With $48 million in city funding, San Francisco is expected to finalize new loans with two nonprofits this month to keep six housing sites affordable and protect tenants from displacement.
The Board of Supervisors Budget and Finance Committee voted Wednesday to approve the financing, which would result in per residential unit subsidies and loans of $474,528 to $872,353, or $680 to $1,671 per square foot. The full board is expected to approve it next week.
The funding includes loans that require monthly repayments over 40 years as well as loans that must only be paid if the nonprofits have the available cash flow.
The proposal is part of the popular Small Sites Program administered by the Mayor’s Office of Housing.
“Since we launched our program in 2014, our portfolio has grown to 29 buildings, 211 residential units and 13 commercial spaces,” said Caroline McCormack, who oversees the Mayor’s Office of Housing Small Sites Program. “And we currently have 18 buildings, 164 units and 20 commercial spaces in our pipeline.”
She noted that “the core of our program continues to focus on acquisition and rehabilitation of 5 to 25 unit multi-family buildings, including SROs. We facilitate this by providing loans to developers to acquire, rehabilitate and own and operate the buildings.”
McCormack said that between June and August the Mayor’s Office of Housing will use the financing to close the transactions on the six housing sites, some of which include commercial spaces.
The six sites comprise 69 residential units and 12 commercial spaces, ranging in size from six to 21 units, according to McCormack.
The sites include 1201 Powell St., with 17-units and one ground floor commercial tenant; 462 Green St. with seven units; 4830 Mission St., with 21 units and six commercial tenants; 3280 17th St. with 11 units and five commercial tenants; 1411 Florida St. with seven units, and 65 Woodward St. with six units.
McCormack said that either the Chinatown Community Development Center or Mission Economic Development Agency have already purchased sites using bridge financing “so that they could move quickly on the transactions in a competitive market.”
The proposal is “to provide the permanent financing for these projects,” she said. The financing comes on condition of a “deed restriction on each property that requires that the project be operated as affordable housing in perpetuity as a condition of financing,” according to the budget analyst report.
The $48 million in funding, which includes a 10 percent contingency, comes from three sources, the Small Sites Program, the Preservation and Seismic Safety Program and the Downtown Neighborhoods Preservation Fund.
The program is designed to ensure the purchased sites have tenants earning on average 80 percent of the area median income, but an individual household could go to 120 percent of the area median income.
The area median income for a family of four this year is $123,150. For a family of four, 80 percent of area median income is $98,500. Maximum monthly rent for a 1-bedroom unit for a household with 80 percent of area median income is $1,970.
Across the current small sites in the program, 75 percent of the households have incomes below 80 percent of the area median income.
Building on the goals of the program, in April the Board of Supervisors unanimously approved legislation that was introduced by Supervisor Sandra Fewer and signed into law by Mayor London Breed to give nonprofits the first chance to purchase small sites properties when they go up for sale. The board also allocated $40 million of state-returned local property tax revenues from the Educational Revenue Augmentation Fund earlier this year to the program to fund more purchases of small sites.
Editor’s Note: This story has been updated for clarity.