Bond oversight committee gets updates on 2015, 2016 and 2019 affordable housing bonds; public presses for 2019 project list

Raleigh Katapan, finance manager at the Mayor’s Office of Housing and Community Development (MOHCD), told the Citizens General Obligation Bond Oversight Committee on March 29 that spending from the 2015 Proposition A housing bond is substantially complete and that the city is preparing to put the first issuance of the 2019 housing bond into the market.

Why it matters: The committee provides independent oversight of whether bond funds are spent in line with ballot measures. Members and callers repeatedly sought a publicly available list of the projects the 2019 bond will fund, and pressed MOHCD for more transparency on where senior-housing set-asides will be located.

MOHCD’s update and spending status MOHCD said the 2015 bond (Proposition A, $310,000,000) had three issuances and, as of December 2020, staff reported 98% of the first issuance and 93% of the second had been spent; 12% of the third issuance had been expended, with spending expected to accelerate in 2023. Katapan cited developments including 990 Folsom, 88 Broadway and 735 Davis as examples of projects funded by the 2015 bond and said the bond has produced more than 400 units to date with additional units in construction and predevelopment.

Public-housing conversion and COVID impacts Deputy for housing Lydia Ealy explained that the term “accelerated conversion” used in MOHCD materials refers to converting units at large public-housing sites from the federal public-housing program (Section 9) into the Section 8 platform after rehabilitation, under an agreement with HUD. She said $5,000,000 is allocated to support renovation so those units meet Section 8 requirements and that work had been delayed by COVID but staff hoped to begin later in the summer. Ealy also cautioned that lease-up and marketing have been affected by the pandemic, which can affect project cash flows.

Forbearance, preservation loans and program performance Jonah Lee, director of portfolio management and preservation at MOHCD, reviewed the re-purposed 2016 preservation/seismic safety (PASS) program and described how the program provides long-term senior debt or direct financing to preserve at-risk affordable housing. He said MOHCD closed 16 financings totaling roughly $45,000,000 to preserve about 284 units and that the city is monitoring performance after offering targeted forbearance agreements to some sponsors during the pandemic. Lee said outstanding forbearance debt service was about $151,000 as of December 2020 and that MOHCD’s analysis shows that even a worst‑case 12‑month suspension of debt service would not materially affect the city’s general obligation bond levy.

2019 bond issuance and committee request for project list Riley Cadapine presented the 2019 affordable housing bond breakdown, including allocations of $150 million for public housing, $220 million for low-income housing, $150 million for senior housing, $80 million for preservation and middle-income housing, and $20 million for educator housing. Cadapine said the first issuance (about $250 million) was expected to close at month’s end and that much of the spending would occur in 2021–2022. Members noted that a projects list had been approved by the Capital Planning Committee and the Board of Supervisors; liaison Jane Natoli asked MOHCD to provide that list to GOBOC members.

Public callers pressed for transparency Patrick Monette Shaw, a public caller, criticized the pace of public reporting for the 2019 bond and asked why MOHCD had not publicly released a project list a year and a half after voters approved the measure. He also asked where the senior-housing set-aside would be located and whether projects would be spread across the city. Shaw said he would submit written testimony for the record.

What’s next The committee asked MOHCD to share the 2019 project list with members; no formal committee action was taken on bond funding during the meeting. MOHCD continues semi-annual reporting to the committee and the controller’s office on loan performance and forbearance activity.