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USA Real Estate Blog

San Francisco to vote on record $600M housing bond

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In San Francisco’s Mission District, vegan ramen is sold across a busy street from a decaying corner building where vagrants loiter outside its boarded-up walls. An advocacy group wants to turn the property into residences for families who can’t afford the city’s $1.5 million median home-sale price.

It’s the kind of project that could get funding from a $600 million housing bond voters will decide Tuesday. If the measure is approved, it would finance efforts to rehabilitate public housing and to buy buildings at risk of being flipped into luxury condos to boost the stock of affordable housing for residents who don’t draw the kinds of salaries that workers in the tech industry do.

The housing bond measure, the largest of its kind in San Francisco’s history, comes as the ballooning wage inequality has sent the city’s homeless population skyrocketing 17% over the last two years. It’s a crisis that has forced working-class families out of their homes and left sidewalks, parks and bridge underpasses populated with people who have no other place to sleep.

Financiers and developers understand how essential affordable housing is, but they need public dollars to make projects work, said Feliciano Vera, senior project manager with the community real estate team at Mission Economic Development Agency, which bought the 1919 building from a former Facebook Inc. executive whose brewpub plans for it fizzled.

“It’s one dimension of the solution,” Vera said of the bond measure. “Access to affordable, flexible capital is vital, and it’s absolutely important to ensuring that we can meet the housing needs of working and moderate income families.”

The city estimates that 2,800 units of affordable housing could start construction in the next four years if two-thirds of the electorate authorize Proposition A in Tuesday’s election. No one has raised money to oppose the bond, while proponents, including Salesforce.com Inc., Ripple Labs Inc.’s Chris Larsen and the advocacy fund of Facebook’s Mark Zuckerberg and his wife Priscilla Chan, have raised more than $2.5 million to promote it.

Helping to sell the measure to voters is a policy that says the city can’t issue the new debt until prior bonds roll off the books, meaning taxpayers wouldn’t see an increase in their bills.

Mayor London Breed and the San Francisco board of supervisors agreed on the November ballot item as the housing and homelessness crisis deepened. In the last fiscal year, the mayor’s office of housing and community development received 94,000 applications for 379 rental units, a figure that doesn’t include an additional 16,000 applications just to be placed on a wait-list for a building. It takes about $750,000 a unit and five years to bring affordable housing online, according to the department.

In 2015, voters approved $310 million in bonds for housing, which led to 1,613 affordable homes created or preserved.

Under Proposition A, funds would be divvied up among five buckets:

· $220 million for extremely low- and low-income people

· $150 million to repair and rebuild public housing developments

· $150 million to acquire and construct housing for seniors

· $60 million to acquire and rehabilitate affordable rental housing to prevent the loss of such housing and to assist middle-income city residents and workers to secure permanent housing

· $20 million to support affordable housing for educators and employees of the San Francisco Unified School District and City College of San Francisco

In a different ballot question, voters in the city will decide whether to approve housing for educators and employees on publicly owned land and expedite those projects.

Bloomberg News

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