The New Gatekeepers, Part Two: Scarcity by Design

Since 2020, fifteen people have died of drug overdoses inside buildings owned by TODCO, a San Francisco affordable-housing nonprofit whose tenants have also lived for years with rat and roach infestations, broken heat, and unrepaired units. Over that same period, TODCO’s spending on lobbying and political campaigns rose sharply while the share of its budget spent on resident services fell. This is the same organization that, in 2021, used a procedural environmental appeal to kill a 495-unit housing project one block from BART — a project that included affordable units, that the state later found the city had wrongly blocked, and that prompted the legislature to change state law specifically to stop it from happening again.

That is the system in miniature. An institution funded to house the poor instead manages their poverty, blocks the housing it doesn’t control, and draws its budgets and its political standing from the arrangement continuing indefinitely. The pattern is structural, not incidental, and it has a name: an apparatus that does not come from the community it governs installs itself as the permanent broker between that community and a roof, draws its budgets and political standing from managing poverty rather than ending it, and withholds the two things that would let people exit the arrangement for good — ownership and self-determination. That is the basic shape of a colonial administration, transplanted to a housing agency. Whatever the intentions of the people running it, that is what the system does, and San Francisco has built one of the most complete versions of it in the country.

It is not one bad actor. A narrow, tightly networked complex of nonprofit developers builds the city’s subsidized housing, manages it, decides who receives it, lobbies City Hall for the money that funds it, and, through allied organizations, helps block the market-rate housing that would compete with it. Access runs through waitlists and lotteries administered by the same institutions that benefit from the shortage.

This November, that same network is asking voters to make the arrangement permanent, under a name built for a ballot measure: the Affordable Housing Guarantee Act. What it actually guarantees is the shortage.

Guaranteed Scarcity

The ballot measure, championed by former Supervisor Dean Preston and a coalition of nonprofit housing developers, qualified for the November ballot on 20,700 signatures submitted July 2. It would lock in the Proposition I real estate transfer tax and dedicate its proceeds, roughly $100 million a year, to affordable housing and eviction prevention. Preston, who wrote Prop I in 2020, says the tax has already raised more than $500 million and will raise another $350 million over the next three years.

It sounds generous. The numbers tell a different story. By the city’s own accounting, produced by the Board of Supervisors’ Budget and Legislative Analyst, San Francisco needs to spend $17.9 billion to build the roughly 40,000 subsidized homes it would take to keep pace with its population by 2031 — nearly $3 billion a year. The measure delivers $100 million, about three cents on the dollar.

Even the coalition’s own lobbyist concedes the point. Quintin Mecke, executive director of the Council of Community Housing Organizations, has called the measure “the bare minimum” and admitted, “We’re not thinking in a big enough fashion.” He is correct that it is not enough. He is mistaken about why. The deficiency is not the size of the check. It is the model the check funds, and the narrow set of institutions that administer it.

“One hundred percent affordable” housing in San Francisco is among the most expensive housing built anywhere in the country, typically running $600,000 to $700,000 a unit — a pace and price the Terner Center at UC Berkeley has found far slower and more costly than other dense, high-cost cities, including other high-cost cities in California. When Mayor Daniel Lurie wanted to showcase a bargain, he pointed to 833 Bryant Street, which he said was delivered for $377,000 a unit, compared favorably to a citywide norm he put at roughly $729,000 a unit. Even that showcase example cost nearly $400,000 a door. The Terner Center’s own independent case study put the real figure closer to $383,000, and found the project was a rare exception the city has been unable to replicate, relying on modular construction and a $65 million philanthropic gift most projects don’t have. The Chronicle posed the question in plain words: if it is faster and cheaper, why isn’t it being copied?

The arithmetic, at either figure, is stark. At $600,000 to $729,000 a unit, $100 million a year purchases somewhere between 137 and 167 homes annually, in a city that says it needs tens of thousands. At that rate, the measure doesn’t solve a housing shortage. It manages one, indefinitely.

Blocking Housing

The clearest illustration of how that scarcity gets protected is 469 Stevenson Street. In October 2021, in an 8-to-3 vote, the Board of Supervisors upheld an environmental-review appeal filed by an affiliate of TODCO, overturning the Planning Commission’s approval of a 495-unit project on a downtown Nordstrom valet lot. The stated reason was that the environmental study had not adequately analyzed gentrification and displacement. But gentrification is not, on its own, an environmental impact under the California Environmental Quality Act, and the appellant said publicly that part of the goal was to pressure the developer into shrinking the project and dedicating part of the site to the city. This was not environmental review in the ordinary sense. It was a negotiating tactic wearing environmental review as a costume.

The obstruction was naked enough that the State of California opened an investigation into two downtown infill projects the city had denied this way, and Governor Newsom’s housing enforcement team warned the city it may have violated the Housing Accountability Act, the state law that bars cities from rejecting or shrinking housing that complies with local zoning. When the environmental study was finally redone, the state’s own housing department wrote a letter urging the city to approve the project, noting that every impact the supervisors had claimed to worry about — gentrification, historic resources, seismic safety — came back “less than significant.” Housing advocates called 469 Stevenson “the poster child for the insanity” of San Francisco housing politics, and in October 2023 Governor Newsom signed Assemblymember Phil Ting’s AB 1633, drafted specifically in response to the 469 Stevenson denial, to close the loophole the city had used.

The man at the center of that vote, and of San Francisco housing politics for a generation, is Aaron Peskin, who represented District 3 from 2001 to 2009 and again from 2015 to 2025 and was twice elected Board President. The Frisc, a local outlet that covers city politics closely, has called him the city’s most influential politician this century. An entire housing movement organized itself substantially in opposition to him. As late as March 2024, Mayor London Breed vetoed a Peskin bill imposing new density limits as part of her pledge to reject anti-housing legislation. The board he led overrode her, enacting the restrictions anyway.

Put the two halves together and there’s a clear strategy. Market-rate housing, the kind that adds supply without a public subsidy and without a nonprofit gatekeeper, gets blocked. The housing that does get championed costs $600,000 to $700,000 a door, depends on public money, and is built and allocated by a specific network of nonprofit developers.

Scarce by Design

When housing is abundant, no one has to decide who gets it. When it’s scarce, and each unit is a $600,000-plus public asset rented out well below market rate, someone has to allocate it. That someone is the affordable housing complex. Access runs through waitlists, lotteries, and income bands calibrated to percentages of Area Median Income, administered by the same nonprofit developers who build and manage the buildings. The Tenderloin Neighborhood Development Corporation, founded in 1981, employs roughly 609 people and runs on about $37 million in annual revenue, making it among the largest landlords of the poor in the city — one of several nonprofit developers operating at that scale. These are not church basements. They are institutional landlords whose tenants number in the thousands and whose gate they alone keep.

In a market, one earns one’s way in. In this system, one applies, one waits, and one hopes the gatekeeper’s eye falls favorably. The resident never becomes an owner. The resident remains a supplicant, permanently dependent on the same institutions that lobby City Hall for the next appropriation.

The Lobby Funds Itself

The same coalition that would receive the money from November’s measure is the coalition that wrote it. The Council of Community Housing Organizations, a coalition of 22 community-based developers and tenant advocates, sits at the center of the campaign for a ballot measure whose $100 million a year would flow to its own members. This is the circle closing on itself: the builders draft the guarantee, the guarantee funds the builders, and the voters are asked to bless the loop as an act of compassion.

TODCO, the nonprofit from the opening — the one that killed 469 Stevenson while its own tenants lived with infestations and overdoses — is not a scrappy tenants’ shop scraping by. A supervisor and a state senator both called for investigations into the nonprofit after reporting on its spending came out. The organization that fought a market-rate project in the name of protecting the poor was, at the same time, redirecting resources away from the poor it already housed. That is not a contradiction. That is the business plan.

The pattern is not confined to one organization. Budgets of this scale do not survive a world in which housing is abundant and cheap. They survive on crisis. The organizations best positioned to lobby against the scarcity are precisely the ones whose payrolls require its continuation. It is a self-reinforcing circuit of public money, political power, and permanent clientele.

The existing funding stream has already offered a preview of the results. In his own op-ed, Preston concedes that Proposition I has raised over $500 million, with another $350 million projected, and that in 2023 “City Hall stopped using Prop. I funds for housing and diverted them to other priorities,” while the Board dissolved the oversight body meant to steward the spending. Half a billion dollars raised, and no clear public accounting of where it built housing.

And where units did get built, the results have drawn scrutiny. 833 Bryant, the project the mayor held up as a model, was reported by the SF Standard to be infested with cockroaches, its elevator broken, its walls and floors torn up — a “filthy, dangerous” situation, in residents’ and social workers’ own words, under the management of Mercy Housing. A brand-new building held up as the model, and its tenants are afraid to complain, because complaint risks eviction from the only housing they will ever be granted.

More broadly, the outcomes are grim for the people the system claims to serve. The city’s homelessness department’s budget reached $676 million in fiscal year 2022–23, even as unsheltered homelessness rose. A 2025–26 civil grand jury found that only 30 to 40 percent of people who leave the city’s homelessness system exit to stable housing, and that roughly 26 percent of the city’s accidental overdose deaths now happen inside the “permanent supportive housing” the city pays these nonprofits to run. “This is not a picture of success,” the jurors wrote.

Managed Dependency

Now name what the numbers add up to. Black San Francisco has collapsed. The population peaked near 13 percent in the 1970s and stands today at roughly 6 percent. Black-owned households in the city fell from about 7,100 in 2000 to roughly 3,600 by 2024, and across the Bay Area more than 5,000 Black owner-occupied households vanished between 2010 and 2020 alone. This occurred under one of the most self-consciously progressive governments in America, the same government that spent hundreds of millions on affordable housing and assured these residents, at every step of their departure, that it was on their side.

The affordable-housing regime does not offer people of color a stake. It offers tenancy, renewable at the discretion of the managing nonprofit. Yet homeownership remains the single largest engine of generational wealth for Black and Latino families, and the Urban Institute has demonstrated that simply increasing housing supply advances racial equity in homeownership. The regime blocks the supply, then offers dependency in place of ownership. It hands communities of color a lease and calls it justice.

The result is a permanent renter class, disproportionately Black and brown, administered by an institutional class that draws its budgets and political standing from managing that poverty rather than ending it. Some on the left have a name for the version of this they condemn elsewhere: they call it racial capitalism. It is also, more simply, colonial in shape — an outside administration governing a population it does not come from. Whatever the intentions of the people running it, the outcome reproduces the oldest divide in American housing: between those permitted to own, and those only ever permitted to rent.

The Choice on the Ballot

There’s a fair objection to all of this. There are San Franciscans — poor seniors, disabled residents, families at the bottom of the income distribution — who won’t be housed by market construction alone, and subsidized housing for them is a legitimate public function. That’s an argument for subsidy alongside abundance, not for a system that blocks the abundant kind of housing while concentrating control over the subsidized kind in a small number of hands. The indictment is not that the city helps the poor. It is that a network has arranged matters so that helping the poor is something only it may do, at $700,000 a door, with a waitlist it controls.

Preston frames the ballot measure as a fight between billionaires and working people, the “for-profit real-estate industry” against bus drivers and nurses. It’s a compelling frame, but it may also obscure the more consequential choice: between an abundant housing market that requires no gatekeeper, and a scarce, subsidized one that requires an intermediary to decide, application by application, who gets in. One path builds enough housing that ordinary people simply move in, no gatekeeper required. The other blocks the housing it does not control, keeps the remainder scarce and expensive, and vests in a nonprofit complex, wired into City Hall, the power to decide who may live in San Francisco and who must leave.

The measure on November’s ballot doesn’t fix that model. It guarantees it.