Mayor London Breed introduces legislation to repurpose $260 million in bond funding to preserve at-risk housing
Legislation would open access to loans to protect tenants and repair at-risk buildings
Mayor London N. Breed today announced legislation to preserve San Francisco’s affordable housing supply and protect tenants who are at risk due to either the physical condition of their building or the potential of rent increases or eviction due to market speculation.
The legislation would create the Seismic Safety Retrofit and Affordable Housing Loan program, which would offer below-market rate and market-rate loans for at-risk buildings. These loans would be available to developers who are acquiring and rehabilitating buildings in order to convert them to permanent affordable housing, or to property owners who are making life safety improvements to their residential buildings.
“This legislation is a creative solution to open up new financing tools that will protect vulnerable residents and preserve affordable housing,” said Mayor Breed. “This is an issue that is personal to me—I grew up in public housing in San Francisco. Funding for affordable housing from the state and federal government has dried up and it is essential that the City provides all opportunities to preserve and expand affordable housing for our residents.”
The Seismic Safety Retrofit and Affordable Housing Loan Program would implement Proposition C, which was approved by voters in 2016 to repurpose $260 million of unspent general obligation (GO) bond authority to allow it to also be used for the preservation of at-risk housing.
The original GO bond was passed as Proposition A in 1992 to provide financing for property owners to comply with the City’s retrofitting requirements following the 1989 Loma Prieta earthquake, but to date only a quarter of the $350 million bond authority has been spent.
“I committed to tackle the affordability crisis, which is why I authored the Prop C Affordable Housing Bond 2 years ago,” said Supervisor Aaron Peskin. “A quarter of a billion dollars sits ready to be allocated for the acquisition and rehabilitation of some of our most at-risk rent-controlled buildings. I’m delighted that the City is finally ready to get this cheap money out the door and invested back into potential Small Site and Single Resident Occupancy (SRO) acquisitions. This is a critical first step in preserving affordable housing stock that would otherwise be lost to an increasingly speculative market.”
Bond proceeds would be distributed in two tiers, one for below-market rate loans and the other for market-rate loans. Below-market loans would require permanent affordability restrictions for the life of the property. There are currently $160 million of market-rate funds and $100 million of below-market rate funds remaining. Up to $35 million of bonds may be issued in a fiscal year.
“Organizations like ours believe that nothing is more important to San Francisco than stabilizing our diverse communities and helping people access and retain affordable housing,” said David Sobel, CEO of the San Francisco Housing Development Corporation. “This funding is crucial to preserving affordable housing and ensuring that existing tenants are not displaced through eviction or large rent increases. We are proud to be working with Mayor Breed and Supervisor Peskin on this critically important issue.”
The legislation is being introduced today at the Board of Supervisors by Mayor Breed and Supervisor Aaron Peskin.