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S.F. committee backs ordinance to keep "cash-out" proceeds in affordable housing
Summary
The Land Use and Transportation Committee voted to adopt amendments and send to the full Board an ordinance requiring that cash-out proceeds from publicly supported affordable housing projects be used solely for affordable housing purposes; MOHCD staff said the change codifies existing practice.
The San Francisco Board of Supervisors Land Use and Transportation Committee on Monday voted to adopt amendments and forward to the full Board an ordinance that would require owners of affordable housing projects receiving public funds to use any "cash-out" proceeds only for the creation, development or preservation of affordable housing.
Supervisor Mark Farrell, who introduced the measure, said the ordinance responds to recent refinancing transactions in which an affordable housing developer "made millions off the transaction, and then spent it on dark money political campaigns here in our town." Farrell said the legislation is intended to ensure that "any financial gains made from public investment in affordable housing goes back to affordable housing."
Amy Chan of the Mayor's Office of Housing and Community Development told the committee the office supports restricting cash-out proceeds to affordable-housing purposes, saying the office already includes such restrictive language in loan agreements and ground leases and would use the ordinance to codify that practice.
The ordinance, as described by the committee, would require the mayor's office of housing and community development (MOHCD) to ensure loan agreements and ground leases contain restrictions on the use of cash-out proceeds and would limit those proceeds to capital and tenant improvements, acquisition of property for affordable housing, building new affordable units or payment of operating and staff costs necessary for affordable housing creation, development, construction or preservation. Supervisor Farrell said he would introduce amendments after public comment to clarify the definition of "affordable housing," expand permitted uses to include resident or tenant services, clarify restrictions on developer fees and require annual reporting on expenditures of cash-out proceeds.
A public commenter identifying herself as Sonia, speaking for the YIMBY Party, said she "strongly" supported the ordinance and noted developers could still raise private funds for political activity.
Supervisor Katie Tang moved to adopt the amendments and send the ordinance to the full Board with a positive recommendation; the motion was taken without objection.
The committee advanced the ordinance as amended to the Board of Supervisors; the Board will consider it on a future agenda.
