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Preservation and Seismic Safety (PASS) Program CGOBOC Presentation May 2019

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Mayor’s Office of Housing and Community Development City and County of San Francisco

Background

Mayor’s Office of Housing and Community Development 2

Key Milestones:

• 1992 – Proposition A: $350M SSLP Program Approved
• 2016 – Proposition C: $260.7M PASS Program Approved
• 2019 – First PASS Issuance: $72.4M 2019A

PASS Program: Low-cost, long-term, and nimble debt financing not available on the conventional market Eligible Uses

• Acquisition/rehabilitation, preservation, and seismic retrofits of affordable

housing

• Small Sites (buildings with 5-25 units)
• Larger multifamily and mixed-use residential buildings (25+ units)
• Single-Room Occupancy hotels (SRO)

What’s not eligible

• New construction
• Acquisition without rehabilitation

Widening Affordability Gap

Mayor’s Office of Housing and Community Development 3 $1,556 $2,419 $3,432 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 1BR (2 people) 2BR (3 people) 3BR (4 people)

Market Rate Rent vs Affordable Rent 80% AMI - $75,750 for a family of 2

Affordable Rent Affordability Gap

Displacement

Mayor’s Office of Housing and Community Development 4

270 Turk Street

Sponsor TNDC Neighborhood Tenderloin, District 6 Loan Closing Date Expected in March 2020 Program Type PASS, Big Sites Number of Units 69 studios 17 one bedrooms 86 total units Total Bond Funding $13.1 million Total Development Cost $27.5 million

Mayor’s Office of Housing and Community Development 5

OPERATING BUDGET Affordable Rents 1,431,770 Operating Expenses 771,193 Net Operating Income 660,577 SOURCES & USES Conventional Loan PASS Loan Remarks 5.50% 3.41% Interest Rate 30 40 Term Uses Senior Loan 8,813,000 13,100,000 Gap / (Surplus) 18,687,000 14,400,000 Total Sources 27,500,000 27,500,000 Uses Acquistion 19,500,000 19,500,000 Rehabilitation 3,500,000 3,500,000 Soft Costs 4,500,000 4,500,000 Total Uses 27,500,000 27,500,000 Notes: Figures are for illustrative purposes only

Next Steps & Questions

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• Originations
• Reporting on Metrics of Success
• Future bond issuances
• Second Issuance: Series 2020A
• Third Issuance: Series 2022A
• Fourth Issuance: Series 2024A

Preservation and Seismic Safety (PASS) Program CGOBOC Presentation May 2019

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Mayor’s Office of Housing and Community Development City and County of San Francisco