As early voting for the June 3 election begins, the Lennar Corp. is flooding the airwaves and mailboxes on behalf of its ballot initiative to acquire and rezone key portions of Bayview-Hunters Point. Lennar’s chief argument is that planning for Bayview has gone on for years without producing development, and that this initiative is essential to jumpstart progress. It’s an attractive argument---so long as one ignores Lennar’s recent history in Bayview, the lack of public process around its initiative, and the fact that these very same claims were used to justify the creation of the Bayview-Hunters Point Redevelopment Area less than two years ago. But the biggest problem with Lennar’s vision is this: with market conditions delaying real estate development in Bayview, and Lennar requiring an unusually high 20% profit margin, there is virtually no chance that this troubled national company will start building housing anytime soon. Why then should voters bind themselves to a development plan that won’t be implemented for years, if ever?
Planning for Bayview: 10 years vs. 3 months
In 2006, San Franciscans were told that the creation of a Bayview-Hunters Point Redevelopment Area would finally get development moving in the city’s largest remaining African-American community. Now, less than two years later, San Franciscans are being given a similar message, only now the Lennar Corp. has replaced the Redevelopment Agency as the agent for community salvation.
During the Bayview Redevelopment fight, proponents insisted that the proposed plan for the Area was the culmination of hundreds of community meetings over a ten-year period. Even when many argued that current residents were largely unaware of the plan, backers responded that the community had already worked long enough to move forward.
Now, less than two years after the Board of Supervisors turned much of Bayview over to the Redevelopment Agency, Prop G seeks to override the outcome of this ten-year planning process. And the Lennar Corp. is making the Agency’s same arguments, with the key differences being:
1) Redevelopment was supposed to jump-start development, rendering Prop G unnecessary;
2) Redevelopment claimed to be a product of a multi-year community process, whereas Prop G was put on the ballot in March 2008 for a June election;
3) Whereas Redevelopment has time constraints, Lennar is under no obligation to build anything or implement its own plan
Many Agency proponents support Lennar, and do not view Prop G as inconsistent with the Bayview Area Plan. But I do not recall anybody claiming during the Redevelopment fight that Lennar would be coming in with a ballot measure that rezoned the neighborhood.
And voters have had all of three months to review and assess Lennar’s plan. That hardly constitutes sound neighborhood planning.
What’s the Rush?
When Lennar first announced its plans, there was an alleged rush to get an initiative before the voters in time to keep the San Francisco 49ers in the city. But one rarely hears about the stadium component of Prop G, which was drafted to allow Lennar to get all of the public benefits without a 49ers stadium being built.
As the Prop G campaign has unfolded, its connection to building a stadium has become increasingly tenuous. In fact, most voters likely see the measure as a way to get Bayview moving again, rather than a serious strategy to keep the 49ers in town.
Why then is the future of Bayview being determined by a national corporation’s funding of its own ballot initiative in a three-month campaign for a measure that had little community input?
What is the rush? It would make far more sense for the city to require Lennar to reach agreement with community residents and other stakeholders and then proceed with a November ballot measure that unites, rather than divides, the Bayview.
Perhaps the biggest illusion surrounding Prop G is the idea that it will jumpstart development in Bayview-Hunters Point.
Check Lennar’s track record in that neighborhood. Years have passed since they received approvals for development, and projects remain uncompleted.
This is a company that is hemorrhaging money like never before. Lennar is not going to put a spade to dirt until the national real estate climate improves, which could take years.
The Planning Department estimates that small developers make a 15% profit, and large highrise condo developers get 18.5%. Yet Lennar requires a profit margin of 20%, a number that cannot be reached anytime soon in the Bayview neighborhood.
Talk to any builder and they will tell you that Prop G is not about development--it's about land banking for the future. Lennar will sell off its affordable housing obligations to nonprofits, and then hold out for a decade or longer so that it maximizes its return on its most valuable properties.
Even if Lennar were eager to build now, other major development projects in Bayview, such as the Jamestown development, have been put on hold due to financial shortfalls and market problems. Lennar will not build until every proposed development in SOMA and the Eastern Neighborhoods is completed, leaving Bayview as the last place available for newly constructed housing.
Lennar is acting like sellers of Florida swampland. In this case the land is buildable, but the prospect that Lennar will jumpstart Bayview development is the mirage.