The Mission Economic Development Agency, a relative newcomer to San Francisco affordable housing that quickly amassed a portfolio of over 1,300 units over the last decade, is in trouble.
The nonprofit developer laid off 12 staffers on April 20 and imposed pay cuts on remaining staff, including a 43 percent cut for its executive director, Mission Local learned. The move, a sign of fiscal strain, came just months after the city of San Francisco approved a multimillion-dollar bailout for 89 residential units in MEDA’s housing portfolio.
The layoffs hit “employees almost exclusively in administrative roles,” according to MEDA spokesperson Juan Mesa. Staff earning under $120,000 took a 5 percent pay cut, those earning more took a 10 percent cut and CEO Luis Granados volunteered to take a 43 percent pay reduction for one year, Mesa said. According to MEDA’s most recently available tax filing, Granados’ total compensation was $468,239 in 2024.
MEDA, which is based in the Mission District, said expenses from the organization’s expansion had outpaced revenue in recent years. It said the cuts were driven by slower-than-expected philanthropic revenue and delayed reimbursements from the city.
MEDA said it is making cuts as part of a 21 percent expense-reduction plan designed to protect core services and restructure the organization for “long-term sustainability.”
Mesa said the organization had also hired Progress Public Affairs, a crisis and PR firm, on April 17.
The cuts come six months after the Board of Supervisors approved a $37.8 million plan to refinance 15 “Small Sites” properties owned by MEDA. Small Sites is a city program that helps nonprofits buy and preserve smaller apartment buildings as permanently affordable housing to protect tenants from displacement and rising rents.
The MEDA bundle included 89 residential units — which housed families with children, couples, individuals, seniors and veterans, according to city documents — and nine commercial units. The portfolio is home to many people of color, including long-time residents who have lived in their units for more than a decade, documents say.
District 7 Supervisor Myrna Melgar, who formerly served as MEDA’s deputy director, said that the city’s decision to bail out part of MEDA’s housing portfolio was a needed measure for those tenants.
“I don’t think it was wasted money because it was for the organization to preserve that housing,” she said. Melgar said the rescue package was part of an effort by the city to help affordable housing nonprofits deal with pandemic-era rental income loss.
Most of the $37.8 million the city included in the MEDA bailout involved refinancing existing loans, documents show. The city also added about $6.2 million in a new loan, which MEDA said was used to pay for repairs and replenish reserves, among other things.
In a written statement, the Mayor’s Office of Housing and Community Development said the refinancing was important because the buildings were among the earliest Small Sites properties and carried private loans made in a pre-pandemic market, when lenders made more optimistic assumptions and potential rental income looked stronger.
The final payments for some of those loans came due in late 2025, and rising interest rates made parts of the portfolio unsustainable. Both MEDA and MOHCD said the refinancing reduced annual loan payments by about $340,000.
Big problems with Small Sites program
Affordable housing experts told Mission Local that the refinancing points to a paradox built into the city’s Small Sites program.
The program is meant to preserve older buildings and keep long-time tenants in place, but those buildings are often in poor shape and expensive to maintain. Some tenants are still covered by rent control, and rent for new tenants is set at below-market rates and pegged to income. That can make it hard to cover the insurance costs or repairs those aging buildings need.
“How do you pay for that?” said Eric Tao, interim executive director of another nonprofit developer, Tenants and Owners Development Corporation, referring to rising maintenance costs at Small Sites buildings. “You start having to borrow, and then you get into debt.”
“The bottom line is, rents have to cover costs, and costs are always higher than people anticipate,” said Whitney Jones, deputy chief of community real estate at the nonprofit developer Chinatown Community Development Center and a board member at MEDA.
Former Supervisor Aaron Peskin said the MEDA refinancing deal is not unusual. In his telling, City Hall often concludes that keeping an affordable housing operator alive is better than letting a troubled project collapse, and the housing department has a long history of restructuring or later forgiving loans when affordable housing projects fail to bring in enough money to cover their costs.
“The city’s ultimate priority is to preserve affordable housing, not take buildings back from nonprofit owners,” he said.
At the Oct. 22, 2025 board hearing that addressed the refinancing package, city officials said the MEDA portfolio’s problems were serious because the original financial assumptions around costs did not hold up. The buildings carried substantial — and unanticipated — repair needs, city officials said.
Some city officials have warned that MEDA’s Small Sites portfolio may need more financial help down the road. At the October hearing, a representative from the Budget and Legislative Analyst’s Office said the city may need to step in with another refinancing in 10 years based on projected cash flow. The office’s written report similarly said the long-term financial feasibility of the portfolio remained uncertain.
Jones agreed that Small Sites portfolios remain financially fragile. Ordinary pressures can accumulate debt quickly: a vacancy or two, tenants falling behind on rent, an insurance spike, rising utilities. “It doesn’t take very much for it to go south,” he said.
Melgar said that Small Sites itself may need reexamination. She said other nonprofit developers, not just MEDA, have struggled with Small Sites rules and lease-up bottlenecks.
“Because it is our only preservation acquisition program, I do think that we should revisit it,” she said. That could mean making it easier to re-rent vacant units, adjusting income rules for existing tenants and smoothing out city processes that can leave apartments empty for months.
Still, the Small Sites program keeps hundreds of San Franciscans housed in their existing units at affordable rents.
For its part, MEDA argued that its housing portfolio is on firmer footing than its recent layoffs might suggest. The organization said its real estate operating budget is separate from its broader organizational budget, that the housing portfolio is in good financial standing after the refinance and that the April cuts were aimed at the corporate side of the organization.
Melgar said she is still worried about MEDA’s overall financial health. “The community has invested a lot in that organization,” she said. “I hope that we can find a way forward.”