Council and Housing Authority create Affordable Housing Preservation Fund, move NEF fees to SDHC

San Diego’s Housing Authority and City Council on June 29 approved the establishment of an Affordable Housing Preservation Fund and authorized transfer of Neighborhood Enhancement Fee (NEF) revenues to seed the fund.

Colin Miller, senior vice president of real estate for the San Diego Housing Commission (SDHC), asked the Housing Authority to authorize SDHC to accept $5,913,554 from the city’s NEF fund into a new preservation fund. The SDHC presentation and supporting materials said the preservation fund will be used to acquire and preserve deed-restricted and naturally occurring affordable units and will not commit funds to any specific acquisition without subsequent approvals by the Housing Commission Board, Housing Authority or City Council.

City Planning staff later brought a companion council item authorizing the Mayor to enter an agreement with SDHC to transfer NEF fees and authorizing the Chief Financial Officer to appropriate and expend up to $8.5 million for the preservation fund.

Council and Housing Authority members emphasized that the amount is a start, not a complete solution: speakers noted the fund’s modest scale relative to the number of units at risk and framed it as an initial capital commitment to be leveraged with philanthropic and other partners. Councilmembers praised the work that led to the preservation ordinance and fund and said the effort creates a mechanism to act when deed restrictions or naturally affordable units come under market pressure.

Public commenters urged careful attention to unintended consequences of development incentive programs and questioned whether NEF transfers would reduce amenities promised to communities; speakers called for transparency and continued oversight. The Housing Authority and council voted to approve the fund establishment and the NEF transfer authorization.

Why it matters: The fund gives SDHC a dedicated resource to act on the Affordable Housing Preservation Ordinance’s right-of-first-offer/refusal tools and to try to stop loss of affordability due to expiring covenants or market conversion. Officials said $5.9 million (FY26) and up to $8.5 million (including FY27 NEF commitments) are seed funds; staff will return with program rules and any proposed acquisition approvals for separate votes.

Next steps: SDHC and city staff will develop program policy and criteria for how the preservation fund will be used, and any property-specific expenditures will require separate approvals.