Chris Daly's remarkable house-buying luck

Well, well, well.

I've long thought it odd that Chris Daly's fan club seemed to be distinctly unlike him. After all, most of them are staunchly against the rich and powerful, and certainly wouldn't support anyone who exploits them for his own gain. But Daly actually isn't very much like his base. He's a Southern Ivy League alumnus who owns a nice new home here in San Francisco, and gets paid about $118,000 per year -- many times what most of his constituents earn. The deeper I dig into Daly's finances, the odder things become.

In 2001, Daly and his then-fiancée Sarah purchased a new condo on Stevenson Street in the Upper Mission, just off Valencia St. The 1,360 square-foot home has three bedrooms, a full bath and two half-baths; quite spacious by SF standards, and the largest available in the 101 Valencia St. development. The condo was priced at $435,000 -- a daunting amount to most young couples, but Daly had an ace up his sleeve. The condo they were looking at was specifically designated "BMR" -- "below market rate" -- a term which means that, by law, it could only be sold only to an individual earning less than $76,600 per year for one person, or $87,500 for a couple. BMRs are specifically intended to enable low-income people to own their own home.

At that time, a Supervisor's salary was $40,000 a year, plus the additional income that Daly was paid in stipends for sitting on certain boards and commissions. His fiancée's income was $32,000 a year, which meant that they just barely made it below the threshold to qualify for the BMR property. Like most young people (and like the vast majority of his constituents), Daly and his fiancée didn't have $135,000 for the down-payment lying around. Fortunately for Daly, his mom loaned him $95,000 at below-market interest rates, and he sold $40,000 of his mutual funds for most of the rest. Must be nice to have such resources to draw from.

But here's where it starts to get curiouser and curiouser. A few months after Daly closed the deal on his new BMR condo, Daly and his cohorts on the Board of Supervisors introduced a measure known as Proposition J. It called for their own salaries -- $40,000 a year for the part-time positions -- to skyrocket to $118,000 a year. Significantly (but buried in the small print), Prop. J took the power for setting the Supervisors' salaries out of the hands of the public for all time, instead putting future raises in the hands of the Civil Service Commission -- roughly the equivalent of asking the bank robbers to mind the bank. Equally significantly, Prop. J did not prohibit Supervisors from continuing to receive income from other work (most Supervisors have long had other sources of income); many other counties ban such supplemental income. And at the same time that the Board of Supervisors were engineering a 300% pay raise for themselves, San Francisco was going through a recession in which we lost about 100,000 jobs.

The Supervisors placed the measure on the ballot, adding a lot of rhetoric about how the 300% pay raise was merely keeping up with what Supervisors were paid in some other cities (although the Statewide average for a county supervisor was actually $52,000 a year -- near the median income of San Franciscans). The public swallowed the story, and -- boom! -- just like that, Supervisor Daly and his fiancee were now making $150,000 a year, squarely disqualifying them for BMR housing. The more naive reader might think "my, how lucky that Daly managed to qualify for his 'low income' 3-bedroom condo just before that unexpected windfall!", whereas the more cynical might think "my, how clever that Daly managed to qualify for his 'low income' 3-bedroom condo just before he knew he would no longer qualify for it!"

As it stands now, Chris Daly and his wife co-own their condo with World Savings Bank until they pay off the mortgage. Presuming that their mortgage is for 25 years, that means that the Daly's will have spent just a few months of their time as mortgage-paying homeowners while actually qualified to purchase their condo in the first place. And given the certainty that the proposition which yielded such a great pay raise for the Supervisors was being discussed and strategized between the Supervisors during the months before it was formally introduced, it's extremely likely that Chris Daly knew that he'd be getting a monster of a pay raise very soon after he was trying to qualify as "low income". Kind of makes you wonder -- when Daly says that he's the champion of "affordable housing for San Franciscans" -- if he's just referring to himself.