San Francisco Pins Hopes on Federal Election for COVID Relief

• San Francisco has received about $154 million in federal relief funds for the COVID-19 pandemic, but has urged more aid to shore up the local economy

• President-elect Joe Biden has signaled support for infrastructure investment, rental and mortgage assistance, and other forms of federal support for cities

• The makeup of Congress will play a key role in what federal aid cities receive, and when. House Democrats earlier passed the HEROES act, which would direct $238 billion to states and $89.5 billion to counties, but the Senate has not taken up the bill

There’s a lot at stake for San Francisco in the federal election results this year.

With former Vice President Joe Biden capturing the White House, cities, including San Francisco, may be in line for an influx of federal relief. Plans and legislation outlined by president-elect Biden, congressional Democrats, and San Francisco policymakers give a good indication of how much money could be in the pipeline, and how it might be used.

In a typical budget cycle, federal grants account for approximately 23% of state and local budgets combined, and support everything from healthcare to education to jobs and housing. The federal government can allocate funds through a competitive process for specific projects, or based on formulas that factor in historical distribution of funds, demographics, or other considerations.

States and cities like San Francisco rely on this funding – and in the COVID-19 crisis, the need is even greater.

Since the pandemic began, California has received more than $24 billion in federal aid, and San Francisco itself received almost $154 million from the Coronavirus Relief Fund. The City also received another $20.7 million in related federal funds passed on through the state.

Of those funds, the City has spent more than $95 million – largely on payroll for staff addressing the public health emergency, personal protective equipment, and housing support for high-risk populations. The remaining funds are already allocated and expected to be spent by the end of the year, according to the SF Controller’s Office. More broadly, San Francisco has put millions into an array of response and recovery efforts, including emergency hardship loans, grants for small businesses and artists, and medical capacity expansion, among other projects and programs.

Biden's presidential win secures executive support for an expansive economic relief plan, including aid to local and state governments. But the makeup of the Senate is still uncertain: Democrats gained one seat in the chamber as of Saturday, but two Senate races in Georgia are headed to a January runoff. If Democrats win both races, they would secure 50 seats in the Senate, giving Vice President Kamala Harris the authority to cast deciding votes in a deadlock. If they fall short, Democrats will face a split Congress in 2021 with the potential for increase resistance to key relief initiatives.

For now, congressional leaders have indicated that a new COVID-19 relief bill is at the top of their agenda. That bill would likely look similar to the latest version of the HEROES Act, a $2.2 trillion package that the House passed on Oct. 1.

The HEROES Act would direct $238 billion to states and the District of Columbia, based on their share of unemployed workers. The package would also send $89.5 billion to counties based on population (San Francisco is about the 65th most populous county out of more than 3,000), along with another $62.65 billion to cities with at least 50,000 people. Notably, Biden has voiced support for this legislation.

Other funding sources in the HEROES Act include $225 billion for schools and childcare for families, $75 billion for coronavirus testing, contact tracing, and isolation, $450 million to help local food banks feed low-income residents during the pandemic, and $64 million to assist Urban Indian Organizations, like the Friendship House in San Francisco. Additionally, every taxpayer would get another $1,200 plus $500 per dependent, and weekly $600 federal unemployment payments would be restored.

For his part, Biden has laid out detailed plans for investment in state and municipal economies. Biden’s COVID plan calls for a state and local emergency fund for governors and mayors to use for health and economic initiatives, including mortgage and rental assistance, cash payments or tax relief, and jobs programs. It would also include payments for employers or workers to cover paid sick leave for those who need to quarantine, as well as interest-free loans to small and medium-sized businesses.

Like many other cities, San Francisco could seriously use an influx of funds.

The city’s sales tax revenue has taken a major hit, significantly worse than declines in other major California cities like Los Angeles. Revenues from tourism, payroll taxes and gross receipts taxes are also expected to plunge this fiscal year, altogether creating an estimated budget shortfall of $1.5 billion.

Coronavirus cases and hospitalizations have dropped significantly, but after an uptick in the past couple weeks, the city paused its reopening plans last week. The economic fallout continues to impact businesses and residents, especially communities of color and those who are low-income.

More than 200,000 San Franciscans have claimed unemployment since the pandemic started, and less than half of San Francisco’s storefront businesses open before the shutdown were still open by August. Meanwhile, the city’s office vacancy rate is roughly 2.5 times higher than at this time last year.

In October, San Francisco’s Economic Recovery Task Force released a report to help guide the city’s response efforts, many of which would require federal support to execute effectively. The report called for an expansion of affordable housing to protect renters at risk of eviction and to house homeless residents. The task force noted that federal recovery funds could be used to provide rental payments for residential and commercial renters and landlords, as well as to boost construction and preservation of new affordable housing.

A blue wave would likely lead to San Francisco getting some of that support.

The HEROES Act includes $5 billion in homeless assistance grants, and over $50 billion in rental assistance for low-income residents. Moreover, Sen. Sherrod Brown (D-Ohio), who has a good chance of chairing the Banking, Housing, and Urban Affairs Committee if the Democrats take the Senate, is a big proponent of rental assistance.

In May, Brown introduced a bill that would have provided cities and states $100 billion to help cover vulnerable residents’ rent, utilities, and other costs. Plus, Biden has said he wants to invest $640 billion into housing over the next ten years. That includes establishing a $100 billion fund to construct and upgrade affordable housing and $10 billion for Community Development Block Grants, which cities can use to expand affordable housing among other things. (San Francisco also identified these grants as a great way to support struggling childcare providers.)

Another priority for San Francisco is public infrastructure investment, which can also boost jobs.

That aligns with Biden’s recovery plans as well. The former Vice President, who played a key role in economic recovery initiatives after the 2008 financial crisis, wants to invest $2 trillion in clean energy and infrastructure, promising to “transform the way we fund local transportation” and “give local leaders a true partner in the White House.” Democrats on Capitol Hill have also signaled support for business grants and expanded food access.

Of course, it’s much easier for policymakers to lay out ambitious plans than to actually execute them, especially when it comes to a presidential candidate’s hypothetical policies that haven’t yet gone through the legislative process. With Trump out of the equation next year, and a potentially deadlocked Senate, we don't know yet what that means for the timing of a new stimulus bill.

Still, a Biden administration would certainly be less hostile to cities like San Francisco than President Trump, who has repeatedly bashed the city and threatened to slash federal funding to states and municipalities.

Nevertheless, Congress might be the more important indicator of a local funding boost: Trump recently got close to making a deal for a new aid package with Rep. Nancy Pelosi (D-Calif.), but Senate Republicans indicated they would reject the plan.

For now, it’s a waiting game, but what’s clear is there’s a lot on the line.