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Committee forwards big housing and homelessness package: Compass amendments, Transbay financing and Mercy Housing project
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Summary
The Budget & Finance Committee advanced several major housing and homelessness actions to the full Board, including Compass Family Services grant amendments (Family Housing Ladder and Flexible Subsidy Pool), a $41M AUSIC award for Transbay Block 2 East, and approval to finance a 145-unit permanent supportive housing project at 1633 Valencia (Mercy Housing). Committee discussion focused on performance monitoring, program design, and funding sources.
The Budget & Finance Committee on May 1 forwarded a cluster of major housing and homelessness items to the full Board, including grant amendments for Compass Family Services, an AUSIC award for Transbay Block 2 East, and financing and local operating subsidy support for a Mercy Housing senior permanent supportive housing project at 1633 Valencia.
Compass Family Services: The Committee advanced two related HSH amendments for Compass. Item 5 extends and increases the Family Housing Ladder agreement by about $7 million to a not-to-exceed $13.1 million total (Prop C funds) to operate a scattered-site program serving up to 70 families annually. Item 6 increases the Flexible Housing Subsidy Pool agreement by about $20.18 million to a not-to-exceed ~$29 million total to support scattered-site permanent supportive housing subsidies; HSH noted these amendments are 100% locally funded through Our City Our Home (Prop C).
HSH staff acknowledged early contract performance shortfalls reported in FY22–23 but said more recent data show better performance. Supervisors asked about coordination with other city departments to meet newcomer families— broader needs (workforce, schools, immigration services); HSH said the Office of Civic Engagement and Immigrant Affairs and cross-agency coordination are part of the approach.
Transbay Block 2 East: OCII requested authority to accept approximately $41 million from the California Department of Housing and Community Development—s Affordable Housing and Sustainable Communities program, including a $28 million loan to the Transbay 2 Family Limited Partnership and $7.7 million in grants for transit and streetscape improvements; $5.3 million of the grant will be administered by the city for streetscape and transit priority measures. The project will provide 184 affordable family rental units with 40 units reserved for families experiencing homelessness; financing is committed and the project was described as ready to close and start construction.
1633 Valencia (Mercy Housing): MOHCD and HSH presented a financing package (Item 8) to support a 145-studio permanent supportive housing project for seniors with up to $41M in city loan funding and a local operating subsidy contract of up to $80.7M over 19 years to cover operating gaps. Staff acknowledged the structure deviates from typical city land-ownership practice — the nonprofit will acquire the parcel and the city will rely on a first-refusal option and declarations of restrictions to hold affordability obligations — and said the deal is modeled on lessons learned from earlier projects. BLA noted the city subsidy per unit and policy trade-offs and recommended committee consideration as a policy matter.
The committee voted to forward the housing items to the full Board with positive recommendations. Staff and supervisors emphasized continued oversight and outreach to landlords and property owners to expand landlord participation in scattered-site subsidy programs.
