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MOHCD tells oversight committee GO bonds remain critical as pipeline struggles to secure state allocations
Summary
MOHCD officials briefed GOBOC on 2016, 2019 and 2024 affordable‑housing general obligation bonds, describing how the city uses bond proceeds as low‑cost loans and to leverage tax credits and federal subsidies while noting rising costs and continued reliance on voter‑approved bond authority.
Lydia Ealy, deputy for housing at the Mayor’s Office of Housing and Community Development, told the General Obligation Bond Oversight Committee that the city relies heavily on voter‑approved general obligation (GO) bonds to fund affordable housing projects as other local revenue sources have diminished.
Ealy said the 2019 bond was a “$600,000,000 bond, the biggest bond yet,” issued in multiple tranches to support public housing revitalization, low‑income units, preservation and senior housing. She described the city’s approach as keeping project design flexible at issuance because many projects depend on unpredictable state allocations and tax credit timing.
William Wilcox, MOHCD bond program manager, explained how the 2016 authority was repurposed to provide permanent, below‑market loans for acquisition and rehabilitation and seismic upgrades. “These are permanent loans,” Wilcox said, noting the program’s three tranches (market, below‑market and deferred) and that the loans function like long‑term mortgages with significantly discounted rates to leverage more private debt and reduce subsidy needs.
MOHCD officials described recent projects that used bond proceeds and leveraged tax credits and federal subsidies, including an SRO conversion at 1303 Larkin Street and an acquisition that will convert an existing market building into deed‑restricted affordable housing. Ealy said the city has funded roughly 3,400 units across these bond programs and typically contributes about $178,000 per affordable unit while total construction costs can approach $1,000,000 per unit.
Commissioners questioned oversight and controls for loaned funds. Ealy and Wilcox said MOHCD underwrites projects, subjects them to a peer review and credit committee, sends loans to the citywide affordable housing loan committee, and requires board of supervisors approval for larger or land transactions. Projects also submit annual monitoring reports and are monitored by tax‑credit investors and, where applicable, state agencies.
The presentation addressed tradeoffs in preservation programs where MOHCD sometimes pays a larger share of cost and the limited ability to rely on philanthropic dollars within low‑income housing tax credit structures. Ealy said developer fees remain part of the capital stack and MOHCD is aligning its fee policy with state rules.
The committee did not take action on bond authorizations; staff said additional issuances are being planned to match near‑term pipeline needs and that timing depends on project readiness and state allocations. MOHCD said it expects further issuances this year to support senior housing projects and other items in the pipeline.
