Time to fill a Crucial Gap in Affordable Housing Financing


There’s a housing problem brewing in the Bay Area – and not the one everyone is talking about. A growing number of local buildings containing affordable homes are many decades old. These buildings often have roofs in desperate need of repair, outdated plumbing systems, windows that need replacing, dangerous flooring or stairs, and other issues. However, to make significant repairs, the owners of these buildings need an influx of funding and most private sources of affordable housing financing don’t support rehab as a stand-alone activity. Building owners could pursue an infusion of tax credits and bond financing from the state but even then; 1) not every project is eligible for this financing, 2) there is less money in that pot than there used to be and, 3) the funding that does exist has become much more competitive.  

 This means owners of affordable housing developments may be left unable to improve conditions to an acceptable standard; in a worst case scenario, some might have to leave the building empty and take the units off the market. 

This chart below  provides an overview of the number of developments financed or assisted by HUD, low-income tax credits (LIHTC), and/or the USDA in the nine county Bay Area that have not received a funding award from a federal or state program since before 2000, 1990, and 1980. Some of these developments were placed in service as far back as the mid-1960s.  

According to the California Housing Partnership, when a building is 50 years old or more, typically structural work has to be done to the foundation, sewer and water piping, and/or electrical wiring, costing between $100-$300k+ per unit. At the 25-30 year mark, doors, windows, cabinetry, and roofs reach the end of their useful lives. These rehabs can cost as little as $50k but typically end up in the $100k+ range. The other components discussed much less are the quality of life improvements that typically occur with a rehab. Not only are units improved, but appliances and systems are more efficient (and quieter), air quality can improve, Americans with Disabilities Act (ADA) upgrades are made, windows and insulation can decrease sound transmission, and repairs can generally make the environment more pleasant and healthier for the residents. 

 Recently LISC, as fund manager for the Bay’s Future Fund (BFF), the largest loan fund in the Partnership for the Bay’s Future—started hearing about this struggle from its affordable housing developer partners.  

“These kinds of investment are a form of preservation and can be much more cost effective than tearing down and building new housing,” says Linda Mandolini, President of Eden Housing, a BFF partner. “Ensuring that financing tools exist to support rehabilitation means ensuring that new affordable units are actually adding options for residents in the Bay Area rather than just replacing existing ones. It is crucial that affordable housing developers have these resources.”  

Last Fall, the BFF Investor Advisory Committee approved an adjustment to the BFF’s Affordability Preservation and Production Loan product to include projects that renovate existing affordable units to extend the useful life and to improve quality of the housing. 

“We saw there was a serious gap, and a growing problem,” says Cindy Wu, Executive Director of Bay Area LISC. “These are not buildings just in need of a fresh coat of paint. Our partners were coming to us with stories of buildings that needed serious repair, without an avenue for financing. Given the fact that these buildings are full of affordable housing units, they are also buildings where the rental income is too low to support repairs when things start to wear down.” 

Though there has arguably never been enough money earmarked for rehab, because of increased competition for and the decreased availability of tax-exempt bonds for rehabbing an aging LIHTC property, the resources that affordable developers could access from tax credit re-syndication has diminished tremendously. Wu says she hopes that this new product helps fill some of that gap but, more impactfully, that it encourages other funds to follow suit.   

 “Everyone in the industry loves the ribbon cuttings or grand openings, but our partners told us to remember the less exciting parts of affordable housing— day to day operation and maintenance,” continues Wu. “These are people’s homes, not just a building. Making sure we hold onto these units is crucial, and maintaining dignity for people living in them is just as important. Having pride in your building and caring for your neighbors, that’s the dream.” 

What’s on the horizon: Using State and Federal Funds to Build Back Better – Event Video and Recap

The charge is clear, we as a community need to not only recover but build back better. To do that we, need to be in position to use Federal and State resources that ensures equity. With trillions of dollars already approved or proposed, we need to seize this moment and respond in a way that ensures racial equity and economic opportunity for all.

These funds allow us to act in unprecedented ways. For example, some economist project that if done right, these resources can cut child poverty in half.

We held an virtual community meeting on  May 27th  to learn about the Federal American Rescue Plan ($1.9 trillion covid relief bill), American Families Plan and the proposed American Jobs Plan ($2.65 trillion infrastructure plan) as well as the CA State budget.

Gain insights from leaders on

  • opportunities to identify, align and coordinate with others,
  • how to prepare your organization and position it to received funds, and
  • how to leverage these funds to build back better with a focus on equity.

Full Event Recording

View the full presentation form the Raben Group



The Partnership for the Bay’s Future Launches Breakthrough Grants Program

The Partnership for the Bay’s Future is pleased to announce the launch of the Breakthrough Grants, a program to help communities pass equitable housing policy. Selected local governments will receive a dynamic, mission-driven fellow who will work on community-driven local policy in affordable housing production and preservation. The Partnership will also provide two years of grant funding to community partners to engage and activate the local community. The whole Breakthrough Grant cohort will have access to a flexible pool of funding for technical assistance to meet their policy goals. The value of this support is about $500,000 per jurisdiction. 

The Breakthrough Grants, managed by the San Francisco Foundation, is a cohort program of Bay Area local governments interested in catalyzing policy change to preserve existing affordable housing and create new affordable units. Up to ten jurisdictions will be selected to be a part of the two-year program. Applications may be submitted HERE.

“We are excited to announce the Breakthrough Grants during affordable housing month,” said Aysha Pamukcu, Policy Fund Initiative Officer for the Partnership for the Bay’s Future. “Housing affordability and stability is an issue for everyone in the Bay Area, and it is particularly acute for communities of color and those who earn low incomes. This program will help accelerate housing security and a more inclusive economy for all.” 

Applications are due July 30, 2021, and awards will be announced in the Fall. 

What are some example Breakthrough Grant policies?  

  • Developing and implementing a Housing Element that demonstrates the jurisdiction is affirmatively furthering fair housing, engaging community, and centering the voices of residents at risk of displacement 
  • Leveraging federal funding to sustain COVID-era housing policies, such as using motels, tiny homes and other spaces to provide housing 
  • Working with faith-based organizations to allow for greater. flexibility in building housing on religious land  
  • Supporting community land trusts through developing collective acquisition processes   
  • Developing and implementing a workplan to leverage public lands for affordable housing.  
  • Passing a Community or Tenant Opportunity to Purchase Act (COPA/TOPA)  

Find more potential policies HERE.

Support to apply for the Breakthrough Grants 

The Policy Fund is offering technical assistance to jurisdictions that would like support in developing their Breakthrough Grant applications. These grants will provide funding to a jurisdiction to work with consultants on developing a competitive Breakthrough Grant proposal. If your jurisdiction does not have a consultant or community partner identified, contact the Policy Fund for guidance. You can request application support HERE

To learn more about the Breakthrough Grants, register for our information session on June 2 at noon and visit our website at HERE.

 Challenge Grant partners share about their experience 

 The Policy Fund currently administers the Challenge Grants, which is a cohort-based program that enables local policy change in tenant protection and affordable housing preservation. Challenge Grant teams across the Bay Area shared some of the impact the program has had on their housing efforts. 

“We were awarded a Challenge Grant last year, which placed a fellow within our department and has added capacity we need to address some of the root causes of the affordability crisis in our community,” said Rachel Horst, Housing Project Manager, City of East Palo Alto. “Our fellow provides critical support to our policy priorities and partnership with community organizations.” 

“The work has moved forward thanks to the core team,” said Aboubacar “Asn” Ndiaye, San Jose Challenge Grant Fellow. “It has built a stronger partnership between government staff and community, which means we can craft equity-centered policy like the Citywide Anti-Displacement Strategy. The other thing that has worked really well is having a strong fellow cohort: being connected to other jurisdictions who are going through similar challenges has helped us troubleshoot and share resources.” 

“The Challenge Grant program gave us a new opportunity to center community voice in the policy-making process,” said Leslie Gordon, Program Manager of Equitable Development at Urban Habitat. “The Bay Area 4 All Preservation Table is made up of grassroots organizations, like ACCE, APEN, CJJC, and OakCLT, so all of our work is rooted in their members’ lived experiences and ideas about how to transform the housing system to make it work for BIPOC, immigrant, and low-income communities.” 

Interested in the Breakthrough Grant program and have questions? Email echavez@sff.org.  

Kinship in Housing – the Story of Friendship

Reflective of its name, the story of how the Friendship Senior Housing project came together is truly a story of kinship.

Set to break ground in Summer 2022 at 1904 Adeline Street, the 50-unit senior apartment building will sit on land owned by Gerald Agee Ministries in the Ralph Bunche neighborhood (behind DeFremery Park) of West Oakland. In an area where 27% of the population lives below the poverty line and the median family income is 36% of Area Median Income (AMI), housing isn’t the first challenge Pastor Agee has helped his community face.

“I grew up in Oakland and have seen the scene change,” says Agee. “In the ‘90s, I worked with other pastors to start a drug rehab program. Then we turned our attention to guns and stray bullets, and once we got those issues calmed, I could easily see that our next challenge was housing. Eight years ago we talked about the incoming affordable housing crisis, and have been working towards this ever since.”

Agee’s church, Friendship Christian Center, owned some unused land, which prompted Agee to begin interviewing developers in 2017 to see how they could use that surplus land to create affordable housing for members of their community. After speaking with dozens of companies, however, he was frustrated to find that none shared his vision—that was until he met Don Gilmore, Executive Director of the Community Housing Development Corporation (CHDC), a Richmond-based organization that has spent the last 30 years working to provide high-quality affordable housing and neighborhood services in the greater Bay Area.

“When I sat down with Don, I already had ideas about what needed to be done here,” says Agee, “but I never had to speak them, because he spoke them. I wanted to develop the church’s land in a way that would create affordable homes, while also bringing new resources into our community. That was the same heartbeat that Don Gilmore had.”

Gilmore and Agee quickly struck a deal wherein CHDC would split the developer fee–of which the developer typically keeps 90%–equally with Friendship Christian Center. Also atypically, CHDC allowed Friendship to retain ownership of their land and keep any income generated from the property in perpetuity.

“After witnessing black churches giving up their land to affordable housing developers and getting no more than their name on the door in return, we are on a mission to let communities know they have the right to ask for more,” says Gilmore. “We want money generated from these projects to stay in the communities where it is so urgently needed.”

But Gilmore and Agee still needed funding to get the project off the ground. CHDC guaranteed the loan and contacted the Local Initiatives Support Corporation (LISC), a CDFI that administers funds for the Bay’s Future Fund (BFF), for predevelopment support. As the investing arm of the Partnership for the Bay’s Future and one of the largest housing funds in the nation, BFF is focused entirely on preserving, protecting, and producing affordable housing in the Bay Area. And this was exactly the kind of project they were looking for.

“Gentrification is a real issue in Oakland,” says Cindy Wu, Executive Director of LISC Bay Area. “The black population has decreased dramatically. A lot of that has to do with housing and displacement, and a lot has to do with disinvestment in minority neighborhoods. This project allows not only for the maintaining of a black presence in the community, but also for a recycling of resources back into the communities that need it most, to help them grow stronger.”

Together, the Bay’s Future Fund and LISC were able to make an interest only loan of $600k to support the project and, in August 2023, 49 local seniors earning at or below 50% AMI will be able to move in. A portion of the units will also be set aside for formerly unhoused seniors.

Residents will live in a four-story housing complex that will provide a new model for sustainable living. The building is being developed with extensive environmental considerations and energy efficient measures, and green building standards, including solar powered electricity and a rainwater harvesting system. A people-friendly outdoor courtyard will maximize sun exposure, while protecting residents from the prevailing winds. In addition, the thermal integrity of the building will eliminate the need for air conditioning, reduce heating consumption, and create greater comfort levels for residents.

Occupants of Friendship Senior Housing will also have access to all services provided to the Friendship congregation, including financial literacy services, low interest car loans for reliable clean transportation, leadership programs, and other services identified in an individualized care plan that will be developed and maintained for the senior residents. In addition, because the money from the project is going back to the church, the very existence of the new housing development will provide more capital to increase the strength and potential of those programs for all those in the community who need them.

“We’re proud to be a true partner in creating homes for those in need in our community,” says Agee. “We’re also building wealth and experience, and ushering in a better day.”

The Value and Meaning of “Home”: The Partnership for the Bay’s Future at Two Years

This past year has been one of extraordinary challenges and hardships for many in our community. It was a year that prompted all of us to reflect on the value of home — home as a place of safety, stability, and sanctuary.  As a collaborative initiative focused on producing, preserving, and protecting affordable homes in the San Francisco Bay area, the Partnership for the Bay’s Future found our work more pressing, as more families in the Bay Area struggled to find and stay in homes they could afford.

We recently marked our second anniversary at the Partnership for the Bay’s Future. Anniversaries for organizations like ours are muted events in the midst of a pandemic, but they are still a time to take stock of progress and map where we still need to go.

While the pandemic compelled us to adjust to new ways of virtual collaboration, our Partnership proved to be adaptive and resilient, and our investment in producing new and preserving and rehabilitating existing affordable homes in the Bay Area continued apace. In the last year, the Partnership’s Bay’s Future Fund closed seven deals that will produce new housing for 492 individuals and families and financed eight deals that kept housing affordable for more than 460 individuals and families. And in December 2020, our partner Facebook and Destination: Home announced the launch of the Community Housing Fund, the latest member of our family of loan funds dedicated to investment in producing and preserving affordable homes for Bay Area residents with extremely low incomes.

This short highlight video provides greater detail on our work.

The Partnership is also about advancing policies to protect Bay Area renters vulnerable to displacement and eviction. Our Challenge Grant cohort, which began its work just over a year ago,  continues to lay the groundwork for equitable housing policy throughout the Bay Area, working with government and community-based organizations across the region.  

To make our work more transparent for all audiences, including and especially prospective new partners looking to work with us, we have refreshed the Partnership website, adding new features to make it easier to track our progress and learn how to collaborate with us.  For example, check out the new impact map on our home page, which allows you to see our latest news from each of the five Bay Area counties where we are currently working.

Visit the Who We Are page to get to know our Partnership team and to see a timeline of our milestones to date. And visit The Work page to learn more about our family of loan funds if you are a developer interested in building or preserving affordable homes. If you are interested in changing housing policy in our region, you can learn about future grant funding opportunities from our Policy Fund.

The urgency of our work — to create a Bay Area where diverse people from all walks of life can afford to live and thrive — has only grown as pandemic-related income and job loss magnified our region’s housing affordability challenges.  A recent 2021 Bay Area Equity Atlas study estimated that 137,500 Bay Area households, or approximately 11 percent of the region’s renter households, are currently behind on rent and at risk of eviction unless new renter protections are implemented. The study found that rent indebtedness in the Bay Area hits low-wage workers and people of color the hardest — nearly 8 in 10 households behind on rent earn less than $75,000 a year, and 90 percent of at-risk renters are people of color.

The Bay Area Equity Atlas analysis looked at the nine-county Bay Areas. Still, the overwhelming majority of at-risk households identified — 113,966, or nearly 83 percent — are in the five counties where the Partnership for the Bay’s Future’s work and investment are focused.  

It will take all of us, across different sectors and communities, working together to meet the challenges before us, and we know that this year — the Partnership’s third year — is a critical one. We hope you will join our movement to create a more resilient and equitable Bay Area.

Berkeley’s first ever ground-up co-living development breaks ground

There are currently thousands of individuals and families who are priced out of the Bay Area housing market, yet earn too much income to qualify for low-income housing subsidies. Commonly referred to as the “missing middle,” this group has been largely overlooked in the past, but interest in serving them has recently gained traction.

One area where the missing middle has been facing a serious challenge is in Berkeley. Rents in the city have been skyrocketing in recent years and its close proximity to job-rich areas means Berkeley’s need for housing for middle income workers and their families is only going to increase. Developer Heidi Lubin thinks that, with the help of the Local Initiatives Support Corporation (LISC) and the Bay’s Future Fund, she may have found an answer.

Lubin, founder of eSix Development Partners, has spent seven years working to help provide more environmentally sustainable, affordable housing for the missing middle. Her work, she says, is guided by the hypothesis that the most stable and impactful investments are transit-oriented developments, purpose-built for workforce housing, with all-electric, green building construction. And when she turned her attention to Berkeley, she had an epiphany. “In the case of Berkeley, I thought we could accomplish all of our goals and more by developing a co-living community,” says Lubin. “I had lived in a co-operative in college and previously built an all-electric co-living development in West Oakland; I just knew this could be the answer here.”

Lubin soon found the perfect space for her project– a vacant building at 1717 University. Situated right in the heart of Berkeley, the lot is well positioned for workforce housing—within easy walking distance to the Berkeley University campus, the commercial downtown area, and commuter hubs with services to San Francisco, Peninsula job centers, San Jose, and Sacramento. Trader Joe’s and a large park are just blocks away.  The property’s then ownership, led by Matt Fialho, originally intended to sell the building on the open market, but taken by Lubin’s concept, they approached her to partner.

Lubin and Fialho joined with former Berkeley City Planning Manager Mark Rhoades to form a development team, H3M Partners, to develop the project. In a nod to sustainability, they would call it “The Bosco”— which means forest. All of this would only work, however, if they could source the needed capital to finance their innovative approach.

Fortunately, Lubin had heard about the Bay’s Future Fund (BFF). The investing arm of the Partnership for the Bay’s Future and one of the largest housing funds in the nation, BFF is focused entirely on preserving, protecting, and producing affordable housing in the Bay Area. She also knew it had a reputation and willingness to support and fund emerging developers. Lubin reached out to the Local Initiatives Support Corporation (LISC), who administers funds for BFF, and was able to secure a $3.3M loan to get the project off the ground.

“They were able to give us a great amount of flexible, predevelopment funding that worked with the equity we already had. It was critical, catalytic capital,” says Lubin. “In addition, as a woman developer who had the skills but not the traditional record of experience in a field where women are already highly underrepresented, I wasn’t sure who would take the chance. LISC and BFF bet on me. That alone made me feel like I could succeed.”

The Bosco will house 59 individuals in a mixture of units that range from two- to- four bedrooms– all organized around common spaces – accompanied by one stand-alone studio apartment. Two, five-bedroom units (designed to house 10 people total) and the stand-alone studio will each be restricted up to 50% AMI or lower; the remaining 12 co-living units will be priced at 90% AMI. Altogether, the units will rent for significantly less than market rate—26% less than nearby Berkeley studios and 70% less than a shared apartment. And rent includes a common membership package covering furnishings, utilities, WiFi, shared household goods, professional cleaning services, free laundry, and access to monthly events.

The Bosco will also have two rooftop gardens, an outdoor deck with a BBQ, bike and scooter parking. The best part? All of this exists within a highly sustainable, all-electric development. The building, which is on track to achieve LEED Platinum status, is using the highest energy efficiency equipment on the market.

“We’re always thrilled when we have the opportunity to support a project that can truly serve as a model to show the rest of the industry what’s possible,” says Cindy Wu, Executive Director of Bay Area LISC. “In the case of The Bosco, we have an incredible opportunity to provide housing to middle income Bay Area workers, while also showcasing environmentally sustainable co-living, and supporting a strong woman developer.”

Lubin is thrilled. “A financially stable and accretive project that can help provide a foundation for working Bay Area families that’s also better for humans and the environment? It doesn’t get any better than that!”