Issue:  Vol. 48 / No. 3 / 18 January 2018

Dispute pits LGBT seniors vs. low-income renters


Vacant buildings at 55 Laguna, the former UC Berkeley Extension facility. The site is slated for residential and senior housing. (Photo: Rick Gerharter)
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A fight has erupted over an infill development project near the northern boundary of the city's Castro District that is pitting affordable housing for LGBT seniors against units for low-income renters.

Community groups, city officials, and the project's developers have been meeting for months to try to forge a deal that would fund Openhouse's LGBT senior housing project, and still result in having 49 below-market-rate units among the 330 market-rate housing units built on site.

The project in question, located at 55 Laguna, was home to the former UC Berkeley Extension campus and lies a block away from the LGBT Community Center. It is one of the last available large parcels near the heart of the city's gayborhood.

Housing activists, while supportive of the units for seniors, are loath to lose the affordable apartments that could be rented by people living with HIV, LGBT youth, or low-income queers.

Yet Wood Partners, which has taken over as the lead developer of the project, and the Mayor's Office of Housing have proposed that the company, rather than build the affordable housing on-site, pay a $17 million in lieu of fee that would be used to help pay for Openhouse's 110-units of affordable senior housing, estimated to cost upwards of $60 million.  

The proposal reneges on the deal hammered out in 2008 that led to city approval of the project and would need to be approved by the Planning Commission. A hearing is tentatively scheduled for August 4.

"We want Openhouse to happen. But the idea of pitting one group of people against another is problematic," said Tommi Avicolli Mecca, a queer activist and the Housing Rights Committee of San Francisco's counseling program director. "Those 49 units could go to HIV-positive people. It is the last block of affordable housing we will get in the Castro in a long time."

Openhouse officials are just as concerned that their project could be fatally jeopardized if a deal isn't struck before September, when they hope to finalize their lease with UC and move ahead with the design phase for their building.

"The Planning Commission really needs to happen on August 4 in order to keep the timeline moving along. If that doesn't happen that can certainly possibly delay our negotiations with UC," said Seth Kilbourn, Openhouse's executive director. "It causes a lot of problems for Wood Partners keeping their process moving along. Delay on this is not good for the long-term prospects of the project."

When the jettisoning of the on-site affordable rental units was first proposed, Openhouse, which has teamed with Mercy Housing California to build its project, did not object. Instead, the agency sided with the proposed fee change and sent out an action alert in May asking supporters to contact planning commissioners and urge them to back the fee proposal.

"The $17 million fee takes the place of building multifamily units on the site that would be affordable to low-income renters. But the fee does make the Openhouse project possible," wrote Kilbourn.

He later added, in bold italic type for emphasis, that, "Without the fee, Openhouse can't build the housing that LGBT seniors and their friends so urgently need. As a result, the project could die or be delayed indefinitely."

The alert was the first time many community leaders learned that changes to the original deal were being proposed.

"Starting in December certain parties to that deal started going behind everybody's back, including Openhouse, trying to change the terms of the deal. They were trying to screw the community out of $88 million in rent savings," said AIDS Housing Alliance director Brian Basinger, referring to the reduced price of the 49 rental units.

While Kilbourn stopped short of issuing a formal apology for not notifying the community sooner about the proposed changes to the development deal, he did tell the Bay Area Reporter that Openhouse now regrets that decision.

"Yes, we absolutely should have brought this idea to the community sooner than we did. Regretfully, we didn't bring the idea to the community and we should have once the Mayor's Office of Housing sent the letter to planning," said Kilbourn. "I do regret that it unfolded the way it did."

Dariush Khan, deputy director of the mayor's housing office, could not be reached for comment by press time Wednesday. Frank Middleton, Wood Partners' San Francisco office director, did not respond to an interview request.

In late April Middleton told the San Francisco Business Times that "the project's overall vision remains intact and reflects years of community interest."

Housing market collapsed

Openhouse has spent decades pushing to see an assisted living center for LGBT seniors built in the city. At first a market-rate project, it switched to being affordable housing at the insistence of housing activists like Basinger and Avicolli Mecca.

In exchange for Openhouse changing focus, the Mayor's Office of Housing promised it would secure funding to help pay for the project. While no dollar amounts or funding streams were specified, it was believed the money would come from in-lieu payments the housing office collected from developers of other projects eschewing on-site below-market-rate units.

Then the housing market collapsed, and the funding dried up. A change instituted under former Mayor Gavin Newsom, that pushed back requiring developers to pay the fees upfront to when their projects were finished, further exacerbated the housing office's budget issues.

Kilbourn said the reason Openhouse didn't raise objections about the in-lieu fee proposal was because it believed the mayor's housing office when it said there was no other money to pay for the project.

"We were taking what the Mayor's Office of Housing said at face value," said Kilbourn. "If they have no money and this is the only option we have, we decided we will move forward because Openhouse is important."

The agency also believed that using the $17 million as leverage to secure the rest of the financing it needs for its project is an "incredibly efficient use of scarce local dollars," said Kilbourn.

"This is a massive investment that will ultimately benefit the LGBT community," he said. "This Openhouse project is incredibly urgent and critical for the LGBT senior community, which is a voice that really has not been heard enough of in this whole discussion. It is really important for us, between now and August 4, to make sure the voices of the LGBT senior community, who have waited for years for this housing to be built, be heard."

It remains unclear if a deal will be reached in time that is acceptable to all parties involved. Some options being discussed include raising how much renters would be charged for the 49 affordable units or securing a bridge loan to pay for the city's contribution to Openhouse that the mayor's housing office would pay back later.

Another meeting with interested parties to hammer out a compromise is scheduled to take place this afternoon (Thursday, July 7).

"I think that everybody is on the same page to figure out how to put the BMRs back on-site," said Kilbourn. "We are all working toward the same goal here."

Basinger said he remains hopeful a solution can be found that all sides will accept.

"I think everyone is committed to this and coming up with a solution. It is going to happen," he said.

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