$64 million allocated for anti-eviction program
The Board of Supervisors approved spending $64 million to fund an existing program that buys small apartment buildings where residents are at risk of displacement.
But Mayor London Breed opposed the plan and announced ahead of the vote Tuesday that the city would work on reforming the program. The city budgeted $77 million for the program this fiscal year. Supervisors had already set aside another $10 million to the program, and Breed pledged Tuesday to allocate up to $10 million more.
Supervisor Dean Preston, backed by seven colleagues on the board, voted to spend another $64 million from the city’s COVID-19 reserve fund. Supervisors Ahsha Safaí, Catherine Stefani and Myrna Melgar dissented.
The eight yes votes are enough to veto-proof the measure, but Breed doesn’t intend to spend all the money for the program this fiscal year, according to Safaí, who is partnering with her on the proposal to spend a smaller amount. Breed previously said she opposes “raiding” reserves, the program doesn’t have the capacity to spend funding before the end of the fiscal year and she wants to fix issues with the existing program before allocating more funding.
Tuesday’s vote is part of larger political debates over the best way to tackle the city’s housing affordability crisis, how to spend limited resources and whether campaign promises about how to spend specific tax money are being kept — in this case Proposition I, which voters passed last year.
Under the Small Sites Program, the city subsidizes about half the cost for a nonprofit to purchase a small apartment building where residents face displacement, such as an owner moving in or invoking the Ellis Act to take the building off the rental market. A majority of supervisors want to use the money to purchase at least 200 units.
Supporters and opponents of Tuesday’s vote agree that the program is valuable and needs reform — but disagree on whether it should be funded with $64 million now.
Advocates, including a host of housing organizations, argue the support is needed to grow an underfunded program critical to keeping people in their homes. Preston said the program is “viewed as one of the key tools to preventing displacement.” Supervisor Hillary Ronen gave an emotional speech during Tuesday’s meeting following the death of her father Monday, who she said lived in a rent-controlled apartment in Los Angeles for 46 years. Without it, her parents would have been homeless, she said.
“We need to fix the program as we save families who are being pushed out of their homes,” Ronen said.
Critics cited issues with the existing program and urged more caution before setting aside an unusually large budget supplement midway through the city’s fiscal year. Safaí said he is a “strong supporter” of the program, but it’s in “dramatic need of reform” while the city is “in a period of real financial uncertainty.”
Melgar voted no, given her concerns about the program’s restrictions on how much the city spends per unit, what kinds of buildings can be bought and the income range of tenants.
“Promising folks that we’re going to save them from eviction by putting money in a program that is not currently viable to me is an empty promise,” she said. “It’s like putting a tank full of gas into your car that has two flat tires and then offering everyone a ride.”
Melgar also said she would rather work on reform than get into a “war” with the mayor. Stefani said she wasn’t comfortable voting for an appropriation that she wasn’t confident would be spent.
Supervisor Rafael Mandelman, who was a last-minute yes vote Tuesday morning, said he continued to have concerns about the Small Sites Program. He wasn’t confident that all, or any, of the money would get spent for that purpose this year but hoped that it would be in the future. Ultimately, he said, he believed that new revenue expected from real estate tax Prop. I should be set aside for affordable housing.
Breed said Tuesday the city will study how to make the program more effective, with results due in January, and adopt reforms by the end of March.
Changes include ensuring nonprofits can buy buildings in more expensive neighborhoods and filling vacant units immediately, which organizations told The Chronicle were longstanding issues.
Preston said the “relatively minor program tweaks proposed by advocates” can easily and quickly be accomplished, but also stressed more money is needed. He said the city “absolutely can” spend $64 million this fiscal year, which could also be used to hire staff to beef up capacity.
The board wants to take that amount out of a nearly $294 million COVID-19 reserve — stocked with funds to fill any future pandemic-caused budget shortfalls — which is part of the city’s total $1 billion in reserves.
Preston is justifying the spending because of Prop. I, which has already brought in $145 million and could generate $210 million to spend over the next two years. He and other supervisors campaigned to use Prop. I for affordable housing and rent relief, but Breed didn’t agree since it technically was a general tax that could be used for anything.
Wrestling between the board and mayor over this year’s budget led to $32 million, derived from the revenue expected from Prop. I, set aside in rent relief and $10 million for affordable housing, which will be spent on Small Sites. Neither pot of money has been spent yet.
The program, which has helped purchase 47 buildings with more than 368 residential units since 2014, has assisted with only one building acquisition so far in 2021.
Peter Cohen, co-director of the Council of Community Housing Organizations, celebrated Tuesday’s vote and said more investment will grow the capacity of smaller organizations willing to participate in the program.
“Without the money, even reforming the program isn’t going to make a difference,” said Karoleen Feng, director of community real estate at Mission Economic Development Agency, a nonprofit that has used the program.