San Francisco is planning to spend $4.5 million to assist nonprofits facing eviction or struggling to make rent as the cost of commercial real estate has skyrocketed amid The City’s second technology boom.
The investment of taxpayer dollars for dozens of nonprofits struggling to survive and remain in San Francisco is similar to efforts The City made during the dot-com boom of the late 1990s.
About half of the money would go toward nonprofits providing social services, mostly in the mid-Market Street, Tenderloin and South of Market neighborhoods, while the remainder would support arts organizations.
A Nonprofit Displacement Work Group was assembled by city officials to address the situation as an increasing number of these groups are being displaced or are suffering from rent hikes.
A final report on how to distribute the money is due out later next month, but will likely include rent subsidies and legal services. For some, the help seemingly can’t come fast enough.
“There have been a number of groups that have lost their lease during the planning process,” said Brian Cheu, a director in the Mayor’s Office leading the work group.
The money would come from the city budget’s reserve fund, which currently totals $44.6 million.
The Board of Supervisors is scheduled to vote Tuesday on whether to earmark the $4.5 million for the effort. The proposal was initiated by Board of Supervisors President David Chiu with the support of Supervisor Jane Kim, who represents neighborhoods with a large concentration of the social service nonprofits calling for help.
Tom DeCaigny, director of the Arts Commission, said that the challenges facing the arts community today are the same as they were back during the first tech boom.
“We are hearing from a large number of our grantees and arts and cultural organizations in this city that the rise in commercial rents is impacting their ability to either retain the leases they have or negotiate decent terms in new lease terms,” DeCaigny said.
An October report by Budget Analyst Harvey Rose said that commercial vacancy rates decreased citywide from 12.4 percent in 2011 to 9.3 percent last year. During that same time, the average commercial rent increased by 32.8 percent, from $39.67 per square foot per year to $52.69 per square foot per year, the report found.
Of the estimated 6,005 nonprofit organizations in San Francisco, 1,425, or 23.7 percent, currently contract with The City.
“The rising costs in The City and the commercial rents are leading to pretty much an exodus of so many of our community-based nonprofits,” Supervisor Eric Mar said. “I view this as a critical part of the battle against displacement.”