The Mayor’s Office of Housing and Community Development (MOHCD) currently manages six different lottery preference programs which provide priority for specific housing projects or affordable housing to households qualifying for each program. Having lottery preference improves a household’s chances in a housing lottery for affordable housing and gives current and former San Francisco residents a chance to continue living in the City.
Background
What are Lottery Preference Programs?
A lottery preference program has specific requirements for a household to qualify. For example, the neighborhood resident housing preference requires that the applicant live in the project’s supervisorial district they are applying to, and another program gives preference to applicants that experienced an Ellis Act or Owner Move-in eviction.
City-sponsored housing
-
The Certificate of Preference (COP) program serves households that were displaced due to government action and promised the right to return to affordable housing. The former San Francisco Redevelopment Agency issued certificates to displaced households in the 1960s and 1970s. COP applicants can exercise the certificate twice – to rent one unit and to buy one unit.
-
The Displaced Tenant Housing Preference (DTHP) helps renters displaced by an Ellis Act or Owner Move-in eviction or by fire to find new housing. It gives applicants higher priority to 20percent of the units offered in affordable housing lotteries. Households can exercise the DTHP certificate only once – to rent one unit or to buy one unit.
-
The Neighborhood Resident Housing Preference (NRHP) is only available in new properties with 5 or more lottery units and provides 40 percent of lottery units to NRHP applicants. Households must currently live within a half-mile radius from the property or in the same Supervisor District as the property.
-
The Live or Work in San Francisco preference applies to every MOHCD lottery. Households must currently live in the city or work at least 75 percent of working hours in the city.
Project-specific Housing
-
Households must be a former resident of the renovated project (i.e. Alice Griffith Housing Development Resident).
-
The Rent Burdened/Assisted Housing Preference is only available for some OCII-sponsored properties in the Bayview (i.e. Hunter’s View, Alice Griffith). Households must currently be paying more than 50 percent of income towards housing costs.
-
The Public Health Employee Preference only applied to one recent development (588 Mission Bay Boulevard North). To qualify for the program, household must include an employee of public universities or health care institutions in San Francisco.
Why are Lottery Preference Programs Important?
The lottery preference programs exist to improve a household’s ranking in the lottery for affordable housing units. Each preference program targets specific populations and maintains specific requirements. These requirements help the City establish a method of defining households with the greatest need for affordable housing. Since there are more households identified with a need for affordable housing than there are affordable housing units available within the City, the affordable housing lottery exists to give every qualified applicant an improved chance to purchase or rent an affordable unit.
What’s Happening Now to Enhance Tenant Protection Services?
The Mayor’s Office of Housing and Community Development (MOHCD) updated the Housing Preferences and Lottery Procedures Manual in March of 2018. The manual outlines the operation and procedures of several City Affordable Housing preference programs. A City Affordable Housing Project is one that includes one or more housing unit funded or created pursuant to a City Affordable Housing Program including, but not limited to, funding from MOHCD, former SFRA supported units with affordability restrictions, or inclusionary housing units. The purpose of the manual is to provide agencies, developers, and potential City housing residents further clarity on available preference programs, the process of applying and being selected, and the allocation of City Affordable Housing Units to tenants or homebuyers. The updated manual serves as a resource to many different organizations and to the general public.
Key Trends
Less than one percent of all applicants with or without a qualified preference program successfully received a housing unit in 2017 and 2018.
This simply reinforces the need for more affordable housing in the city.1
867,000 people have visited the DAHLIA website since February 2016 and 342,000 applications have been completed since November 2016.
The largest proportion of applicants awarded a unit were COP applicants, followed by DTHP applicants.
When looking into race and ethnicity of applicants versus occupants overall for all preference programs, there are a few differences between the percentage of races and ethnicities applying and the percentage receiving a unit.
Additional data may help ensure where more outreach is necessary to ensure equity in all programs.
Most Supervisorial Districts with a high number of census tracts with predominantly low-income households experiencing gentrification and/or displacement also contain a high percentage of applicants for preference programs in San Francisco.
What’s Happening Now
Data analysis on why households may refuse a unit or not qualify for a unit is also key to understanding the limitations of each program and to developing strategies to address limitations. Debt counseling will help a significant number of households qualify, especially in cases where disqualification is based on credit or debt issues. The pilot phase of the DAHLIA portal is currently collecting this information.
Issues with Gaining Housing through Lottery Preference Programs
The number of applicants in each preference program far outweigh the number of available units, therefore many applicants may be waiting for an eligible unit for a long period of time. In certain Districts there have been over 4,000 lottery preference program applicants without any available or eligible affordable housing units to accommodate the need (such as District 1 and District 4). District 6, which had the highest number of applicants from San Francisco (approximately 16,800 applicants), only had 17 developments built in the past two years which resulted in 809 affordable units. Overall, from 2017 to 2018, there were 1,368 affordable units available and over 100,000 applicants. While the number of applicants might be inflated by duplicates across different preference programs and different housing developments, there are still far fewer affordable housing units created for the number of individual applicants overall.
It can be difficult for applicants and community organizations to understand how units are divvied up amongst the different preference programs. The number affordable units set aside for preference programs in a development vary depending on available units and funding requirements, among other reasons. MOHCD staff also highlighted the need to adjust the lottery preference system to be accessible and meet the City’s equity and housing goals.
Federal fair housing laws may be out of step with the goals of the City’s lottery preference programs. Laws are specifically designed to eliminate segregated neighborhoods but may impact current or former residents’ ability to continue to live in their communities given today’s displacement trends. In certain urban areas, fair housing laws can be outdated and not necessarily applicable to all programs, and they may create additional challenges when trying to achieve the anti-displacement and stabilization of neighborhoods and residents already under stress.
For Future Consideration
The ideas for future consideration that have the potential to increase community stability in San Francisco are described below. They provide a starting point for agencies, decision-makers, and community members to explore stabilization efforts and identify critical pathways forward. Based on preliminary information, staff is qualifying these ideas according to the type of task, scale of resources and level of complexity to underscore that any of these ideas would require time and additional resources not currently identified. These are not City commitments or recommendations, rather informed ideas that will require careful vetting and analysis as to their reach, resource needs, feasibility, unintended consequences, legal implications, and racial and social equity considerations.
Tailored preference programs for specific at-risk communities
Community stakeholders suggested adding more preference programs to target sensitive communities at risk of displacement.
| Type of Response | Early Intervention, Mitigation |
|---|---|
| Type of Task | Policy Implementation
 |
| Resource | More information required |
| Complexity | More information required |
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD), community partners |
| Benefit | In the same way that NRHP targets residents within the neighborhoods receiving additional housing units, new preference programs to address artist populations or families with children would help stem the loss of these types of households from the City. |
| Challenge | Requires funding and resources, strong engagement with existing or rapidly declining communities to establish requirements for new programs. Creating new lottery preference programs may push other existing preference programs further down the list in terms of priority or make less units available to the general population. |
Enhanced Outreach and Education
Additional outreach and education on preference programs
Due to the complexity of housing lottery preference programs, prioritization of programs, and requirements for documentation, many households may feel intimidated or may not feel qualified to apply.
| Type of Response | Early Intervention, Mitigation |
|---|---|
| Type of Task | Service, Funding
  |
| Resource | Generally only staff time would be required
|
| Complexity | Less Complex (generally no or limited legislation and/or an existing program, and one agency involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD), community partners |
| Benefit | By expanding outreach and education on qualifying for a unit through lottery preference programs, more households could be notified of their qualifications, and the daunting process can be clearer. |
| Challenge | Requires funding and resources, capacity building in neighborhoods where there may not be existing community organizations. |
Enhanced Outreach and Education
Support in additional languages
The Mayor's Office of Housing and Community Development (MOHCD) website could link to the Lottery Preferences Manual in multiple languages including but not limited to: English, Spanish, Chinese, and Tagalog.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Service, Funding
|
| Resource | Generally only staff time would be required
|
| Complexity | Less Complex (generally no or limited legislation and/or an existing program, and one agency involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD), community partners |
| Benefit | Providing the manual in additional languages could help with outreach, and to provide support to non-English speaking communities in the City. |
| Challenge | Requires funding and resources. |
COP Program extension
Since displacement of households in the 1960’s and 1970’s affected generations of families, the City could explore extending the Benefit of the COP program beyond the directly affected head of households.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Funding, Regulation, Data
 |
| Resource | Generally only staff time and some program funding would be required
|
| Complexity | Medium (generally some legislation and/or some change of and existing program, and two to three agencies involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD), OCII, community partners |
| Benefit | Since a portion of COP holders have already passed away and displacement has affected generations within these families, extending the COP to surviving family members such as grandchildren can aid in bringing back displaced communities to the City. |
| Challenge | Requires funding and resources and extending the COP to surviving family members still requires that the family members meet income eligibility and other requirements. Locating surviving members is difficult. |
Fair Housing Law updates
Given the changes and understanding of community stabilization over the years, existing fair housing laws could be evaluated and updated to include key stabilization efforts for ensuring a racially and economically diverse City. Further discussions with the U.S. Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (HCD) on the National Register of Historic Places (NRHP) program could continue to include reasoning behind the need for similar preference programs and the impact of allowing these types of preferences on existing fair housing laws.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Policy Implementation
|
| Resource | Generally only staff time would be required
|
| Complexity | Complex (generally major legislation, and/or new program required, and more than three agencies involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide, Nationwide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD), U.S. Department of Housing and Urban Development (HUD) |
| Benefit | The City could work with community organizations involved in affordable housing and stabilization efforts to understand opportunities to enhance specific types of preference programs to target communities at risk. |
| Challenge | Requires a potential review of national law and the alignment of proposed changes with existing political agendas. |
Lottery Preference Program Data Analysis
Applicant specific data for each preference program
In addition to researching the effectiveness of each program, data could be consistently collected and analyzed for why applicants refuse a unit or do not qualify for a unit.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Data
|
| Resource | Generally only staff time would be required
|
| Complexity | Less Complex – generally no or limited legislation and/or an existing program, and one agency involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD) |
| Benefit | Important data points, such as reasons why households refuse a unit or do not qualify, contribute to the understanding of the success of each preference program. |
| Challenge | Requires funding and resources. May require applicants to provide details about reasons for refusing a unit, which may be difficult for applicants. |
Lottery Preference Program Data Analysis
Applicant data analysis
Applicant data is being collected through the DAHLIA website. Due to limited staff capacity, the data has not been analyzed.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Data
|
| Resource | Generally only staff time would be required
|
| Complexity | Less Complex – generally no or limited legislation and/or an existing program, and one agency involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD) |
| Benefit | Evaluating existing data could help staff understand the number of people who have not completed applications or do not qualify for a unit, and to conduct further outreach or provide support to these households. |
| Challenge | Requires staff resources and time. |
