Public Housing Preservation

Background

What is Public Housing?

Public housing was built from the 1930s to the 1970s using federal grants to construct over 6,000 units of rental housing in San Francisco for eligible low-income families. Public housing ranges from individual buildings to larger developments made up of multiple buildings covering many acres. Public housing developments have relied on federal operating subsidies that have steadily declined while they increasingly served a very low-income population. Insufficient revenue combined with management challenges resulted in severe habitability issues for tenants. Despite these challenges, the immense need for affordable housing in San Francisco is demonstrated by the waiting list for public housing with over 18,000 people currently waiting for qualification and assignment to a unit.

What is Public Housing Preservation?

San Francisco has used available federal programs as well as significant local funding to rebuild or rehabilitate most of the aging public housing in San Francisco. The City has also made a commitment to rebuild all remaining public housing units.  The programs described in this section contribute to preserving public housing while improving standards of living.

HOPE VI

After the decline of maintenance in public housing, a federal grants program in 1992 jumpstarted the rebuilding of several deteriorated public housing buildings. Grants from HUD were awarded annually to San Francisco from the late 1990s to the early 2000s the SFHA used these funds to revitalize five public housing sites with 1,149 units of affordable housing.

Rental Assistance Demonstration (RAD)

Before the Rental Assistance Demonstration (RAD) program, public housing authorities (PHAs) were not able to borrow money or use tax credits to rehabilitate aging public housing buildings. RAD was created to give PHAs a powerful tool to preserve and improve public housing properties and address their severe deferred maintenance. RAD also gives owners of three HUD "legacy" programs (Rent Supplement, Rental Assistance Payment, and Section 8 Moderate Rehabilitation) the opportunity to enter into long-term contracts that facilitate the financing of improvements.

In RAD, units move to a project-based Section 8 platform with a long-term contract that, by law, must be renewed. This ensures that the units remain permanently affordable to low-income households and provides a steady funding stream that can be leveraged for debt. In addition, housing authorities can enter into partnerships with nonprofit housing developers and tax credit investors bringing professional management expertise and tax credit equity to public housing rehabilitation projects. RAD maintains the public stewardship of the converted property through clear rules on ongoing ownership and use.

RAD program rules prohibit any permanent involuntary relocation of residents because of conversion. In addition, the tenants that are moved out while properties are being repaired have the right to return to the property after completion without any rescreening. Tenants also have the right to move with tenant-based assistance if needed. To return to the property, the PHA operates and maintains a RAD waitlist.

As of late 2017, approximately 3,181 units in 28 developments around San Francisco in need of major repair and maintenance have been converted to RAD. Approximately 2,535 units have been converted to the project-based Voucher (PBV) program, and about 833 have been made part of the Section 8 moderate rehabilitation program. Thirty-seven percent of the units house families and 63 percent of the units house seniors and people with disabilities. The average income of the residents is $16,405, which is less than 25 percent of the area median income in San Francisco.

HOPE SF

While the federal HOPE VI program has ended, San Francisco has committed to rebuild remaining public housing sites under the City’s HOPE SF program. The HOPE SF program includes four public housing developments in the City to be completely renovated and existing public housing units replaced on a one for one basis along with additional affordable and market rate housing. HOPE SF will rebuild more than 2,000 units in all four public housing sites and will also create approximately 3,000 additional homes for rent and for purchase. Construction began in early 2010, and several projects have already been completed at Hunters View and Alice Griffith public housing sites. The Sunnydale-Velasco and Potrero Terrace and Annex sites will be rebuilt in phases in years to come.

Since HOPE SF is a local initiative, it relies heavily on local funding highlighting the importance of local funding in preserving public housing. HOPE SF will likely leverage federal programs such as tax credits and the ability to convert public housing operating subsidy to long term project-based vouchers and rental assistance as well as state funding sources. However, local funding is crucial to leveraging these state and federal sources and as well as to complete predevelopment work including planning, design, and infrastructure improvements.

Issues Related to Preserving Public Housing

The San Francisco Housing Authority (SFHA), established in 1938 by the Board of Supervisors, managed multiple housing programs including leased housing programs such as Section 8, and production or rehabilitation of affordable housing through Rental Assistance Demonstration (RAD) projects. SFHA was recently found in default of various agreements and obligations and transferred most of its duties to the City and County of San Francisco. After the transition, MOHCD assumed primary responsibility for SFHA properties and functions.  The agency is in the process of determining a management and program structure. There are few online or physical resources for clarity on how the waitlist works for both Section 8 Vouchers and RAD. Most information can only be found on other agency websites or community organizations involved with the project or neighborhood.

HUD limits the number of public housing units that can be converted to PBVs or project-based rental assistance through RAD because it is still a limited “demonstration” program.Only 185,000 public housing units nationwide can be selected for RAD (as of 2015) according to HUD.¹ As of 2017, in the City of San Francisco, there are approximately 1,081 number of public housing units managed by the SFHA.²

Lessons Learned from HOPE VI

Since Hope VI and HOPE SF provide for the relocation of families and replacement of unit once rehabilitation is complete, the demographics of the population living at these developments should not have changed over time. However, the replacement and relocation processes differ between the two programs. HOPE VI relocated households to make way for mixed-income developments, but not all units were replaced on a one-for-one basis, causing residents to be displaced. With the new HOPE SF program, the City relocated communities to other housing within the same neighborhood and then replaced the units on a one for one basis for households to return to as soon as rehabilitation was complete. For example, residents of the Alice Griffith Public Housing Development were relocated directly from their old units into the newly constructed Alice Griffith Apartments using a special housing lottery preference.

What’s Happening Now to Support ADU Production?

The Planning Department developed a team in 2017 to coordinate the review of ADUs and unauthorized dwelling units. In September 2018, Mayor Breed issued an Executive Directive mandating Departments to complete the review of ADU permits within a certain time period. To address issues related to the fragmented permitting process, Digital Services is testing a pilot for the one-stop permit center and for the creation of a fully digital permitting process: the applicant will be able to apply for ADU permits, submit plans, and complete the process online. The Planning Department has also developed a variety of materials to communicate the benefits of and the process of adding an ADU in simplified language. In addition to these materials the City has hosted or attended outreach events targeted to a variety of audience.

The Planning Department is exploring a deed-restricted affordable ADU pilot in the Bayview and surrounding neighborhoods. San Francisco’s potential pilot involves versions of an equity loan or incorporating future income of property to increase loan amounts possible for low-income households. CASA, the Committee to House the Bay Area, is an effort comprised of public policy and housing advocates, developers, elected officials, and others, to develop methods of addressing the regional housing crisis. The recently published CASA Compact, which packages up detailed policy proposals for a 15-year horizon, details a program for junior ADUs, which may be more affordable to build because they are supposedly smaller than the average ADU. The proposed definition at the State level notes that the junior ADU can share sanitation facilities with the main home, and generally is created from existing space within that home. However, this program could use some more details and research for local application, such as the definition of a junior ADU and exploring tenant rights specific to these types of units.

Issues with ADU Production

One of the main challenges for building ADUs has been the lengthy review process by various departments. Small property owners find the process complicated and daunting. The long process was due to lack of allocated staff, lack of coordinated review between multiple Departments, or, in some cases, disagreements between departments.

Within the existing landscape of mortgage products, loans for ADUs either do not exist or are at the early stages of being formed. During summer of 2018, the Planning Department hired an intern to research how financial institutions are responding to the need for a loan product for ADUs. Most traditional lenders are reluctant to consider the future rental income from the ADU when securing financing.

The Department has occasionally heard concerns from tenant advocacy organizations that construction of ADUs have been disruptive to existing tenants. Examples referenced included when common amenities (defined by the SF Rent Board as “housing services”) were being converted to ADUs, or when required seismic retrofitting in combination with new ADU construction required temporary relocation of tenants.