Peskin's still making waves, challenging the mayor and pushing back on the city’s real estate and tech boom
June 24, 2016 by Ronald Li
Last year, on Dec. 8, a new yet familiar face strode into City Hall’s legislative chambers to a burst of applause.
Aaron Peskin had returned to the Board of Supervisors, representing District 3. A month earlier, the former Supervisor and Board president from 2001 to 2009 had re-emerged from private life. He defeated Mayor Ed Lee’s handpicked incumbent, Julie Christensen, batting away a candidate backed by hundreds of thousands of dollars from the tech and real estate industries.
Peskin said at his first Board meeting that he had no intention of returning to politics, but the city’s affordability crisis had become so severe that he felt compelled to act.
“The message of this election is clear: City government hasn’t been doing enough to ease this crisis, and there’s much more we can and should do. We have a mandate to take bold action on affordable housing,” said Peskin.
And then he voted to kill an $80 million public land deal where a 600-unit residential tower was proposed at 30 Van Ness.
It was a dramatic arrival, and Peskin’s impact and influence have only grown in the past six months. As the critical sixth vote for the previously outnumbered progressive bloc of the Board of Supervisors, Peskin has created a new majority and a sharp policy shift.
To some, Peskin’s arrival signifies a a new direction for the city, one that is less deferential to big tech money and real estate developers. Others fear that the return of a polarizing figure from the city’s political past presages a return to the fierce battles that marked his first stint in office, many of them over land use and development. Critics of Peskin say that he is a foe of development who delays and kills major projects.
He has already proposed a flurry of legislation, such as independent audits of city real estate deals and scaling down a density bonus program so it would not apply to market-rate projects. Peskin has also proposed a November ballot measure to remove mayoral control of three major city real estate departments. Supervisor Jane Kim, with Peskin’s support, also successfully convinced voters to pass Prop. C this month, which doubled the city’s affordable housing requirement to 25 percent, the most sweeping housing policy change in years.
At the same time, Peskin appears to be cultivating a calmer, less combative tone. The politician once nicknamed the “Napoleon of North Beach,” and known for his late night abusive phone calls to city officials and others who displeased him is older now, with a whiter beard, seven years after he was last in power. “I promise not to call you in the middle of the night,” Peskin told his colleagues at his first board meeting.
Sitting outside his favorite coffee spot, Caffe Trieste in North Beach in May, he told the Business Times he’s approaching the job differently now.
“When I was first elected I was 35 years old. I wanted to save the world in eight years,” he said. “I’m turning 52 next month. I see the world with more perspective.” Friends and allies say they’ve seen a calmer, more introspective Peskin as well. Part of that is circumstances. “When he was president of the Board, the pressure was immense,” said Jon Golinger, a member of the Telegraph Hill Dwellers who managed Peskin’s first campaign in 2000.
The best deal for the city
After the city’s economy roared back from the recession, issues like affordability, homelessness and transit have only intensified. And the stakes may be even higher, as one of the city’s most valuable assets — the very air where new buildings can rise or not rise — has become more valuable.
“Our fundamental job is to get as much for our shareholders, the people of the City and County of San Francisco, as we can,” said Peskin at his first hearing.
And Peskin is a veteran dealmaker who can recall tiny details from the city’s arcane planning code or hundred-page purchase agreements, according to colleagues and real estate sources.
Peskin is progressive on many issues like social services, affordable housing and LGBT rights. But on many economic issues, longtime ally Golinger describes Peskin as “almost fiscally conservative,” citing his disdain for wasting city money.
“Aaron is clearly one of the best minds on housing and land use that the city has seen in some time,” said Tim Colen, executive director of the San Francisco Housing Action Coalition, which has disagreed with Peskin on some housing policies. “He’s a nuts-and-bolts pragmatist who can get things done.”
Peskin’s skills have won him surprising support from some real estate groups. The San Francisco Apartment Association, which represents landlords, endorsed Peskin in last year’s campaign, despite his support of expanding rent control to post-1979 buildings, which the Association opposes.
“I want someone who will fight for the best deal,” said Janan New, executive director of the Association. “He has a vision for San Francisco. What I think we’re really lacking in this town right now is a vision.”
Foes, few of whom will speak on the record for fear of risking his ire, paint Peskin as an obstructionist who blocks all development. An examination of his voting record offers a more nuanced portrait. In 2009, he helped pass the Eastern Neighborhoods plan, which has led to the transformation of vast swathes of South of Market and the southeastern waterfront in one of the city’s biggest development booms.
“I remind people when they hurl accusations of being ‘anti-growth’ or ‘anti-real estate’ that I was the president of the Board that presided over the rezoning of over 20 percent of the city and was an integral force in greenlighting the largest single housing development that the city has built since World War II at the Hunters Point Shipyard,” said Peskin.
At the same time, Peskin can be brutally effective at shutting down projects that he hates. The rejection of a citywide ballot measure that would have raised height limits on the waterfront in 2013 essentially killed developer Simon Snellgrove’s 8 Washington tower proposal.
Kilroy’s Flower Mart proposal in South of Market agreed to additional concessions last year that would preserve the existing market after Peskin and groups threatened a ballot measure to block the project.
Peskin also backed a lawsuit to block Lennar Urban and Wilson Meany’s Treasure Island plan, despite supporting the project while he was supervisor ( see related story). His reasoning was that the developers sought to change the terms of the deal around 2010, following the global recession. But he noted that the initial agreement assumed a 30-year timeline and that meant anticipating downturns in the market.
Peskin remains unapologetic for supporting the lawsuit, which was ultimately rejected. “The city made a terrible mistake in walking away from its original deal. And they got taken advantage of,” said Peskin of Treasure Island.
As for more market-rate housing development, which economists and the state’s Legislative Analyst Office say will alleviate high housing prices eventually, Peskin says it’s one piece of the city’s toolbox to combat unaffordability.
“Supply is definitely part of it. But we also have to remember what kind of supply,” said Peskin. “Certainly building market-rate, $2,200-a-square-foot Infinity towers serves a need. But it’s not going to house a schoolteacher.”
The Supervisor v. the Mayor
Many of Peskin’s proposals seek to shift power away from the Mayor’s office and give more oversight to the Board. Peskin stresses that he has a long, productive relationship with Mayor Ed Lee, and they now meet every few weeks for coffee or a meal. But Peskin said he believes there is a leadership vacuum in City Hall, and a wave of cash from the tech industry is seeking to exploit that void. “I am concerned that a handful of primarily tech billionaires have captured the political hearts and minds of City Hall. Somebody needs to stand up to them,” said Peskin.
And Peskin has a particular billionaire in mind, one who has spent millions loudly supporting Mayor Lee’s initiatives and candidates: Ron Conway, founder of Angel Investors, an early investor in now gargantuan tech companies including Google, Facebook and Airbnb.
“He’s a bull in a China shop and throws his weight around and has undue influence in the administration,” said Peskin. “But there are many, many tech companies that are very much a part of the ethos of San Francisco.”
Conway declined to comment.
Peskin said that part of growing older was recognizing that no entity was monolithic, whether tech or housing activists.
“I don’t see tech as the enemy,” said Peskin.
Observers say that the differences between Peskin and the Mayor are as much about style, with the understated Lee a sharp contrast to the fiery Peskin. “The mayor has chosen the approach of seeking consensus. That is, in itself, a form of leadership,” said Michael Theriault, secretary-treasurer at the San Francisco Building and Construction Trades Council.
Mayor Lee’s spokeswoman defends his leadership style, as well as his record.
“With all due respect to Supervisor Peskin, who is extremely passionate about this city and its citizens, many will beg to differ about the accomplishments of Mayor Lee,” said Deirdre Hussey, a spokeswoman for the mayor. She noted that unemployment in San Francisco has dropped to 3.1 percent in June, and the city has more housing constructed and in the pipeline than any other California city. “Some politicians measure accomplishments by how many fights they pick and how many headlines they garner, and Mayor Lee has a different style. He measures success by how much he gets done and how many people he gets involved in solving some of the city’s most challenging issues,” said Hussey.
Reacting to the housing crisis
One of the biggest deals that Peskin and colleague Jane Kim have made is Prop. C, which raised the affordable housing requirement for new projects to 25 percent. Developers initially were shocked by the new requirements and said the new threshold would kill new housing. But a series of marathon negotiations led to virtually no opposition to the ballot measure, which passed this month.
Eric Tao, CEO of developer AGI Avant, the main negotiator on Prop C for the business community, said he, Kim, Peskin and Mayor Lee met multiple times earlier this year. “I felt that there was a lot of mutual respect,” said Tao.
They ultimately agreed to allow projects proposed in the last few years to pay lower requirements. The 25 percent change may also change following a study by July.
“If Prop. C had passed without a trailing ordinance, the pipeline would have been destroyed. Now the pipeline would be preserved,” said Tao.
However, projects proposed this year or in the future are currently subject to the 25 percent requirement, which developers like Oz Erickson have said will kill future plans.
Having four negotiators essentially deciding sweeping citywide policy with no public input has drawn sharp criticism from the more moderate supervisors. “The process has been a farce,” said Supervisor Mark Farrell, a moderate, who described the process as a backroom deal. “If we’re going to create new regulations around affordable housing, we need to make sure we’re not changing the rules in the fifth inning in the game and cratering their process.”
Supervisor Scott Wiener, another moderate member of the board, is also critical of Prop. C.
“I don’t like the direction the board is going on housing. We’re at risk of going back to the days where we’re looking at any excuse to not build housing,” said Wiener. But he’s also complimentary of Peskin as a person.
“He’s very smart. He’s very engaged. He’s thorough,” he said.
Mayor in the making?
Peskin will be running virtually unopposed again in November for his board seat, but the 2019 mayoral election also looms on the horizon. Lee will be termed out and a free-for-all is expected. Will it include Peskin, as some observers speculate?
“I doubt it. I like where I’m at,” he said.
In the meantime, even if there is a downturn in the coming years, the influence of big money on the city is unlikely to waver. And Peskin believes that the tech industry’s vast coffers has made it an insidious force in city politics.
“It’s the Wild West. They’re behaving like the railroad barons of the 1850s,” he said. “I’m not trying to be the sheriff, and I’m not looking for a fight, but I’m not going to shy away from my responsibility.”