you have got five months to work it out. if we don't workout a solution with pg&e they will be ready to have hearings on these matters and we will be back with pg&e saying let's move forward subject to refund. it would be today all over again.

that is why i am saying we have gone along in the past. sometimes we are successful with affordable housing agreement. i would love to have similar conversations productive to address this unmetered load issue. >> unlike homes where families use different amount of electricity every month depending if it is cold or hot or cooking more or for whatever reason. i would imagine the america's use is consistent with streetlights because they operate in the exact same way, for the exacted same hours every month much the year, is that right? >> that's right for decades they

paid their bills by calculation of the lighting hours, conassumption. it is a known quantity. if pg&e is successful and they become the retail elect are trick service provider for the streetlights and traffic smalls they would be unmetered and would bill on such a calculation under the pg&e proposal. >> that is all my questions. colleagues, any questions? supervisor peskin? >> supervisor peskin: thank you. maybe this is a conversation tomorrow in closed session. the answer might be privileged. it seems to me that the only venue shouldn't be in the nation's would tolwith appeals to the washington, d.c. court.

is there a 17.200 business and professions claim, riko claim here? this seems nuts. it is insane. are there other things we can do in a court of competent jurisdiction to stop this behavior in san francisco or the state of california? if you are not comfortable answering that. that is a question for attorneys. we have the general manager, anyway. >> i will pop in here. something i probably would not want to talk about here. rest assured i am in continuous conversation with folks in my former office about options that are available to us there. every option is looked at.

>> thank you. we can talk about it tomorrow in closed session if it is appropriate. >> chair melgar. >> supervisor melgar: thank you. i had a question. there are other municipalities around the state that provide public power. i wonder if they have the same issues with pg&e if they are targeted as well. if there is an effort to band to do something along the lines what supervisor peskin was questioning about. i will leave that for closed session with respect to the

treatment of our municipalities. san francisco as they were reading from that case. san francisco is different. we don't have a standalone service territory as a publicly owned utility. we serve customers right next door to pg and e. we serve that and a third of the bank. we don't have a grid of our own. that is the way the system was built out over the decades. we don't have a fellowship with other municipal utilities who have clear boundaries between geographic boundaries between their territory and the

territory. >> their boundary is the entire island. >> no pg&e electric. >> thank you. if we quantify how much this costs us? >> we have estimated over $1 billion to save that load for he t.c.h. y. we include in the quarterly report the spreadsheet that shows how much too city departments and p.u.c. have incurred out of pocket costs associated with these disputes, redesigning, buying equipment, have to pay contracts because the project is off schedule those are collected in a spread

ship with the report that we do around $19 million at this point. that is actual costs the city has incurred historically because of these disputes since we started keeping track. >> thank you. >> i know supervisor ronan we have m.t.a. and rec park witnesses as well. i didn't mean to forget to call for them. >> i can call them up. thank you so much. i do want to appreciate aaron johnson, regional vice president. i will call up the project manager for rec and park and then acting chief financial officer for m.t.a. >> good afternoon. i will try to share my screen

here. >> thank you so much for calling this hear on the pg&e issues impacting our important recreation projects. they are on schedule delay and cost increases to fulfill our commitment be to the community

are impacted. since the last time rec and park was here at land use in 2018 to discuss these issues, negative impacts pg&e had on projects increased. as an example these are two projects with issues finally now nearing completion and resolution. francisco park and the pool. both experienced cost increases due to the pg&e caused delay. the park was impacted by the unnecessary requirement to tie into power two city blocks away from the park. there was delay in the connection dispute, to reduce the project accepted the requirement resulting in additional work and conduits, additional design review, unforeseen utility conflicts and delays in inspections.

the cost and scheduled impacts are significant. it was energized on january 5, 2022 to set our opening date. pg&e caused delay at the pool to open to the community. the delay turnaround on reviews. the pool is now scheduled to open february 7th. those are great stories. we had huge delays. we are really concerned about the current projects and future impacts in relation to the wd3 interim agreement and primary switch requirement. on the right you can see the averages we are looking at in terms of costs for delay and some of the issues we see across projects. the pandemic has shown parks and

rec space are critical for everyone inault parts of the city. they provided a space to say healthy in social spaces. this is a space comparison for primary switch gear they are requiring on all projects. it is larger than a small restroom. about is size of an outdoor gym and quarter of the size of our clubhouse. this is space, recreation and open space permanently lost to pg&e infrastructure that is not necessary. new park improvements are coming to the community late. delay means increase costs unforeseen. for contractor overhead and city staff costs during months the project is delayed. it creates domino effect leaving

the next project in the pipeline delayed because rec and park staff are working on the delayed project. it has to absorb 500,000 to 700,000 to pay for this switch gear. we are losing an outdoor gym, community fund and dog play area. this is the majority of the budget for many of the rec and park trail projects. these are correct projects facing scheduled impacts. golden gate park. design called for moving the meter 10 feet. in the plan view the red dot shows location of the existing meter and how that location is in the middle of the plaza. red rectangle to the right where

we propose moving the meter is the size of the primary switch gear should we install. you can see impact that would have. requests were made to approve waiver. it would lead to unforeseeable delay and associated cost escalation without any sense the waiver would be approved. rec and park is moving forward with the project leaving the meter in the current location. the design. this rec center project does not change electrical load under wd3. it will require electrical service. on the plan you will see two red boxes showing potential sizes ofthe switch gear. one bedroom apartment size is taken away. this has constrained budget

funded through 2020 health and recovery bond and impact fees. this cannot absorb delay in cost including escalation due to delay. recreation and park is partnering for a new recreation center and gym. the center will provide a much needed recreation center south side of san francisco. electrical load does not require primary service. under wdt3 without waiver they require high voltage electrical service. on the plan you can see the size of the switch gear. space and size taken away from recreation space permanently. we cannot afford delay. we are partnering for block 3

park. play features and gathers for trees and plantings and small restroom. the electrical load does not require primary service. this team has requested a waiver from the primary service requirement by applying for secondary service with a retail agreement. under -- [indiscernable] shown in the red box. placing the witch gear size of one bedroom amount surrounded by high density buildings does not make sense.

two parks in the network of waterfront parks in india basin. 900 inness is going to bid in weeks. the electrical service application before april 15th to be considered. pg&e required primary electrical service. it has been delayed. the project to remove the pump. ocean beach will avoid installing the switch gear nearly equal size. all projects and those on the right side require service agreements with pg&e under the wdt3 agreement at risk of schedule delays and significant

cost and permanent lost of recreation space. all recreation and park project electrical loads do not require primary electric service. the cost over ages are ripple effect on the next park train or rec center. reducing scope. the biggest impact is on the permanent loss to switch gear structures of one bedroom apartment unnecessary. pg&e are barriers to fulfilling our commitment to the community. when we are required to build unnecessary infrastructure we

are not delivering a new rec center or play field. thank you for calling this hearing today and all allowing us to share the impacts we have experienced and concerns about the future especially under the terms of the wdt3 agreement. we hope this hearing will result in changes which will improve city coordination with pg&e including honoring waivers for the community. that concludes my presentation. i am available for questions. >> any questions? >> thank you. we will hear from mr. brewers.

>> acting chief financial officer at m.t.a. my regular job is program manager for the agency. one element is our electrification program which is important to allow san francisco to move to an all electric transit fleet. i will talk about that. that is in the future. it is something we are very concerned about. as you know, as part of our climate plan we want to transform our entire bus fleet to zero emissions battery electric. we have been working towards moving to a full electric fleet for nearly a decade now. we are currently piloting vehicles and have the project to start with charters. this will require nearly $1 billion in investment in electrical infrastructure across the city. one of the test vehicles now.

as the supervisors know the mta spent hundreds of millions of dollars on the fleet. with the schedule risks time of police procurement is high risk for the city.

these battery electric vehicles require power. we will increase power requirements across the city. i believe the mta is one of the highest users of power in the city. we are proud uses of the power. again, we are dependent on the infrastructure to get the power to the location and to the fleet throughout san francisco. this is going to require significant logistical planning to make this work. if we don't have the successful reliable partner it will put billions of dollars at risk with the transportation infrastructure and climate goals the city has for itself. two very specific examples. with our first example trying to get in pilot chargers.

the service agreement when we prepared the presentation was 5-12 months late. on the back end. imagine we are looking at hundreds of vehicles, billion dollar facility where we will require this level of power. there was an 8-12 month delay to get chargers for 5 to $10. imagine when we look at the entire fleet. barbara mentionedthe traffic si. they are key first point of keeping streets safe in san francisco. example we spent many years working on the traffic signals. pedestrian count down signals, updating visibility of the traffic smalls in the city. we were not able to turn on until 12 months after completed. that puts the safety of san

franciscans at risk. we are not able to start this important infrastructure. summing up, it is important. we want to transform the transportation system in san francisco. we want to move to electric and implement important safety improvements across the san francisco streets. we need a reliable partner. the risk and cost and delay we have seen is unacceptable and will make it very difficult to contemplate programs. i am happy to take questions. >> thank you so much. any questions? thank you. appreciate your presentation. now it would be great to hear from mr. johnson, regional vice president for pg&e. thank you for being here.

as you can tell we are troubled and frustrated here in san francisco. i am very curious to hear what justification you have for really holding our residents hostage with this anti competitive behavior. i am looking forward to hearing from you. please begin. >> thank you, supervisor ronan members of the board of supervisors. thank you for having pg and be e today. way of production i am aaron johnson. i am in a relatively newly established role as regional vice president. account ability for all operations gas and electric and operating unit in the bay region. for us we have that defined as san francisco, sam mateo. contracosta and alabama meadda

county. i hold a operating meeting every morning to bring together all lines of business to meet customers needs across the entire business. personal introduction i am a 23 year resident of the city. i was born in the city and grew up visiting my dad at the rec center. i live in the inner sunset. thank you, supervisor melgar for representation. i raise my family here. ride my bike to the office every day downtown and have been an active member of the community involved in organizing longer hours at the only outdoor public pool in the city, the mission pool. this is my city, too, i am fond of it and excited to see the projects move forward. i am an engineer buyback ground

and love getting things done. i spearheaded the project agreement. i came to energy to clean it up. i fell in love with the service in this business. in this role i would like to be a great partner with the city and get some things done. energy infrastructure is hard and complex. i think we will be more successful working together. that will always be my approach. i did want to go for a short presentation and then respond to questions. i would love to speak to a few items that have come up in the previous presentations. we have four priorities i want to highlight with our relationship with san francisco. first is safety. reliability. continued investment.

partnership. we will go through each of those. we start with safety. we have a new c.e.o. that has drawn a line in the sand. everyone and everything is safe. we know we have a long way to go to earn back the trust of our customers about our safety performance with the company. one of the ways we are doing that is setting very clear standards in the city of san francisco. we have a patchwork system of rules and regulations that have been enforced in some instances and granted many exceptions in others how we operate that system. we recently did a survey of the 15 largest utilities in the united states that provide 75% of the load. there is no other city or utility in the united states that provides the kind of service that san francisco

receives from pg&e in this sort of patchwork and piecemeal fashion the way we provide electricity here. standards are critical to safety. our regulatory filings are designed to make the standards clear so everyone can plan appropriately. we are not moving through one off by one off basis. >> it has be far the highest and best reliability customers experience less than one out age a year for 50 minutes. average is 90. average for p.g.e. is 100 in the rural areas.

san francisco is by far and a way receiving the best reliability around. >> our investment in san francisco is quite impressive. we have been a partner every step of the way in the most important energy projects. 25 years as one of the projects i was able to work on was closing of hunters point power plant and then potrero power plant to leave san francisco which used to get 45% of the energy to transmitting the power to the city. we have built a nice solar plant on the reservoy. the vast majority comes from the long transmission lines.

pg&e made investments to make sure the power plants would close and we would continue to improve reliabilities. we have over $1 billion investment for several high profile projects. new substation on the south end of the city to address homeland security events with terrorist elent a number of years ago. relocating the outdoor substation next to where the hunters point power plant was. we are going to move that across the street to a world class ark secretary designed indoor facility at the request of the community and city. we will move that and doing a similar project down in potrero illinois by the old power plant

pier 70 on the old power plant site. these projects will improve reliability, increase redundancy, key to rely ability. they will make san francisco more resilient in the event of an emergency. move to the next slide, please. >> over the last several years we have a strong partnership with the city about how the various wholesale tariffs are implemented in the city. i will speak to that in a minute in more detail. we prioritized the priority projects in affordable housing to move forward despite change in tariffs with exceptions for city-owned housing. schools and parks are prioritized. we have engineers to work through the projects anchored

nation meetings with many city departments monthly to make sure we are working through all details of the project where we all have opportunity to come together and work more closely to make sure things can get built in a timely fashion in the city. i guess i will speak to the matter that first came up. we do have this relationship around wholesale and retail service. if i was to summit up in one phrase the city asks us to provide them retail level of service at wholesale prices. that is primarily the essence of the dispute. now what entity wouldn't want retail service and all of the things that come about that at wholesale prices? there isn't a whole lot of difference in what actually is provided in the cost of how were or what it costs us to provide

power at the retail for the secondary or primary level. what happens with customers that receive wholesale service from san francisco they avoid most of the public purpose program charges. they are able to avoid the costs of low income programs,ho income free home weatherization, energy, battery, solar support. the very values to me are why i live in the city. very much san francisco values that we would want to support. taking the wholesale service we receive a lower cost service and we are able to have that difference and unfortunately not avoid a number of programs are ones the city would strongly support. we respect the right to provide

service. [please stand by] stand by.

-- to allow folks that would like retail-like service to take retail service, and those that would like to have a wholesale customer experience to continue in doing so. i have a number of things that i think that were not accurately characterized from the first hearing. i think that i would just say that the decision against ferk last week primarily was an admonition to a regulatory body from a court that has passed several of these in the past and said that the administrative agency has failed to provide strong enough written decisions in favor of its opinions and it was merely a remand to that

regulatory body to strengthen their own decision-making process. it did not find or reverse any of the precedents that ferk has ruled in favor of pg&e and it merely said that you must provide more evidence in your written filings. this is something that particular court has done to ferk on many occasions recently and has expressed its frustration with that particular agency. so it actually doesn't express any opinions pg&e or the matters at issue. we will continue to discuss these. my strong preference to find a settlement. we have tried hard in the past to settle these issues. the last time we almost had a bargain was in 2015. with previous administrations. it was very challenging for pg&e to reach an agreement with the city. the city family doesn't always agree with itself, and we end up negotiating with each members of

the family separately. so what we would ask of the city is in order for us to resolve these issues, to come together, and to bring us one voice that can help us to have that discussion and we can work through these matters. so we look forward to answering any of your specific questions and thank you again for having us. and i do want to say that anybody that's interested in coming to the thursday sessions and seeing how we sit down and roll up our sleeves and work through the projects, we would welcome anyone's presence in this meeting or any other member of the public, frankly that, wants to sit in and to go through -- you know, the challenging task of making sure we're aligned and getting projects moving forward. >> thank you. i have a number of questions. i will say that it is true that different members of the city family often disagree, but i think that when it comes to pg e

and the level of really below-the-belt actions, you brought this city together more than it's ever been brought together before. and we -- we speak with one voice when we say what you are doing -- your actions to delay these projects is unconscionable. it's not okay. and it is extremely consistent with your behavior that have perhaps now -- you're going on your third criminal indictment for the way that you treat your customers. so i'll just start with that. first question to you -- first let me make a comment and then a question. the way that you characterize the d.c. federal court's decision is inaccurate, because pg&e intervened in the case.

joshua levenberg was there arguing on pg&e's behalf, presenting any evidence that you have that requiring primary loads for projects that require a relatively low amount of energy have nothing to do with safety. so you couldn't convince the d.c. court that there were any safety justifications for requiring that 720-square-foot box on every third street. you live here, mr. johnson. do you want to see one of those boxes on every third street taking up parking spaces in your city? do you want that -- that 720-square-foot box in your child's classroom? ironically, i tried to get air purifiers that are about this big in every classroom in san francisco. and i was told -- and i tried to get those because of pg&e

wildfires that you have started and the air quality that our children are breathing. and the teachers didn't have enough room to store them in the classroom. but you want to put -- equivalent of one-bedroom apartment on school campuses to require safety upgrades? that's the opposite of safety. tell me the detailed safety reason why you need primary equipment to power small projects in san francisco? >> so let me speak first to the unmetered load because i don't think that was characterized. >> first answer my question. why is a 720 primary load box --

720-square-foot box required for every approximately three street lights in san francisco, when we never had any safety or reliability problems with them in the hundreds of years that we have been operating them. what is the safety problem there? >> there is no requirement to do that. that's the characterization of our filing in that requirement. we've never said anything to that effect. >> so you're not requiring primary equipment for every -- for the 25,000 city-owned street lights and -- we require metering of those and if they need wholesale power, they need that equipment. we provide a retail service to meet their needs. there is no unmetered load at wholesale level. again, this is the issue of wholesale versus retail offerings. every other municipality that takes street light service from

us, from unmetered load, does that as a retail service. that is not a wholesale service if you would like to be a wholesale provider and be a utility, with that comes obligations and responsibilities. so it's -- >> so, in other words, you are saying -- >> the desire is to provide to get wholesale prices for retail services. >> so -- because of the act, and because san francisco has a special set-up established by congress in 1914, we are an independent utility that under pg&e's own contract received wholesale prices. so you're saying to us under this new filing with ferk, you are saying to us that we are going to hold you hostage if for the first time in hundreds of years, you do not install this

on every street in san francisco, we are going to increase your prices through the roof. you don't call that anything less than hostage holding? you know that san francisco -- you live here. and you know that we do not the space to safely put a 720-square-foot box every three blocks in san francisco, so you are forcing san francisco, contrary to the agreements that we had and contrary to a legacy from the raker act from 1914, you are saying that if you don't like the way that we do this, then we're going to require to you do something that is dangerous -- dangerous for your residents.

>> so there's nothing unique about the raker act that provides wholesale service. it is provided to any entity, city or private that, wants it. and many take advantage. primarily we see water agencies that have large pumping load that choose to install their own generation on their side of the meter. and all of those entities have switch equipment and -- and participate as a wholesale entity in that market. so there's nothing unique about the service. we offer it the same and what we are trying to do in this filing is to make sure that those rules are 100% clear to all and that everyone can plan accordingly and then choose the option that best meets their service need. if it's a retail from pg&e, so be it. if it's wholesale from the city, so be it. it's very important to remember that the sale of electrons is not the way that pg&e makes money as an entity.

at the end of the day if we sell less or more electricity, that is chewed up annually by the state. and so, you know, from our perspective, it's the city's opportunity to choose whatever makes the most sense for its customers. >> supervisor ronen: mr. johnson, a couple things. number one, you are arguing that this is a safety matter, not me you argued before ferk and before the d.c. courts that the reason that you're acquiring this equipment -- requiring this equipment of san francisco is of safety. and now you're saying it's not safety. it's that you're mad that we pay a wholesale instead of a retail rate and pg&e in typical fashion wants to earn an extra buck off the back of californians. compromising safety, fairness and rationality of what's required to -- to power public

amenities that serve the people of your city. so i once again want to ask you the question -- i don't want to argue about the wholesale and retail price. you said in your documents to ferk and to the d.c. circuit when you intervened in the lawsuit that the reason that you require primary equipment is because of safety reasons. explain to me those safety reasons, because you didn't do it sufficiently to the court and we need to hear those reasons. >> so i'll quibble with one characterization there and then i'll get into the safety issue. the d.c. court took issue with ferk's explanation of our safety issues, not with our -- >> i don't want to -- we could go back and forth all day. i just want an answer. >> not the utility. >> what are the safety issues?

>> let me give you an example. so coming home from an event in december on the east bay, i was exploring some of our facilities out with our crews, we had an outage down at mission and spear. so i'm coming off the bay bringe and i come down and i was in the holding to go to a job site. so we go down there and the men and women of pg&e, there are about three crew there is, they have to climb into that manhole and deal with infrastructure that's over a hundred years old down there and make sure that's safe for them to work on and fix. we had matrix event coming up at the water bar there that was raised to us by various public officials. in a few nights, you know, i thought about the downtown core and the ferry building and how

that area has been devastated by the pandemic. but i have to ask men and women in these shirts to go down in that hole and make sure that they can fix that equipment. and that everything is turned off and switched appropriately. so we will take a complex network and we'll go to a central control facility that's located in concord and an operator there has a map of the system. a digital map. and they will move switches and they will try and find the smallest way to isolate where the problem appears to be, and they will -- they will narrow that down so we can affect the fewest customers. we can get some back right away and we isolate where those issues are. and they are sure that we have that isolated and that wires no longer live when those folks climb in there and start working on it to repair that equipment. when we have the equivalent of jumper cables attached to our

lines all over the system on the secondary level, or where major customers who may be taking activity on their own system have no intervening equipment that allows us to isolate customers that we do not have contact with -- they are not pg&e customers when they take wholesale service. they are customers of the city and we don't know what equipment they might have behind that equipment. >> i don't think that you're answering my question. we're not talking about -- >> you need a point of operation and safety in order for us to work on the system and that is what this is about. to switch gear to isolate equipment when you're working on that system to make sure that the public isn't affected by that and that the men and women that work on that equipment witn do so safely. >> mr. johnson, we are talking about apples and oranges right here. >> no one in the united states -- no one else has these types of arrangements that we

have in san francisco. and we're trying to -- >> can you please stop and answer a question. thank you. mr. johnson, i'm sorry that you haven't maintained -- thank you i am sorry that you haven't maintained your equipment to standards that you feel is safe for your employees to go in there and to make repairs when there are problems. that's par for the course with your company and it's the reason that you have faced bankruptcy and it's the reason that we've had -- you have caused more environmental destruction in this state than perhaps any other single event. the question that i have for you is in new projects, not old projects with 100-year-old pg&e equipment, in new projects that are creating essential amenities to protect the environment, something that we actually put money and infrastructure into doing here in san francisco to make our schools safer, to make our streets safer, and to have

the only trauma one hospital in the region, and to have open space during a pandemic for our children, elders and families to play. those are new projects. you are requiring an amount of equipment that you do not require anywhere else. you don't require it for yourself. you don't require it for any other municipalities. you don't require it for any other customers. you require it only for san francisco-based projects and you have not given us a single -- you have not given ferk, you have not given the d.c. court, and you have not given the city and the county of san francisco a single coherent safety reason for requiring that expensive and burdensome equipment that have delayed the implementation of projects that have literally saved people's lives.

and you do it over and over and over again. it went from bad to worse. it's getting progressively worse. supposedly patty poppy, the new c.e.o. of pg&e is all about safety. well, please give this message to ms. poppy. you are making dangerous situation after dangerous situation in this city and county of san francisco, because you're mad that we have a wholesale rate that is historic and that has allowed us to provide the safety and the -- the safest, and the cleanest and the most reliable energy. one more time i will ask you, can you give me one coherent safety reason why primary equipment is required for these 68 san francisco projects that require an incredible low amount of electricity? i'm still waiting.

don't obfiscate. i don't want to hear about existing projects and, you know, your brave electricians going down and fixing your very old infrastructure. that is complete obfuscation and it is not answering my question answer my question, please. so whether the system is brand new or whether the system is in the older parts of the city where the networks is, the answer is the same. to operate the system safely we need clear zones of demarcation and we need to understand what is actually on that system in order for it to operate safely and for people to respond to that system safely. and there is no other utilities that provide these services. we have a long track record in san francisco of those facilities. these change tariffs and these

changed systems are ways for us to move forward with a safer system for everyone going forward. and we are going to have to make that transition at some point. and in order to improve safety in the city and improve this company's safety track record we need to draw that line. >> you know, i don't -- i honestly as a san francisco resident, father, i hope that you can look your neighbors and your family's friends in the face and tell them why they can't use their park, or why their friends don't have affordable housing. or why our city can't go electrical and help the environment. two more questions for you before i turn it over to my colleague. i understand that you just tried to play this game because what it is is a game and it's a very dangerous one with ucff. and the new research facility. because they are ucff, and perhaps because they have the

governor's ear in a unique way, a governor and a legislature that you've had to turn to time and time again for a bailout, you have finally reached an agreement with them. ucff was at the point of losing our trauma-one center status if this project didn't get energized, if their research facility didn't get energized in time. but luckily you said that you were going to work it out. now, unfortunately, ucff hasn't had the level of experience with pg&e that the city and county of san francisco has had, so i worry that you will not keep your promise. can we have your assurance today on the record that pg&e will follow through and perform any necessary electrification work based on the terms of settlement that you agreed to with ucff to get that project energized in time for them to save their trauma one status?

>> we will get into details of that, but we are happy to sit down with ucff or the s.f.puc and hash out details to meet -- to meet any particular deadlines. we have every intent -- >> you already did. you reached an agreement with them. >> we have made -- i do not have an encyclopedic knowledge of any project in the city, there are hundreds, and i can't commit to specific timelines and actions in those projects but i will make every good-faith effort to sit down immediately after this and we will attend to that item at our thursday meeting this week and make sure that we are aligned across the city after pg&e on the status of that project. and i will be happy to do that.

>> well, all right, we'll be sure to sit down with the c.e.o. of the hospital and the chancellor to let them know that you would not go on the record agreeing to maintaining the terms of that agreement publicly and making sure that our only trauma one hospital in the city remains open and available to deal with any emergency -- emergencies that come their way last question -- >> so i will -- i will make a commitment -- >> your new role as regional v.p.? >> so i just want to add to the hospital thing -- the hospitals are a very high priority for me i spent the last couple of years ensuring that the 35 hospitals that pg&e serve in the high fire threat area, have individual plans for each one of them to be exempt from the power shutoff program. so hospitals are always, especially in this time, our highest priority and they will continue to be and we'll do everything to that project to the best of our effort to meet

that equipment. i just need to look at the details with both the hospital and the team before i can go on record and support that -- i have a colleague, my colleague darren may want to add a few words on that project much. >> . >> i'm sorry. supervisor roben -- >> mr. cline, can you answer -- will you give a public declaration that in order to make sure that ucfs maintains general hospital trauma one designation that you will meet the terms of the agreement that you made to electrify their research facility on time as requested? >> yes, and i believe that -- yes, we will. it is not technically an agreement. it is a contract that goes through the system. so i believe that mr. johnson got a little, you know, when you

talk about an agreement, there were a lot of different things and a lot of different issues at ucfs as you are building new things. so it's just in some of the definitional terms, so, yes, we are going to meet the terms of the contract. we have a contract with ucsf and we will perform the duties that we are obligated to perform. >> okay, mr. cline. thank you. your title? >> i'm a manager of local government relations for the bay area for pg&e. >> okay, thank you. and then, mr. johnson, my last question before i turn it over to my colleague anne peskin. how long have you been the regional vice president? >> since june of last year. >> and during that time have you sat down with any sfpuc staff, any personally -- any staff from any of the departments or anybody from the city and county

of san francisco to discuss any of the 68 projects that are currently delayed because of your unreasonable and unconscionable requirements? >> i get regular updates from the teams that meet with those projects and i'm generally aware of the issues that we are working through and we have been on numerous job sites but we haven't done a systematic review of the projects. >> i suggest that you do that and then you look your children and your neighbors in the eye and say what you're doing is okay. mr. peskin? >> thank you, supervisor ronen. mr. johnson, i'm inclined to like it because we share our first same names. but with that, i thought that i'd change the subject to something entirely different which is not the world of wholesale and retail and hostage taking and 68 projects, but

something really simple. which is the lights -- pg&e lights and not sfpuc lights have been out for the better part of the year. can you tell me when pg&e can get my lights back on? >> so we -- supervisor, i am familiar with that project. we have a very old type of lighting equipment that exists throughout the bay area. some cities own the same equipment. and it's street light technology. there are only a handful of individuals that handmake the replacement equipment for that. we are expediting in the next two years the replacement of all of that equipment on our system i put my foot down internally and it's time for it to go. and we need to take that out. and it's very hard to get parts for replacement of that. and so we are see wag it takes to energy a project and change out that technology. that will be a fairly disruptive technology on columbus that will

require some major trenching. so we are working that in conjunction with the city right now with the intention of hopefully we can mutually cooperate and find out a way to do that is as little disruptive as possible and really get that fixed. because it's not a sustainable thing and that's a public safety issue from my perspective. >> thank you. and then not to make a gratuitous comment, but i do believe that there are two entities that have actually gotten the very complicated city with all of its entities -- the mayor, the board of supervisors, various departments on the same page. and that would be -- and we speak now with one voice through both of those entitys and that would be the company that you work for and a company called recology, and to the extent that things are complicated with historical patterns of electrical ownership within the city and county of san francisc)

we have half the street lights out for a long time and the city is dealing with public safety issues and dark commercial corridors are not helpful. mr. johnson, can you commit to putting your foot to tell me why we still have no lights there and also, putting your foot down was the expression you used in making sure we get those restored and we're trying to just get that out of the system and i assume recognize that the provision of street light service is also very complex here in san francisco with the mix of city owned street lights and pg&e street lights so we did do, a number of years ago, an

inventory so we now have that well-marked and demarcated with the sfuc and the street lights they have responsibility for. not specifically familiar with those and i'll have -- we'll follow-up with your office and we'll get back to you on the status of those. >> thank you. some issues are complex and sometimes they're sim pleasure than they seem and i want to say in looking into this and adhering the back and fourth on this and there are a lot of complexities and there are also at the end of the day and we're talking about retail pricing or wholesale pricing and i think a form of i would say negotiation around that issue that is depriving some critical services in our city of the power they need so i won't retrade the ground and thank you for going

over this in detail and i will y this, the proud democratic socialist on this board and there are moments when the failure of the private sector and the absolute needs for the. >> my colleague supervisor preston knows i'm not a democratic socialist and we agree and i think in terms of public utilities being a public good and healthcare and childcare and we are on the same page of that. i will ask mr. johnson if there is an e-mail address that

we can follow-up on because i actually have several streets and directing 7 that are in that category and it's a little bit harder because we have all the of the right of ways and alley ways behind houses that are not so much but they do pose a significant safety issue and we have seen, in during the pandemic, and if we can follow-up with a list, i would appreciate it and i understand that we're understaffed just like puc is but you know, since we are customers, wholesale or retailer i would i appreciate

you. >> thank you. and before we open the item up for public comment i wanted to give an opportunity to puc general manager, or assistant general manager for power barbra hail to make any remarks or ask any questions. >> supervisor, i don't have any questions. obviously, i would just say i appreciate this board having this hearing. we have engage in with conflicting messages and what has happened in the past. i can tell you, sir, with respect to things going forward, as far as the puc is concerned,

the person who and the person in this agency who is going to make a decision that get run by the mayor's office and the board, is me and i have a longstanding commitment to making sure and working in collaboration with this board so ensure we get reliable, safe public power here in san francisco and that we work together to make sure that rate payers and our residents are fairly treated and supervisors, you can make sure that that longstanding commitment that i've had working with you from my prior work is steadfast and will remain one of my stop priorities in this new information and i will keep you informed as to the progress that we make in our on going conversations with pg&e. >> thank you general manager her

herrera. >> there's one issue i want to be clear on the record and thank you for the additional time. mr. johnson referred to san francisco's paying a wholesale rate and avoiding certain contributing to middle income programs and the like and i wanted to make it clear that san franciscos through the hetch hetchy programs through our rate payer programs not avoiding those obligations at all rather embracing them with the programs we offer and the discounts we provide to our low income residential customers but i wanted to make sure it didn't hangout there. there's a lot of other things we can talk about but i'm sitting down with mr. johnson and having a opportunity to do those

through. >> i do want to thank you mr. johnson for coming here and presenting and being willing to answer questions that has not always been the case with pg&e in the past. so hopefully with your new leadership, at the company, you can be more engage in these projects because the truth of the matter is pg and he's bee hiv year is causing real harm to real people and these are not abstract issues. projects are being delayed months and months at a time and the estimated cost of san franciscans is $19 million when we stopped a worldwide pandemic and needed every dollar to do so and we needed every bit of outdoor space to give people mental health reprieve and we needed every affordable housing unit so people can get off the streets and into safe housing. we need our hospital to work and

functioning. we needed our public transportation system more than ever. you just survived this pandemic with us. it's not true we need primary equipment for these projects. you know that and i know that. it's a way for pg&e to squeak extra dollars out of the city and county of san francisco for its own profits and it is not ok. san francisco spends $20 million a year providing reenumeration for the service that you provide and to us and we are happy to take it off your hands if you

don't want to offer that wholesale rate to us. there are 2,000 projects that have secondary service that's have run safely for decades in the city. you know that this is not a matter of safety. and so trying to hide behind that and pretend it is is disingenuous at best and dangerous at worst. we expect better. the one last question i had for our city staff is, i was looking into mr. johnson's background and i understand you come to pg&e from the california public utilities commission and we've been talking about ferc and having to gain some accountability for this corporation through this federal appointed body but i'm just wondering if the california public utilities commission, where we have a lot more direct relationship through the

governor where we can do some advocacy there can intervene and require that the company acts in a more up right manner with the city and county of san francisco. mr. gur era, can you answer that question? >> yes. >> we are in front of the cupc in terms of making our request for the evaluation study in terms of the value. so they're differing involvement but each has its own respective -- it's own respective areas. i will say and i don't know this off the top of my lead with the

unmetered load issue, if ferc made a decision, if they were to go along with pg&e and there's action that would be needed by them cpuc and the involvement is related but in a different way. like i said, the evaluation valn study. >> madam chair, if i can turn it over to you to open this item up for public comment. >> thank you, supervisor ronen. madam clerk, if there's no other questions or comments from my colleagues, let's please take public comment now. >> thank you, madam chair. we are checking to see if there are any callers in the queue. please press star 3 to be added to the queue.

wait until the system indicates that you have been unmuted and you may begin your comments. we have seven listeners with three in the queue. if you unmute the first caller, please. >> good afternoon, supervisors. my name is garcia and i sit on the sfpuc citizen advisory committee representative directing 9 and i am a chair of the purchase submit' since late 2019 and elected chair of the cac last month. thank you supervisor ronen for sponsoring this hearing and the board of supervisors for reaffirming the 2018 resolution last year to continue to report issues that highlight pg&e deplorable behavior and do real harm to san francisco and the residents. to continue and grow interaction issues our primary reason why the sfpuc passed a resolution

supporting. the take over of pg&e transmission and distribution assets. i continually rewind the cac it took 70 years to end the spring valley water monopoly of the local water system and hearing highlights why we can't wait decades to end the anti competitive business practices even with the recent dc circuit ruling and if which want critical and essential services while trying to address climate changes issues and thank you power aging agm and barbra hail and deputy agm for your consistent and with me and lastly thank you chair mill gar and other members of the committee for your sfpuc c.a.a. appointments who hit on the power subcommittee.

thank you. >> thank you so much for your comments. next speaker. >> yes, hi, this is chris tanevance and i'm calling today on behalf of the haiti ashbury association so supervisor preston has referenced the project that i was concerned about. we had construction that took place along the haight-ashbury corridor from 2016 until 2021 as the work was completed in early 2021 and we still have half of our street lights are unpowered. the contractor has completed their work and the polls are installed yet the north side of the street and the south side of the street is one block is not powered at all and these are pedestrians scale street lights

that have very low amount of power to them and they're environmentally the latest technology and i will they cost about two and a half million dollars and to power them requires maybe just hundreds annually or a few thousand but i was told the reason we did not have the power on in those street lights is because pg&e was requiring equipment that would total about half a million dollars additional cost to the project and so obviously, i'm hearing what supervisor ronen and others are saying about pg and a primary equipment for secondary youth and i really appreciate this hearing of transparency so why it's now more than a year that we've had the project completed the polls and called and they're still unpowered.

thank you so much. >> thank you so much for your comments. next speaker, please. >> supervisors, that being to your attention that pg&e was created when this city stopped 30 miles south and pg&e was created to bring in the lines. the public housing in past got free electricity and so did san francisco the military. and the municipality. we have to sit down with pg&e and ask them how much money are they making from our public housing? how much money are they garnering from the presidio in san francisco. how much money are they

garnering from the municipal city hall and the using pg&e. we have to have tough negotiations. do you know who pg&e has on the outside. willie brown? do you know what willie brown likes, money. we need to sit down with pg&e and make a check list of why they're bullying us. they are bullying us because you know, we don't know our own history and because with people like willie brown. he has a finger in every pie. a dirty finger in every pie. the corruption in this city has reached saturation points and the general manager from the

spfuc knows about this but he is talking in generalities. the supervisors are talking in generallal tease. they do not know the history. >> let's take the next speak. if you want to speak on item number 3, press star 3. >> hi, my name is wendy hi. my name is wendy williams and i'm a small business owner in district four. i'm opening a new bakery at 3928 irving street and purchased an electric oven as opposed to a gas one. because of that decision, i need an electrical upgrade. i've been communicating with pg&e since last february in regards to this project and my contractor has been trying to coordinate with them about the equipment her electrician needs

to order for the project which has a two month lead time and will cost me $30,000 which is a lot for a small business. but that's just for the commitment so basically, as we see it now, the construction of the business could be completed, but i won't be able to open because i'll be waiting on pg&e to upgrade the electrical. i really hope this is the case and i appreciate the sfsupervisors holding pg&e accountable. thank you. >> thank you so much for your testimony. next speaker please and this is the last caller in the queue. >> good afternoon supervisors. today, i'm calling the city in its desire to embrace city owned clean affordable power. clean offshore nuclear power is the renewable source we need in

our city and have needed in our city for a very long time. we do see in europe where they've embraced nuclear power in france and where germany has chosen not to do so. they can't even manage to stay warm. they need russian gas. what i have to tell you is it's not just for jr. nabs or the french to be able to stay warm. no. it's the majority of heat that feeds the earth. our core nuclear reactors are running at all times. but we're looking for a clean source of power to run our

civilization. one that already does. we should look to what we can build here. china is building dozens of nuclear reactors all over their country and we have the option to build a micronuclear reactor right here. without needing to talk to pg&e without transferring power from temperature temperatury. we can do it. and a small spot right near the ocean. it will be city owned. it can be clean. it can be affordable and it can be delivered in less time that pg&e claims it can fix the street lights. so i'm calling for our city tonight to embrace the nuclear power. >> clerk: thank you. madam chair, there's one more caller. let's take that call, mathew.

>> caller: hello there. i am the secretary of the sfpuccac and i want to thank the supervisors for holding this hearing. we need public owned power now and this hearing has made it abundantly clear to me and it's upsetting to hear when we should be focusing on cleaner energy in the face of climate change. so thank you for taking my call. that is the end of what i wanted to say. >> clerk: thank you much. that concludes the list, madam chair. >> chairman: thank you so much, madam clerk. with that, public comment is now closed. supervisor ronen, what would you like us to do with this request? >> supervisor ronen: if you could continue it to the call of the chair, i want to see how things go moving forward and i have a feeling we might have to come back and do this again. >> chairman: thank you very much, supervisor ronen. colleagues, does somebody want

to make a motion. >> supervisor peskin: moved. >> chairman: thank you, supervisor peskin. madam clerk, can you please call the roll on that. >> clerk: on the motion to continue to the call of the chair, [roll call] >> chairman: thank you so much. i'm sorry, supervisor ronen, i didn't give you a chance to make closing remarks. >> supervisor ronen: it's fine. everything's been said. i'm just hoping that pg&e makes some progress with the city and gets 68 projects completed. >> chairman: for goodness sake. we're going to be under water. thank you so much, supervisor ronen. >> supervisor ronen: bye. >> chairman: madam clerk, please call item number four. >> clerk: yes, item if you remember four is a hearing to

address concerns on the residential vacancies. the meeting i.d. today is 24821186252 and then press pound again. if you have not done so and would like to do so for item four, you just need to press star three. madam chair. >> chairman: thank you very much, madam clerk. and thank you, supervisor peskin for calling for this hearing. the floor is yours. >> supervisor preston: great. thank you so much chair melgar. today we'll be presenting or hear the report from the budget and legislative analyst on what i see as the elephant in the housing policy room and that is residential vacancies in san francisco. so much of the conversation on

housing in the city has been dominated by a focus on production. we hear the talking points and the questions are always about how many new units, how quickly can they be built? how do we incentivize building more. how do we address the obstacles to creating more, but what's missing from a lot of these discussions has been consideration of how we actually use the housing that exists or the housing that gets built. and discussing housing supply without discussing how many perfectly habitable units sit empty seems to me like an incomplete exercise. so it is my hope that the hearing today and what i believe is really a first rate report from our budget legislative analyst will help to expand the housing discourse to include consideration not just of the physical

structureses, but of how they are used. and i believe the data shows a compelling picture that necessitates a policy intervention in san francisco. we'll hear more from the b.l.a. momentarily, but some of the basics nearly one out of every ten residential units in san francisco is sitting vacant. a figure that has seen in recent years. since 2015, the total number of vacant units in san francisco has increased by about 20% to over 40,000 units, 40,500 is the estimate. compared to other u.s. cities, what's interesting is san francisco has among the lowest vacancy rates for units that are on the rental market. for units that are up for sale and that is laid out in detail in the report we're about to

hear about. but despite having low vacancy rates, we have a higher overall vacancy rate than most of these other major cities indicating that many units are being held off the markets they report further break downs into what's referred to as a sold, not occupied where a buyer is using property for investment purposes and doesn't intend to live in it the dramatic increase has eclipsed the rate of the from 8.5% in 2015 to 10% in 2019 compared to just 4.2

increase. these show our failure of housing policy. we have tens of thousands of fully constructed units ready for residents but which are being off the market. and i appreciate the report describes not just the scope of the problem and in particular what other cities have done which i think can be constructive as we look at san francisco policy and how we construct it. i do want to point out supervisor ronen's past work of the vacancy and appreciate her collaboration and i also thank her for co-sponsoring this hearing request from my office and i want to thank supervisor peskin for his leadership on

the commercial side of this, on the store front vacancy tax, the ballot measure that was passed on that which addressed really a lot of similar issues again, but related to commercial property. and, lastly, i want to thank the b.l.a., budget and legislative analyst in particular for the many hours they spent on this really comprehensive and i think important report and we as a board benefit tremendously and their work often serves to lay the foundation for our policy work and i hope that will be the case in this instance as well. so i believe mr. percel is here to present on the report and look forward to getting into the details of it more. thank you, madam chair. >> thank you, chair melgar.

from the budget and legislative analyst office. this afternoon i'll provide a summary from our summary analysis report. the report was issued earlier today. so i will share my screen and as soon as that is up. so the context in which we conducted this analysis was, of course, are the san francisco housing market which is well-known for its high costs and short supply and the negative impact that that causes on health, the economy, and the climate.

and there are a large number of vacant units in san francisco so our housing inventory is affected by that and as express express mentioned, 10% of our housing inventory is vacant. so that does not help our supply situation. this chart shows housing production from the period of 2015 through 2020 and we've added the goals that were set for having production for the city by the regional housing needs by the study which was the state imposed set of goals that covers an eight-year window. what you can see here is that from the period between 2020,

we have produced a total of 26,370 units. the goal for that eight-year period is 28,000. so there's been an update in production and the numbers have improved some getting towards the goal short of the goal, but what you see here is the distribution where we have overproduced in above moderate income and produced affordable housing for moderate low and very low and the totals captures in this chart are 5,800 units whereas the goal is 10,617 for the eight year window. so within this context and during this time, by the way, the population has increased, of course, beyond the rate of production of housing, the rate of job growth has increased beyond the rate of production

of new housing. so it leads to the question of vacant units and how many vacant units are there. why are they vacant and can something be done to transition some of those housing units back to occupied housing to increase the housing stock in san francisco separate from the issue of housing production. this chart shows the number of identified vacant by the census bureau which is what we found for this information. it shows 40,458 units vacant. the number has been growing steadily since 2013 going from 26,400 units in 2013 to the current number. and the rates have also increased. so 6.9% is the housing

inventory was evacuee cannot in 2013 and that rate is now 10%. we researched why units are vacant. the census bureau provides a number of explanations. we also find explanations from other housing sources and here you see a number of them. what we found is there is no single answer so there is no one policy that was addressed in the issue because of the wide variety of issues. and that can be as simple as someone has purchased that housing unit, but has not yet been able to move and we're occupying at the time of the census bureau. but another reason for not occupied can be a buyer has purchased the property for investment services and doesn't intend to live in it. it could be sitting empty as a

place to park cash for some periods of time. other explanations include owners being in care facility and they can't be in their home during that time foreclosures, second or other nonprimary homes. these are how units are used occasionally by primary users elsewhere. there's many stories or complications with families or owners of the unit that may explain the vacancy. some are used for corporate housing. so they are occupied off and on through the year, but they don't have permanent resident occupants. some are being repaired or the owner intends to repair them and they have not been able to finance the repair as quickly as they thought. so the unit may sit empty until they're able to cover those costs. some units are left empty to

avoid rent control regulations. the owner wants to sell the unit and want to sell it for a higher price without having tenants in it. others are used for nonresidential purpose such as storing business supplies and equipment or in some cases, the owners plan to demolish the unit in the future and they're waiting to do that. in this chart, we show the distribution of the 40,458 evacuee cannot units as of 2019. these are groups that the census bureau defines and they classify these units into the various categories. this is kind of a grab back of explanations that include corporate housing. they include personal family reasons. they include units under repair. they include those that are subject to legal proceedings

and it's a variety of reasons. seasonal, recreational or occasionally use is the second largest grouping. it's 8,555 units and those are as i mentioned earlier units that are used part time or occasionally that have primary residences elsewhere. it can also include timeshares and instrumentals in some cases. and then for the more expected vacancies, the top four rows are units that are for rent. units that are rented and not occupied. units for sale and units sold, but not occupied. however, i want to add that has been the fastest growing classification of vacant units in recent years. currently,, it captures 20% of the vacant unit. and it can include those where the situation is simply logistical, they purchased, it

can also include units that aren't ever going to be occupied that their investments or temporary havens for cash. in terms of where are the vacancies and where are new housing units being constructed, that's shown in these maps, the panel on the left showing where the residential vacancy rate by census tracked. concentration in the northeast quadrant of the city and particularly in the dark blue shaded areas which is largely downtown south of market, the financial district. and up on market street you can see. but there are vacancies throughout the city. a concentration in the southeast in 2016. in terms of new housing units, there's overlap with the concentration in the downtown and south of market areas. a lot of construction between 2015 and 2020 has also been

downtown, south of market and on into the areas. on that note, i just want to point out that about half of the new units added during that period are in those districts. so about 11, 589 in just those two markets in the fanl district. we looked elsewhere to see what other cities are doing. we found some interesting examples and i'll briefly taxed in oakland starting in 2018 the tax ranges for $3,000 and $6,000 for vacant properties and lots.

the city collected we estimated around 1,500 property parcels that are required to pay that tax. variable prices are in place in washington, d.c. and variable places in british columbia. these are the property values of the vacant units and in washington, d.c., the charges are $5 for every $500. the tax in that city covers vacant and blighted units. in vancouver, british columbia, the vacancy tax is 1.25% of the

assessed value tax of the unit that's vacant. and in vancouver, owners are required to report every year and both washington and oakland, the system is perhaps not as effective because they are either self-reported or reported by city reporters, but there isn't a systematic way of capturing all the units in either of those cities. vancouver b.c. by the way has produced a report showing the results of their tax. what it showed was that a drop of about 25.4% in the number of units reported vacant after two years after the tax was imposed. the numbers have gone down since then which we conclude is

a demonstration of the effectiveness of the tax. there are fewer vacant units now because of the tax being imposed. and the 25.4% reduction translated into that 1,896 units now occupied that were vacant when the tax was first put into place. barcelona has the most stringent system that we found in our research. they have the ability to either take temporary possession of units that are vacant for two years or more. and provide them as affordable housing for about four-year period after which they are returned to the owners or they can actually sell the units at a 50% market value. so they can be used for affordable housing. and they have actually done that for about 194 units in the last couple years where the

city took and they are now in the affordable housing stock. we also just presented the findings and we wanted to present that for the board of supervisors so that while there might be good reason to impose a tax because of the negative impacts. if this was found in other cities, that may be funds that can be used for the city or community based organizations to purchase properties and make them available for affordable housing. we did prepare some estimates here of what the city might generate if it imposed a tax and we provide aid few in the

cities i just described other than barcelona. on the low end, we used the low unit or low property tax in oakland that could well be subject to the tax and this is assuming that san francisco would allow for exemptions as is true in all of the three cities where we examined their tax structure. they allowed for exemptions in cases where the owner may be waiting on so based on the

experience in vancouver, they applied the tax to about 1.1% based on their exemptions accounted for. so that gets us to an estimate of $13.8 million in vacancy tax that could be raised by the city when you subject out operating costs for administering the tax we assume, that would be about 11% based on the experience in oakland and that tax would be 12.2 at the low end. we also applied the higher tax consistent with what's in place in vancouver, b.c., and that resulted in annual taxes of about $61.2 million in the high end. and the higher tax in oakland that produced the mid range estimate of $38.8 million for san francisco.

we provided some policies for the board of supervisors to consider. the timing is very opportunity because the housing industry is going to be up and running later this year and that is focused on housing but could be expanded to owner occupied as well and collect information on all units as part of the strags process that property owners will now be going through as operation allayers here. we also recommended the board consider advice from the city attorney on all legally permissible options. we shied away from anything having to do with a property tax increased with that which would require adding something to the current property tax which more or less the city can't do. but voter approval would still be requireded for a flat tax

and obviously you will want to get advice from the city attorney on steps if that is the direction the board chooses to go. and then, finally, considering establishing a residential vacancy tax since it's been shown effective certainly in vancouver where we have the best numbers, but even in the other cities of washington and oakland and even in barcelona. and then.

thank you. >> supervisor preston: thank you so much and thank you for the report and i would recommend colleagues and to the public for those interested in housing policy, it's 49 pages of excellent research. i just was wondering and i was just looking for a minute about the break down you talked about about the different census of reasons why units are vacant. of i was wondering if you could

address which types of vacancies we would expect to be the most susceptible including the vacancy tax and other jurisdictions. i think we all understand, it doesn't matter what the tax is. it's vacant for a reason and it's going to stay vacant and there's others where at least the vancouver experience shows it can influence behavior and i'm wondering if you can elaborate on which of the categories we should be looking to to expect the most activation of units if there were some kind of disincentive to vacancies on the books. >> right. so, yeah. supervisor preston, through the chair, the categories are probably what we would classify as kind of a normal turn over

and that accounts for 35% of the units. it's probably a mixture. so those also could be part of normal turn over, but they could also include those investment properties that you mentioned and those that the owner may not ever intend to actually occupy. so that would be -- well, it was part of the grouping of the 8,000 units, but then there was about 60%, about half of the units fall into seasonal or other vacant. and seasonal, recreational, or occasional will depend on how you find vacancies, but in vancouver, it was units that was occupied. so if someone has a home for

example and occupy it in san francisco that would qualify for the tax using the vancouver model. and so those would be i assume there's quite a few in that category where the occasional use would be less than that but that could provide housing for affordable housing units. in the other group, the 12, 991 units, that has a wide mix of uses that would also some of which would be eligible for conversion to occupancy because they could be just being held on to for a future sale. they could be used for corporate housing. they could just have various

repair needs that they're not addressing that a tax might serve as an incentive to get it taken care of or to otherwise occupy it. so the short answer is there's probably about, you know, half that would be eligible of the 40,000 or, you know, could actually result in a change in status if a tax were imposed. and that could be a resolution of the problem choosing to pay the tax or, you know, getting it fixed and occupied, renting it out or selling it faster than might be done after the tax. >> supervisor preston: thank you. that's very helpful and so i think i understand the breakdown you described. i guess the one i'm wondering is in your list of possible evacuee cannot reasons that we held vacant, you -- there was a

category that i was interested in also is just like where someone's anticipating may be a future sale, so they hold the building vacant. we have a bunch of those in our building. and then years go by and the think the presumption what you're describing is the owner wants to sell it eventually and thinks it will be more value if they sell it vacant. would that live in the other vacant or is that? >> yes. that's the place i would most expect to find it. other vacant. >> supervisor preston: got it because it's not on the rental market. >> that's correct. >> supervisor preston: okay. thank you. so i'd be very interested in how the vancouver tax is and

your findings there and then there's the other extreme where the tax is so prohibited that the business model of keeping it vacant doesn't make sense. so obviously we're not free to

peg it to the property value. if there was a legal way to do a tax that it was roughly of that magnitude, you have some estimates in the report around how many units we would expect roughly for that to activate in the first year for two years and i wonder if you can share those numbers from the report and any comments on that. >> sure. yes. so prepared our high estimate on vancouver's rates. but if the tax were set at something comparable to 1.25%

of assessed valuation which is what that would amount to about $15,000 on our median value properties in san francisco. and also based on vancouver, about 4,600 units would be subject to the tax out of all of our vacant units. so that would produce about $61 million a year assuming the same overall conditions as in vancouver. again, that would not be set with the property tax. that would be if the city chose to impose a tax that averaged out about $15,000 per unit.

>> supervisor preston: i'm sorry. so the 4,600 units is what we expect to be activated go from vacant to rented during a two-year period. >> correct. >> supervisor preston: okay. but the $61 million, that you were saying, that was an estimate of an annual tax. >> correct. >> supervisor preston: and i guess just one more question and apologies, chair melgar, i see you're on the roster with questions or comments as well. but just one more like of the policy proposals, it seems like whenever this issue comes up, there's a consensus that the

strongest or the policy intervention with the most potential to activate units is a vacancy tax. ment and i just want to make sure that's my take away from certainly the report. but i just want to make sure that's an accurate read. you haven't come across anything in the research around how different jurisdictions treat vacancy other than potentially be more extreme appropriation model which i think would have some legal challenges in the u.s. but if the vacancy tax is the strongest tool at our deposal to try to activate vacant units. >> right. from our research, yes. and the vancouver model in particular skeeps pointing back to that because it did in fact point out results. the city has reported a number of units that were converted

from vacant to occupied. so it certainly seems to be the most effective. as you say, the barcelona model has worked. it's produced affordable housing on the implementation of that. we would have concerns about how that would done and is that feasible. >> supervisor preston: thank you. and some other comments around the industry that's coming online, you know, around rental housing and some of the other efforts our different departments are under taking. i just want to note that i think that those efforts in the event that san francisco had a vacancy tax will also be very helpful because one of the challenges obviously with a vacancy tax is enforcement and

making sure folks holding vacant units are paying that tax and so i just want to say that thanks to a lot of hard work on these issues by prior supervisors and current and it's just exciting that we're at a place where we're actually moving forward and tracking these units in a more systematic way and if we were to have a tax in place, we would be able to use those for enforcement purposes as well. thank you, chair melgar. back to you. >> chairman: thank you, supervisor preston. and thank you, mr. bruco. this was a fantastic report. i had a couple questions and perhaps you cover tuesday in your presentation but i missed it. i'm wondering about the methodology. like how did you find that units were vacant? how did you count those units? and i'm asking this because, you know, my district is very different from supervisor preston's district. mine is 75% home occupancy or

single-family homes and i see a lot of vacancies around them and i'm wondering if we count them. do people fill out the homeowner's exemption. ful but i had a house on my block that was empty for eight years and it was not because of speculation. it wasn't anything like that. it was an elderly lady who inherited it from her parents. they had grown up there. they went to all the parents stuff was in the basement and they would come once a month and they would open up one box and look at the pictures and close it back up and cry. the heirs often don't know what to do and there's no cost of keeping a unit empty just don't like outweigh the effort to put a property on the market or to

rent it out, you know. and so after prof position 19 passed a couple years ago, i was hoping that was going to spur some of this a little bit better but i don't know if it has or not. so there are two houses on my block and, again, it was elderly folks who lived there. their heirs live somewhere else. they don't want to live in san francisco. but there's no incentive for renting out the house or selling it. and so i'm interested in how we counted those units and i was surprised that the vacancy rate was so low in district seven and i know this happens a lot when folks pass away and the heirs just don't have interest in either being landlords or selling the properties because they think it's so much trouble.

you know how we're going to do it. >> right. chair melgar. good question. so the accounting is done by the census bureau and they do their annual american family survey each year and they identify what you're describing in your district and the personal families like you're so that's where it gets tricky on the policy intervention side. although some of those heirs and situations that you're describing might have the

incentive if suddenly there were a tax to be paid letting it sit vacant for eight years. the other thing i want to add about that is i think some people could use assistance or support or people don't know what to do or they thought they were going to repair their unit and now they don't have the funds have funds available for support services in situations like that for kind of these personal situations that could be an effective tool too and sort of back to your question, supervisor preston is just the tax that may be using some of the money to help convert some units and help out in these kinds of situations and what you're describing throughout the city, chair melgar, there's a lot of very interesting

stories about families and relatives and what they do with their inheritances. >> thank you. it's an interesting question. it's like the map that chair melgar is referring to. is that a rate or a wrong number? because part of what i'm wondering is maybe the rates is just a single family and [ indiscernible ] south of market that has 150 units and might have 30 vacancies, right, that's going to show up just doing numbers, that's going to show up as a deeper color, right than the two on the block.

>> right. >> that makes sense. >> supervisor preston: might that be what's gong on or is the. >> try to look at your district chair melgar. i get the general idea. there's definitely vacancies out there. >> supervisor preston: thanks for clarifying. thank you, chair melgar. i probably have some final remarks, but if you want to move to public comment on this item, that'd be great. >> chairman: let's do that. madam clerk. >> clerk: i'm so sorry. did you ask me to call for public comment. >> chairman: yes.

please go to public comment on this item. >> clerk: okay. so it looks like let's see. if there are any callers in the queue, please continue to hold. if you'd like to speak to item number four, press star three to be added to the queue. it looks like we have six listeners in the queue this evening with four in the queue. can you unmute the first caller, please. >> caller: at the january 27th meeting of the planning commission regarding the housing element, commissioner imperial stated that we were 48 houshgs vacant housing units in the city. commissioner chan referred to the housing policy 4.8 siting housing as a valuable global commodity. state senators have said that there are 1.2 million vacant

housing units in california. california needs 830,000 new housing units. however, governor newsol has quoted mckenzie and unit. the new members are triple the previous ones due security over. the reasonable methodologies for calculating arena numbers involve carry numbers. the state department produced inflated numbers based on double counting of its own numbers and state department of finance members as well as inflated vacancy rates. this was all based on senator weiner's big sb 8. however, they could result in loss of local discretion and implementation of by right

development. i would urge the community to have a hearing and invite the senator on these issues. thank you. >> thank you for your comments. can we get the next caller, please. >> caller: supervisors, this hearing is moving in the right direction after about 40 years. so every ten years, you have the housing element and this information must be incorporated into that report. we also need to incorporate certain elements of avac.

so i've been saying on an average 35,000, vacant homes in san francisco, the planning department itself as you've heard from one of the commenters, 48,000. the board of supervisors, if you ask them, most of them just keep quiet. so we are living in the year 2022. people have access to all sorts of information but when it comes to having a roof over your head, nobody wants to help. during the dot com, we had a plan, we could have quiet

homes. during the spiralling of the economy, 2008 and 2009, and 2010 we could have done the same. now the two of ya'll i see are deep into housing initiatives. one as the planner, and one i don't know if i can call you that, but i would think you lend yourself to be more towards socialism which is not bad and we need that type of thinking to help the poor people. middle class families have gone to the streets and some of them have died. >> clerk: your time has concluded. thank you, for sharing your comments with the committee. can we have the next caller,

please. >> caller: good afternoon, supervisors. this is teresa flanderek. >> there have been many illegal mergers of two units and then being priced at 8,000 per month. i also have seen a new york banker, for example, wanting to buy a unit here, a lock it and leave it for $2 million as well as a lot of luxury condos that have been built here that are empty. i don't know if the numbers that are in this b.l.a. report some of the reality. but there's a lot of reality

that's also not included in there. i know of ellis buildings and no one knows of this at this time. so the other reality is with the rent board having worked on the housing inventory, i know that the rent board has said they will first go work with the larger buildings and that would be completed by july 2022 and then go to the smaller buildings with the plan of that being completed by 2023, july 1st. so to keep that in mind to talk about a vacancy tax which i would certainly report. thank you very much. i really appreciate this report and the fact that we're talking about this right now. thanks. >> clerk: thank you for sharing your comments. can we get the next caller, please. >> caller: yes.

hello. this is anesthesia yovonapolis. i want to thank the supervisors for the b.l.a. report which is really clear. one of the things that a vacancy tax would do would be to detour people who have want to invest money coming over from other countries wanting to invest in housing property here. they want to invest. so let's get some kind of instrument that we can detour this from happening and also when you're looking at inventories and you want to extend, i think you should also

include the price of these units. these units are merged and overpriced. thank you. >> clerk: thank you so much for your comments. if you would like to speak for item number four, you just need to press star three. >> caller: good afternoon supervisors. i believe anyone that wants to live here should be able to live here. i don't think that these games help us. reallocating the housing stock that we have might cause for a modest increase in prices, but it's not going to be anything meaningful compared to the new jobs that we're bringing in.

and the r.h.n.a. for a long time has stated this to san franciscans was for a long time optional. it's no longer really optional if we want to be able to control the shape of our city which i think we do. given the fact that it's not optional that we balanced or that we are going about the process of residential areas. i encourage us not to look to these fights over our existing inventory, but to focus on expanding the inventory of available houses especially and continue to do so because i would like to see the city continue to have a coherent shape and coherent neighborhoods and all these other things that are threatened by its failure to implement proper residential housing creation in my view. so i thank you for your work and seeing this 2% or 10% of our housing stock that's there.

i think the best way to punish these perceived bad actors is to build so much housing stock that they're stale investment decreases in value and the only way to do that is through massive production. so i look forward to our city complying with the residential housing needs allocation. and i hope it does so in a way that encourages -- >> clerk: speaker's time has concluded. let's take the next speaker, please. >> caller: hi, i just have two questions. one is one of the reasons why we have vacancies as indicated by supervisor preston is people who hold units for future use. one of the reasons this is done is because, you know, the massive increase in san francisco.

many people if they sell their home and move out of the city would never be able to move back. ful you also see that to a smaller degree with more technology. how would this proposal guarantee that folks who did move away would have the ability to move back at some point, you know, right now because of prop 13, they can refuse to hold it and not rent it out. the other question is would this only apply to homeowners or would this also apply to renters. as we saw on the slides earlier, there are a large number of a couple thousand units that are rented, but not occupied. it's not uncommon in san francisco for people to have that they rented many years ago and they hold on to them because the rent is solo. it seems like that would be another way to easily free up a

large number of units. thank you. >> clerk: thank you for your comments. next speaker, please. >> caller: hi. nancy here calling in from district two in san francisco, are the former appraiser for affordable housing who has been so blessed at being a beautiful building that overlooks the city. my building has over 20 units, you know, my landlord has been in sf for awhile. and it's wild, what's happened to the building i'm currently living in is vacant. so there's at least ten units vacant. in the meantime, he wants to raise my rent to $5,500 a month. and the fact that i cannot state that this needs to

happen, we need to be doing a better job counting and i do appreciate all the work done by mr. rousso and the other worker that was speaking. again, regarding this report. i also believe that the vacancy is massively undercounted. we speak of corporate housing and i think that's great, but the fact of the matter is when you have three to five to six people sharing a two and three bedroom place, that's also a miscounting of available units and of the actual people in the city. i am very much in support of the taxation if that works. i do know there are other cities where they've been doing some other forms to basically encourage landlords to, let's be real, landlords want to make money. they aren't going to necessarily self-report. again, also the a.c.s. and the census. they're great data, but they're also sometimes inaccurate because the fact a landlord is

not always going to be responsible about their holdings. going back to the water, fully in support of that and i very much look forward to the work that will continue to be done on this. yeah. so i would love for the landlord -- >> clerk: thanks. that was the last caller in the queue, madam chair. >> chairman: thank you. and thank you supervisor preston. did you have closing remarks? i'm sorry. supervisor peskin, did you have any comments or issues before we turn it over? okay. thank you. >> supervisor preston: thank you, chair melgar. you know, in the opening remarks, i focused on some of the data that i think highlights the problem of vacant units and i appreciate the presentation on that from the b.l.a. and the report. we're talking about one in ten

units in the city, this is a very significant issue, policy issue for us and so, you know, i'll go back over that, but i would like to just close by going over some of the potential policy solutions because ultimately, those are what we at the board need to be working to try to implement. and so, we went through some of the policy options that are analyzed. the fixed flat fee as you call it for vacant units, a vacancy tax that's more variable based on specified criteria. the temporary appropriation of possession by the city of vacant units which, again, may have some legal issues, but that's another avenue. and then as he described a combination of vacancy tax, one of these vacancy tax options along with some kind of option

for either the city or nonprofits to or community based organizations to make an offer to purchase kind of like our model for properties that are vacant for a pro longed period of time. so it seems like those are the main tools that we've got. some of them would require going to the ballot. the taxes, some of them don't. like the idea for right to purchase. i mean, that's something that was created at the board. and so i think we may have a mix of policy options with any tax needing to go before voters. you know, i think one of the most significant things is the findings from the report that mr. rousso reiterated in our question and answer period that if we were to adopt a tax based

on the vancouver model that the city could see an activation of an estimated 4,460 housing units in san francisco within two years and that is a huge number and when you compare that to our housing production, that's equivalent of approximately 90% or more of new housing that we as a city have added over the last five years. so i think it's very significant that we figure out how to do everything we can to activate those units. he also suggested and the details in the report, a range of the potential taxes we could collect and so this assumes, again, if we follow the vancouver model that we're not only activating close to 5,000 years, but there's a lot of people who are not going to activate the unit. and they're going to pay the

tax. and the estimates there were from $12 million to $61 million with that higher end again being if we took a similar approach that vancouver took and those funds could be used for housing preservation for the acquisition for vacant properties for affordable housing. this is something, colleagues that i know we've all been part of these discussions over the years. i will say when we talk to people who do housing work and affordable housing policy around the city, this is one of those things where it has been talked about for so many years now. i mean, really for years if not decades. i think supervisor peskin took a huge step forward in calling the collection on this, on the commercial side with all our vacant store fronts. the voters responded very positively to that and i think the board has handled the

realities of the pandemic and delaying some of the implementation on that. i think there's certainly an appetite among voters or was one on the commercial side and i would expect similarly on the residential side. but i really do look forward to moving from talking about this, are talking about how complicated it is, talking about how badly we need it to get it right and doing it, i think it's not just an opportunity, but really a policy imperative for us and in a city with such a long standing housing affordability crisis is with thousands of people living on our streets, we cannot continue to allow thousands of homes to sit vacant for no good reason. i think it's a moral issue and i think we just have to intervene to activate these homes as quickly and effectively as possible. so thank you very much for the time at the end of a long

hearing, very much appreciate it and thank you again to the b.l.a. for all their work preparing this report. >> chairman: thank you, vice chair preston. what would you like to do with this hearing? would you like to file it to the call of the chair? >> supervisor preston: i think we can file it, thank you. >> chairman: great. thank you. and i failed to close public comment. so public comment is now closed. thank you, supervisor preston. i was an aid once to supervisor mar and i think he called a hearing on this so many years as. so, yeah, you're right. we're still talking about it. so thank you for your leadership. okay. madam clerk, we don't need to vote on filing the hearing. >> clerk: we do. on the motion to file the matter, roll really [roll call]

have you three ayes. >> chairman: that motion passes. thank you. madam clerk, do we have any other items pending on our agenda? >> clerk: that concludes the agenda for this evening. >> chairman: thank you so much. we are adjourned. >> clerk: thank you.