Supervisors hold hours-long hearing on limited-equity co-ops; officials propose study and capacity investments

The San Francisco Board of Supervisors’ Land Use and Transportation Committee held an extended hearing on November 1 to examine the city’s limited-equity housing cooperatives (LEHCs) and what the city can do to preserve and build co-op homeownership.

Chair Supervisor Mirna Melgar said the hearing aimed to set a baseline for existing co-ops, address structural barriers (including historical disinvestment), and identify refinancing and financing paths to preserve affordability. The panel of witnesses included Lydia Ealy of the Mayor’s Office of Housing and Community Development (MOHCD); Saki Bailey of the San Francisco Community Land Trust (SFCLT); Caroline Fang of Mission Economic Development Agency (META); Andrew Ryker of New York's Urban Homesteading Assistance Board (UHAB); Fernando Marti of the Council of Community Housing Organizations; and residents and co-op leaders including Norma Brown and Reverend Arnold Townsend.

MOHCD overview. Deputy Lydia Ealy said the office currently provides mostly on-demand technical assistance for co-ops and lacks an in-house, proactive program. She described recent MOHCD-sponsored technical assistance (Enterprise Northern California) and recommended pursuing a large-scale study to inventory co-ops, assess demographics and finances, and identify capacity needs and governance gaps. "We do not currently have a kind of proactive program where we are going out and talking with co-ops and getting kind of ahead of what their needs are," she said.

Community-land-trust and LEHC model. Saki Bailey described SFCLT's work creating limited-equity housing cooperatives paired with community land trusts to produce inheritable, permanently affordable ownership. She cited Columbus United Cooperative (converted to a 21-unit LEHC in Chinatown) as an example: residents raised $200,000 in combined resident equity and set individual share values at $10,000 to create lasting affordability. Bailey said successful LEHCs budget a resident education coordinator into the project and recommended a centralized resident-education capacity (an estimated 1–1.5 FTE across projects) so new co-ops do not flounder after initial conversion.

Developers and small-sites experience. Caroline Fang described META's small-sites preservation work: the nonprofit acquired 33 buildings pre-pandemic and scaled internal capacity from one to 18 staff members to support acquisition and stewardship. Fang said many small buildings (4–8 units) are promising co-op candidates but that the current small-sites underwriting and the DALIA/Dahlia vacancy-filling process can leave units vacant for months and undermine co-op financial stability.

Technical assistance and scale. Andrew Ryker of UHAB reviewed New York’s long-running tenant-purchase programs and emphasized the importance of sustained training and stewardship. He noted HUD financing programs historically used to support co-ops (referred to during the hearing as the HUD ‘‘213’’ and ‘‘223(f)’’ programs) and said expiring tax-credit projects may present additional conversion opportunities.

Barriers and funding. Presenters and supervisors identified common barriers: (1) lack of embedded city capacity and stable program dollars for governance and stewardship; (2) financing complexity in San Francisco’s high-cost market; (3) administrative friction in vacancy-filling (DALIA/Dahlia) and small-sites underwriting; and (4) limited clarity in local regulations and loan clauses that would guarantee conversion options to LEHCs. Several speakers urged that city loan agreements include explicit conversion clauses and that funding should be available for resident education coordinators and monitoring/stewardship fees.

Public comment and local voices. Residents with long experience in co-ops — including representatives of St. Francis Square, Lauren Miller Homes and Freedom West — told the committee the co-op model can preserve multigenerational ownership, provide community stability and blunt displacement. "If we had co-ops, we would have been able to maintain and San Francisco would look like the diverse and eclectic place that I came to 54 years ago," Reverend Arnold Townsend said. Supporters urged the city to adapt small-sites and funding rules to make conversions feasible and culturally competent.

Next steps. The committee unanimously voted to continue the matter to the call of the chair to allow follow-up work with MOHCD, the SF Community Land Trust, community partners and to pursue the suggested inventory/study and funding conversations.

The hearing highlighted widely shared interest in using LEHCs paired with community land trusts as a vehicle to preserve affordable, inheritable housing for BIPOC and low-income residents — while also documenting the practical need for funding to staff stewardship, resident education and more flexible underwriting.

Action recorded: committee continued the item to the call of the chair for additional work and follow-up.