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  • SF Examiner - By Joshua Sabatini

Small Sites program a major asset to SF housing

In early 2016, Ani Rivera’s landlord offered her a $5,000 buyout to leave the place she called home in the Mission and Bernal Heights area. Then, the landlord began showing the property to prospective buyers.

Anxiety and vulnerability set in. Rivera was uncertain how to proceed.

Her post as executive director of the Mission nonprofit Galeria de la Raza was called into question, as Rivera believed she needed to live in the community to properly serve it.

But when she shared her bad news at a community meeting, someone from the nonprofit Mission Economic Development Agency asked if she had ever heard of a city program that provides nonprofits with funding to buy small rental properties with fewer than 25 units.

She had not. She learned about it. She organized her neighbors. They banded together. When the four-unit “shoebox” building was shown to prospective buyers, they rallied to show they would not leave without a fight, displaying posters that read: “This building is not for sale. Eviction equals death.”

It worked.

The four-unit building last year became one of the properties purchased through the Mayor’s Office of Housing Small Sites program by a nonprofit — in this case, MEDA.

Launched in 2014, the program has ensured those living in 160 rental housing units across 25 buildings won’t lose their homes through evictions under the Ellis Act or through owner-move ins. Last year, there were 1,657 evictions filed with the Rent Board, of which 201 were Ellis Act evictions. There were also 335 buyout agreements reported.

Since the program began, The City has provided nearly $50 million in loans to help nonprofits purchase the properties. They, in turn, took out mortgages totaling $24.9 million, bringing the total purchase cost to $73.9 million, according to data provided by the Mayor’s Office of Housing.

The initiative has been promoted by two June mayoral candidates — former state Sen. Mark Leno and Board of Supervisors President London Breed — in each of their recently released homeless plans.

The program is about to close on its latest acquisition, the Gran Oriente Filipino Hotel, a 24-unit single-room-occupancy building at 106 South Park St. in the South of Market, which mayoral candidate Supervisor Jane Kim helped accomplish as a representative of that neighborhood.

The deal nearly fell through six months ago but is now expected to close next month with Mission Housing Development Corporation. About six households currently live in the building, and the nonprofit plans to rehab and fill up the remainder of the units.

The $5 million in city funding for the purchase isn’t coming from the usual Small Sites budget, but from the SoMa Stabilization Fund, which has collected revenues from an impact fee charged to area developments like the Rincon Hill towers.

Gran Oriente Filipino Hotel, which was built in 1907, is an important asset for the Filipino Cultural Heritage District. Filipino seamen of the Gran Oriente Filipino Masonic fraternity purchased the site in the 1920s.

Sam Moss, executive director of Mission Housing, praised the deal.

“The history of the Gran Oriente runs just so deep through the Filipino culture and history,” Moss said. “It helped the Filipino community establish itself in San Francisco.”

Moss said there was a real risk the building would have sold on the private market, and the units rehabbed and then rented out at high rents.

“We’ve been hemorrhaging units like that,” Moss said.

It’s unclear how long it will take to rehab the units before people move in.

Leno said during an editorial board meeting with the San Francisco Examiner that the program isn’t has effective as it could be due to a lack of funding. “The problem is it’s not funded. We haven’t put the money into it,” Leno said.

The City has budgeted $17 million for the Small Sites program next fiscal year. Since the program began, The City’s share of the cost of each Small Site purchase has ranged from a low of $1.2 million to a high of $4 million.

Leno suggested The City should move ahead with a vacancy tax and have revenue from that tax “go toward the small sites fund so that we could purchase more units so that we don’t lose more rent controlled units to speculation.”

Kim said preservation of affordable units through the Small Sites program, which she noted had its first acquisitions in the neighborhoods she represents, is vital.

“Construction and preservation are twins. You can’t do one without the other. For every two new affordable housing units we build, we lose one rent-controlled unit through demolition, no fault eviction, et cetera,” Kim said during an editorial meeting with the Examiner. “All that construction isn’t going to be helping us if we are not preserving as well.”

She added the next mayor would likely serve during a recession and that “we should be saving money now to go out and purchase in the down cycle.”

Asked if the Small Sites program was adequately funded, Kate Hartley, director of the Mayor’s Office of Housing, said it “depends on how you define ‘adequately.’”

“Affordable housing is in great need, and the more revenue we can secure and the more permanently affordable housing we can create, the better,” Hartley said. “We are meeting the demand as we can.”

Funding isn’t the only limitation. Some building owners may simply be asking too much, some properties may need too much repair work and 75 percent of the tenants need to agree to go through with the program.

The nonprofits own the buildings. When units become vacant, they are filled through the lottery system for all below-market-rate units built in The City, which is administered by the Mayor’s Office of Housing and the online website called DHALIA.

MEDA spokesperson Christopher Gil said the funding gives them a chance to make a competitive offer. He noted that not every “tenant-landlord relation is adversarial” and some property owners like to know their tenants will be taken care of after selling.

“We would like to buy one building a month,” Gil said. “We’d like to be able to sustain that.”

Rivera said the whole process took a lot of hard work. Tenants had to learn their rights quickly to make decisions, consult with the Rent Board, and open their financials up to be considered for the program — all while feeling the stress of housing insecurity.

She suggested The City should fund case managers to closely work with tenants during the site acquisition process.

“This is an arm that needs to be really developed,” Rivera said during a recent interview. “People have this idea that affordable housing is something that’s just given to you. No, it’s not. We have to work really hard for it.

“A lot of that is put on the tenant.”

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