Rebuilding public housing in San Francisco stymied by bad economy 

When Mayor Gavin Newsom started the Hope SF initiative in 2007, the goal was to transform eight of San Francisco’s grimiest public housing sites into vibrant, thriving communities with residents from all income levels.

Those were the best of times.

While launched with great fanfare, promise and, yes, hope, four years ago, the dream is now fading and Hope SF’s future is uncertain. Only two sites have the public funding to move forward and now hundreds of residents of the most decrepit public housing in The City face the increasing possibility that they will be stuck in vermin-infested homes that are consistently rated as dangerous because of life-threatening deficiencies.

Part of the problem is the drop in the housing market. Funding for Hope SF — which stands for Housing Opportunities for People Everywhere — relies heavily on developers who would make money by building market-rate condos in the area. Financing the projects depends largely on projected sales of those market-rate units. Yet the only project that has broken ground so far, Hunters View, won’t include market-rate housing in the first of its three phases. (San Francisco housing officials, however, say market-rate units are expected to be added in the later phases of the project.)

The recession has plunged The City into record-high deficits, and increased funding is unlikely to come from taxpayers as San Francisco faces an estimated $380 million shortfall.

The rebuild of the other funded site, Alice Griffith, depends on the Redevelopment Agency’s ability to match a $40 million commitment from Lennar Corp., which promised to rebuild the housing site in return for development rights on the old naval shipyard at Hunters Point.

Redevelopment agencies throughout the state are in peril because of Gov. Jerry Brown’s plan to eliminate funding. It is still uncertain whether projects already planned will be protected if the proposal succeeds. (UPDATE: The governor's office has come out and said that redevelopment funding for the Hunters Point project is safe.)

But for two sites atop Potrero Hill, a massive housing project in Sunnydale and the Westside Courts in the Western Addition, public funding has run dry. The bad news was detailed in a city report released in March outlining the next decade of development for San Francisco: The City needs to find $127 million to start infrastructure projects such as utilities, street paving and drainage before construction can move forward on the remaining Hope SF rebuilds.

Doug Shoemaker — who heads the Mayor’s Office of Housing and has been coordinating the efforts of developers, redevelopment and housing experts — acknowledges that there are funding challenges ahead.

“What’s incredible is we have two fully funded projects in one of the worst economies we’ve seen since the Depression,” Shoemaker said. “Does that mean I’m not worried about where to find the money? I’m incredibly worried about where to find that $127 million.”

Building on federal success

Hope SF is modeled after the federal Hope VI program, which was responsible for the rebuilding of public housing complexes in the Mission district, North Beach, the Western Addition, Hayes Valley and Bernal Heights between 1994 and 2006.

By all measures the rebuilds have been a success compared with the developments they replaced, but the federal money ran out and Newsom turned to City Hall to continue the program. He formed a task force that came out with a report in March 2007, that would be the impetus for Hope SF.

In 2007, Newsom persuaded the Board of Supervisors to put $5 million from the general fund on reserve as seed money for $95 million in revenue bonds, which didn’t require voter approval. The total project budget — with funding from public sources, grants and private investment — is expected to exceed $1 billion, according to Henry Alvarez, executive director of the San Francisco Housing Authority.

Since then, private donations and federal dollars — the Hunters View project received a one-time grant of $14.5 million in stimulus funding — have helped supplement The City’s investment.

Millions of dollars have already gone into design and development, and significant investment from private developers is riding on the future of Hope SF.

Mercy Housing has been tapped to build 785 public housing units and 1,498 new units at Sunnydale. And Em Johnson Interest is the developer selected to rebuild 136 existing units and 220 new units at Westside Courts.
Bridge Housing Corp. is slated to build 605 public housing units and 1,151 new units at the Potrero Hill development.

Cynthia Parker, CEO and president of Bridge Housing, said she expects all the required environmental review and planning approvals to be completed in one year.

From there, a complicated schedule of phased construction could begin with public matching funds, which, as of now, are not available.

“I think we always knew that the Hope SF projects were extremely ambitious for The City to undertake,” Parker said. “We went in knowing that the money was not going to be available for all the projects.”

Despite the setbacks, city officials aren’t losing hope. They say the economy is bound to turn around and that one day San Francisco will be a national model for urban renewal.

“We’re going to do this, but we’re constrained by the whims of the market,” said Alvarez, who took over the beleaguered San Francisco Housing Authority in mid-2008. “When you’re doing it in affordable housing, that becomes even more difficult. We have to step back and say to folks, it’s going to take some time, it’s going to take some time to get out.”

And what would he have done differently if given the chance?

“We can’t overpromise,” Alvarez said. “Delivering is not completely up to us.”


Drugs, loss of heat bedevil complex

The military-barracks-style buildings of the Potrero Terrace housing development look nice enough from a distance. Kenneth Sanford, who grew up there, said that’s because the San Francisco Housing Authority pays residents to repaint the exterior every year to make them look fresh.

“So what?” he said on a recent sunny day, just down the hill from where a 26-year-old woman was stabbed to death the day before.

Take a closer look and you’ll find out that all is not as it seems. The lights around the complex are regularly burned out or are on the wrong schedule and shine brightly during the day. Hot water is a luxury because the boilers are consistently breaking down. And since radiators heat the units, if there’s no hot water, there’s no heat.

“All the boilers  are bad, especially when it’s raining and storming out here,” Sanford said.

That’s the No.1 complaint for Helen Lewis, 76, who moved to the neighborhood from the Fillmore in 1961. But it’s the drug dealing that got bad about 10 years ago that has really hurt the area.

“A lot of drugs out here,” Lewis said. “It wasn’t always this way. This used to be a good place to live.”

Potrero Terrace is one of eight housing projects in The City that is supposed to be rebuilt through Hope SF. It’s unclear when and if The City can put together the money to begin the infrastructure work to start construction.

For now, residents continue living their lives wondering if the heat will turn on or if the lights will be on at night.
The poor conditions are the result of years of underfunding and deferred maintenance, according to Housing Authority Executive Director Henry Alvarez. He said any issue that threatens a resident’s safety gets priority.

One Potrero Terrace resident, who declined to be named, opened up her unit to show an aging radiator she said hasn’t worked since she moved in three years ago. Throughout the cold winter, she used the oven to heat the two-bedroom unit where she and her three kids live.

On her wall, days of a calendar are marked with X and children’s birthday parties. The calendar was given to all Potrero Terrace residents by Bridge Housing, the lead project developer, and it has sunny renderings of the housing complex that will one day replace where she currently lives.

“They keep saying it’s going to happen, it’s going to happen,” she said. “Every month I look at the pictures and wonder if it ever will."

How the communities stack up

While plans to replace some of The City’s most dilapidated public-housing projects stall, residents continue to live in units found by the U.S Dept. of Housing and Urban Development to have many problems. A HUD inspection score of 60 or above is considered a passing grade, anything below 60 is substandard.

Hunters View
Current units: 144
2010 HUD rating: 65 (out of 100), with life-threatening conditions present
Hope SF status: Early construction begun; yet to have no market-rate housing

Hunters Point East
Current units: 213
2010 HUD rating: 51, with life- threatening conditions present
Hope SF status: No plans

Alice Griffith (Bayview)
Current units: 249
2010 HUD rating: 66, with life- threatening conditions present
Hope SF status: Construction to begin with the approval of Lennar master plan; funded through Lennar and matching redevelopment funds

Current units: 769
2010 HUD rating: 65, with life- threatening conditions present
Hope SF status: Environmental review pending, funding uncertain

Potrero Terrace (Potrero Hill)
Current units: 467
2010 HUD rating: 65, with life- threatening conditions present
Hope SF status: Environmental review done in a year, but funding uncertain

Potrero Annex (Potrero Hill)
Current units: 135
2010 HUD rating: 57, with life- threatening conditions present
Hope SF status: Environmental review done in a year, but funding uncertain

Westside Courts (Western Addition)
Current units: 135
2010 HUD rating: 52 with life- threatening conditions present
Hope SF status: In design and environmental review stage, but funding uncertain

Westbrook Apartments
Current units: 224
2010 HUD rating: 62, with life- threatening conditions present
Hope SF status: No plans

On the block

  • 6,500 Approximate units managed by city’s Housing Authority
  • 26,000 Families on public housing waiting list
  • 8 Housing projects identified for replacement under Hope SF in 2007
  • 1 Hope SF projects that have broken ground (Hunters View)
  • $1B Estimated total cost of Hope SF projects
  • $100M Amount earmarked by The City for Hope SF projects
  • $127M Needed to start infrastructure improvements before construction of remaining projects can move forward

Source: Housing Authority

Correction: This article was corrected on April 14, 2011. An earlier version of this article incorrectly stated the future of market-rate housing at the Hunters View project. The project will not have market-rate housing in the first of its three phases, but city officials say the market-rate housing will be added to future phases.

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