February 20, 2015

HUD Secretary and SF Mayor Announce Plan to
Revitalize SF Public Housing

Mayor Lee and Secretary Castro at yesterday's announcement

FEBRUARY 20, 2015 | Secretary Juli´┐Żn Castro of the U.S. Department of Housing and Urban Development (HUD) and San Francisco Mayor Ed Lee announced agreement yesterday on key issues that pave the way for the city to move forward with a groundbreaking plan to revitalize more than 3,400 of San Francisco's oldest public housing dwellings and ensure strong tenant protections in partnership with San Francisco's top housing and service organizations.


The California Housing Partnership has been working with city, HUD, and San Francisco Housing Authority staff for more than a year to develop the innovative financing strategy that underpins the ambitious revitalization plan. The plan will result in the investment of more than $750 million in new private and public capital into repairing, improving and preserving 29 public housing developments that have been underfunded by Congress for many years as part of a national trend, as shown in this chart comparing the Housing Authority's immediate capital needs (red) to federal funding (green):  

Source: San Francisco Housing Authority
The plan is made possible by HUD's expansion of the Rental Assistance Demonstration
 (RAD) program to allow revitalizations of larger portfolios of public housing. The use of RAD by itself, however, would not have come close to covering the costs of the needed renovations. In recognition of the more than $200 million that San Francisco has invested in revitalizing its public housing to date and a new $50 million commitment the city is making to the 29 SF RAD revitalization properties, HUD has agreed to award additional funding sufficient to pay for 1,448 housing vouchers, less any vacancies. The Housing Authority will use this funding in combination with its own reserves to create 1,600 project-based vouchers with renewable 15-year contracts. These long-term renewable contracts will provide stable funding at a level sufficient to not only pay for operating expenses but also to leverage $250 million in new private financing. 

Participating in RAD will also allow the California Housing Partnership to help the city and its developers raise nearly $500 million in private equity generated through the sale of 4%
Low Income Housing Tax Credits, a federal resource that would otherwise go unused.

Continued public
control over the developments is assured by the requirement that the Housing Authority continue to own the land under all of the buildings and lease it to the developer partnerships responsible for revitalizing and operating the refurbished properties efficiently, giving both the Housing Authority and the city strong oversight roles. Other preconditions of the plan moving forward were agreements with tenant leaders, advocates, and attorneys to require no change in tenant rent payment structure, one-for-one replacement, a right of return, and continued affordability in perpetuity for all current residents in good standing with the same tenant protections they currently have under public housing rules, as required by RAD. When taken together, the ground lease structure combined with all other protections will ensure that both the surrounding communities and the long-term public housing residents benefit from this critical revitalization effort.

Revitalization will take place in two phases. The first phase will start late this year, with completion of the renovations expected in 2017. Completion of the second phase is expected to occur by 2019.

For more information on the financing of SF RAD, please contact Senior Housing Finance Consultant Dave Kiddoo at

CHPC Services for Nonprofit and Local Government Staff  

CHPC provides technical assistance and training to help nonprofit and government agencies build and preserve affordable homes for California families and seniors. For more information about our preservation program, please contact Housing Policy and Preservation Associate, James Pappas at jpappas@chpc.net or (415) 433-6804 x 320. For information about CHPC's technical assistance services, contact Richard Mandel at rmandel@chpc.net.


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