Supervisors approve $4.5 million supplement to help nonprofits facing rising commercial rents

The San Francisco Board of Supervisors voted unanimously March 18 to appropriate roughly $4.5 million from the city's general fund reserve to support nonprofit organizations affected by rising commercial rents, placing the funds on the Board of Supervisors reserve pending recommendations from a nonprofit displacement working group.

President David Chu and Supervisor Jane Kim, sponsors of the measure, said the money will be directed to the Mayor's Office of Housing and Community Development (MOHCD) and the San Francisco Arts Commission to implement programmatic recommendations from a working group convened to study nonprofit displacement. "This supplemental is one piece of a larger collaborative effort to address the needs to protect non profit organizations that provide vital services to our residents," President Chu said.

Why it matters: Supervisors said immediate funding is needed to provide bridge grants, technical assistance and other short-term relief while the working group completes a final report in April. The board amended the ordinance to place the funds on the full board reserve (rather than the budget committee reserve), meaning the full board will consider releasing the money after the working group issues recommendations and the administering departments present implementation criteria.

The appropriation consists of two parts discussed in the meeting: $2,515,000 identified by staff as the estimated general-fund property-tax increment from the Mid-Market area, and a $2,000,000 addition specifically allocated for arts-related organizations. Supervisor John Avalos said he proposed the arts allocation because arts groups often receive less budget attention and provide substantial economic and cultural benefits.

Administration and process: Director Brian Chu of MOHCD told the board the working group surveyed nonprofits and sent a questionnaire to city-funded nonprofits receiving $25,000 or more to assess urgency and lease expirations. He said the report will include short-, medium- and long-term strategies such as technical assistance, bridge grants, space-sharing models and options to identify or acquire permanent space. Awards would be subject to a competitive RFP process administered by MOHCD; the board voted that the full board must approve release from reserve after public comment.

Concerns and conditions: Several supervisors (notably Scott Wiener and Jane Kim) pressed for clearer eligibility criteria, geographic neutrality, and assurances smaller organizations and grassroots arts groups could access funds. Supervisor Wiener asked whether only city-funded contractors would be eligible; Director Brian Chu said prioritization would likely include city-funded contractors because those organizations have established performance records, but the working group's report and the RFP structure will specify criteria. Supervisor Tang and others urged stronger data and program design before final disbursement; supervisors agreed the reserve mechanism and the requirement that the full board vote on release would allow further review.

Vote and next steps: The board approved the ordinance as amended on a roll-call vote (11-0). Supervisors directed MOHCD and the Arts Commission to present the working group report and proposed award criteria to the Board of Supervisors when seeking release from reserve. The working group's final report was expected in April; allocations could begin after the board releases the reserve and departments publish RFP criteria.

Ending: Supervisors who spoke in favor emphasized that the funding is a one-time, bridge resource and that longer-term policy and budget solutions will be needed to stabilize nonprofits and arts organizations in the city.