Housing Loan Program
Loans to Finance Acquisition and Rehabilitation of Affordable Housing
Authorizes putting unused bond capacity from a previous earthquake retrofit program toward the acquisition of housing units for rehabilitation and conversion to permanently affordable housing.
What the Measure Would Do
Prop. C would amend an existing seismic safety bond program to make unused funds available for a new purpose: to acquire and rehabilitate apartments that house tenants at risk of eviction and to convert those apartments to permanently affordable housing. In addition, these funds could be used to perform seismic, fire, health and safety upgrades or other improvements necessary to ensure that units remain habitable. Of the original $350 million bond authorized in 1992, $261 million of unused bond authority remains to be used for these new purposes.
Prop. C includes two tiers of funding: the Affordable Housing Loan Program, which would offer $105 million in loans at a favorable rate to buyers of at-risk apartments (typically, nonprofit providers of affordable housing), and the Market Loan Program, which would offer $156 million in loans at a slightly less favorable but still below-market rate. Both loan programs would provide funds for the new uses permitted by Prop. C: acquisition, rehabilitation and repairs. Depending on the needs of the project (the average income of the resident, the degree of rehabilitation needed), the city could elect to provide more favorable or less favorable financing.
If Prop. C is approved, the Mayor’s Office of Housing and Community Development intends to use the funds in a manner consistent with its Small Site Acquisition and Rehabilitation Program, meaning that it would be targeted to help households earning 80 percent of the area’s median income on average, roughly $86,000 for a family of four.
Prop. C carries over a restriction from the original bond that only $35 million could be issued in any year. The city controller projects that this level of bond issuance can fit into the city’s existing capital plan without negatively impacting other planned capital projects or increasing the tax rate.
If voters do not approve this measure, the provisions of the 1992 Prop. A would remain unaffected.
In 1992, the voters passed Prop. A, a $350 million bond to fund upgrades to unreinforced masonry buildings. The bond was part of an overall city program requiring seismic upgrades to these types of buildings; a portion of the funding was to go to affordable housing developments, and a portion to market-rate buildings. In the 24 years since then, just $90 million of bonds have been issued, leaving $261 million of unused authorization. Part of the reason the original bonds were not used was that private financing for seismic upgrades became much easier to obtain, making public financing less desirable.
This measure would add an allowable use to this bond authorization: the acquisition and rehabilitation of at-risk rental housing. San Francisco has a significant shortage of affordable housing. Identifying more sources of financing to create or acquire and preserve affordable housing is a major priority of the city leadership.
This measure was placed on the ballot by a unanimous vote of the Board of Supervisors. As a bond authorization, it must appear on the ballot and requires support from two-thirds of voters to pass.
Prop. C would make use of underutilized bonds and put them toward one of San Francisco’s most important priorities as a city: preserving and rehabilitating multi-family apartment buildings that are at risk of being converted to higher-income housing.
Prop. C provides funds for important improvements to existing buildings, including seismic, fire, health and safety upgrades, thus helping to maintain San Francisco’s housing stock over time.
- Because it is so expensive to acquire and/or subsidize housing in San Francisco, this bond would only be able to help a very small number of the people who cannot afford housing in San Francisco.
One of the most urgent problems facing San Francisco is the high cost of housing. This bond measure would make use of a pre-existing voter commitment to providing bond-funded loans for a public purpose and could help preserve and create much-needed affordable housing. While only a part of the solution, it would enable nonprofits to purchase buildings and make them permanently affordable for the people living there, thus stabilizing housing costs for many low-income households.