City Program Designed to Invest in Affordable Housing

By Thomas K. Pendergast

In a first of its kind for the Sunset District, the residents of a building on Taraval Street will not be facing eviction thanks to a citywide program for keeping long-term tenants housed in place.

The Small Sites Program (SSP) removes apartment buildings from the market by purchasing them in order to protect low-income families and seniors from getting evicted or priced out of their apartments. 

Small Sites Breed Mar 9-27-19

San Francisco Mayor London Breed, with District 4 Supervisor Gordon Mar, at a press conference on location announcing the Sunset District’s first Small Sites apartment building at 3544 Taraval St. on Friday, Sept. 27.  Photo by Michael Durand.

“While these six units represent a very small addition to the City’s overall affordable housing stock, for the Sunset, today represents a significant turning point,” District 4 Supervisor Gordon Mar stated in a press release. “In the last 10 years before I was elected supervisor, there has not been a single acquisition or rehab, and only 21 units of affordable housing were built in District 4, by far the lowest of any district. And during that same period, District 4 has lost 479 rent-controlled apartments.” 

These six apartment units sit near the end of Taraval Street, a few blocks uphill from Ocean Beach, in a sleepy and somewhat neglected part of the City. 

“Behind these statistics are hundreds of longtime Sunset residents, families and seniors forced out of their homes and their neighborhood. The tenants here at 3544 Taraval were facing the very real threat that they would become the latest victims of the housing affordability crisis in the Sunset District,” Mar stated. “There were many challenges and we met incredible resistance. The west side lacks development capacity, and resources are often focused on new and shinier projects…. Even though the Sunset is known for its single-family homeowners, outer Taraval Street has historically been the frontier of affordability: a working-class enclave with small apartment buildings. It has since been undergoing dramatic change with fewer affordable, neighbor-serving businesses and more luxury condos.” 

A City website describes the purpose of the SSP as helping San Franciscans avoid displacement or eviction. It notes that small rent-controlled properties are often “vulnerable to market pressure” resulting in higher rents, increased evictions and property sales. So the SSP protects tenants living in these properties by removing them from the market and converting them to permanently affordable housing.

Eligibility requirements include provisions that tenants have incomes not more than 80 percent of the Area Median Income (AMI), the building ranges between five and 25 units and requires no major renovations, and that tenants meet “per-unit subsidy limits” outlined in the program guidelines.  

More recently, another program related to the SSP has gone into effect, expanding the basic concept to allow for non-profit organizations to get even more involved with buying up properties full of low-income tenants vulnerable to eviction. 

The Community Opportunity to Purchase Act (COPA) gives qualified non-profit organizations the right of first offer when a property comes onto the market, and the right of first refusal to purchase certain properties offered for sale in San Francisco. It also has the aim of preventing tenant displacement and promoting the preservation of affordable rental housing that includes buildings with three or more residential units or vacant land that could be developed into three or more residential units.

“This is really building off of the success of the Small Sites Program,” Ian Fregosi, a legislative aide to District 1 Supervisor Sandra Lee Fewer, explained. “The Small Sites Program allows these non-profits to buy these buildings, using a combination of City funding and private financing … and preserve them as permanently affordable housing. Specifically, it’s an anti-displacement tool.

“By having a nonprofit buy them, the units are actually preserved as permanently affordable housing in perpetuity,” he said. “So from here forward, even if the tenants that live in the building now eventually move out of that building, the new tenants that come in will also be protected. They are rent-restricted at below-market rate and they are not on the speculative market anymore.”

Fregosi said that between Ellis Act evictions, condo-conversions and flipping houses, plus long-time tenants paying below-market-rate rents because of rent-control laws, and combined with “speculative” property owners or investors that want to come in and buy a building and then find ways to get those tenants out, San Francisco has been losing one affordable housing unit for every two built.

“This allows us to stop the bleeding and also preserve as permanently affordable and add to our affordable housing stock, which is actually cheaper than it costs to produce new housing. So it’s a win-win,” Fregosi said.

He said COPA gives non-profits that qualify the first opportunity to bid on these properties. When a property owner puts it on the market, the non-profits must be notified right away. 

“The owner is totally free to reject any offer that they may receive from a nonprofit,” he said. “But if they do receive an offer from a non-profit that they reject, then when they ultimately get an offer from another buyer that they do wish to accept, they have to then bring that offer back to whichever non-profit or nonprofits made an offer, and just give them an opportunity to match that offer.”  

So far there are six qualified non-profits registered in the COPA program: the Bernal Heights Neighborhood Center, Chinatown Community Development Center, Mission Economic Development Agency, San Francisco Community Land Trust, San Francisco Housing Development Corporation and the Tenderloin Neighborhood Development Corporation.

“The tenants at 3544 Taraval who have been here for decades in our neighborhood, have witnessed this spiraling change,” Mar stated. “Through the Small Sites Program, we have secured affordable housing for their families so they no longer have to worry about their future in San Francisco and in the Sunset. 

“The work must continue, and I am committed to future Small Sites acquisitions, 100 percent affordable new construction like the Francis Scott Key educator housing project and every creative solution to solve the affordability crisis. I look forward to working together with Mayor Breed, our community non-profit housing developers, and community stakeholders to secure and expand affordable housing in the Sunset,” Mar stated. 

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