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Prominent City Builder Likens Developers’ Plight to That of Nazi Victims

Oz Erickson finds a novel analogy in rejection of the Mission moratorium.

Developer Oz Erickson, seen here with Mayor Ed Lee, warns, "The mood against construction is getting hysterical."

 

In an emotional and private plea to fellow builders hoping to defeat the Mission moratorium this November and pass a $310 million affordable housing bond, influential city developer Oz Erickson employed a novel analogy: the Third Reich.

“I am starting to feel a little like Pastor Niemoller in Nazi Germany,” Erickson wrote in an August 15 letter obtained exclusively by San Francisco. “You are all probably familiar with his famous words. ‘First they came for the Socialists, and I did not speak out—because I was not a Socialist. Then they came for the Trade Unionists, and I did not speak out—because I was not a Trade Unionist. Then, they came for the Jews, and I did not speak out—because I was not a Jew. Then, they came for me and there was no one left to speak for me.’”

“Hyperbolic for me to bring up Niemoller,” Erickson acknowledges, “but if we let [Mission District developers] Maximus and Podell go down in flames even if they were in part responsible for the mess, we jeopardize development throughout the city. . . . The mood against construction is getting hysterical.”

Erickson goes on to suggest that developers submit $10,000 or $20,000 to fight Prop. I—which would halt development projects in the Mission that are not 100 percent affordable—to go along with $500,000 in contributions from Maximus and Podell. “After all it is their fat that is actually in the fire,” he writes. “We are simply marinating.”

Contacted regarding the letter (which concludes, “PS: Please don't pass this on. It would be sad breach of confidentiality if this ends up in the papers somewhere”), Erickson tells San Francisco that he’s been “busting his ass since February 2014” to create and pass an affordable housing bond. “It’s the right thing to do. It provides a huge amount of affordable housing: perhaps as many as 3,000 or 4,000 units.”

His position is reiterated in another strongly worded letter to fellow developers, this one sent on July 31, in which Erickson solicits $50,000 donations to help pass the bond, also known as Proposition A, in the coming November election: “When all of us support the passage of Prop. A,” Erickson writes, “we are on the side of the angels.” As framed within the letter, however, it’s a transactional siding with the angels. He details an arrangement made with organizers of last year’s Proposition K, in which developers agreed to donate $1 million or more to help pass a future housing bond in exchange for the removal of elements in Prop K that were seen as unfavorable to developers. 

As originally proposed, Supervisor Jane Kim’s Prop. K would have mandated that developers of market-rate housing obtain conditional use permits from the Planning Commission for their individual projects if the goal of 30 percent affordable units was unmet. This would have been a time-consuming and onerous requirement for housing creators, which is why developers and Mayor Ed Lee detested it. So: “As part of the agreement, our side agreed to raise cash to make sure that a major affordable housing bond was enacted by the city,” Erickson wrote in the July 31 letter. “Jane’s side agreed to eliminate the ‘metering’ and C.U. requirements which they did.” The revised Prop. K, which was described by the Chronicle as “a watered-down compromise of a much more aggressive and controversial proposal,” was approved by voters. 

Erickson emphasized that he supported a housing bond long before the specter of Prop. K crossed his horizon, and would have been aggressively fund-raising for it regardless of whether the elements of Prop. K he described as “just terrible” were stripped out (he and others sent this letter to Kim in June 2014). “There was absolutely no quid pro quo,” he told us. “There was no formal arrangement.”

That, however, doesn’t exactly synch with this passage from his August 15 letter: “That bond money truly provides homes for those that need it most, and we in the real estate community made a formal commitment to get the bond passed to avoid the horrors of Prop. K as originally designed.”

So what, exactly, was the nature of this “formal commitment”? Had it involved pledging a hefty pile of cash to an individual politician—or his/her individual campaign—in exchange for altering legislation, that would be illegal. But, according to legal experts, it is not a crime to promise a donation to a future ballot-proposition campaign in exchange for alterations to pending legislation. That, while possibly discomfiting, is 100 percent legal (you can see the relevant laws here).

Erickson claims that plural terms in his letters—“our side,” “we in the real estate community”—are actually singular. “That is me saying that I would do my very best to raise the funds to pass the bond,” he says. Peter Cohen of the Council of Community Housing Organizations, one of the supporters of Prop K, adds that the allegation that he and others agreed to strip elements of Prop. K in exchange for a pledge to fund a housing bond campaign is “too narrow.” Kim, who is on a trip to New York, could not be reached for comment.

The last two affordable housing bonds to make the city’s ballot were rejected by voters, in 2002 and 2004. Those, however, were fought hard by developers. This time, Erickson emphasizes, developers are on board and leading the charge for Prop A. In his letters and on the phone with us, he stipulated that he is merely acting in the best interests of the city he loves.

“If Prop. A fails, if Prop. I wins,” Erickson writes, “construction slows down, future development becomes extraordinarily risky, Richmond-style rent control appears on the scene, and overall the City, which I adore, gets unmercifully savaged.”

 

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