>> clerk: resolution authorizing the execution of the performance of a second amendment to the ground lease between the city and mission bay affordable housing for a real property at 150 barry street to 13, to 15, to 17, to 19, 23, 25, 27 king streets in connection with the zone refinancing and minor rehabilitation of the space at the commons. >> supervisor cohen: we have amy chang from the mayor's office of housing on this item. i want to call you up and i understand that the mayor's office of housing would like to continue this item due to issues with the lender. so i don't know if you want to speak a little bit and then we'll take public comment and then a motion. >> sure, good morning, chair cohen and supervisors. amy chang from the housing and community development. for item 14 we request that the item be continued one week and the project lender has brought up conditions for the ground lease that we're still negotiating and so we would like to request a week's additional time to resolve this issue. cloip than>> supervisor cohen: k you. public comment, any member of the public to speak on item 14 come up to the podium and you will have two minutes. seeing none, public comment is closed. may i have a motion to continue this item to the next meeting? >> so moved. >> supervisor cohen: thank you. and we'll take that without objection. thank you. and item 15. >> clerk: itema 15 -- >> supervisor cohen: excused me, before we go further i'd like to call the budget of finance federal select committee to order. it is 11:07 and i'm calling the budget and federal budget select committee to order and we can continue with items -- item 15 and then we'll pivot and go back to -- and i will call items 1 and 2 from the federal select committee agenda. clerk. >> clerk: item number 15, resolution of approving and authorizing the grants of an easy easement on a city property of 68.52 square feet of the parcel looking at 1101 connecticut street. >> supervisor cohen: thank you and i'm the sponsor of this legislation and i bring up miss faith kirkpatrick to share with us about this resolution. thank you. >> thank you, supervisors, i am faith kirkpatrick and i'm a project manager and working on the project and i'm here to request your approval for an access easement at the city-owned parcel at 1101 connecticut street and the size of the easement is 68.25 square feet. and 1101 connecticut street is the parcel for a 72-unit affordable housing project known as black x and it's part of the revitalization project. this committee and the board of supervisors has previously approved a 75-year grant lease with a 24-year extension to the affiliate of bridge housing which is the developer of black x. and black x began construction in january of this year and it's currently 25% complete and they've completed the foundation work and they are about to start the framing work. the project is estimated to be completed in november 2018. and includes infrastructure improvements on 25th street and connecticut street. adjacent to the project site as part of the master plan revitalization work. and the small access easement is required to give pg and e the permission to install an underground vault that requires three feet of access area around all four sides of the vault, three sides of that access are located in the street and the fourth side is located on the edge of 1101 connecticut, that parcel. mocd supports this easement as it's ensuring that the undergrounding of the lines provide temporary power to the project and if approved pg and even will schedule the work and the overall project will maintain its current schedule to be completed by november 2018. on behalf of the mocd and bridge housing i thank you for your consideration today and we're here if you have any questions. >> supervisor cohen: thank you very much, faith. let's go to public comment. if there's any member of the public to comment on this item please come on up. this is for item 15. seeing none, public comment is closed. thank you very much. colleagues, i'd like to make a recommendation to move this as a committee report with a positive recommendation to the full board. >> supervisor yee: so moved. >> supervisor cohen: thank you, taken without objection. so earlier i had mentioned that we would go into the -- i'm going to refrain from calling items 1 and 2 from the budget and finance federal select committee and we're going to hear that at the end of our regular budget committee meeti meeting. so i just want to acknowledge that we've got two more supervisors here in the chamber and we have supervisor sheehy and supervisor fewer and he'll substitute for supervisor yee in about 20 minutes, so with that said, call item 16. >> clerk: item 16, resolution approving and authorizing a long-term ground lease with 96 housing on city-owned land and wall street for a term of 75 years with 24-year lease to extend and in order to construct a 100% affordable 94-unit multifamily rental housing for low-income seniors and formerly homeless seniors. >> supervisor cohen: thank you very much. the sponsor is supervisor ronan but we have miss sarah ama maral that will speak to this item. >> good morning, i'm with the mayor's office of housing and i'm the project manager. to approve a long-term ground lease between the city and the project sponsor of 1296 shotwell l.p. that has the agency and the chinatown community development center. the city obtained the land from oyster l.l.c. who elected to satisfy the requirement of inclusionary housing for the new mission theatre development and by dedicating 1296 shot well to the city and the city had an r.f.p. to develop the site into 100% affordable housing for seniors with 20% of the units set aside for homeless and formerly homeless seniors and it was chosen to develop the site and they have predevelopment work and construction is ready to begin in march 2018. once developed the property will be 85 feet tall with 94 units, and one unit reserved for a manager, on-site manager. and 19 homeless units at 30% a.m.i. and the rest is up to 50% a.m.i. and the ground lease will have annual payments of base rent and resil saidual rent, which is $10,175,000 and the city will collect $15,000 in base rent and to the incident that the residual receipts is available, they will collect an additional $1,205,000 and they will have a ground lease for 74 years with the option to extend for 24 more years and otherwise we are in full support of this project and the analyst report to -- we request that you move to approve it based on the analyst report. >> supervisor cohen: what did you say? >> sorry. i was fumbling a bit. at the time i was saying that we're in a full support of the project and we considering the budget legislative analyst report hope that you move to approve it. >> supervisor cohen: let's hear what the budget legislative analyst has to say. >> yes, this project would be -- this resolution would approve 74 up to 99-year lease for 1296 shotwell street and the tenant would be a limited partnership between the mission economic development agency and the chinatown development corporation. and the base rent would be set at $15,000 a year with a residual grant to go up to a million dollars a year which represents 10% of the appraised value of the property and this is standard terms for a ground lease for this type of affordable housing project and we do note in our report that given the low-income threshold for the tenants of this property that it seems likely that there would be residual rent to the city over the term of the lease and we do recommend -- if, for example, a new lease and license negotiated at the end of the full 80-year term of the lease. in addition to these items requiring board of supervisors approval, on september 19, 2017, the ssmta board approved purchasing 48,177 square feet, 1.1 acres of property for $1.15 million which is not subject to the board of supervisor's approval. and the ssmta agrees with the proposed amendments recommended by the analyst report. thank you for your support and i'm happy to answer questions. >> supervisor cohen: thank you, as you know there's a lot of conversation around this particular project with the neighbors, specifically my constituents janet carpanelli and robin chang. and at some point there was a promise made for use, access to -- to open space and public use. can you explain the agreement that you have reached with the constituents of mine in dog patch? >> currently we're working on a space-use policy for the community room which is on the ground floor and we're also looking at opportunities for the community to be able to access the second floor but yet keep our employees safe and secure during their operating hours and -- which are 24/7. so we're in the process of looking at that as well as a space plan overall for the islis creek facility. >> supervisor cohen: to be fair you have looked at it for a very long time and this is the subject of many meetings for a couple years now, so what is the status and how close are we? >> we have a draft policy that we're e viewing internally and we hope to share with the community soon. >> supervisor cohen: um-hmm. and in this draft policy, i haven't had a chance to review it, so does it have a clear access to the public space, to -- to the meeting room -- >> yes, there would be a way for the community to access the room that's on the ground floor as well as possibly to use the second floor space. >> supervisor cohen: um-hmm. what about the requests -- i think that there was another element that was a point of contension was the a-- contention the amount of time to notify m.t.a. and the need for security, have those been resolved? >> part of the access issue is access to the ground floor room and the hours that the m.t.a. operates as well as when the community meetings would be so those are all part of a space-use policy that we're in the process of finalizing. >> supervisor cohen: how do we remedy that issue? >> in terms of giving notice to the m.t.a., so we'll work out the number of hours or days that we would need notice so we can have the staff available to let people into the room. >> supervisor cohen: how much notice are you proposing in this draft proposal? >> i believe that it's three days. >> supervisor cohen: three days? so i just wanted to kind of go on the record for a couple talking points. as you heard in my questioning i have heard several -- several pieces of communication from residents in dog patch about the public community space that was agreed upon several years ago and i think that it was me as supervisor. thank you for an update on the outreach and the collaboration with the community. i know that there have been several meetings and i would be interested in seeing the draft policy, i have not seen that. and i'm honestly have to authorize the m.t.a.'s approval -- authorize m.t.a.'s approved additional lease, extension without coming back to the board and maybe you should explain publicly why i should support this? >> the director of transportation has the authority to approve the extension under the city charter and so that's what we are requesting. >> supervisor cohen: so... all right. thank you. thank you. i just want to go to the budget legislative analyst to hear a few of her thoughts. i think that you're making a recommendation of four amendments if i'm not mistaken and detail them for us. >> okay, correct. the board is actually under this resolution asked to approve the air space lease with cal-tran to a license and easement agreement and some planning department determinations. our recommendations are generally to correct numbers in the report. the first is to amend the resolution to clarify that the rent is actually -- there's -- from 191 to 241 so there's a dollar difference with the lease and another amendment is to correspond to the commencement date and so that the total costs would increase from 2191, to 21903676 and the third recommendation is to change the cost based on the closing date, so in the resolution 1328185 and that is 138931 and the more substantive recommendation is that this is a 50-year lease with two, 15-year extension options to extend and the way that the legislation is written is that the board of supervisors would be approving those extensions upfront and would not have approval authority at the time of it coming due and we consider that to be a policy matter to not have the authority to approve the extension through the time. otherwise we recommend approval as amended. >> supervisor cohen: thank you, i appreciate that. madam clerk, did we take public comment already? i can't remember. anyone here from the public that would like to comment on item 17? all right, seeing none, public comment is closed. and supervisor tang, may we -- may we -- let me say this -- i would like to -- i'd like you to make a motion to support the first three of the amendments and possibly consider not supporting the fourth. i do believe that we should have m.t.a. come back to us when they want to extend the lease and we should not allow the m.t.a. to make authorizations to extend and that is where i am on this particular item, i don't know how you feel, but -- >> i will defer to supervisor cohen on that dpifn that she's following this very closely and so i'll make a motion to that effect. >> supervisor cohen: thank you, i appreciate that. so we'll accept the first three of the four amendments and that the budget legislative analyst has introduced and also what i'd like to do is to -- i'm going to send this to the full board without a positive recommendation and i'm going to send it as a committee report and in that time between now and next tuesday i want to see the draft policy and it will determine whether or not i'll support it as a full board. okay? thank you, and if we can take that. >> okay, so i'll send it forth as amended as a committee report without recommendation then. >> supervisor cohen: i would like the record to reflect that sandy fewer is voting in place of supervisor yee. may we take these changes without objection? thank you, we'll do that. okay, please call item 18. >> clerk: item 18 resolution thursdaying the corrective actions by the mayor and the director of the mayor's office of housing and community development to mitigate or to avoid the negative consequences of the proposed federal tax reform on multifamily housing revenue bonds of the city and on the multifamily rental housing project and authorizing the collection of certain fees. >> good morning, supervisor, i am the bond program manager for the housing and community development and i'm here to present a staff report on the corrective action before you. as a sort of matter of background i wanted to provide a bit of information on the private bonds and construction draws as reported to the affordable housing projects that the mayor of housing and community development typically finances. as members of the committee are well aware, the city issues tax exempt private activity bonds to finance the development and rehabilitation of many affordable housing projects every year. and these p.a.b.s provide tax exempt financing for over 90% of the projects and they allow projects to access federal low-income housing tax credits as well that cover about 30% of the costs of the development for each project. whether than disbursing all of the bond proceeds upfront, they are often structured so that the construction lender disburses the proceeds to the project gradually over time through a draw process. proceeds are not subject to interest charges until they're drawn so this saves most projects millions of dollars of interest each year. and so with that bit of background comes the -- the private activity bond repeal that appears in house resolution 1, so on november 16, 2017, the u.s. house of representatives passed the tax cuts and jobs act, h.r.1, which repeals the tax exemption for private activity bonds effective january 1, 2018. and any bond proceed that is drawn on or after that date is taxable and any live financing with those proceeds would also be lost so it would be a tremendous blow to many deals that are outstanding that have been financed with live equity as i have mentioned before, typically 30% or more of the project is financed with this, and it would open up significant holes in the budget for these projects. to preserve, the they must draw down all bond proceeds at the end of 2017 as a result. and this includes the projects currently under construction and together these projects have $900 million in undrawn proceeds that the city will have to facilitate drawing down by the end of this year due to this pending legislation. while the p.a.b. repeal is not yet law, it's potentially disastrous consequences and the imminent effective date require the city to act and i'd like to add that this is the consensus among -- throughout the industry, among issuers and legal experts, and financial advisors regarding this issue that we really have to act to draw these bonds down by the end of the year to avoid very negative consequences for our affordable housing projects. so that brings us to the corrective actions resolution before you. you know this resolution does several important things and first it approves the certain corrective actions to project the projects with undrawn proceedproceeds and they include accelerating the construction draws and having accounts and providing reinvestment of the drawn funds and negotiating with lenders for lower interest rates and holding public hearings and, to bill droppers for administrative costs and for modifications to outstanding city documents and subject, of course, to the review of the city attorney's office and the outside bond counsel for these projects and corrective actions already taken and grants authority to negotiate and execute necessary documents to execute the draw downs by the end of the year. you know, this is a very complex endeavor that has to happen in a very short period of time so we certainly appreciate the board's support with this measure and with that i'd like to conclude the staff report and answer any questions that you may have. >> thank you, coo colleagues, ay questions? thank you for that presentation and so we'll go to public comment now on item 18. okay. seeing no members of the public we'll close public comment and chair cohen is back. >> supervisor cohen: so i have a couple of questions for mocd. i wanted to wait until you got comfortable and sat down. so i just wanted to say that i appreciate -- how we are anticipating how the proposed tax change will affect our housing streams but when -- when does mocd -- when will you be deciding to take any corrective actions that we will be needing to authorize through this resolution today? and two-part question, how will we -- how will the board be notified? >> sure. so, you know, everything has to happen between essentially now and the end of the year and the draw downs, depending on the lender, will occur as late as the 28th of december. but, you know, all of the draw downs have to happen by that date so in the weeks leading up to that date we'll need to take all of the actions outlined here and to the extent that, you know, any -- that any revisions of the outstanding documents are required or new documents are issued we'd be providing those to the board within 30 days. >> supervisor cohen: will we as supervisors receive individual updates or notifications about the projects that are happening in our respective districts? >> we will certainly provide that. >> supervisor cohen: great, no other questions. all right seeing that we're taking public comment on this and let's -- let's entertain a motion to send this to the full board with a positive recommendation and ensure that we're sending this as a committee report. all right? >> so moved. >> supervisor cohen: thank you very much and taken without objection. madam clerk, call items 19 and 20 together, please. >> clerk: item 19, resolution authorizing the mayor's office of housing and community development on behalf of the city to execute a grant application and grant agreement and related documents under the department of housing and community development affordable housing and sustainable communities program and the applicant is 950 housing associates for the project at 915 mission street. and for housing for the project at 2050 fulsome street. >> supervisor cohen: mr. kitchigham. supervisor rohan is the sponsor of this legislation but we'll hear from the mayor's office of housing. >> good morning, chair cohen, before you is a resolution to assume liability and apply for funds from the california department of housing and community development affordable housing and sustainable communities program. it's commonly referred to as ahh ahhc, and the first is 915 mission street, family housing, located at 1950 miss street. it was purchased from the san francisco unified school district in 2014 and most of you will know that it's located in the heart of the mission district at 16th and miss streets. currently serves as the home of a navigation center run by the department of homelessness and supportive housing which provides transitional services to the area's homeless with the goal of placing clients into permanent housing. most staff is in close contact with the department of homelessness and with the start date of construction, they expect to begin in the fall of 2018, shortly after the anticipated award. and the second before you is for 2060 folsome street, which is located at 2060 folsome street which is a city-owned parcel between 16th and 17th street and it will face south on the recently completed neighborhood park. the project is a new mixed-use nine story building with a community serving uses on the ground floor. ground floor uses include an affordable child development center operated by the mission neighborhood centers and good samaritan family resource center. and youth and adult leadership and eb engagement programs withw offices and a grand floor café. and the project will have a similar start of construction timeframe in the fall of 2018. and both of these projects have units which are set aside for formerly homeless households and the a.h.c. program, which i mentioned a little bit earlier funds land use and housing and transportation and land preservation projects to support infilm and compact development to reduce greenhouse gas emissions. funding for the ahc program is provided from the greenhouse gas reduction fund and the count established to receive cap-and-trade proceed options at the state level. in order to be highly competitive, each project sponsor, the first which is a venture between bridge housing and mission housing development incorporation and the joint project with the chinatown community development center for the 2060 fulsome project is submitting joint applications for approximately $15 million for each project. the a.h.c. award for each project is broken up into two components. the first is a award of $10 million for each of the affordable housing developments and the second is an approximately $5 million grant award to go to the san francisco municipal transit agency for the associated greenhouse gas reduction measures included in the application. and for 1950 mission streets it has upgrades to a bus line and upgrades to the pedestrian and bicycle experience vis-a-vis the better markets plan and as well as smaller an ann changes. and an installation of the pedestrian countdown signals on fulsome street and related improvements. the agreement for joint liability for the city and housing developers due to the requirement for the housing project's and transit improvement projects, it means that in each case both parties will be liable for the completion of the entire project and either party may need to step in and to execute the measures to have the housing development completed or to have the transit improvements completed. i want to thank you for considering these resolutions and the assumption of liability and the ability to apply for $15 million to the department of affordable housing and sustainable communities program and we're excited to try to leverage these funds to see affordable housing folded into the solutions for greenhouse gas reduction and combating climate change through smart grid policies. finally, i have some written amendments here, i would like to submit a request detailing the sections for each resolution that refer to, quote, accept and expend. for file for the 1950 project, to line one, starting with accept and expend grant and strike out starting on page 3, line 24 through page 4, line 4, starting with the language, if the application is approved. and please also strike out, starting page 4, line 16 to line 22, starting with the language further resolved and i have these amendments in write are if you you too if you can't follow. >> supervisor cohen: thank you. can you circulate the amendments if you have them in writing? i'll get them. >> thanks. thank you. >> supervisor cohen: okay. >> almost done. >> supervisor cohen: i know. >> file 175172060 fullsome street to start with the language apply for and accept and extend and page 3, line 16 and line 22 and if the application is approved and please also strike starting page line 4 -- page 4, line 8 to line 14, quote, further resolved. and we will return to the board for an accept and expend authorization after we receive the award and this concludes my presentation and members from the development team, sam mottes for mission housing development corporation and whitney jones from chinatown community development center and elaine yee from the economic mission development project is here if you have further questions. >> supervisor cohen: let's see, is there a report on this... no, there's no report on this. okay. supervisor tang, supervisor fewer, you have the amendments in front of you and supervisor fewer i see your name. would you like to speak? superviso.>> supervisor fewer: a project that i worked on extensively at the school district when i was on the board of education and i'm so glad to see this project moving towards the building of the 157 units of affordable family housing. this originally came before the san francisco board of education for sale and they wanted to actually sell it to developers for 130 market rate condos and this is the kind of housing that we should build on the mission corridor and partnering with non-profit like the san francisco unified school district so that it makes it affordable for the mayors office of housing to purchase. and a prime location, right on the mission corridor, preserving 157 families in san francisco. so i just wanted to mention how wonderful it is to see this moving along. thank you. >> i apologize for my manners, thank you for your leadership supervisor fewer and i remember those meetings with you and it's come to you from i guess afte yg time. >> supervisor cohen: great, thank you. let's go ahead and take public comment. public comment on items 19 and 20, seeing none, public comment is closed. thank you. okay, so we've got amendments at hand and i think that they're self-explanatory. supervisor tang? >> i think they were stated so i can make a motion to adopt those motions. >> supervisor cohen: yes. >> and send forth as amended to the full board with positive recommendation, items 19 and 20 as a committee report. >> supervisor cohen: without objection it passes. thank you. okay, folks, we are going to make a change and go to the budget and finance federal select committee and we called this meeting at 11:07 and there's two items both of them are hearings and first, madam clerk, call 1. >> clerk: item one -- >> supervisor cohen: one and two together. >> clerk: one and two, with the update on the federal budget and any related impacts to the city and reports to the comptroller's office and the mayor's budget office, and item two the hearing on the proposed federal tax plans and its local impact and requesting the city controller to report. >> supervisor cohen: thank you for calling the items and we have miss michelle alarsa from the controllers office, it's going to make -- and -- and melissa whitehouse from the budget office. so i'm not sure who is making the presentation, either one. the floor is yours, michelle. thank you. >> good morning, supervisors. i'm here with a brief update on the federal tax reform proposals as well as the federal budget update. i'll review the first two items and then we'll look at it in slightly more detail at the proposals at the department of housing and i think that you have heard some of that in the budget finance committee agenda so we won't spend too much time on that. and also cindy comerford is here to discuss the updates on the affordable care act in particular as you recall that federal funding, a vast majority of the funding that the city receives is for health programs, particulary medicare and medicaid to san francisco residents so it's a large piece of the federal picture. by far the largest dollar value component of the proposals that are in front of the congress at this point, in terms of their effect both individuals and state and local governments, is the state and local tax reductions and also just to mention very briefly that you're aware that the house and the senate have separately passed versions of tax reform legislation and currently are reconciling those two versions to bring a final piece of legislation to the president to sign by the time congress leaves for holiday break which is christmas, so they're in a very short timeline. and so some of this information in here -- this is very dynamic and probably amendments are being proposed and reviewed and discussed, even as we're speaking here. but by far the largest impact item to both the individual taxpayers and to the state and local government is this proposed changes to salt, the state and local tax deduction. so as you know the taxpayers can conduct the state and property taxes and sales that are minor from their federal income tax returns, both the versions that have been passed so far would eliminate these deductions and capital dedukdz for property tax at $10,000. and the net effect is highly dependent on what tax bracket individuals fall into and what their particular tax circumstances are, but on the whole this will certainly increase the taxes for taxpayers in high tax states such as california and new york and new jersey and will disproportionately lower taxes for the lower tax states such as texas and florida. we looked at some i.r.s. tax filing information from 2015 to get a sense of what this means for california and san francisco, and in california over five million or 30% of the filers in 2015 took $80 billion in self-income tax deductions and not including property tax deductions, and so if they hadn't been able to take that deduction it would have increased their taxes -- in san francisco in that same time period filers filing from a san francisco address which is slightly different than the san francisco residence, but from a san francisco saved $2.1 billion using the income tax deduction and so it's an incredibly large and valuable deduction. the largest portion of that value accrues to households with income over $200,000. so out of that $2.1 billion, $1.8 billion of that value accrued to the households with incomes over $200,000 so it's skewed towards the high end. and in terms of the property tax deduction, it is even more -- the benefit of that is even more highly weighted toward high-income households in san francisco, just given the fact of prop 13. most filers in san francisco pay less than that, given the current assessed values of their homes. what this really does is that it makes it harder for new entrants into the home buying market in san francisco and it will increase their taxes. because they will be paying market prices that will almost certainly result in total property tax and special assessment liabilities over that cap. so probably for purchasers or single family homes that will make it much more -- not much more -- it will make it more expensive to enter that market. just a little bit of tax theory here because i think that it's important, salt was an integral part of the federal income tax when it was created in 1913. and the point was that it's the state's right argument that states -- we'll leave it to the states to figure out how to solve their social problems and raising revenue to do that in a way they see fit and now some states have raised local revenue to do the programs as they see fit. this really throws a wrench in that because now the states that have chosen to do that are being heavily penalized and the value of the deduction goes away and you could argue that the net effect is that the next time that we go to the state or the local governments in, say, california and go to voters to ask for new revenue the voters will say that i'm now double taxed on certain of my income and i feel less able to afford that. so that's the concern that it makes it understandably taxpayers feel less able to support those things if they have increased their tax burden. some of the other tax proposals that affect individuals, the mortgage interest deduction and the house bill would reduce just for new mortgages over $500,000 in value you will not be able to deduct the interest value on that. again, that matters much more in a high housing cost area like the bay area, or even a middle-income home it's over that threshold. so it's, again, the effect of this is much more heavily weighted toward the high cost states on the coasts. some of these increases in taxes that people are feeling will be offset by the increases in the standard deductions, so kind of the net effect of this is it's hard to tell and it depends on the individual tax situations but as you can see both house and senate versions would increase the standard deduction. and similarly with income tax brackets the number of brackets and the maximum and minimum rates and the thresholds for the brackets, there's proposals to change these as well and the net effect is hard to say. as we'll discuss, cindy i believe will discuss in a moment, the senate bill would repeal the affordable care act, individual mandate, to maintain insurance coverage so that has significant impacts to individuals and government as well. again, this is all changing but the house bill would make the tax cuts both to individuals and corporations permanent. the senate individual tax cuts would expire in 2025 and permanent tax cuts would be permanent. you just heard from the mayor's office of housing on what it means for housing production in the city. and habs are used for all sorts of infrastructure, including airports and ports and water infrastructure and hospital, housing and educational facilities and really a very vast array of public -- public benefit infrastructure. the house bill would eliminate the tax deductibility of these and so in addition to the costs on housing, the aircraft has estimated -- airport has estimated in their current capital plan calls for issuing $4.4 billion in habs and this elimination of the tax credit would increase the cost of that borrowing by $1.2 million over the life cycle of the capital plan, so about a 25% increase in cost which is large. and we already kind of discussed the effect on the low-income tax credit. another item that affects the local government's ability to finance capital projects, the elimination of being able to issue new tax exempt debt using advanced refunding bonds and this is like if you're a homeowner and you refinance your mortgage because the rates are good and you benefit from a lower payment and similarly, the government, when the rates are favorable and the conditions are right we can refinance our tax exempt debt and bi get the simir saves and so it's market driven what we achieve with that. in 2015 we used this to save $7 million in outstanding geobond debt so it's something that we do to maximize our ability to do a pay go and other capital funding. finally the eliminatation of the historic rehabilitation tax credit which is a 20% tax credit for spending to rehabilitate historic buildings. for the city this is most important, this is somewhat important in geneva car barn and also to the port which has two federally designated historic districts for the piers and the iron works at pier 70. so the sort of loss of investment is estimated at $260 million to $350 million and the larger question is just does it pencil out to do the project without the tax credit? you might not just have a more expensive project and you may have no project at all. and so all of these ca cuts aren order to be able to afford the reduction in revenue that the federal government would experience by cutting taxes to businesses and owners. and so most businesses in the u.s. are organized -- they receive passthrough income so they're owned by individuals or partnerships and the profits on that is taxed kind of at the individual's income tax rate. and so both bills would reduce the tax rate for passthrough income to individuals significantly from about 40% to 25% with some other provisions. and the senate bill down to 17%. in addition for the smaller portion of businesses in the united states that are organized is sea corps that pay an income tax rate and it's reduced from 25% to 20% and there's a discussion of 22% but a very significant corporate tax deduction rate with different effective dates in different smaller provisions underneath that. so this is a major tax cut that the house and senate are needing to offset by finding -- reducing the tax deductions for other entities. i'm happy to attempt to answer any questions about federal tax laws. i think that -- i think that we don't yet quite know what the net effect is on san francisco because it really -- it depends on what the final bills do to different groups of businesses and individuals. so i think that the general view is that if you are sort of a higher income individual and maybe you'll lose out on property, you know, the salt deduction will cost you and the mortgage deduction will cost you but you're more likely to be a ben wisbeneficiary of a inheritx and passthrough income because you're a business owner so at the higher end of the income bracket you're more likely to have those offsets and what we consider the middle-class in the bay area you're likely to see a tax increase, but, again, depending on your particular situation. and then we are beginning to look at what this could mean for san francisco's economy as a whole because what does it mean to different industries such as real estate or technology companies and there's a lot of provisions about offshore revenue and it's pretty dynamic discussion at this point and we haven't really yet captured the effect of that. a brief word on the federal budget, it's kind of more of the same. the government is currently operating under a continuing resolution that expires tomorrow and the view is that the most likely outcome is that another continuing resolution will be passed to carry the government through december 22nd and then another one some time in january. so the best advice is to stay tuned and to see what actually happens with those resolutions but that is it. our general expectation. we talked a little bit about and we have addressed the effective tax proposals on the mayor's office of housing projects and i won't go over that again and i think that for questions about affordable care act we're going to turn to the department of public health. and before -- or after that i'm happy to answer any questions that you have. >> supervisor cohen: thank you for the presentation and i know that the subject matter is incredibly complex and also changing. i have a couple questions and i think that they're more high level and you said that folks, san franciscoians in particular will most likely experience higher taxes. are you able to give me a range as to what you have studied or how you understand what the tax increase will be for the average san franciscoian or at least the average san franciscoian who is making over $200,000 a year? >> yeah, the information that we have is that the i.r.s., again, the i.r.s. data on filers in 2015, it really looks like most of the effect is on filers who have incomes over that threshold. >> supervisor cohen: so we're clear, are these joint filers or individuals? joint -- joint household income? how is the data assessed? how is it collected? if you don't know, you don't know. >> i don't know exactly. i'd have to look at that and find out. >> supervisor cohen: i thinking that a lot of the data is it's a household income. so if you have over $200,000 or $250,000 -- >> $200,000. >> supervisor cohen: then the tax impact would be what? i'm sure that there's a range. >> it would be -- it's hard to say, i mean, the one thing that we were looking at is what would have been the value -- you know, what is the lost value of the state and local income tax deduction and the property tax deduction to san francisco filers so we think that it's about $2.1 billion for the state and local tax dedukd deduction a lot smaller, i don't know, $100 million or so in the property tax deduction. >> supervisor cohen: so overall there's less revenue going into the state budget and the local san francisco budget for us to then reallocate during the budget process? >> i don't think that it's a direct affect and if you take $2 $2.1 billion out of the local economy, you have to expect that it will affect the local business' ability to invest or to expand -- >> supervisor cohen: to hire. >> you have to expect that discretionary spending would decrease because the cost of necessities is going up and it would certainly affect your sales tax. the effect on the housing market and our transfer tax and the property tax as a result seems like it would -- if anything -- it would have to possibly drive down prices and just reflecting the fact that most buyers are going to have higher costs to finance and then pay taxes on these new purchases that one would think that it would depress slightly the home prices but not in a way that will substantially benefit. >> supervisor cohen: so in the news that i was reading earlier this morning, i think that there are republicans from california and other high tax state -- they're putting pressure on the congressional leaders to make some considerable changes that could avert some of the most severe impacts to us being felt here in california. can you describe maybe -- if you don't know it just let me know that you don't know, but what exactly is our congressional delegation doing? i know that two weeks ago in a very public way that pelosi was set to meet with the president but then the talks were derailed because of twitter. so where are we -- what are our lobbyists telling us in terms of in sacramento and in the capital? >> i am receiving updates from them as they're sort of more able to get current information. one piece of information we got from our federal lobbyists yesterday is that there's a bipartisan bill and i don't know who the sponsors are on the spot, who would seek to maintain more of the salt deduction, maintain the property tax deduction, and pay for it with -- i think that it was a passthrough proceeds to kind of shift that a little bit more in favor of toward the individuals and less in favor toward the businesses. that's one proposal from two congress people. i'm not sure where that is, if it's -- where that is in the process. >> supervisor cohen: okay. supervisor fewer, did you have questions, i see your name. supervisor fewer thanif>> superk you, i just have a comment and i think what we may see from this is that individuals who are trying to get into the home market, the real estate market here in san francisco, will have a harder time because it's so expensive to buy a home here and when you can't deduct your taxes it doesn't give you some relief at the end of the year. because the relating corporations are taxed at a lower level it just encourages corporations, quite frankly, to buy real estate because they can take a hit on not deducting on the property tax because they're also leveling it with a generous tax package for the corporations. so i think that this is actually very detrimental to all of the housing that we're building that is at that price range that we're trying to get at with the new home buyers and this will hit them hard. and speaking of someone who just bought their first piece of property in san francisco as we're building them for them is that this group of people actually will have a harder time getting into the market considering they will not be able to get -- deduct these things on their taxes. and so i see the effect actually hitting the people that we actually wanted in san francisco versus the corporations that buy up a lot of real estate here that are going to get a huge break with this tax deduction. let's just hope that people have a moral conscience and that's far-fetched, i know, and we'll pushback on this but i think that we are--