Feds give SF big bucks for innovative public housing plan

The federal government awarded San Francisco $180 million to help rehabilitate two-thirds of The City’s ailing public-housing units through a privatization arrangement.

The U.S. Housing and Urban Development Department windfall will energize Mayor Ed Lee’s plan to reshape San Francisco’s dilapidated public housing using private capital. The mayor made the announcement Thursday from Washington, D.C., where he is attending the U.S. Conference of Mayors’ winter meeting.

Lee’s plan is the largest of its kind in the country and will fund repairs and rebuilds, taking day-to-day operations out of the hands of the local Housing Authority and putting it into the hands of local nonprofits.

“HUD’s approval demonstrates confidence in our plan to re-envision public housing in San Francisco and paves the way for the preservation, rehabilitation and long-term viability of thousands of existing housing units for very-low-income people,” Lee said in a statement.

The City applied for the funds soon after HUD Secretary Shaun Donovan visited The City in September and praised the public-housing revitalization plan.

“This innovative and cost-effective approach greatly enhances our ability to confront the decline of our public housing and older housing stock,” Donovan said of the funds he approved.

The federal RAD program (rental assistance demonstration) will impact 4,584 of the Housing Authority’s 6,054 units by transferring ownership of each building to private hands to make necessary fixes that the cash-strapped public-housing agency simply cannot afford. The process, which requires the involvement of nonprofits, will keep the land in the hands of the Housing Authority.

To entice investors, The City will use the RAD funds — actually $180 million in tax credits — and 20 years of guaranteed voucher funding, similar to Section 8, from the feds for each project. The value of the vouchers is unknown, but will exceed current federal funding and go to developers for building maintenance. Developers will receive up to $2 million in fees for their efforts. Property management companies will receive $50 per unit per month for oversight.

Sara Shortt, executive director of the Housing Rights Committee of San Francisco, said she is glad The City is being creative in finding ways to fix and keep these units in San Francisco.

“What’s clear is that status quo is unacceptable,” she said, adding that this is one of The City’s few tools to get more money to these sites.

Still, she added, “It is privatization; it is moving the public asset into the hands of private industry with a tremendous amount of public oversight.”

The Housing Authority does not have enough money to pay for the $270 million in deferred capital improvements because of years of declining federal funding.

Much of The City’s neglected housing — including some notorious for violence, such as Sunnydale in Visitacion Valley — is slated to be rebuilt by private investors under another program, Hope SF, which is backed by $95 million in local bond funds.

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