New Report Shows Mayor Breed's Budget Raids $20 Million from Key Affordable Housing Program

SAN FRANCISCO — One of the city’s most effective anti-displacement tools, the Small Sites acquisition program, is facing a $20 million cut in Mayor London Breed’s proposed budget, according to a report released Monday by the city’s Controller.

“We have gone to the ballot to raise additional money for affordable housing, which the Mayor refuses to spend,” said Supervisor Dean Preston. “Now, they are taking away affordable housing funds already appropriated by a supermajority of the Board of Supervisors. This is an assault on affordable housing that will deprive stable housing for hundreds of at-risk tenants.”

San Francisco’s acquisition program allows the city to step in and purchase residential buildings, taking them off the private speculative market and converting them to permanently affordable housing, usually in the form of community land trusts. Since its 2014 launch through 2021, the program acquired 47 residential buildings (368 units). The program had struggled to scale up, however, because it lacked a source of dedicated funds.

In November 2021, with the backing of more than 40 community organizations, including housing justice advocates LGBTQ+ groups, and prominent labor organizations, the Board of Supervisors approved an historic $64 million investment in the preservation program, allowing for a significant expansion.

More than 100 homes across seven different buildings in San Francisco were preserved by the Board's investment, according to a February 2023 letter from the Mayor’s Office of Housing and Community Development. The sites include a SOMA property with six long-term families, an SRO with 64 homes badly in need of repair, a North Beach apartment building where tenants have lived for 30-plus years.

In January, the City voted to adopt a new Housing Element, which sets a benchmark for new housing production for the next eight years. These new targets – to create 46,500 new affordable homes for working San Franciscans by 2031 – are significantly higher than any previous goal set by the city. In the most recent cycle, the city had a mandate to create 16,333 new affordable homes, but only delivered on approximately half of that goal.

The Housing Element explicitly highlights the small sites program as an important tool to promote housing stability, with a recommendation to “[p]rioritize and expand funding for the purchase of buildings,” as a short term goal.

Source: Housing Element Update 2022, Page 101

“It makes no sense whatsoever for the city to adopt ambitious new affordable housing targets, and then defund the preservation of naturally occurring affordable housing,” said Shanti Singh, Chair of the Housing Stability Fund Oversight Board. “It’s even worse that the Mayor’s office has essentially slow-walked spending this money for nearly two years, deepening the crisis on our streets and leaving San Francisco tenants facing homelessness to twist in the wind.”

The Controller’s report analyzes the Mayor’s FY 2023-25 proposed budget, and details “project closeouts” or de-appropriations composed of prior fiscal year balances (see pages 10-11). Of the 132 proposed cuts, the $20 million from the small sites program is the second largest, comprising 17% of all general fund de-appropriations.

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