ATTACHMENT 2
Existing Housing Policies and Programs
Inclusionary Housing Ordinance
For years, the City had an inclusionary housing ordinance requiring developers of market rate, forsale housing to include a set-aside of below market rate units. In 2018, following State legislation allowing it, the City Council voted to expand the inclusionary housing ordinance to market rate, rental housing developments. These inclusionary housing policies ensure that 15% of all new rental and for-sale housing units constructed in South San Francisco are set aside for households earning under 120% of the area median income.
Commercial Linkage Fee
Prior to 2012, the City, through the South San Francisco Redevelopment Agency (RDA), had a direct and steady source for funding for affordable housing. After the State dissolved redevelopment agencies in 2012, the City was left without this important source of funding to support housing organizations and fund new affordable housing development. To help begin to make up this shortfall, in 2018, the City Council adopted a commercial linkage fee. This fee is charged on net, new commercial development to help offset the impact it has on the need for affordable housing.
Gap Financing for Affordable Housing Production
South San Francisco has traditionally provided "gap financing" to multi-family affordable housing developers in the form of long-term low-interest loans. Cities typically need to provide affordable housing developers with funds in order for them to leverage other financing sources. A City’s willingness to provide funds demonstrates a local commitment to the project which is favorable to other funders. Land donations or long-term ground leases with no payments qualify as a financial commitment.
Staff review developer requests and negotiate the terms of the loans which are determined on a case-by-case basis. Typically, the loan amounts provided have been in the region of roughly $55,000, or less, per door. For all loans provided, the financing is secured by affordability covenants (i.e., deed restriction) that ensures the property remains affordable to lower-income tenants for a minimum of 55 years. In the case of predevelopment loans, the City will hold any permits and entitlements as collateral, this provides the City some leverage in determining the future of the property should the project, as contemplated at the time the loan was conveyed, not be constructed. Once terms have been negotiated staff present a loan agreement to Council for consideration and approval. Presently, City efforts to assist developers from securing financing quicker include consideration and approval of the loans on a timeline determined by the developer.
City and Successor Agency Property Disposition
Until recently, a majority of the sites that the City sold were former RDA properties. Pursuant to redevelopment law, the City has been instructed to sell these parcels in order to distribute the proceeds to the taxing entities. To this end, the City has sold the following parcels: Cadence Phase
I and II, Grand and Linden, 432 Baden, 200 Linden, the PUC Site, and the Rotary Terrace site.
Developers were solicited using a Request for Proposals process (RFP) which allowed the City greater control in determining the development, price, and terms.
There is a greater opportunity to pivot to long term ground leases on sites that are solely owned by the City. Acquiring land for the development of affordable housing presents the opportunity to retain site control under the terms of a long-term ground lease and, also, through an RFP process, have greater control over the development.
Attachment 3 outlines the former RDA and City-owned properties that are currently held or have been sold in the last five or six years, with housing development potential.
Supporting Housing Nonprofits
Through its Community Development Block Grant (CDBG) program and housing funds, the City supports a number of nonprofit community organizations that provide critical housing resources, including shelters, home repairs, legal assistance, and referral services. These nonprofits include:
HIP Housing, Legal Aid Society, Project Sentinel, ReBuilding Together, and others whose missions align with the program goals to assist extremely low, very-low, and low income persons by providing decent and affordable housing; providing a suitable living environment; and expanding economic opportunities.
Rental Assistance Program
One of the most effective tools the City has in preventing homelessness and displacement is its rental assistance program. The YMCA Community Resource Center located on Huntington Avenue in South San Francisco administers the program, which provides rental assistance to lowincome South San Francisco residents experiencing an immediate financial hardship. More recently, the program has been augmented significantly to provide assistance to residents impacted by COVID-19. In Fiscal Years 2019-2021, the City Council appropriated $500,000 ($250,000 in each fiscal year) from the City’s Low- and Moderate-Income Housing Asset Fund and approximately $556,789 of the City’s Permanent Local Housing Allocation (PLHA) toward the program.
Accessory Dwelling Units
Accessory Dwelling Units (ADU) are another housing type that has contributed to housing affordability citywide. South San Francisco plays an important role in supporting property owners by establishing the Bright in Your Own Backyard program, administered by Hello Housing, which offers up to 100 hours of free feasibility and project management support to eligible homeowners and small landlords who want to add an Accessory Dwelling Unit (ADU) or a Junior Accessory Dwelling Unit (JADU) to their property.
Although ADUs are not deed-restricted or subsidized, they may be affordable to moderate income households. Nearly 65 ADUs were produced or legalized citywide, equivalent to about 65 ADUs produced or legalized annually. The last few years have seen an upward trend in ADU production due to recent efforts at the state and local level to facilitate ADU production and legalization from a regulatory and financial perspective.
Preservation/Protection of Affordable Units
Preservation is a key tool in ensuring more equitable communities. In South San Francisco, it is accomplished through collaboration with developers and property owners, sound policy, and a range of financing tools. To support healthy and equitable communities, our preservation methods are intended to keep rents low and keep existing housing stock well maintained. The City has offered solutions to non-profit developers seeking to renovate existing affordable housing through resyndication, where the developers seek a new allocation of tax credits to ensure preservation of existing low-income housing properties. A new allocation of credits can help to finance the refurbishment of properties, making them more sustainable while extending their affordability covenants.
Program Administration
Critical to the success of the City’s housing program is its administration. City staff monitor existing affordable housing units – reviewing annual rent increases for rental units and ensuring for-sale units are occupied according to their deed restrictions – and negotiate affordable housing agreements for new developments. Central to the administration of the housing program is having transparent guidelines, which are available on the City’s website at www.ssf.net/bmr under Procedures and Guidelines for Inclusionary Units. In addition to managing the inclusionary and affordable units, staff manage all housing grants and programs related to emergency housing assistance including the City’s rental assistance program which has assisted approximately 210 household's since it was established.