Bay Area Housing: The Path Forward – Preservation -The San Francisco Foundation

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Bay Area Housing: The Path Forward
Bay Area Housing: The Path Forward – Preservation

Bay Area Housing: The Path Forward – Preservation

Bay Area Housing: The Path Forward

Preservation

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Overview

Preventing the Impending Loss of Affordable Housing Across the Region and State

We need to preserve the affordable homes we already have. The loss of affordable housing occurs for various reasons, such as the expiration of affordability protections, the redevelopment of existing rental housing, inadequate maintenance, and the loss of rent-controlled units.

From 2013 to 2022, San Francisco added 9,285 affordable homes but lost 3,879—a net gain of only 5,406 units. [1] Statewide, 30,000 deed-restricted affordable homes[2] and over 300,000 unsubsidized homes are at risk of being lost, according to estimates by the California Housing Partnership Corporation (CHPC).

The California Department of Housing and Community Development estimates the state has 500,000 subsidized, deed-restricted units. [3] Many were built 30-50 years ago, with regulatory affordability agreements that are set to expire soon. That means that droves of units are at risk of converting to market-rate housing. Units are sometimes also lost when project-based rental assistance contracts with the U.S. Department of Housing and Urban Development are not renewed.[4]

Unsubsidized housing is often affordable to Californians with lower incomes due to its age, location, and physical condition. The number of these units is declining for various reasons, including recent acquisitions of small multi-family developments by large for-profit corporations, as well as the redevelopment of old sites into new, higher-density office and housing projects. Families with lower incomes are displaced as demand from higher-income residents increases housing costs.

Bay Area organizations and jurisdictions can preserve affordable homes through several strategies: creating incentives for developers to keep units affordable when deed restrictions expire by restructuring or selling to a nonprofit sponsor,; providing funding to tenants or nonprofits to purchase housing with the express goal of keeping units affordable; adopting first-right-of-refusal policies that allow tenants and community members to buy housing before it is offered for sale; prioritizing funding for repairing units to keep them habitable; and creating alternative ownership models, such as community land trusts or cooperative housing. Additionally, strengthening and protecting rent-controlled units is a vital preservation strategy.

[1] City of San Francisco Planning Department, April 1, 2023, “Housing Balance Report No. 16–2013 Q1-2022 Q4.”.

[2] California Housing Partnership Corporation, 2023 Subsidized Affordable Housing At Risk Report

[3] California Housing Partnership Corporation, Naturally-Occurring Affordable Housing Report 2023

[4] California Department of Housing and Community Development website, Preserving Affordable Housing

Our Priorities

Asset- and wealth-building

We support nonprofits in acquiring and rehabilitating affordable homes and pioneering new ownership models, such as land trusts, to make asset- and wealth-building possible for communities of color in the Bay Area.

Tenant-centered preservation

We support tenant-centered preservation, which engages with current tenants and the community to meet their needs when preserving already affordable housing.

Capital, loan products, and expertise

We support efforts to bring additional capital, loan products, and expertise into the effort to preserve housing.

Protecting and improving existing affordable housing

We support policies that protect and improve existing affordable housing.

Preservation in Action

Examples of SFF grantees preserving our affordable housing.

The Martinez family was just one of the many families assisted by Mission Economic Development Agency (MEDA), funded with help from the foundation’s Bay Area Community Impact Fund (BACIF).

Mission Economic Development Agency

Supported by a loan from BACIF, Mission Economic Development Agency (MEDA) acquired 300 Ocean Ave. in Mission Terrace. It will preserve and update the building as affordable housing in partnership with the City of San Francisco’s Small Sites program, which helps longtime residents vulnerable to no-fault Ellis Act evictions stay in their homes. Residents of 300 Ocean Ave. include Black and Latinx households, including families with children and tenants with physical impairments.

HOPE SF

HOPE SF is an integrated and innovative approach to addressing multigenerational poverty in the most distressed public housing in San Francisco. As the nation’s first large-scale, explicitly anti-racist community development initiative, HOPE SF centers resident voices, builds wealth, and supports healthy communities. HOPE SF is about developing vibrant, mixed-income communities at four San Francisco public housing communities without mass displacement of original residents. SFF, Enterprise Community Partners, and the City and County of San Francisco lead this public-private partnership.

Community Ownership for Community Power Fund

SFF initiative Great Communities Collaborative (GCC) supports the Community Ownership for Community Power Fund. This bold $22 million philanthropic initiative brings together community power-building organizations and the expansive funder ecosystem to address the inequitable funding system for California’s community ownership of real estate, land, and housing. Community ownership refers to community-led initiatives such as community land trusts, housing cooperatives, and other shared equity models developed by and for the benefit of residents, not speculative developers or other public and private institutions who often fail to engage community leadership.

Photo of the Imperial Family, Oakland Community Land Trust homeowners.

Oakland Community Land Trust

SFF’s Bay Area Community Impact Fund supported the Oakland Community Land Trust with a $900,000 loan, providing critical early financing to purchase properties with tenants at risk of eviction. These projects make these homes permanently affordable and help Oakland Community Land Trust members transition from being tenants to homeowners. For single-family homes, the Oakland Community Land Trust retains permanent ownership of the land, leases it long-term to the resident, and sells the home to the resident by helping them secure a mortgage.

Policy Change

Examples of policy solutions that create systemic change

SFF supported the Community Anti-Displacement and Preservation Program (CAPP). Without a strategy for preserving existing, unsubsidized affordable housing in California, we are putting at risk thousands of renters who are predominantly people of color with low incomes. CAPP would have provided funding for the acquisition and rehabilitation of unrestricted housing units while attaching long-term affordability restrictions to prevent the displacement of current residents.

SFF-initiative Partnership for the Bay’s Future (PBF) has been active in helping communities develop equitable policies such as Tenant or Community Opportunity to Purchase Acts (TOPA/COPA). TOPA/COPA empowers tenants with options and opportunities when their rental property owner decides to sell. These policies give either tenants or nonprofit housing developers the first chance to purchase rental property and keep homes affordable. Nonprofit organizations will be required to keep the building affordable permanently.

Bringing more resources to the field

A powerful community of donors is helping provide the deeply needed resources to fuel this work.

Developed by SFF initiative Great Communities Collaborative, Five Ways Philanthropy Can Catalyze Tenant-Centered Housing Preservation helps donors and funders explore housing preservation and community ownership models as strategies to achieve housing equity. It highlights the impact funders can have on the affordable housing preservation ecosystem by funding urgent community needs and providing the patient investment necessary to build long-term systems grounded in racial equity.

Rendering of the 203-unit tower TNDC plans to build at 921 Howard.

The San Francisco Housing Accelerator Fund and SFF helped launch and support the Home for Good Fund. This Fund – which has raised $26 million – allows individual donors and philanthropic investors to help San Francisco families find and keep affordable homes by making short-term bridge loans to community developers. Since launching the Home for Good Fund, HAF has financed 26 projects in San Francisco, producing and preserving over 1,600 affordable units.

Bright Spots

In addition to SFF grantees, our whole community is working hard to address our housing needs. Here are some bright spots.

Small Sites Program

The San Francisco Small Sites Program provides acquisition and preservation loans to nonprofit sponsors working to stabilize neighborhoods by converting rent-restricted homes to permanently affordable housing. Sponsors work with existing tenants and ensure that future rent increases are limited to 2% to 3.5% annually.

Preservation of Existing Affordable Housing

HIP Housing, with assistance from the Sand Hill Property Foundation, acquired and rehabilitated a ten-unit apartment building (Rolison Road) in Redwood City, ensuring that the project’s 13 residents would not be displaced. The property had been placed on the market, and tenants faced severe rent increases. Now, it will be restricted to occupancy by households earning 60% of the Area Median Income or below for 55 years.

Preservation of Federally-Assisted At Risk Housing

In 2023, the Housing Authority of the County of Santa Clara purchased two projects (Girasol and Jardines Paloma Blanca) that had fallen into foreclosure. This ensured that 102 senior households could remain in their homes and that rents would continue to be restricted at affordable rates. Many households will also have access to Section 8 Housing Choice Vouchers.

Tenant Right to Purchase (TOPA) and Community Right to Purchase (COPA) Programs

In 2019, the City of San Francisco adopted a Community Right to Purchase program that provides nonprofit organizations a first right of refusal to acquire and preserve multi-family rental housing before it is made available on the open market and to restrict rents in perpetuity. The program then works with tenants to develop cooperative governance and to eventually convert the property to a limited equity cooperative.

Community Conversations

Through op-eds and speaking on panels, SFF is an important part of regional conversations around housing.

Bay Area Housing: The Path Forward – Preservation