San Francisco, CA – Mayor London N. Breed and the Mayor’s Office of Housing and Community Development (MOHCD) today announced a new strategy to access federal funding to deliver nearly 3,700 much-needed affordable homes in San Francisco, helping expedite construction timelines.
The new program will speed up the delivery of critical affordable homes and save local funding to be used for other housing projects and needs.
Known as “Faircloth to RAD,” the new program at full buildout will provide operating funding for nearly 3,700 affordable homes in San Francisco. The program will kick off by securing the delivery of 700 new homes currently in the pipeline at sites across the City in neighborhoods like the Sunset, the Mission, Alamo Square/North Panhandle, and Potrero Hill.
No other city in California has launched a program under the new federal program. Faircloth to RAD will work in concert with other affordable housing sources, including the $300 million affordable housing bond recently approved by the voters, as well as the City’s inclusionary housing fund, which is supported by market-rate developments.
The new program will also work alongside the proposed $20 billion regional housing bond that is headed for the November ballot, which, if passed by Bay Area voters, would provide up to $2.4 billion for San Francisco.
“Making our City more affordable requires us to pull every lever we have to build more housing faster,” said Mayor London Breed. “This new program will allow us to help fund thousands of new affordable homes all across our City and deliver on our state housing goals. I want to thank the Biden Administration for their support with creative solutions to fund affordable housing in cities like San Francisco.”
The Mayor’s new strategy was a key recommendation of the Mayor’s Affordable Housing Leadership Council, which she launched as part of “Housing for All,” her strategy to meet San Francisco’s state-mandated Housing Element goals of building 82,000 new homes by 2031. The Affordable Housing Leadership Council – which included representation from community-based organizations, housing developers, academia, business, and philanthropy – identified a series of recommendations to increase the production of affordable housing. One of the recommendations was to fully leverage HUD’s Faircloth to RAD program.
“Faircloth to RAD represents a significant opportunity for San Francsico to support new construction, preservation, and acquisition of affordable housing,” said MOHCD Director Daniel Adams. “I am extremely grateful for the ongoing collaboration with the Housing Authority, our non-profit partners, and HUD staff that will help unlock San Francisco’s Faircloth Authority and support the delivery of thousands of affordable homes in the years to come.”
"While Federal subsidies for affordable housing haven’t kept pace with the demand across the U.S., HUD’s Faircloth to RAD program provides a new and important tool in the toolkit for cities to use to advance their affordable housing goals,” said Carol Galante, founder of the Terner Center for Housing Innovation at UC Berkeley, former Federal Housing Administration Commissioner, and member of the Affordable Housing Leadership Council. “I am delighted that San Francisco is taking the initiative to move forward on one of the Leadership Council’s principal recommendations to implement Faircloth to RAD to leverage scarce resources and advance its extensive pipeline of affordable housing while ensuring that the units remain deeply affordable over the long-term.”
“By partnering with HUD, and better aligning state, federal and local goals, the Mayor is going to deliver crucially needed housing in San Francsico, faster – and that’s something everyone can support,” said Tonia Lediju, Chief Executive Officer of the Housing Authority of the City & County of San Francisco.
“Maximizing federal resources like Faircloth to RAD moves San Francisco closer to its affordable housing production and stabilization goals,” said Joaquín Torres, President at the San Francisco Housing Authority Commission. “By working together, under Mayor Breed’s direction, our city partnerships are drawing more resources to expedite our housing goals and ensuring that San Francisco continues to lead the way in offering smart housing models for other California counties to follow.”
What is Faircloth to RAD?
In 1998, Congress enacted the Faircloth Amendment which sets limits on the number of public housing units each public housing authority (PHA) can have in its portfolio – this is called the “Faircloth Limit.” Many PHAs, including the Housing Authority of San Francisco, have fewer public housing units in their portfolios than their Faircloth Limit. The difference between number of public housing units and the Faircloth Limit is called the “Faircloth Authority.” SF’s Faircloth Authority is 3,667 units.
HUD recently launched Faircloth to RAD, a new program whereby PHAs can use their Faircloth Authority to create units subsidized by new project-based vouchers (rent subsidies) set at Rental Assistance Demonstration (RAD) rents – formerly known as Section 8 rentals. Through Faircloth to RAD, San Francisco has the potential to receive federal rent subsidies for 3,667 units, applied to both new units in MOHCD’s pipeline and existing units in the City’s affordable housing portfolio – delivering homes faster.
What is the City’s Faircloth to RAD Initiative?
MOHCD and SFHA have developed a Faircloth to RAD Plan, the initial phase of which is to accelerate the production of approximately 700 units of new affordable housing (PSH, Family and Senior). By leveraging RAD rents through the program, the City’s operating subsidy costs will be reduced by 76% and will save approximately $130 million over 20 years. SFHA and MOHCD will be submitting “placeholder” applications for the entirety of San Francisco’s Faircloth Authority of 3,667 units.
New construction projects in San Francisco’s Faircloth to Rad program:
- 1234 Great Highway – 216 units in the Outer Sunset for low-income seniors, with 50% of units for seniors experiencing homelessness
- 249 Pennsylvania Street – 120 units in Potrero Hill for individuals and families with 60 units for homeless households
- 650 Divisadero – 95 units for families and individuals, including 24 units for homeless households
- 250 Laguna Honda – 115 units for families in Forest Hill with 29 units for homeless households
- 1979 Mission PSH – 150 units in the Mission with 149 units for homeless individuals
Portfolio Rehabilitation:
- Larkin Pine Senior Housing – 63 units for low-income seniors in Nob Hill
"It’s not hyperbole to say that Faircloth to RAD will be a historic investment in 100 percent affordable housing not seen since in a handful of decades,” said Mission Housing's Executive Team of Sam Moss (Executive Director) and Marcia Contreras (Deputy Executive Director). “San Francisco’s nonprofit affordable housing community is nationally renowned in our ability to build and manage low-income housing, and it’s an honor to be a part of the cohort that will potentially bring us back to the days when all levels of government and investment believed in housing as a human right.”
"It's great that there is this new ability to direct federal investment into locally conceived and controlled affordable housing. Operating subsidy is often the hardest to sustainably secure for housing, parks, schools, and other community serving infrastructure. Faircloth to RAD will provide sustainable operating funding that will allow the City to house seniors retired from a lifetime of work and families with dignity and respect,” said Katie Lamont, Chief Operating Officer and Interim Co-Chief Executive Officer of the Tenderloin Neighborhood Development Corporation.
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