SF has 305 empty affordable homes despite huge demand

Hundreds of apartments in San Francisco reserved for low- and middle-income families are vacant, the result of slow bureaucracy and a pandemic-era rental market that has become less predictable, according to a new report. of the Board of Supervisors Budget and Legislative Analyst.

For 30 years, San Francisco has required real estate developers to include a percentage of “below-market-rate” units in their projects, an effort to create affordable housing and mixed-income neighborhoods in a city that has become increasingly richer and less accessible to average families.

While San Francisco’s 1992 inclusive housing requirement has long been seen as a model — most major U.S. cities now have a version of it — the new report shows the program is marred by high vacancy rates. Of the 1,961 units created under the program, 305 of them – about 15% – are unoccupied, according to the report, which was requested by supervisor Ahsha Safai.

According to the report, a combined 21,000 households applied to live in the 305 apartments. However, the units remain unoccupied.

“We have a housing crisis in the city and yet we have a government bureaucracy that prevents people from getting housing,” Safai said. “It is unconscionable for us to be sitting there with this level of vacancies.”

The current iteration of San Francisco’s below-market rate program – units are known as BMR – requires 14.5% of homes in smaller projects under 25 units to be made affordable while larger developments important must reserve 21.5%. The income levels required to qualify are complicated: in low-rise buildings, households must earn just under 55% of the region’s median income, or about $58,600 for a two-person household; in tall buildings, 60% of below-market-rate units are reserved for two-person families at the 55% AMI level, while 20% target moderate-income households earning $85,000 and an additional 20% for families earning $117 $000.

Christie Donnelly opens the door to an apartment inside the George Apartments at 434 Minna St., San Francisco. Donnelly is the director of Brookfield Properties.

Santiago Mejia/The Chronicle

Of the 305 units currently empty, five have been vacant since 2019, 55 have been vacant since 2020 and 245 have been vacant since last year, according to the report.

In addition to wasting badly needed homes, the number of empty units is a burden on builders who rely on income from those units to pay off construction loans and cover operating costs, according to the president from the Residential Builders Association, Sean Keighran. In some cases, they wait months or even years for the mayor’s office of housing and community development, which oversees the program, to approve qualified applicants.

“Next to PG&E, they are the most inefficient bureaucracy we have to deal with,” Keighran said. “The units sit empty and the process takes forever. It seems the city doesn’t care.

The process of qualifying for a BMR unit is more arduous and time-consuming than applying for a typical apartment, according to Caroline Caselli, CEO of Haven Connect, a tech company that has created a platform to help match BMRs with people. tenants.

Applicants must prove income and asset verification for each household member, along with rental history, credit score, and other documentation.

“It’s like doing your taxes but more invasive – just for a rental,” she said.

For low-income renters in the below 55% AMI range, this type of review may be familiar. But those in the 80% or 110% AMI range may have market rate options, especially at a time when rents are down 12% from pre-pandemic highs and many new buildings offer two or three months free and other benefits.

Caselli said high-income units are the hardest to fill. A former Catholic Charities social worker at San Francisco’s Tenderloin, Caselli said most of her clients don’t earn enough to qualify for higher BMR units. Those who qualify often had easier options.

Keighran remembers a couple who “draw a winning ticket” for a BMR condo in one of his buildings. “They were partying, jumping up and down,” he said. “In their eyes, they had won the lottery.”

The party didn’t last long, however: the couple lost the home because their income was $100 a month too high. “The program is so stiff and stiff,” Keighran said.

According to the report, shifting priorities and uncertainties caused by the pandemic have also made it more difficult to place qualified households in BMR homes. Prior to the pandemic, MOUCD reviewed an average of about five applications before completing a unit. That number has now skyrocketed to 31 as many people on waiting lists have left the city, Bay Area or state. Others have found units in buildings at market rates.

Eric Shaw, executive director of the Mayor’s Office of Housing and Community Development, acknowledged that the pandemic has made it more difficult to fill BMRs. He said the bulk of the 305 vacancies were “in about 10 buildings”. The city requires developers to hang banners advertising BMRs, promote them on social media as well as in posts targeting a wide range of communities. The city’s BMR website, called Dahlia, has up-to-date information on every available unit.

According to the report, around 53% of vacant homes are small – studios or one-bedroom apartments – which have become harder to sell since the start of the pandemic. About 69% of the units are intended for low-income families while 30% target low-income households.

“We are all committed to renting units as quickly as possible,” Shaw said. “We understand that right now you have to go deeper into the lists because people are moving or changing their minds. Lives change, preferences change. Sometimes we lag behind these changes when we place people.

Additionally, the city cannot compete with the free rents that some developers offer as incentives. “Those guys got the balls out,” he said. “These are concessions that we cannot make.”

Emerald Fund, which owns about 1,600 apartments in San Francisco, manages 227 BMRs. Emerald Fund CEO Oz Erickson said the lottery process takes about four months “from start to finish” to qualify a family and move them into the unit. The process — along with all the other fees and requirements the city places on housing — makes it more expensive to create housing in San Francisco.

“Other units have to pay for this empty unit,” he said. ” It is very frustrating. It was all done with the best of intentions, but it’s an incredible amount of money. ”

JK Dineen is a writer for the San Francisco Chronicle. Email: [email protected]: @sfjkdineen

Comments are closed.