Housing construction hasn’t halted during the citywide shutdown, but the potential long term impacts of coronavirus weigh on affordable housing developers.
San Francisco has deemed housing construction, particularly affordable housing, essential and allowed it to continue during its unprecedented shutdown instituted Tuesday. That’s good news for The City’s 308 affordable housing projects encompassing 12,702 units that were in the pipeline as of September.
But the anticipated impact lies not just in the immediate future but in the economic aftermath that could threaten financing future projects and paying current loans should tenants face steep income losses.
“Just like everyone around the world is wondering about a global recession or depression, that would have a big impact in financing our existing pipeline,” said Don Falk, executive director of the Tenderloin Neighborhood Development Center. The state and The City, Falk said, could face slimmer budgets and “may be challenged to fulfill their ambitions of affordable housing money.”
Tenderloin Neighborhood Development Center has three projects under construction — 270 Turk St., 1990 Folsom St., and 555 Larkin St. — and expects a fourth, 681 Florida St. to begin in the summer that will deliver more than 400 units. The Mission Economic Development Agency has two of five projects under construction, with another two expected to break ground in the next year, and is in close contact with the Mayor’s Office of Housing and Community Development to keep them on track.
Falk said he has confidence in projects now under construction, which account for roughly a third of the city’s total pipeline. It’s other projects that still require permits and financing applications that might or might not happen in as timely a manner as they could have, Falk said. Plus, hearings expected to gather crowds — which often involve housing — have been postponed to limit the spread of coronavirus. TNDC has another three projects that may get put on hold and a fourth in jeopardy as a result.
As long as public financing holds, Falk said the long-term pipeline can weather the coronavirus crisis. San Francisco voters passed a $600 million housing bond in November that will keep some financing going, though inclusionary housing fees from other construction could dwindle.
The San Francisco Housing Accelerator Fund, which provides bridge funding to affordable housing projects and finances loans, was encouraged by the fact that they were able to secure a $4.5 million loan on Tuesday for MEDA to acquire 3254 23rd St., a mixed-use building with six residential units. The stock market’s volatility certainly hasn’t helped.
“It was a little touch and go because of the shelter-in-place,” said Housing Accelerator Fund CEO Rebecca Foster. “We are both focused on how do we manage risk in a changing environment like this and what would a recession, for example, mean for the financing that needs to support affordable housing, as well as the income levels and rents that existing residents and businesses can afford to pay.”
That’s the concern nonprofits who manage tenants are facing today. TNDC is balancing the safety of its 450 employees, tenants and program participants across some 4,000 units, and maintaining critical business functions.
Keeping people in their homes and safe is also the main concern for the Council of Community Housing Organizations. The San Francisco group joined ACLU California and others in calling for a moratorium on all evictions and utility shutoffs, not just directly related to coronavirus as Gov. Gavin Newsom and Mayor London Breed issued. It also called for the end of eviction proceedings in San Francisco Superior Court, a demand met Wednesday after outcry.
“This is when the people-focused work of affordable housing and community development matters as much as the brick-and-mortar development of housing units,” said CCHO spokesperson Maya Chupkov. “It is critical now more than ever to acknowledge the outbreak of this virus is exposing long-standing weaknesses in our public health infrastructure and preparedness. And it is exposing the inadequacies of our system to provide housing access and housing security for all.”