How San Francisco’s Tenant Protection Policy Is Stabilizing Low-Income Communities

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A couple with a dog on a city walk in San Francisco

San Francisco's COPA law aims to preserve affordable housing.

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The words San Francisco and affordable typically aren’t used in the same sentence, at least when it comes to the housing market. But a program called Community Opportunity to Purchase Act (COPA) changes the way in which multifamily rental projects and certain vacant lots can be sold in San Francisco. 

Since its launch in 2019, COPA has been providing certain nonprofit organizations with first dibs on purchasing multifamily residential buildings and the right to match a private buyer’s offer. 

The idea behind this built-in advantage for nonprofits was that it would prevent rampant speculation, preserve existing affordable housing in gentrifying neighborhoods and ensure community stability.

The San Francisco Housing Accelerator Fund (SFHAF), a public-private partnership, provides flexible loans to nonprofit community partners so they can compete with market-rate development corporations to purchase buildings for low-income residents vulnerable to displacement. 

With financial assistance from SFHAF, the nonprofits buy the buildings, complete extensive repair work and operate them as permanently affordable housing.

“The Housing Accelerator Fund aims to preserve or develop 1,500 affordable housing units in its first five years,” said Rebecca Foster, chief executive of SFHAF. “We help keep low-income renters who are at risk of displacement in their homes, enable working families to live in the city, and stabilize — and ultimately revitalize — economically distressed areas.”  

Currently, eight qualified nonprofits are on the San Francisco Mayor’s Office of Housing and Community Development’s list to exercise rights of first offer and refusal as allowed under the program. SFHAF’s partner, Mission Economic Development Agency (MEDA), has been successful at responding to building owners’ notifications that their buildings are up for sale, as COPA requires. 

During the pandemic, MEDA has bought six small residential buildings serving tenants at risk of displacement through COPA transactions. SFHAF provided bridge financing for all of the transactions, ensuring that MEDA had access to resources to make attractive offers to sellers and then quickly close the deals.

The Housing Accelerator Fund explains that those seeking to protect affordable housing in San Francisco must maneuver through three challenges: a fast-moving market that requires a transactional speed for which the nonprofits initially weren’t set up well to handle, lack of funding and the small number of nonprofits pursuing these acquisitions.

The Accelerator Fund’s focus on providing bridge loans to nonprofits in a critical window of opportunity helped them make offers at the speed of the market. 

“The nonprofits responded accordingly by becoming skilled at putting in offers on buildings quickly and efficiently,” explained Foster. “What COPA has really done is slow down the market, which allows a very limited number of participating nonprofits to be more selective in applying the limited resources they have. Even with these obstacles cleared, the availability of long-term funding remains a constraint in nonprofits’ ability to acquire sites in the private market without disadvantage.”

Victoria Joseph, senior vice president at Citi Community Investing and Development, said the Housing Accelerator Fund is at the forefront of implementing COPA by helping provide resources – financial and otherwise – to nonprofits trying to capitalize on this new advantage. 

 “Citi has provided funding and expertise to SFHAF, committing $60 million in loans to date,” said Joseph. “Since 2017, SFHAF has closed on 21 building loans, three loans for development on underutilized land and has an outstanding lending portfolio totaling over $100 million.” 

The Housing Accelerator’s programs have helped to preserve over 300 existing affordable homes and are assisting with an additional 600 new affordable homes through construction. More than 1,000 San Francisco residents are served through these investments.

Sandra Lee Fewer, District 1 representative of the San Francisco Board of Supervisors, proposed the COPA legislation in December 2018 as a means of stabilizing communities by preventing tenant displacement and preserving affordable housing. 

Fewer’s bill was based on successful precedents in other cities, most notably in Washington D.C., which has had a first-right of refusal ordinance for over 30 years. Similar policies are in force in various forms in Boston, Chicago, and Seattle.

Rent-controlled apartments have become a prime target for speculation in San Francisco. Until recent years, when long-term landlords sold their buildings, their primary market was to other investors seeking ongoing rental income.

Lately, however, speculators and cash buyers have been swooping in to buy these rent-controlled buildings by using common tactics such as evicting tenants under the Ellis Act, owner move-ins, harassment tactics or buying the properties with the intention of flipping them, renting them at market rates or converting them to TICs (tenancy in common housing), condos or tech dorms.

Prior to the COPA initiative, a clear pathway didn’t exist to allow nonprofits to buy such buildings, even if they had the means to match the seller’s price. A speculator or cash buyer was able to out-maneuver a community entity wishing to buy the building in the tenants’ interest.

The COPA law addresses the need to balance the playing field so the nonprofit community can adequately compete, without disadvantage, on the open market in acquiring rental buildings when they are put up for sale.

Elizabeth Bell, 74, has lived in the Mission District of San Francisco since 1986. “When I learned my building was for sale, my mind immediately flashed to location, location, location,” she said. “I’m two blocks from the Bay Area Rapid Transit system, so I knew the developers would be all over this building. As a senior, it’s important for me to be close to transportation. I’m also part of the Mission community. I raised my daughter here.” 

Bell contacted the Mayor’s Office of Housing and Community Development and MEDA when she found out her building was for sale.  

“I’m so happy that I reached out, which was on the advice of housing activists I knew from the neighborhood, and that MEDA responded,” said Bell during a conversation in March, a few weeks after MEDA succeeded in purchasing her building.

Over the years, she noticed that many of the neighborhood’s longtime dwellers, such as artists, poets and residents from Latin America, were leaving the Mission District, seeking cheaper housing alternatives in other locations.

 “I stopped seeing them around,” said Bell. “I’d run into them at an event and they’d tell me, ‘I had to move to Berkeley,’ ‘I had to move to LA.’ It has been scary to see the businesses and the arts spaces vanish little by little. The cafe scene has greatly dwindled. Still, the bilingual schools my daughter went to are still here with a new crop of students. The cultural center still has exhibits and performances. There are still rumbas almost every Sunday in different places, poetry readings are still happening. That’s my community, and I want to stay here. I want it to stay alive.”

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