Affordable housing has been a top issue for Bay Area funders for quite some time, now. One study last year found that 90 percent of San Francisco households could not afford a median-priced home in city, and things are also pretty bad elsewhere in the region, such as Silicon Valley.
More efforts have emerged to address this housing crisis, with tech companies, banks and foundations stepping up in some notable ways, such as the recent moves by Facebook and the Chan Zuckerberg Initiative, which we've reported on. But it remains questionable whether these efforts will make any dent in the problem.
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Collaboration remains the name of the game when it comes to fixing the Bay Area’s housing crisis, and new partnership is taking that game to a new level. Mayor Edwin M. Lee, a handful of foundations and corporations, and affordable housing developers recently announced the new San Francisco Housing Accelerator Fund. Unlike other collaborations that have come before, this one brings in an impressive number of diverse partners with a single goal—to “accelerate production and preservation of over 1,500 units in the fund’s first five years, and to grow and create more housing opportunities into San Francisco’s future.”
The San Francisco Housing Accelerator Fund is the latest public-private partnership that involves the city of San Francisco, local grantmaking foundations, private lending institutions and corporations. It’s designed to be a “one stop shop” for housing investments in the city to benefit working families here.
We've seen similar efforts emerge in other cities. While affordable housing is way too challenging for foundations to tackle on their own, savvy funders that forge alliances can shake loose bigger amounts of money from government, corporations, and private investors. In some ways, housing is one of the more exciting arenas of philanthropy right now, as new collaborations emerge that showcase clever ways to leverage philanthropic wealth.
The lead investors who have kicked off this San Francisco affordable housing collaboration are: Citi Community Development; Dignity Health; the San Francisco Foundation; and the Hewlett Foundation. Additional support comes from Bank of America, the Silicon Valley Community Foundation, and Enterprise Community Partners. Development of this fund began in 2015, when Mayor Lee made a call to action for more investors to get involved. Affordable housing is the backbone of San Francisco’s communities, and this is something that all the early capital providers can agree upon.
So how much money’s in play here? Well, the city has put in around $10 million, philanthropic foundations have contributed $7 million, and private institutions topped the pool with $30 million. The goal is to build this fund to over $100 million without the need for any additional public funding.
"We need to provide our affordable housing partners with the necessary resources and support to compete with market-rate development corporations," Mayor Lee said in a press release. "If we want to preserve San Francisco neighborhoods and ensure that working-class residents stay in this city, we have to create affordable housing options. The Housing Accelerator fund allows us to work with our private partners on innovative ways to help us build those homes."
One lead investor, Citi Community Development, contributed to this new fund because it “provides an innovative and flexible resource to finance and significantly expand access to affordable housing.” Will this strategy gain steam and attract more funders and make a real difference, or will it be another valiant attempt that barely makes a dent?
With the support of philanthropic powerhouses, this effort shows more promise than its predecessors. For example, the Small Sites Program has been successful so far in stabilizing buildings through acquisition and rehabilitation of occupied buildings that face eviction and displacement. One of the first uses of this new Housing Accelerator Fund money is to expand that program. If affordable housing developers can be more competitive, they can save more buildings at a faster pace. The Small Sites Program has stabilized at least 154 people in 13 buildings with 78 units closed so far. An additional 12 buildings are pending.
Meanwhile, though, the loss of affordable housing units in San Francisco continues at a steady pace, with evictions under the Ellis Act up sharply in recent years. Whether this fund and other efforts can offset that trend remains to be seen.