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Committee Debates $35M Seismic Safety Loan Authority; Budget Analyst Recommends Narrower Authorization
Summary
Committee heard staff and budget analyst testimony on a proposed not-to-exceed $35 million authorization for the city's seismic safety loan program; budget analysts recommended restricting initial authorization to about $13 million based on identified and probable applications, and the item was continued for further review and stakeholder meetings.
The Budget and Finance Committee examined a proposal to authorize up to $35 million in taxable general-obligation bonds to support the Seismic Safety Loan Program. Nadia Sasse of the Office of Public Finance outlined a proposed structure that would allow the city to use a private-placement ‘draw-down’ mechanism so funds could be drawn as loans are approved rather than issuing the full amount at once (Nadia Sissay). Sasse said the approach would let the city pay a one-time issuance cost and draw only as needed; the Office of Public Finance identified roughly $12 million in committed or probable loans at the time of the hearing.
Budget Analyst Deborah Newman recommended reducing the initial authorization to $13 million to match the currently identified ($5M) and probable ($7.5M) applications plus issuance costs and flagged that the program has effectively shifted toward low-interest loans for affordable housing compared with the original 1992 Proposition A voter intent (Deborah Newman). Committee members questioned whether expanding the program to favor affordable housing alters the original intent of the bond authorization; the deputy city attorney and program staff said the structure is legally permissible and that economic conditions have made affordable housing loans more likely to use the program (Deputy City Attorney Mike Martin; Joel Lipsky).
Multiple nonprofit housing developers and advocates—including Mercy Housing and the San Francisco Community Land Trust—testified that the funds would be critical to retrofit and preserve at-risk affordable buildings and urged authorization at levels that serve ready projects. The committee agreed to meet with preservation and finance staff during the interim, asked the mayor's office and budget analyst to reconcile identified needs and administrative costs, and continued the item for additional review and input.
