SoMa Stabilization Press Release
SoMa residents saved from displacement with help from broad community coalition
San Francisco, CA – Amidst an ever-increasing background of displacement and Ellis Act evictions of lower income households in San Francisco, a broad coalition of community-based organizations has saved the homes of five low-income households living at 534-536 Natoma Street in the South of Market (SoMa) neighborhood, by using the Community Land Trust model to acquire the apartment building before it sold on the private market.
Working together to identify a strategy for stabilizing existing residents and homes in the rapidly developing SoMa neighborhood, the San Francisco Community Land Trust (SFCLT), South of Market Community Action Network (SOMCAN), Asian Neighborhood Design (AND), and the Filipino American Development Foundation positioned themselves to take action when a low-income apartment building was at risk of losing its affordable units to the private re-sale market.
With the real estate market heating up in San Francisco, existing rent-controlled, affordable apartments are at risk of losing their affordability due to various market forces. When a long-term tenant moves out, the rent can be adjusted to market rate. Rents for a one-bedroom apartment start at $1800/month, which is not affordable to any household earning less than 80% of San Francisco’s median income. This may be good for an investor, but it’s not good for the community, especially when only 38% of San Francisco residents can afford homeownership and 62% depend on rental housing. Additionally, Ellis Act evictions by investors who want to re-sell the units as Tenants-in-Common (TIC) units displace long-term residents, many of whom are low-income and will not be able to find alternative affordable housing in the community. The Rent Board reports a 68% increase in Ellis Act Evictions in the last fiscal year.
SFCLT plans to rehabilitate the building to improve the quality and extend the life of these affordable homes. The acquisition-rehab strategy can be more cost-effective than building new affordable homes in San Francisco, and yields greater socio-economic benefits by preserving the existing social-economic fabric of the neighborhood. The successful acquisition of this small building reflects a new strategy that can be used by community organizations to preserve existing affordable, rental housing in a competitive real estate market. This collaborative effort would not have been possible without the support of the SoMa Stabilization Fund, the San Francisco Foundation and the Levi Strauss Foundation.
SFCLT Organizational Director, Tracy Parent, said, “This is a small but significant victory for the community. As a result of our coalition’s planning and preparation, we were poised to take immediate action when the opportunity arose. Despite receiving five offers, the owner was willing to give the community a chance to buy the building to not only stabilize these five families, but to stabilize five quality homes for many generations to come. Residents and community members have voting power within the Land Trust to ensure the long-term preservation of this community asset.”
Glenda De Vera, long-time resident of 534 Natoma Street says, “I am very happy that SFCLT bought our building and saved it from sale to a private investor. If they didn’t buy it, it would have been a big problem for us. Now we know that our building and affordability will be maintained and that our issues will be heard.”
In addition to rehabilitating and stabilizing the property, SFCLT will offer its financial education program to the residents to help them build their financial assets through savings, credit counseling, and debt management. SFCLT’s education program is funded by a Community Development Block Grant (CDBG) from the Mayor’s Office of Housing, the San Francisco Foundation and the Levi Strauss Foundation.
In an effort to counter and mitigate the negative effects of rapid private development and gentrification in SoMa, the nonprofit community led an effort to create the SoMa Stabilization Fund, funded by a portion of proceeds from private residential developments on Rincon Hill. Since 2010, the Fund has supported numerous community-based nonprofit organizations to identify strategies for stabilizing diverse, long-time, low-income residents and businesses in the community. This recent victory serves as an alternative strategy in the realm of affordable housing development. While a limited number of affordable apartments have been created in SoMa, the large number of applications received and selected through a lottery process makes it difficult for existing SoMa residents to compete for apartments in their own neighborhood.
Acquisition financing was provided by Clearinghouse Community Development Financial Institution, and a generous private investor. Douglas J Bystry, President of Clearinghouse CDFI says, “we consider affordable housing preservation essential to achieving our community development mission. Clearinghouse CDFI is honored to provide permanent financing to SFCLT to preserve and stabilize housing for Natoma Street residents.” Clearinghouse CDFI provides economic opportunities and improves the quality of life for lower-income individuals and communities through innovative financing that is unavailable in the conventional market. To date, the company has funded a total of $925 million in loans to distressed communities, benefiting over 776,000 individuals each year.
SFCLT is a membership-based organization whose mission is to create permanently affordable, resident-controlled housing for low- to moderate-income people in San Francisco through community ownership of the land.
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