Shocking City Audit Finds Mayor's Office of Housing With Nearly Half Billion in Unspent Funds
SAN FRANCISCO — A bombshell audit of the Mayor’s Office of Housing and Community Development (MOHCD) published today reveals noncompliant reporting practices, “untraceable” decision-making processes, and a five-year average ending balance of $482 million – with Department staff f or the city’s lead Affordable Housing agency refusing to disclose how much of that balance is committed, and how much is unallocated and available for additional affordable housing investments.
“In a city with a notorious lack of affordable housing, we have a department, nested under the Mayor’s office, that does not follow reporting rules, has highly-politicized decision making, and, with an apparent balance of nearly a half billion dollars, can’t even tell us how much money is committed and how much isn’t,” said Supervisor Dean Preston, Chair of the Government Audit and Oversight Committee, who called for the audit. “We knew it was bad, we had no idea it was this bad.”
The Board of Supervisors unanimously approved Supervisor Preston’s request to audit MOHCD in July 2021, and over the past 20 months, the City’s Budget and Legislative Analyst conducted interviews with MOHCD staff and leadership and reviewed the department’s policies and procedures. The performance audit focused on three separate policy areas:
Reporting on Affordable Housing Projects
MOHCD is required to produce quarterly milestone reports on affordable projects in its pipeline. The department does “not fully comply with the reporting requirements” under city law, and because there are no established goals or performance metrics, “the Board of Supervisors and the public are not able to assess whether MOHCD is meeting its affordable housing goals and improving on these metrics related to cost-effective and timely delivery of affordable housing,” according to the audit.
Funding Decision Criteria and Transparency
MOHCD does not have “formalized processes, workflows, or recordkeeping practices” that provide clarity on how decisions are made, the BLA found. Because of these systemic deficiencies, “overall transparency of MOHCD’s funding decisions and processes is impaired.”
Affordable Housing Fund Balances
Over the past five years, MOHCD has had an average ending balance of $482 million, the audit found. MOHCD asserted that some of the fund balances are committed but not yet spent, but was unable to provide additional information on how much of this amount is committed under fully executed loans, and how much is only anticipated for not yet executed loans because “of the amount of time that would be required for the analysis.”
“This audit confirms what many have suspected: the Mayor’s office itself is a major barrier to our city reaching our affordable housing goals,” Preston said. “It is alarming that the crucial task of affordable housing production is entrusted to a department that has no oversight, no transparency, no policies guiding key funding decisions, and cannot even account for a half billion dollar balance.”
San Francisco has produced less than half (48%) of its targeted goals for affordable housing, while the city has produced 151% of its market rate housing goals, according to the 2015-2022 Regional Housing Needs Assessment (RHNA) data. Starting this year, the city’s affordable targets increase dramatically, as do the corresponding funding gaps, which grow to $1.3 billion annually for 2023, ending at $2.4 billion by 2029.
“Not only has this Administration categorically failed to meet our housing targets, but their systems and structure seem to guarantee that we will fail again,” Preston said. “We need serious, structural changes before this Mayor blows more affordable housing opportunities.”
The full audit can be found here: https://url.avanan.click/v2/___https://tinyurl.com/MOHCD-audit___.YXAzOnNmZHQyOmE6bzpjODIzYWQwNWQxYjYxNzE3OGQzNjdhNzZlMzg1ZmE4MTo2OmExODk6YWI4ZmUxYTQ5MjZjMTc4ZDE2YzIxMDU2YWY2NjViMzE5NTY0MzU1Njc4NzUwOWE0OWI3M2I3N2JjMzk0NmY5MDp0OlQ
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