San Francisco Community Land Trust VP Bruce Wolfe: Hack the Housing Crisis slides
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San Francisco Community Land Trust VP Bruce Wolfe presented to the San Francisco Public Press and Shareable's Hack the Housing Crisis in June, 2014.
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San Francisco Community Land Trust VP Bruce Wolfe: Hack the Housing Crisis slides
- 1. Market-Rate Rents in San Francisco
- 2. Ellis Act Evictions in San Francisco 1998 – 2013 Source: www.theatlanticcities.com October 2013
- 3. Strategic Solutions • Inclusionary Housing Ordinance • Small Site Acquisition Policy (2009) • Real Ownership Opportunities for Tenants (ROOTS) • Housing Trust Fund • Tenant Opportunity to Purchase (TOPA, DC)
- 4. Small Site Acquisition in SF • City policy approved in 2009 • “Small” = 5-25 units • Competitive market requires a more nimble acquisition process • Scattered sites require new approach to property and asset management • Mixed-Income may be necessary
- 5. When is it Feasible? Monthly Rent per Unit This is Affordable for a Household earning: ______% AMI Can cover this much of a mortgage Will need this much “Subsidy” from the City to cover the gap between income and expenses $500 30% ($20,000) $ 23,000 $277,000 $700 40% (28,000) $ 45,000 $255,000 $900 50% ($36,000) $ 75,000 $225,000 $1,000 60% ($40,000) $ 80,000 $220,000 $1,200 70% ($48,000) $110,000 $190,000 $1,500 80% ($57,000) $150,000 $150,000 $1,800 100% ($71,000) $190,000 $110,000 $2,200 120% ($85,000) $240,000 $ 60,000 Assumptions: - City subsidy = $200,000 per unit - Annual operating cost per unit = $5,000 - $300,000 Total Cost per Unit (to purchase and/or renovate)
- 6. Mixed-Income Buildings 10-unit Building - Average 70% AMI # Units % AMI # Units % AMI # Units % AMI 1 30% AMI 2 30% AMI 3 30% AMI 4 50% AMI 1 50% AMI 0 50% AMI 6 80% AMI 6 80% AMI 6 80% AMI 0 100% AMI 1 100% AMI 1 100% AMI 10 71% AMI 10 69% AMI 10 67% AMI
Editor's Notes
- Inclusionary – requires 15% on-site units to be affordable or developer can pay an in-lieu fee, which most opt for. Problem – marketing by lottery and with 100s of applicants in the lottery residents in the neighborhood don’t have much chance to move-in. Small Site – Recognizing rapid development and displacement already taking place, and that most developers were choosing to pay the “Inclusionary in-lieu fees” over building on site units, the Board of Supervisors approved this new policy unanimously in 2009, which requires that 10% of the Inclusionary In-lieu fees collected be used to fund the acquisition/rehab of small buildings (<25 units). However, this was approved just in time for the economic downtown during which time there wasn’t enough revenue from the reduced in-lieu fees to justify operationalization. ROOTS – City policy approved in 2007 that provides funding to developers to help existing low-income residents purchase and convert their buildings into “Limited Equity Housing Co-ops”. Not a big demand, and the process is very complicated. Housing Trust Fund –provides a permanent source of revenue to fund the creation of affordable housing for low and middle income households over the next thirty years – approximately $20 million per year. TOPA – 1 & 2 units tenants have a first right to purchase; multi-unit tenants must form a tenant association to qualify for the first right to purchase.
- 100% private Financing. Using CDFI financing limits us to a 7-10 year balloon term, but we can take advantage of using principal pay down as replacement reserves, rather than from cash flow. Scattered sites require a new approach to property and asset management to achieve economies of scale; We are still researching possible cost-saving strategies especially around: property mangt, maintenance and compliance reporting. Mixed-Income model will enable cross-subsidization.
- If the average cost is $300,000 per unit and the City will only give $200,000 per unit subsidy, then the average rent revenue must be able to cover a mortgage of $100,000 per unit to be financially sustainable. With Avg square foot of 780 sqft/unit = average TDC per sqft = $384 and Subsidy per sqft = $256 Assuming an average operating cost per year of $5,000 per unit we found that we’d need a minimum average rent that would be affordable for households earning around 65% AMI and higher. This depends on tight cost management and annual rent increases of at least 2% - which is comparable to our existing rent control. Higher average income levels will restrict the sources of financing to 1) Small Site Fund and 2) CDBG Fund and 3) possibly Housing Trust Fund dollars through the “Stabilization” program Example – There is still room for deeper affordability (30% and 50%, but you’d also need a 100% unit in the building). However, when comparing the options of either losing units and families to market forces and evictions, this seems like a worthwhile compromise.
- CDBG funding supports up to 80% AMI average. Welfare Tax Exemption requires a minimum 90% of the units targeted at no more than 80% AMI. For each 30% AMI unit, you’ll need at higher income unit.