Five more apartments are about to be preserved as affordable housing by a Mission District nonprofit – and now the city is rolling out an innovative loan program to help nonprofits acquire 1,500 more units in the coming five years.
When the building went on the market, “Everything seemed really bleak and scary,” said Emily Kurland, a teacher who lives in the mixed-use building 3800 Mission Street that the Mission Economic Development Agency (MEDA) is about to acquire. “For us, we had a happy ending.”
That’s the kind of deal that MEDA and other housing nonprofits can only make if they have the money lined up to compete for buildings against cash-rich private buyers. To make sure those resources are available, San Francisco is launching the Housing Accelerator Fund, a sort of clearinghouse starting out with some $50 million, soon to be $100 million, directed toward affordable housing.
The money will come from a variety of sources, including foundation grants, a no credit check loan from financial institutions and donations from philanthropists, and be administered by the accelerator fund.
Mayor Ed Lee made the announcement today during a press conference at City Hall, saying that such a program was necessary because private and public money are often competing for the same site. The city has to be able to act quickly to secure the site for affordable housing.
“If we’re not there, that site is gone,” said Mayor Ed Lee. “We have to be able to accelerate to do this better.”
Recently, he said, a supervisor came to him to discuss a site in her district up for sale that would be ideal for affordable housing – but it was being marketed for $24 million.
“Who’s gonna buy it first? I don’t have $24 million,” Lee lamented. “I don’t know if you have $24 million in your pocket, but we don’t.”
Lee didn’t name the supervisor or the district. But in the Mission, local nonprofits and activists have long been advocating for the acquisition of two sites on the Mission Street corridor, at 22nd and 29th streets, where fires have destroyed large buildings and displaced in total nearly 100 people.
The accelerator program is some two years in the making, with the idea originally stemming from a task group convened by the mayor after his pledge in 2014 to build 30,000 units in San Francisco by the year 2020, according to the accelerator fund’s executive director Rebecca Foster.
Unlike government funding programs, which can be slowed by bureaucracy, not to mention limited in resources, the accelerator fund is designed to respond quickly and be well-funded. It’s starting out with $50 million from various sources, and expects to have accumulated $100 million “soon,” Foster said.
“We need to start deploying capital yesterday,” she said. “We need to be closing on loans, tons of them, and fast.”
One of the fund’s first benchmarks, Foster said, is to secure the acquisition or construction of 1,500 households over the next five years – a start, she said, but not nearly enough.
“1,500 is a drop in the bucket compared to the need,” Foster admitted.
Lee and Foster both issued a call for more contributions to the fund, saying it needs several hundred million to function well.
But the accelerator also aims to be around for a long time. Funds will be disbursed as loans, which, while low-cost to the borrower, will keep the program sustainable.
Housing is the city’s main focus for curbing displacement, but the mayor’s office is also focused on keeping nonprofits in place in a time of even more out-of-control commercial rents. State law prohibits rent control for commercial spaces, so the city is allocating some of its money but also trying to get creative about funding and figuring out other solutions to the nonprofit displacement problem.
The city has dedicated $4.25 million in seed funding over the next two years to help nonprofits buy their own spaces. Another $1.46 million has been allocated to provide grants for expenses like architectural or engineering costs, legal services or moving expenses to help nonprofits convince their landlords to provide long-term leases extensions.
If lending a hand for one-time expenses like that isn’t going to cut it, the city is also exploring another option: Doubling up in existing spaces. The city is trying to help nonprofits that want to work together to share space figure out how to do so.
The Northern California Community Loan Fund will be offering “cohorts” of two organizations or more learn how to share space. The Loan Fund will also help administer the financial assistance and hold informational sessions for interested organizations.
Information sessions will take place Thursday, March 2, 2:00pm at the Arts Commission (401 Van Ness, Suite 125) and Tuesday, March 7, 4:30pm at the Roxie Theater (3117 16th St). Applications must be received by 5:00 pm, March 28, 2017 to be considered for the first round of awards which will be announced on May 22, 2017.
This story has been updated to reflect that the number of units at 3800 Mission Street – it is five, not four, apartment units. The building also has one commercial space.
Sounds like a great idea! It would be interesting to know some specifics about where these funds are coming from. And how about soliciting some large donations from the billionaires in our midst?