What is affordable housing?
Affordable housing refers to housing units that are priced to be affordable for low-to-moderate income households. Generally, housing is considered affordable if it costs no more than 30% of a household’s gross income. In expensive housing markets like San Francisco, affordable housing programs are critical for providing lower income residents access to housing they could not otherwise afford at market-rate prices.
There are a few different ways affordable housing is provided in San Francisco:
- Public housing owned and managed by the San Francisco Housing Authority
- Privately-owned subsidized housing supported by public funding and requirements to reserve units for lower income tenants
- Inclusionary housing requirements on new market-rate developments to include a certain percentage of affordable units
- Rent control regulations to limit how much landlords can increase rents on existing tenants
The income limits and rents for affordable units are set based on Area Median Income (AMI) levels for the region. Typically units are priced to be affordable for households earning between 30-80% of AMI depending on the program.
Who qualifies for affordable housing in San Francisco?
To qualify for affordable housing in San Francisco, households must earn below a certain income level, which varies by property but is generally set between 30-80% of Area Median Income (AMI). AMI levels are published annually for regions across the state by the California Department of Housing and Community Development and used to determine eligibility.
Here are the income limits for affordable housing programs in San Francisco for 2022:
| Household Size | 30% of AMI | 50% of AMI | 60% of AMI | 80% of AMI |
|---|---|---|---|---|
| 1 person | $24,300 | $40,500 | $48,600 | $64,750 |
| 2 person | $27,800 | $46,250 | $55,500 | $74,000 |
| 3 person | $31,050 | $51,750 | $62,150 | $82,850 |
| 4 person | $34,350 | $57,250 | $68,750 | $91,700 |
In addition to income limits, applicants usually have to meet other eligibility criteria as well such as being a resident of San Francisco, having acceptable credit scores, passing criminal background checks, etc. The specific requirements vary by property.
How do you apply for affordable housing in San Francisco?
There are a few ways to apply for affordable housing opportunities in San Francisco:
- Apply directly to specific properties you are interested in – Look for listings on websites like Craigslist or Affordable Housing Online to find properties that are accepting applications.
- Get on the San Francisco Housing Authority waiting list for public housing units
- Sign up for housing lottery notifications through the Mayor’s Office of Housing and Community Development (MOHCD)
- Work with a housing counselor at a non-profit like CHP, MEDA or NPH
For properties managed by the SF Housing Authority or supported by Mayor’s Office funding, you typically have to wait for open application periods, which are announced through mailings, advertisements, email lists and online notices. Sometimes there are housing lotteries during open application periods where applicants are selected at random.
For other privately owned affordable properties, you can inquire directly to get on their waiting lists and apply for any vacancies. The property managers maintain their own site-based waiting lists and application process.
Having all your documentation ready is key as affordable housing applications ask for:
- Photo ID for all adult household members
- Social security cards for all household members
- Income statements (pay stubs, tax returns, etc)
- Bank statements
- Landlord references
- Proof of San Francisco residency (lease, utility bill, etc)
The more properties and waiting lists you apply to, the better your chances are of securing an affordable unit. It can take persistence to find and land affordable housing opportunities in San Francisco’s challenging market.
What incentives exist for developers to build affordable housing?
San Francisco has implemented a few key policies to try to incentivize developers to build more affordable housing:
Inclusionary housing requirements
The city’s inclusionary housing ordinance requires new market-rate residential developments with 10 or more units to make 12% of on-site units affordable or 20% of units affordable if the development is on city-owned land. Developers can opt to build affordable units off-site or pay an in-lieu fee instead. This policy helps incentivize affordable units in higher income neighborhoods.
Density bonuses
Developers can get a density bonus allowing them to build more units than normally allowed by zoning if they include more affordable units, with higher bonuses for higher levels of affordability. This incentivizes affordable housing by allowing developers to make up some lost revenue from the below-market units with additional market-rate units.
Expedited processing
100% affordable housing projects can get priority processing and review to help shorten the development timeline and reduce costs.
Affordable housing fees on commercial development
Fees levied on new commercial developments also help fund affordable housing development in the city. This shifts some of the burden in addressing affordability from residential to commercial builders.
Public land dedication
The city dedicates public land for affordable housing development at reduced or no cost to help improve feasibility.
Tax credits
Affordable housing developers can utilize state and federal Low Income Housing Tax Credits to attract private investment in projects.
While these incentives help, affordable housing production still falls far short of demand in San Francisco. The city continues to look for ways to encourage more affordable development.
What are the pros and cons of rent control in San Francisco?
San Francisco passed its rent control ordinance back in 1979. Today, around 76% of the city’s rental housing stock is covered under rent control. Under the policy, landlords can only raise rents a limited amount each year (currently tied to inflation) on existing tenants.
Here are some of the key pros and cons of rent control in San Francisco:
Pros:
- Helps stabilize rents for existing tenants
- Tenants are protected from sudden large rent increases
- Incentivizes tenants to properly maintain units
- Can reduce displacement especially for seniors and long-term residents
Cons:
- Discourages new rental housing construction
- Creates disparities between new and existing tenants
- Can enable profiteering on unit turnover
- Landlords may defer maintenance on properties
- Owners are incentivized to convert units to condos
In a city with extremely high housing costs like San Francisco, rent control offers important protections for existing tenants against rising rents. However, economists generally agree it tends to restrict supply and availability of affordable units over the long-term by discouraging rental housing investment and construction. Reforms to expand tenant protections while overcoming negative impacts on supply could help strike a better balance.
How does the lottery system work for affordable housing applications?
Many affordable housing opportunities in San Francisco utilize a lottery system to select applicants due to the overwhelming demand. Here is an overview of how the lottery process generally works:
- A property begins accepting applications during a specific window, like for 30 days.
- The application collects information on income, household size, etc. to verify eligibility.
- The application window closes after the set period.
- All completed qualified applications are entered into a random lottery.
- Applications are pulled randomly until all available units are assigned.
- Initial lottery winners still have to complete full income/background verification.
- If any of the initial winners end up being disqualified, units are assigned to the next applications pulled in the lottery.
- Final approved applicants are offered units to lease.
Using the lottery system is an equitable way to randomly select from the applicant pool rather than a first come, first served basis. It incentivizes submitting applications as early as possible during the open period.
Lotteries draw many more applications than available units, so odds of winning are low. But applying to as many lotteries as possible improves your chances. It takes persistence to eventually secure an affordable unit.
How many people are currently on waiting lists for public housing and Section 8 vouchers in San Francisco?
The demand for affordable housing assistance dramatically exceeds supply in San Francisco. Here are estimated waiting list totals for key programs as of late 2022:
- Public housing units: Approximately 10,000 households on SFHA waiting list
- Section 8 vouchers: Roughly 20,000 households on SFHA waiting list currently closed except for those who already applied
- Project-based Section 8 units: Varies by property from a few dozen to thousands on individual waiting lists
For context, there are only around 6,000 total public housing units and 12,000 allocated Section 8 vouchers in San Francisco. New resources open up extremely rarely. It can take 5-10+ years to receive assistance after applying in most cases.
With over 30,000 households waiting and so little turnover, most applicants end up waiting in vain indefinitely. The enormous mismatch between supply and demand keeps waiting lists painfully long. The only real solution is major investments in new affordable housing creation.
What are the barriers to building more affordable housing in San Francisco?
San Francisco faces a number of challenges increasing affordable housing production to meet the overwhelming need:
High construction costs
Land, labor, materials and government fees add up to extremely high development costs that make affordable projects financially difficult. Costs averaged over $700,000 per affordable unit recently.
Limited vacant land
With minimal greenfield sites available, developers have to demolish existing buildings or construct higher density projects which adds expense.
Neighborhood opposition
Affordable housing projects often face resistance from neighborhood groups over concerns like gentrification, parking impacts, increased density and property value effects.
Complex financing
Affordable developers have to cobble together funding from strained public programs, tax credits, banks, bonds, and multiple other sources. The process is complex, competitive and time consuming.
Lack of public land
The city struggles to identify, acquire and dedicate appropriate available public land for affordable housing frequently enough.
High demand for subsidies
Cities like San Francisco simply lack enough funding in subsidies like LIHTC, HOME, and CDBG to meet the tremendous need. State and federal resources fall far short.
Overcoming these barriers requires creative solutions like modular construction, public land acquisition funds, streamlining approval processes, and increasing subsidy funding. With unprecedented political will and effort, San Francisco could build many more affordable homes.
Conclusion
San Francisco faces an extreme shortage of affordable housing options for its low and moderate income workforce. With approximately 30,000 families languishing on waiting lists for public housing and Section 8 vouchers that only about 25,000 households receive, it is clear that the city needs major investments in affordable housing production. Leveraging every tool available from inclusionary requirements to public land dedications while reducing barriers like high costs and neighborhhod resistance can help expand affordable development. Strong political leadership paired with smart, equitable housing policies that preserve existing affordable units while incentivizing greater supply will be key to making the city liveable for residents across the economic spectrum into the future. With persistence and creativity, San Francisco can work to house its teachers, service workers, nonprofit employees, seniors and most vulnerable residents.
