Lottery for senior housing spots delayed to await federal ruling

The Mayor’s Office of Housing has said it would delay the lottery for an affordable senior apartment complex in the Western Addition because it is hopeful that a federal ruling will give the city more flexibility in setting aside units for current neighborhood residents.

The move means that 6,000 applicants for the Willie B. Kennedy senior housing complex on Turk Street will likely have to wait a week or 10 days to find out if they were lucky enough to land one of the 98 units in the building. The lottery was scheduled to happen on Wednesday. Applicants were notified of the delay at 5 p.m. Monday.

“We have all indications that HUD will approve an antidisplacement plan that will provide the level of commitment to affordable housing that keeps people and families in neighborhoods where they have built lives and set roots,” Deirdre Hussey, director of communications for Mayor Ed Lee, said Monday.

A dispute with HUD flared up in early August when the agency rejected the city’s plan to give preference to people living near the new development, which was built in part with federal money and will offer federal subsidies to some tenants. In rejecting the plan, HUD said offering a neighborhood preference violates the 1968 Fair Housing Act and could “perpetuate segregation.”

The HUD decision was met with disappointment by city officials as well as U.S. Rep. Nancy Pelosi, D-San Francisco, and Sen. Dianne Feinstein, D-Calif., who said Willie B. Kennedy and other 100 percent affordable projects represent a rare chance for local residents to get a foothold in a soaring real estate market. City officials, including Supervisor London Breed and Lee’s top housing advisers, went to Washington, D.C., to plead their case.

After that meeting, HUD agreed to reconsider.

“We are hopeful this is a positive sign,” said Don Falk, executive director of the Tenderloin Neighborhood Development Corp., which built the housing complex. “HUD is clearly grappling with finding a way to address our concerns around antidisplacement within the confines of fair-housing law.”

The city neighborhood preference law, which the Board of Supervisors passed in November, set aside 40 percent of subsidized housing units for residents living in the same supervisorial district as the development or within a half mile of it. Proponents contend that will help preserve San Francisco’s African American population, which has fallen from 13.3 percent of the city’s total in 1970 to just under 6 percent now. J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen