More than 100 San Francisco mixed-income residential buildings are struggling to fill affordable units, according to a new report from the Board of Supervisors’ Budget and Legislative Analyst.
In total, 15 percent of the city’s below-market-rate apartments, 305 out of 1,961, were vacant as of April 4.
Some of the 305 units have sat empty for as long as three years, despite 21,000 applicants for the units.
Moreover, the report found, it might take a year to fill up a building that has more than 100 units. The Budget Analyst, in part, blamed the pandemic market, lengthy leasing times, and applicants who reject units.
The report also pointed to developers who “prioritize leasing market-rate units,” and some units, particularly small studios and Single Room Occupancy units, that are simply not attractive to applicants.
“There is not an incentive for developers to rent these units. They are more worried about the market-rate units, the people who pay $4,000 for a studio,” said Dairo Romero, the community planning manager at Mission Economic Development Agency, known as MEDA.
Of the 305 vacant units, roughly 44 percent are two-bedrooms, and 53 percent are one-bedrooms, studios and single-room occupancy units.
The majority of vacant units are reserved for the lowest-earning income brackets: Nearly 70 percent of the vacant units were reserved for those earning, at most, 55 percent of the area median income: $51,300 for a single person.
“It’s not a good look for the city. There’s no excuse for below-market-rate units not being filled,” said John Avalos, the executive director of the Council of Community Housing Organizations and a former San Francisco supervisor. “Why aren’t [tenants] able to get housed as quickly as they like?”
MEDA’s Romero was shocked, because most of his clients qualify for those units. Why some failed to get selected, he could not explain. “I’m surprised,” Romero said. “We should get more families in those units … and work with the city to make that happen.”
Red tape, however, means it takes months to lease a below-market-rate unit. Each time a unit is available, it gets advertised on the city’s affordable housing portal, DAHLIA, and prospective tenants apply.
From there, the application closes, and DAHLIA draws a tenant via lottery. A Mayor’s Office of Housing staff person calls the lottery winner and vets the tenant, who may reject the unit or be ineligible. If the unit is not leased, the office moves to the next lottery winner.
Eric Shaw, the director of the Mayor’s Office of Housing, also said developers may fill out their documents incorrectly, an issue that can take extra time to address. At times, developers have three or four missing documents, forcing the city to wait until they come in, Shaw said. But recently, it also takes longer to review and find the right lottery winner. The Mayor’s Office of Housing staff review a “current” average of 31 applications before a tenant is placed in a unit. Before the pandemic, it took only five applicants, or lottery winners, to fill a unit. The report attributes the change to more applicants rejecting units that they find too small or unsuitable in some other way.
This may have particularly impacted Single-Room Occupancy units. In the past year, Mission Housing has struggled to lease its SROs, which is a “newfound problem,” said executive director Sam Moss. “We’ve been asking potential tenants why. They say, ‘it’s a 90-square-foot room without my own bathroom and without my own kitchen.’”
In some cases, the lack of an adequate subsidy to maintain the units can lead to decrepit buildings and rooms that applicants do not want to rent. “It’s better than living off the street, but it’s not awesome,” Moss said.
Another solution is to bolster enforcement policies that would require developers to lease out below-market-rate units in a timely fashion.
Shaw did not offer new solutions to address the vacancies, but said the city should improve existing efforts and be proactive when communicating with developers about unit leasing, outreach and requirements. “The goal of everyone is to have these units leased up,” he said. “I think it’s about maintaining the education of leasing agents.”
Currently, developers who don’t comply in leasing their units after 60 days are sent a warning notice and given another 60 days to respond. If the issue remains, they receive a second notice and another 60-day response time, costing three months already. If these warnings fail, the project is referred to the Planning Department, which can charge a fine of $250 each day a unit stays vacant. Of the 305 currently vacant below-market-rate units in the report, 60 incited enforcement, the report said. The Planning Department intervened in 14 projects from 2019 to 2022, a spokesperson wrote in an email to Mission Local, and can take several months or a year to resolve.
Shaw said that according to his department’s data, more than half of the units are in an “active leasing” stage, a broad time-frame that includes the housing application process down to final checks before a tenant moves in. New buildings that just came online may also affect the statistics in this preliminary report.
The Budget Analyst’s report recommended a quarterly analysis of vacancies be sent to the Board of Supervisors, a new economic analysis on the market be executed, and it recommended strengthening enforcement by cutting out times in between enforcement warnings and ramping up fines.
Shaw and the Planning Department staff expressed reluctance to fine developers, stating the priority is on leasing units and not racking up fees. Instead, the agencies may explore new legislation that attempts to consolidate enforcement of vacancies.
“Another solution is to bolster enforcement policies that would require developers to lease out below-market-rate units in a timely fashion”
The first half of this article is talking about how long it takes the city to do it. What does added enforcement on developers who have no say in a city process achieve?
BMR is aptly named, it’s a Bummer to qualify for. This report seems to only cover rentals, not the ownership units, and I wonder if a similar number of vacancies exist with this program? It is not surprising to see that the vast majority of vacancies are those for the 55% AMI category, there are just not that many folks who qualify. There should be some mechanism for those units that are vacant for too long to go to the next level, to allow more to qualify and generally to make these units more attractive to let, i.e. loosening a lot of the restrictions. It’s a terrible but accurate reflection on the beaucratic mess that is the BMR lottery system, that these units can be vacant for over 1-2 years when all housing is in such a crisis.
C’mon now.
Y’all looking at this the wrong way.
In the worst run city in America – 85% of the units have occupants!
An incredible success rate given the level of incompetence and corruption endemic in our fair city.
Article is a bit confusing as the vacancies referenced are in private mixed-income buildings, the type that have a percentage, around 20% of, “inclusionary” affordable units. The rest of the units are market rate, and the differences between two categories of units are minimal in size and quality.
Reading the City report it seems to say that it isn’t so much the size of the units that is the issue (vacancies in one bedrooms 53%, 2 bedrooms 44%, so not all vacant tiny SRO units which are actually fairly rare in new market rate mixed use apartment buildings), but the income band these unita are required to address. Specifically there are lots of vacant BMRs targeted for 100%+ AMI (Area Median Income) and currently there are non City regulated apartments of similar or better quality available at comparable rents.
“David Baker”,
Exactly.
The BMR requirement @ 100% AMI for new small studio units (e.g. “SRO”s) should be eliminated as the market is showing that they are already naturally affordable and competitive with other existing building stock.
I’m not sure that’s really accurate? https://sfmohcd.org/sites/default/files/2021%20AMI-RentLimits-HMFA-ForMOHsf_0.pdf – rent for 100% ami for a studio is 2k. In a newer building that’s still a discount compared to market.
The group housing mini-studios that I described can be created by market-rate development to rent for less than $2000/mo. — that is, until two months ago when Peskin’s legislation, outlawing them, passed.
Of course, recently, Supervisor Peskin and his fellow travelers on the Board of Supervisors in their “wisdom” made group housing “mini-studios” (each with their own private bathrooms and kitchenettes) illegal throughout the City.
So that naturally-affordable option is now no longer available.
Well done San Francisco!
Developers need to step up and have these units livable to rent. 350ft. Is not very much living space. To share a bathroom is unhealthy and unsatisfactory . It’s plain gross.
No one is developing new SROs.
“MLA”,
So, in your opinion, it’s better to be homeless.
Gross.
Scott Wiener’s plan is to build even more small SRO-type units. He just calls them microunits. He really thinks it’s a great idea. Everyone will want to live in one. So I really don’t understand why the 90 square foot, no bath/no kitchen units are still available. Tell us why, Senator Wiener. Why is your dream not working?
Gadfly,
Your comment regarding Senator Wiener is absolutely nonsense.
But can you really complain about the spec of a home you are being given at a huge discount to its actual value? Doesn’t that come across as a tad churlish?
Sounds like a lot of BS excuses coming from incompetent city agencies.
This is *subsidized* housing, people. Offer it to qualified applixants, and you take it or you’re off the list. Yeesh, the entitlement of people who are rejecting freebies because it’s not good enough? Come on now.
And Planning taking a year to resolve issues with developers not renting the units? Come on now! Don’t these staffers have bosses? Milestones? Goals?
For the band of Progressives running this city and constantly complaining about lack of housing to have hundreds of units sitting vacant… so pathetic.
“This is *subsidized* housing, people. Offer it to qualified applixants, and you take it or you’re off the list.”
Yes, if an applicant rejects a subsidized unit then they should go to the back of the line, and presumably have to wait a few more years before getting another shot.
That might focus their minds more.
The details expressed in he article and the comments describe what I ave heard from people who live in buildings with affordable. The AMI has been blamed for the high rents in affordable units, that never go down, even when market rate rents fall.
The logical solution is to either change the Dahlia process or drop the lottery system and turn the affordable market over to the building managers to handle. List the affordable units as such and show them to whoever wants to apply. When someone likes what they see they can be vetted. If the managers can’t rent some of units units out because they are not fit, consider putting two together and turning them into livable units, or rent them out as storage.
If the Board of Supervisors voted to remove the mini SROs or group housing from the mix they have my blessing, especially if they are remaining empty. It would be interesting to see some photos of some of these “unacceptable units” before we pass judgement on them. Don’t forget the pods they are trying to rent out now for $800 month. What zoning or use do these come under?
Hard to believe that homeless people are turning down subsidized housing units because they do not meet their specification. The expression “beggars can’t be choosers” comes to mind.
When I see the lotteries for affordable housing advertised in our newspapers, I am shocked at the monthly HOA fees that the “winners” are expected to pay. It is no wonder that people don’t want to live in those places.
But it has to be that way. The owners of those BMR units save on the capital cost of the unit. But they have to share equally in the costs of the upkeep of the building, insurance etc.
There is no funding for eternal subsidies of the running costs.
“At times developers have three or four missing documents…” Maybe there should only be 4 documents, that sounds like part of the problem. And why is this being handled by the planning department, they can’t do their day job why are they moonlighting?
Unless the developers make the affordable units comparable to the market-rate units the whole program falls apart. Why would anyone want to rent, or worse, buy, at full rate when they find 20% of their neighbors are going to live in SROs the size of a toilet? The whole point was to include working families in our city’s growth.
Sean,
Your comment is not true.
Developers are required — and do make Below Market-Rate (BMR) units — comparable to the Market-Rate Units.
You are correct that it can be harder to sell or rent new units if the subsidized units are in the same building. If an investment banker pays $1.5 million for a unit then they probably do not want to share an elevator with a cleaner. That is why developers often pay a sum of money to the city in lieu of building the subsidized units. And in those cases any problem with letting those units is down to the city and not the developer.
Your comment is sickening. How does what someone makes as a banker and pays for his unit (1.5 million) have to do with a person sharing elevator space with someone else’s profession (ex: “a cleaner”)?
I’m sure the person wouldn’t have a problem sharing space with a cleaner if the person were to clean their space!
We live in San Francisco! If we continue to perpetuate thinking like this it will continue to pervade and to exist.
It is thinking like this that Actually corrodes our minds and souls and the futures for our youth.
Have you lost yours?!?
Have you actually questioned how you have ingrained the stinking thinking yourself?
We are more than what we do or how much money we make. Bc that can actually all disappear overnight, (Russian/Ukrainian war, pandemic serve as recent examples ).
I think some people actually believe we take money with us in the afterlife, or if heaven allowed property…
When are we actually going to begin to look at each other as “investments” into our own futures?!?!
Even If you wanna look at it from a capitalistic perspective,
How many studies have proven that when the society is concerned for its members, the society benefits?
I am called to it more from the social justice perspective bc it tugs at my heart.
Heart or head, how can you not be called to wake the …..UP?
and stop posting fearful, idiotic and mainstream thinking ?
WE ARE SF!! At least I thought we were. When did we become this weird place we are calling Sf?
Meg, I was merely describing the thought process of developers and buyers of units in such buildings. People prefer to live with and spend time with others who are like themselves. That is true whether you are talking about bankers or left-wing extremists.
SF is a tribal city and its much vaunted love of “diversity” is mostly just a pretext for hating others who are different. Does the typical Mission dweller tolerate, let alone love, the average Marina dweller?
With no disrespect to the author, affordable housing and it’s system is a joke. Yes you do apply, they do a lottery pick then you’re on a waiting list for several years. I’ve been eligible for six units in 12 years, but each time I provide my required paperwork, they seem to lose some of the paperwork and/or tell me that I’m not eligible even though I make $24,000 a year. In the case of Mercy Housing, they can inspect anytime and the contingency of living in their units is that you have to interact with the buildings residents with group dinners and social work, whether you requested it or not. Additionally, if you live within either half mile or a mile of the unit you’re applying for your status changes and you’re bumped up the waiting list. However that’s not always done. I have applications into two places that are very close to me and only one has been given preferential status. And then there’s the cost I could’ve moved to South Park to an SRO with no bathroom or kitchen and paid nine $50-$1400 for approximately 400 ft.². Most of these units are about 350 ft.² and that’s ridiculous. I wish more people knew how absolutely useless the affordable housing program is.
Yes, Dean Preston — and all the other homeowners on the Board of Supervisors living in homes created by “evil” market-rate developers — want everybody else to live in government rental housing. Long term equity for them and none for you
Please follow up with Sam Moss about the applicants rejecting SRO units. Maybe these people know something the rest of Us don’t.
I doubt that the $4,000 a month (market rate) studios are a major contributing factor to this issue.
Send a 30 day warning notice when developers don’t comply with leasing these units stating that if the unit remains vacant, developer will be fined $250 per day. No second warning notice. Problem solved.
Except that the problem is cause by the City bureaucracy, not the developer who actually created the housing and would like nothing more than rent/sell the unit to pay of the financing.
The City controls the process, is failing utterly to do it’s job to timely fill the BMR units — yet you want to penalize the victim.
Idiotic and immoral — pretty much describes the (so-called) “progressives” on our current Board of Supervisors thanks to district elections.
Yes, punitive taxation on exploitation can be an effective counter-measure to exploitation, so it has no chance of being implemented in a society run by exploiters, as Shaw confirms in the last paragraph. More likely is that the professional-managerial class minions who design the complex and dehumanizing eligibility requirements for housing, medical care, and all other essential social services, will make those requirements even more complex. People in the lower economic classes must never be allowed to forget their place!