Ideas that work: a plan for a new San Francisco

With its own public bank, San Francisco could begin to fund and promote more community-centered forms of economic development

OPINION San Francisco is a city of tremendous riches and problems — a locus of wealth, inequality, innovation, creativity, and sometimes stifling resistance by political and economic power brokers. It's time to break through. We have the ability, and opportunity, to create a whole new set of economic, social, and political relationships between people and government. On everything from municipal banking, to Muni reform, to public-controlled sustainable energy production and community-driven budgeting, we have a flood of ideas from thinkers and activists across the city.

The Aug. 14-15 Community Congress at the University of San Francisco will focus on turning those ideas into a political platform the city can implement. Last week, we described the vision; this week, we offer some proposals that will be discussed at the event; following the event, others will be posted at

The event runs Aug. 14 from 9 a.m.–5 p.m. and Aug. 15 from 9 a.m.–1 p.m. at USF's McLaren Conference Center. For information, go to (Karl Beitel and Christopher Cook)


San Francisco is rich — it has $16.1 billion in assets, with a net worth of $6.5 billion, according to the city treasurer. With a little maneuvering and political will, roughly a half-billion of that money could be devoted to creating a municipal bank: a fiscally solvent, federally insured economic engine that would invest in community development projects serving underfunded activities and endeavors, providing significant economic and social benefits to the residents of San Francisco.

With its own public bank, San Francisco could begin to fund and promote more community-centered forms of economic development. Worker co-ops, for instance, could get loans for projects that are socially beneficial and economically viable. The bank could also help generate new homegrown industries that produce both revenue and social value to the city. This would help democratize the city economy, giving financial muscle to community-based projects and neighborhood-serving businesses.

Over a period of three to five years, a modest portion of the city's liquid investments can be transferred to create to the new bank. The bank could use this pool of capital to extend low-interest, long-term loans for projects located in San Francisco. The bank would offer a full spectrum of retail banking services, such as money market accounts, to attract additional deposits to supplement funds from the city.

A municipal bank has potential to grow into a major economic force in the city for financing community-centered development. With the right up-front commitment from the city, the total asset portfolio of loans and other investments would grow far beyond this initial public investment — representing a significant infusion of loan capital into currently underserved segments of the credit market in San Francisco.

The municipal bank would be a member-owned, federally chartered, and federally insured credit union. It would engage in rigorous vetting of loan applicants. But because the bank would not run as a profit-maximizing enterprise, loan officers would explicitly consider projects in light of their economic viability and potential contribution to the economic, social, and cultural well being of San Francisco.

Priority could, for instance, be given to loans for affordable housing development and community economic development.


This is a great article and vision but I would offer one important caveat.

You wrote:

"Fifth, depoliticize the request-for-proposals (RFP) process by moving it out of city departments and into the Controller's Office."

This would be very dangerous. The Controller's office is the product of the Mayor's office and can be highly politically compromised.

To give one example, in recent years the Controller has helped undermine the City's fledgling citywide clean energy program, Clean Power SF, by cooking up totally ridiculous, false economic analyses, which purposely and cartoonishly skew numbers to make the program appear financially nonviable.

The RFP process should instead be shifted to a truly independent body which cannot be politically manipulated by future mayors.

Posted by Eric Brooks on Aug. 11, 2010 @ 10:00 am

While the idea of using public money to fund a public bank (as opposed to bailouts of private banks and institutions) is an initially appealing idea, in practice it would seem that it would substantially reduce the transparency of how public moneys are utilized by moving the decisions from a democratically elected person or body to individual loan officers, and as private business loans, it is questionable if the results of these individual decisions could be made public.

In addition, the commingling of funds suggested by seeding the bank with public money and then encouraging additional private investment would appear to create a conflict between the bank's purpose of promoting San Franciscan's ideals and it's fiduciary responsibilities to those investors.

Finally, if it is a member-owned credit union in which members elect the board, what would prevent capture of the bank's loan policies by those private investors? Would it be one investor, one vote, or one dollar invested, one vote? Is the former even legal?

I have frequently mumbled about how, if the Federal TARP funds did not result in the anticipated increased lending, then the Feds should have just started their own bank and lent the money directly. However, either of these feel-good ideas would seem to create a big new can to put worms in.

Posted by Guest on Aug. 13, 2010 @ 3:35 pm

But it will never happen because voters lack confidence in government to do this, hell progressive activists, including many in City Hall, lack confidence in government to do this.

This idea will never see the light of day because it will require a tremendous level of organizing that proponents have proven unwilling to engage in after City funding for the nonprofits materializes.

To the contrary, efforts at structural reform to rebuild confidence in the ability of government to deliver core services have been sandbagged by the nonprofits who prefer to "raise more revenue" than to address the structural corruption that governs how existing dollars are spent because they benefit from it.


Posted by Guest on Aug. 13, 2010 @ 5:40 pm

I think that only states can charter banks

Posted by Guest on Aug. 14, 2010 @ 1:36 pm

The City could use its authority to go into business (Redevelopment or a new agency) to apply to the state for a banking charter.

Not sure if it would be possible to federally insure SF's bank; the Bank of North Dakota, the only public bank in the US is not FDIC insured.


Posted by marcos on Aug. 16, 2010 @ 12:32 pm

Re: the Housing proposal put forth by Amy Beinart. Well written proposal. Starts off with a nice, comfy name-dropping of every San Franciscan's favorite boogyman: the Dot-Commer. Never mind that they all left town years ago, it's a hallmark of good propaganda to begin by reminding everyone how it's all Snowball's fault. Then on to a wonderful idea about stopping that scourge of "low-income families", the evil T.I.C. Have you ever considered that so many multiunit buildings get broken up into Tenancy-In-Common sales because of the wrongheaded belief that anyone who dares to own property is inherently evil as well as the many punitive and draconian codes dealing with landlords? You've made it untenable for anyone to own more than one residence in SF and you act dismayed at the glut of T.I.C.'s on the market? I'm all for insuring renters are treated with dignity and respect, and that their rights are strictly guaranteed to the full extant of the law (I was a renter for last 22 years after all), but balance is needed in order to bring about the desired results: lower rents and more families. This lack of balance is essentially what has happened of late with the Unions and their unfeasibly high benefits and wages. Oh wait, let me guess. Miss Beinart has a Boogyman culprit for that mess as well? No doubt.

In any case, her proposed solution of allowing "Nonprofits" to "take over" and run housing for people with a low income (i.e. - all renters in SF) is nothing less than a undisguised first step to outlawing all privately owned residential rental units. So, under Beinart's wonderful, completely fair, and totally not communist plan, people would no longer be able to apply for apartments based on their references and credit, but rather they would go downtown and wait in line and some bureaucrat working for a "Nonprofit" would decide where they were going to live and when and if they could move into another apartment. Sounds really great! Now, who can we get to run this for us? Hmmm.... any ideas Amy? What? You could do it? Awesome how that all worked out!

Next we have a proposed law which would require owners to offer tenants the right to buy the unit they occupy at a price "based on the last best offer from a bona fide purchaser". What does that even mean? Are you saying that whatever price the unit sold for when it was last on the market is the same price that the current owner is now required to offer to the current renters of the unit before it can be placed again on the open real estate market? Why would anyone ever buy a property if that was the law? Owning the unit would just mean that you would be responsible for the outrageous San Francisco property taxes as well as the upkeep of the unit, only to be able to sell the property with no gain (not even a nominal increase to reflect inflation/cost of living), whereas renting the place leaves you with no responsibility whatsoever and a low rent written in stone for eternity. But let's say the renter does want to own. And he/she buys the unit fro the evil landlord. What about their subtenant? You know... their roommate? Everyone in SF has at least one. What about the roommate? Doesn't that now make the newly anointed owner of the unit officially an evil landlord? And what ridiculous laws are you going to come up with to regulate that? And where does it end?

All in all, this was a typically hare-brained fantasy for a town where "Nonprofit" means that you don't have to prove what you're doing is producing positive results because it's being paid for by the very people you're determined to run out of town. In other words, it's brilliant! Keep up the good work!

Posted by Guest on Aug. 16, 2010 @ 9:40 pm

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