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 has 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 permanent 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 remains 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.”
Wow.
Raking in the cash at $468,239 per provided by us tax payers so he could learn older buildings are “expensive to maintain”.
That’s a big sack full of profit “non-profit”.
Man, I could have elucidated that knowledge for a mere 200K.
I’m in the wrong racket.
Melgar >< La Raza story has been pulled from ML’s front page after only two days.
Articles from a week ago are still posted.
Why is that?
Definitely interested in more comments from the community about that whole thing.
“and the housing department has a long history of restructuring or later forgiving loans”
Is this considered solid governance, a sustainable practice? Vibing it like that? It looks like the BoS needs to have a look into this and put Small Sites and similar programs on a formal foundation.
Hard to blame non profits for being financially irresponsible when they know daddy will pay their bills when they run out of money. It’s called spoiled brat syndrome.
“Granados’ total compensation was $468,239 in 2024.”
Outrageous. How can this possibly be justified?
And there are several other employees on six figure salaries?
When the Community Land Trust wrapped up its work around 2003, we recommended that the City start up small sites acquisition to acquire and preserve housing at risk of eviction to stabilize our neighbors.
At that time, the CCHO housing nonprofits, MEDA was not in CCHO yet, opposed small sites because CCHO viewed the entirety of affordable housing spending as their personal property.
Around that time, MEDA, whose remit was to defend and stabilized Mission businesses, had failed so bad at that task that they decided to continue failing upwards, to expand their business model to affordable housing, at first to include the small sites program that had been slow walked by CCHO. It is one thing for a nonprofit to fail to defend small biz, but it is quite another to take on housing families with that poor track record.
That delay, from when unit prices were in the $400K range, prevented acquisition until the nonprofits articulated their operations to do small sites. Over that interval, unit prices basically doubled. Land trust were supposed to be resident empowering coops. MEDA out-competed the land trust for their authoritarian affordable charity housing.
As MEDA got into the housing business, Luis Granados’ salary began to skyrocket to the point that it is significantly greater than the salary of the Mayor of San Francisco. He got paid that much to run the operation into the ground. Perhaps Granados was trying to get his while the getting was good?
We need a charter amendment that prevents any nonprofit that takes in 60% of revenue from city grants, contracts or earnings from city subsidized property from paying any staffer more than 60% of the Mayor of San Francisco’s salary.
And we need to put MEDA back in its box, to sever its corruption of using public dollars to lobby the government for more public dollars when all they’ve got going for them is political connections, not subject level expertise. MEDA is the citizens united of the Mission.
I was at a propel.sf public event last week where panel was portrayed as “housing experts.” If anyone were a housing expert, then we’d not be in worse shape now than before they got involved. I know a lot, I hefted my freight, engaged with the principals and yet despite the planning code and CEQA that infests my brain, I’d not refer to myself as a housing expert. They might know how the Rube Goldberg machine functions but they can’t always get the ball out the other end.
At that same meeting, I raised the issue of how maintenance and operations were funded if rental income streams could just cover the principal of the mortgages. Nobody understood the question nor had an answer. Perhaps they knew what was coming.
Residents should set policy and nonprofits should compete for the resources to implement those policies. Better still, these units should be reclaimed by the government that funded their acquisition and run as a public utility.
Ideally, we’d use revenue bonds to acquire units, which would be serviced primarily by rental streams. We’d need for a public incremental subsidy for very low income people whose payments were not covered by on-site subsidy of higher income neighbors. We’d also need a consolidated maintenance and operations function provided by the City to small sites as a public utility where economies of scale could make materials cheaper.
None of this is going to happen under Lurie. It would take a decade for any of this to scale under the best scenarios. There is no leadership that would push for such a rethinking. CCHO would probably oppose this as well.
What happens after Permanent Supportive Housing is opened at 16th and Mission and MEDA has another “fiscal crisis?”
That last comment didn’t post right.
Last part should read:
Melgar/MEDA = no surprise.
Pumping more City money into MEDA will guarantee her that $468,239 per once she terms out.
BTW – the Hillary/La Raza story has been pulled from ML’s front page after only two days.
Articles from a week ago are still posted.
Why is that?
Definitely interested in more comments from the community about that whole thing.
Hi Carlos —
There’s no conspiracy here. Articles filter through various display areas based upon their tags.
JE
SF’s Small Sites acquisition program relies on underwriting assumptions that were always wildly optimistic, even in a Pre-Pandemic environment. For informed observers, it was not hard to predict that MEDA’s small site buying spree would eventually require a bailout. This $40M bailout was just to stop the bleeding and keep the private banks from foreclosing. Refinancing these buildings with private conventional private debt later on down the line, in most cases, will be practically impossible. Don’t be surprised if MEDA has to come back to the city sometime in the next 10 years with hat in hand because there’s no other way to keep the roof from caving in on their tenants without selling the building (assuming MEDA’s still in business in 10 years time). This whole episode smells a lot like the run up to the 2008 Financial Crisis when banks duped unsuspecting borrowers into thinking they could buy more house than they could ever realistically afford, with sub-prime credit. There is no way the private lenders involved in these deals would have made loans on properties like these to an agency like MEDA if they didn’t think they would eventually get a bailout from MOHCD when thing hit the fan.
The Small Sites Program is a giant money pit that will continue to suck up money that could otherwise be used for building new affordable housing.
Sadly this is true. The entire principle underpinning this venture is flawed. They buy the worst maintained buildings with tenants paying the lowest rents, that no private enterprise will take on.
Then they act surprised when the building doesn’t generate the cashflows needed to fund the loans. And guilt the City into a bailout.
Cut the chord NOW.
Fiscally irresponsible profit making non profits in the business of loosing.
Get real. These guys are a joke, and they destroy the neighborhood.
Bring back mom & pops and loosen the rental rules for them, no need for giant waste of time & money aka MEDA.
Cut the chord NOW.
Fiscally irresponsible profit making non profits in the business of loosing.
Get real. These guys are a joke, and they destroy the neighborhood.
Bring back mom & pops and loosen the rental rules for them, no need for giant waste of time & money aka MEDA.
It is worrying that MEDA didn’t anticipate the cost of repairs. It seems like that should have been part of their calculations when making the initial purpose – how much are likely repairs going to cost, will the rent being collected cover it, what amount of rent can they realistically expect, what will they do if there is a vacancy or failure to pay, etc. I know things happen and some costs rose unexpectedly, but it is troubling to me that they didn’t seem to factor some of this in when they were buying the properties in the first place.
Sorry, I’m just picking up my jaw that dropped to the floor when I saw that the CEO earned $468,239 in 2024. And his compensation probably increased since then. So nice of him to volunteer to take a 43% pay cut, which will leave him still earning more than a quarter mil. a year. Curious to know what justifies this level of compensation given that it sounds like he’s running the organization into the ground. I’m not some highly paid non-profit CEO, so forgive me, but I would’ve thought balancing a budget is a required skill for someone at that pay level. Shows how much I know!
This headline feels sensationalist. The third paragraph from the end says MEDA’s real estate and organizational budgets are separate, so why are layoffs and salaries being shoe-horned in to an article about housing? Why are the lead pictures from the groundbreaking at La Maravilla? That project is very different from the small-sites projects the rest of the article references. Many non-profits are having challenges, but MEDA is actually restructuring and being transparent. It would have been nice to see a more nuanced piece about those challenges that reflected this reality.
The title here doesn’t match the thoughtfulness of the journalism in the content, the thoughtful strategy in fiscal solvency, and the real issue of keeping affordable housing available in the Bay.
I’m curious about how city officials are planning to take steps to resolve the issues they’ve named and make the same hard decisions nonprofits have had to make so that the work continues to move forward.
Wow. This piece feels irresponsible and misaligned with the broader reality nonprofits are operating in right now.
Across the sector, organizations are navigating delayed government reimbursements, reduced philanthropic revenue, and ongoing funding instability. Staff reductions, while awful and difficult, are sadly not uncommon in this environment. Presenting MEDA as headline news without situating them in that broader context risks misleading readers about what’s actually happening.
Nonprofits are often operating with extremely thin margins. They are reliant on philanthropic funding with shifting priorities and on municipal reimbursements that are frequently delayed. That is not a stable or resilient financial model; it is a system that leaves organizations perpetually vulnerable.
There’s also a question of editorial judgment here. At a time when organizations like MEDA who are courageously serving immigrant communities are under sustained political and economic pressure, coverage that isolates and amplifies internal challenges without deeper analysis does little to inform the public and can actively undermine trust in institutions doing essential work.
The focus on compensation is also troubling, particularly in the Bay Area. The reported salary reflects leadership of a large, complex organization that has significantly expanded its housing portfolio over the past decade, led by someone who has been with the organization for many years. A more useful comparison would be peer organizations of similar size and scope, including affordable housing developers and CDFIs in the region. Singling this out reinforces a familiar and harmful narrative that nonprofit leaders should be underpaid regardless of scale or responsibility. That double standard is rarely applied to leaders in other sectors.
Local journalism plays an important role, and it also carries responsibility. In moments like this, reporting should be grounded in context and reflect the realities the sector is facing, rather than leaning toward framing that feels sensationalized and is click-bait.
The only way to keep government funded nonprofits, outsourcing, honest is with critical journalism that makes up for nonprofit culture that is notoriously suspect of accountability.
Why would executive salaries of city funded nonprofits scale with the magnitude of the org when the Mayor of San Francisco’s salary, managing an infinitely more complex operation, does not scale when government grows?
If Granados makes $422K in salary per year (2024, from candid.org) for managing 2500 units of housing, then if MEDA were to increase that to 25000 units of housing using tax exempt mortgage revenue bonds and somehow figure out how to fund depreciation, then should we expect for Granados to make $4.2m per year?
What we have here are grifter sector apologetics excusifying skyrocketing charity nonprofit salaries, which is broadly appalling to an electorate who, by and large, have seen stagnant if not decreasing wages against an increase in the cost of living.
Since the government funded nonprofits came on the scene, conditions have deteriorated across the board and the nonprofits barely scratch the surface of their remits.
Marcos,
Critical journalism absolutely matters. Accountability matters too. I don’t think anyone here is arguing otherwise.
What I’m pushing back on is not scrutiny, but the absence of context and the leap from critique to broad conclusions about an entire sector.
The comparison to the Mayor’s salary is a false equivalence. Public sector compensation is set through entirely different political and structural constraints than nonprofit compensation, which is benchmarked against a labor market that includes private developers, financial institutions, and other entities competing for the same leadership talent. Whether we like that system or not (I do not), that’s the reality organizations are operating within.
The “$422K → $4.2M” example is also a bad hypothetical that doesn’t reflect how compensation actually works. Executive pay in nonprofits doesn’t scale linearly with units or budget in that way; it’s typically tied to peer benchmarking, board governance, and regulatory oversight. If there are concerns about excess, those should be evaluated against comparable organizations of similar size, scope, and complexity, not abstract extrapolations.
More broadly, I think it’s important to separate two things:
Whether individual organizations should be held accountable (yes), and
Whether the existence of nonprofits or their leadership structures are the reason conditions have worsened (that’s a much bigger claim, and one that isn’t supported by the realities most organizations are facing).
Many of these organizations are operating in systems defined by chronic underinvestment, delayed public reimbursements, and shifting funding streams. That doesn’t excuse poor performance where it exists, but it does matter when we’re trying to understand outcomes.
If the goal is stronger accountability, then we need better analysis: how funds are allocated, what outcomes are achieved, where gaps exist, and what structural constraints are at play. Broad characterizations like “grifter sector” don’t get us there, and they risk flattening a very complex landscape into something that’s easy to react to but hard to actually improve.
Happy to engage on specifics if there are particular data points or decisions you think deserve closer examination.
I believe a boy can be born and girl and a girl can be born in a boys body .. some are born gender neutral and can CHOOSE their identity
I feel like we are playing with words … This is clearly Government Subsidized Housing . Only affordable to the people living it . Who’s paying the remainder .
If it costs the taxpayer $5,000 a month and someone can rent a really nice similar unit for $3,000 a month . Shouldn’t we save the working man’s tax dollars $2000 a month ?
I am all for Government Subsidized housing … I think Bill Clinton was on the right path . Monica recommended just giving vouchers instead . Why doesn’t S.F. just give out $3,000 vouchers a month . Like a golden ticket . We could house any additional 30% this way
Because if the City offered everyone a golden ticket, then the price of market rate housing would rise by the amount of that ticket because landlords knew they could charge rent for that whole ticket.
We’d do better to capture Section 8 and any potential city rent subsidies into paying down acquisition loans for the community land trust, social housing or even nonprofit small sites.