Housing Authority Board of Commissioners - Regular Meeting

the Housing Authority Board of Commissioners regular meeting for October 23rd, 2025. The time is 4 o'clock. We can start with item two for roll call of commissioners. President Doug Shoemaker. Aye. President. Commissioner Luana Kim. Here. Commissioner Marianne Pikes. Present. Commissioner Juan Carlos Cancino. Present. Commissioner Falafuta-Satili. Present. Thank you. Item three is acknowledgement of the Ramatusha-Ohlone community.

Thank you, Bennett. The housing authority of the city and county of San Francisco acknowledges that we are on the unceded ancestral homeland of the Ramaytush Ohlone, who are the original inhabitants of the San Francisco Peninsula. As the indigenous stewards of this land and in accordance with their traditions, the Ramaytush Ohlone have never ceded, lost, nor forgotten their responsibilities as the caretakers of this place, as well as for all peoples, who reside in their traditional territory. As guests, we recognize that we benefit from living and working on their traditional homeland. We wish to pay our respects by acknowledging the ancestors, elders, and relatives of the Ramatishaloni community and by affirming their sovereign rights as First Peoples.

Thank you, President. Item four is the President's report. Would you like to report out to the board?

No report from me.

Great. Item 5 is general public comments. Before we open, noting this portion of the agenda is not intended for debate or discussion with the commissioner staff. Please simply state your business or the matter you wish the commissioner staff to be aware of. It is not appropriate for commissioners to engage in a debate or respond to issues not properly set in a publicly noticed meeting agenda. If you have questions or would like to bring a matter to the commission's attention, please send your communication via email to sfhapubliccomment at sfha.org. With that being said, is there any general public comment in the room or online? And if you're online, just raise your hand. Not seeing any. We can close general public comment. Item six is the tenant representative report. Any representatives from citywide council or the public housing tenant associate like to give report out to the board? Also not seeing any. We can open for public comment on item six. Any public comments? Also not seeing any, we can close with a comment. Item 7 is the chief executive officer report. For item 7A, we have the acting executive director of general communications, Daniel Adams, who would like to report out to the board.

Yes, please.

OK. Whoops.

Just wanted to make quick mention, as you may have read in the paper, the federal government is shut down. And we continue to be concerned as it drags on about its impact on housing authority functions. Our largest exposure, as you know, is on our HAP payments, our voucher payments that flow through the housing authority. We do have affirmation from NARO, which is our trade organization that they've received word from HUD that November and December admin fees are projected to be issued, even though despite the federal shutdown. So we are hopeful that that is the case, and we'll continue to track this very closely. But it provides some solace or affirmation that we will be able to get those payments for the next two months and hope that the shutdown is resolved more quickly than that. Additionally, one of the challenges we have are contacting HUD staff for transactional work or questions that we have. HUD staff, despite the furlough, have been able to reply in a fairly timely way. And so we have not had true emergencies yet. But it is something for us all to be aware of, that the furlough, as it extends, will impact the functions that we undertake that need HUD approval. So I'll continue to bring updates on this topic as we move along. But I did want to provide that short synopsis for you today. That's it for me.

Thank you. If there's no additional commissioner's comment, we can open for public comment on item 7. Any public comment? Closing public comment for item 7. Item 8 is the regular business consent items. We have two consent items, including commission regular meeting minutes of September 25, 2025, and the commission special meeting minutes of October 14, 2025. Would commissioners like to pull either one of these items for further discussion?

Great.

Then we can open for any public comments on the consent agenda. Also not seeing any closing public comments, is there a motion to approve the consent agenda, item 8?

Motion to approve.

And a second.

Make a motion.

And we approve by roll call vote. Commissioner Pikes? Aye. Commissioner Kim? Aye. Commissioner Satili? Aye. Commissioner Cancino? Aye. President Shoemaker?

Aye.

So moved. Thank you. Item 9 is the regular business action items. Item 9A, this is the resolution approving the new flat rents for the low-income public housing program of the Housing Authority of the City and County of San Francisco, effective January 1, 2026. This will be presented by our Housing Operations Director, Kendra Crawford.

Good afternoon commissioners Kendra Crawford housing operations director. This is a resolution to update the flat rents for the public housing stock. We have three hundred thirty one units in public housing one hundred ninety three units at Plaza East and sorry. 133 at North Beach, sorry, totaling 331. And so every year we're, based off of the HUD FMRs, 80% of the FMRs should be, is what the flat rent should be. And so every year we update those. And so we have provided a schedule where the flat rents have increased. Most of them have not increased more than $20. The one that is increased 85%, The previous flat rent was $38.16. And so if we had kept that FMR at 80%, then there would be no change. So it's just a small increase for all of the flat rents for public housing, which these are families who choose. They get a choice between. All families have a choice to choose between income-based rent and flat rent. And so residents who choose flat rent, this would be the rents that they would be charged for for their next annual recertifications and their new admissions. I've summarized that, but are there any questions or any clarifications you need?

I just have a small question. It's not super important to this, but approximately how many households take advantage of the flat rent or not take advantage or choose the flat rent?

None at North Beach, about five at Plaza so far.

Okay.

Thank you. How are staff, is this something, sorry, not staff, residents, are they aware of the sort of differences or how do you communicate that?

Yes, this is a required form in the annual recertification packet so that residents know what their choice is every year.

So I think that sometimes forms are difficult to understand, especially government forms. We worked in government for 20 years.

This rent schedule is also included. So we can say 30% of your income is this, or you can choose this amount for your bedroom size. And that is how they make that decision.

Thank you.

Yes. Thank you for the questions.

OK. Seeing no other questions, Bennett.

Then we can open for public comment. Item 9A. Closing public comment. Is there a motion to approve item 9A?

Motion to approve.

And a second. Thank you. Roll call vote. Commissioner Pikes.

Aye.

Commissioner Kim. Aye. Commissioner Satili.

Aye.

Commissioner Cancino. Aye. President Shoemaker. Aye. So moved. Thank you. Item 9B. This is the resolution approving and authorizing the updated payment standards for the Housing Choice Voucher Program of the Housing Authority of the City and County of San Francisco effective January 1st, 2026. And this will also be presented by Kendra Crawford.

So this is also affected by the HUD-updated fair market rents, and that's what FMRs are. And so we also update our payment standards based off of this FMR. Last year and previous years, we received a HUD waiver for 120% to use 120% of the FMR. And that was really to help entice landlords to accept our vouchers because we were paying more rent. But now, due to the budgeting, we've had to flatten that out and flatten out these flat rents so that as far as budgeting, it would make sense that we're not paying more HAP than necessary. And so that is why this year, for 2026, we are going to use 110% of the FMR, of HUD's 2026 FMR. And so just for an example, to give you all some examples of the differences. So for a studio in 2025, the payment standard was $2,047. This year, for 2026, it'll be $2,050. For a studio, the FMR for 2025 was $2,730. For 2026, it'll be $27.33. So basically, we're leaving it flat so that our HAP payments are not increasing significantly. I'm summarizing. Yes.

I'm sorry, go ahead.

I was just saying I'm summarizing, so let me know if you all want me to give more information. But I just want to make it as clear as possible.

I might have missed something you said there, Kendra. So the percentage went down from 120 to 110, is that right? That is correct, yes. But the practical effect is it's flat.

Yes, and that is because we do not want to increase our HAP payments much more. And if we had, so I want to tell you, if we had gone to 120%, so for example, for a one-bedroom, for 2025, the payment standard was $33,36. If we did go to $120, it would be $4,003. Got it. And so we would be increasing our HAP significantly if we did ask for that waiver again.

Okay. So this will hopefully enable us to serve approximately the same number of households as we served this last year? Yes. Okay.

Just if I could add, it also helps to mitigate risks that the future budget proposes for our overall ability to meet our HAP obligations. So as you know, the federal government can prorate what they provide to the housing authority. Additionally, we are in shortfall this year, and we have a request into the shortfall team to address that. But with a very challenging dynamic at the federal level, increasing HAP payments this year would only exacerbate our ability to meet future shortfalls, be they caused by proration or a lack of attention to our current shortfall status. So it's really important that we continue with our obligations but not increase that rent obligation this year.

Will there be an impact to utilization given that it's flat? Do we know?

No. So the way that this looks, there would be no impact to the utilization because the numbers are basically the same.

I do want to add that I believe the examples that Ms. Crawford has provided are really helpful. I think there is a small reduction in rents for the larger units. So while they're generally flat, some owners will see a very modest reduction in their annual rent for the larger units.

So I'm sorry, Ms. Crawford. It is the case that the project-based vouchers are unlikely to see a change in usage because they're on a project-based contract. But we might see some people moving in and out of the program on the tenant-based level. But we would hope that the overall program level would stay about the same.

The initial rents should not change on the contracts. But on every rent increase request, we do do a rent reasonableness study. And we do ensure that the rents are below or at the payment standard.

Right. I guess just in answer to the other commissioner's question, though. In an environment where rents are going up overall, it's possible that some people will say, I don't want to stay with this program because the rents are flat. And that's one of the risks of keeping a flat rent. But that's our challenge in this budget environment.

Just to clarify also, so last year we used 120%. That was based on a waiver from HUD, because PHA can raise FMR up to 110%. So anything above that, you have to have a specific waiver from HUD. So this year we don't have that waiver. So our cap is 110%. OK. Thank you.

So this is an action item, right?

Yes. Thus, we can ask for any public comments. Item 9B.

Public comment.

Hi, thank you. Margaret McNulty from RCA. It seems to me that the biggest problem is the fair market value, like whoever's imposing that. Because if we keep paying on fair market value, the gap is going to be wider and wider when who can afford these apartments and who can't. And then we're going to be a lot of people homeless. So I just would like to put a stop If we could curtail the fair market. I know that's a different commission, and I'll speak to them, but it just looks like down the road, especially with this president, that we're going to run out of money. Thanks.

Thank you.

Any additional public comment? Okay. We can ask for a motion for approval. Item 9B. Motion to approve. And a second.

Second the motion.

Thank you. Roll call vote. Commissioner Pikes. Aye. Commissioner Kim. Aye. Commissioner Satili. Aye. Commissioner Cancino. Aye. President Shoemaker. Aye. Thank you. So moved. Item 9C. This is the resolution approving the new utility allowances for the housing choice voucher program of the housing authority of the city and county of San Francisco effective January 1st, 2026. This will also be presented by Kendra Crawford.

Every year, the housing authority is required to review our utility allowances. Utility allowances are credits or a deduction for residents to enable them to be able to pay the utilities. And so we're notified by landlords of what utilities the resident will pay and what the landlord will pay. And so this year, we had US housing consultants come out and do a study. And so before you are the new schedule for the utilities for high rise, low rise, and the other types of housing that we offer. And these utilities have changed a little bit based off of the changes in utility consumption, as well as the update to the provider's rates and charges for electricity and natural gas. So this will be effective January 1 for any new admissions and annual recertifications. Any questions?

Not seeing any comments from commissioners. Thank you, Kendra. We can open for public comment on item 9C. Great. Closing public comment. Is there a motion to approve?

Motion to approve.

And a second?

Second.

Thank you. Roll call vote. Commissioner Pikes? Aye. Commissioner Kim? Aye. Commissioner Santilli? Aye. Commissioner Cancino? Aye. President Shoemaker? Aye. So moved. Thank you. Item 9D, this is the resolution approving the new utility allowances for the low-income public housing program of the Housing Authority of the City and County of San Francisco, effective January 1, 2026, presented by Kendra Crawford.

This is for the 331 apartments in North Beach and Plaza. They also have utility allowances. This one is a little bit different than last year. Plaza, the study kind of included the survey. So it's like this really long survey. And so now it's been simplified just for the bedroom size and the amount for each size. And so we're very happy to have it simplified. But this is the same based off of the bedroom size. The US housing consultants actually went to both sites, looked at occupied and vacant apartments. They looked at bills. And they looked at the site as a total. And so what we found in this is that the North Beach allowances lower than Plaza because of the condition of the site, right? So if the site is doing upgrades and things like that, residents are using less power, less water, things are better. So it's less in North Beach than Plaza where we find that There's more electricity, less energy efficiency things going on. And so those are the differences in the utility allowances. These will also be effective January 1, 2026. And they will be effective for new admissions and annual recertifications. Any questions?

So based on that, do we make, so it sounds like we make adjustments by usage and by area so that folks are not, so residents are not detrimentally, they are not disadvantaged due to sort of the upgrades and the efficiency of the appliances?

Well, it is based off of the usage. And so when they're looking at the usage, yes. And the consumption, that is how they base these rates.

Any additional comments from commissioners? OK. Any public comment on item 9D? Then we can close public comment. Is there a motion to approve?

So moved.

And a second? Second. Roll call vote. Commissioner Pikes? Aye. Commissioner Kim? Aye. Commissioner Satili? Aye. Commissioner Cancino? Aye. President Shoemaker? Aye. So moved. Thank you. Item 9E, this is the resolution approving and authorizing the acting executive director of the Housing Authority of the City and County of San Francisco to execute a contract with the Housing Authority Risk Retention Group for commercial general liability insurance in an amount not to exceed $490,586. And this will be presented by Ted Perini, the Housing Authority's People Operations Manager.

Good evening, commissioners, Tepperini People Operations. This one hopefully should be pretty quick and straightforward. The authority's general liability insurance policy is set to expire at the end of this month. It's a standard multifaceted policy that provides very important protection to the authority for various lawsuits and claim types, including commercial liability, public officials liability, employment practices claims, third-party discrimination, lead-based paint, mold, other fungal or bacterial-based claims. In addition, this policy specifically provides ground-lease liability coverage to over 30 sites throughout San Francisco. The policy was created by the Housing Authority Risk Retention Group, or HARG for short, who the authority has been partnered with for several decades now and have a great relationship with them. HARG is an affiliate of the Housing Authority Insurance Group, who produce policies almost exclusively for housing authorities throughout the country. The policies they offer would prove challenging to find if we were to explore through a standard insurance brokerage market. A prime example is habitability coverage, which we've personally learned is not only difficult to find in our industry, but throughout California, which this policy includes. So with the board's approval of this resolution, the authority will go ahead and renew the general liability policy for another year, effective November 1, 2025. Thank you.

Comment from commissioners.

I'm just curious about how cost has sort of changed year over year.

Yeah, so I think it ranges between 5% and 10%. I think this year it was about 8%. I think just with the general cost of insurance, it keeps going up. But we have a really good relationship with HARG. So as long as we maintain our claims, respond to them in a quarterly manner, they try to keep our rates pretty low.

Is it, just for point of information, does this liability coverage exclusively cover the public housing units?

Yeah, so this is just the housing authority side. So I guess a good example. So the plaza properties under the corporation for plaza corporation, there's a separate policy for that. We were unable to get that through HARG. And then same thing with Sunnydale and Potrero. Those are through the San Francisco Housing Corporation. So there's a separate policy for that as well.

So what does this cover?

So this covers anything that's filed against the housing authority, whether it's Directly at the Housing Authority anything we manage But also it covers all the ground leases that we have so we have over 30 ground leases throughout San Francisco and we we've met or this this provides coverage for the the land that we own there and those are the hope six and red converted sites That we still on the land.

Okay, and we're not this is just a point of information, we're not indemnified by the leaseholders in those circumstances?

That, I would have to, yeah, I'm not too sure on that one.

Within the lease, the ground lease themselves, there are provisions that require them to provide insurance and we are an additional insured under those agreements. So that's how we protect it under those.

So this is sort of like an additional

Yeah, this is basically providing coverage for the housing authority's interest. So we are the fee owner under all the RAD projects as well as the Hope Stakes transactions.

I have one more question. Sure. Curiosity is a newbie here looking to learn a little bit. Do you... negotiate a sort of a group around rate changes year-over-year or just given that there's sort of only it sounds like there's one provider yeah doesn't sound like you'd have much market power unless you sort of unless we went out to like at a got a broker to explore the market I was thinking more I mean if there are other sort of public housing authorities that are clients yeah yeah

I would say over 90% of the housing authorities use HAI for their insurance, just because it's the only provider that provides for that specific industry. That's a really challenging industry. But you're right. I don't know. We haven't really negotiated with any other of our partnering housing authorities about it.

Yeah, no expectation, just curiosity. And I mean, last part of this question, just in terms of sort of our rate changes, do we sort of survey kind of the larger market or their sort of, you know, to understand how ours are moving versus Los Angeles or anyplace else?

We haven't, not typically. I guess where we do check is we have to get one-off insurance policies for, say, like Plaza. We can get an idea through our broker. We use Heffernan to explore other insurance options. And they can kind of give us an idea of where the market is as far as coverage goes and rate changes. I know in California in particular, insurance is just becoming a problem. And just having insurance is also an issue. So we're happy to stay with HEI because they give us full insurance, whereas another provider might not. We might get partial insurance, which actually we're facing at Plaza right now.

Thank you.

We go for public comment on item 9E. Any public comment? Closing public comment. Is there a motion for approval?

Motion to approve.

And a second?

Second.

Thank you. Roll call vote. Commissioner Pikes? Aye. Commissioner Kim? Aye. Commissioner Satili? Aye. Commissioner Cancino? Aye. President Shoemaker? Aye. So moved. Thank you. Item 9F. This is the resolution approving and authorizing the acting Executive Director of the Housing Authority of the City and County of San Francisco to submit certain evidentiary documents to the U.S. Department of Housing and Urban Development for the Restore Rebuild Program for 1303 Larkin Street to be developed by Larkin Pine Limited Partnership, providing for operating subsidies for 32 public housing units that will be converted after construction to units receiving project-based vouchers under the HUD Rental Assistance Demonstration Program And to execute certain evidentiary documents related to the foregoing, including the mixed finance amendment to the consolidated annual contributions contract, the declaration of the trust class restrictive covenants, and the regulatory and operating agreements. We have Zawadi Lange, our program administrator here, as well as William Wilcox from the Mayor's Office of Housing and Community Development. And SFGF TV, we do have some slides for this item as well.

Hello, commissioners. Restore Rebuild, formerly known as Faircloth to RAD, allows public housing authorities to restore rental assistance subsidies that were lost as public housing was demolished or sold over the years, and to use the assurance of long-term subsidy contracts to finance and rebuild new deeply affordable units up to their existing Faircloth authority. In 2024, in our annual plan process, the authority announced that it would file notice of anticipated RAD rent applications equal to its full 3,667 units of Faircloth Authority available at that time for new and existing projects within the pipeline and affordable housing portfolio of the Mayor's Office of Housing and Community Development. And then in the 2025 annual plan process, the authority identified the initial cohort of pilot projects from OCD's pipeline to initiate its first group of mixed finance proposals. 1303 Larkin Street is one of the six pilot projects that was identified in the annual plan this year and is expected to close on construction financing in December of this year. While I have included some details of the project in the staff report that was attached to this agenda, we do have William Wilcox, the tax exempt bond program manager for MOCD here today with us to present a presentation on 1303 Larkin along with the developer for that site. So I will step aside and allow them to do the presentation, and then I'll return to finish my report.

Thank you so much, Zawadi.

Like Zawadi said, my name's William Wilcox. I'm the bond program manager at MOCD. And I've also been managing our partnership with the Housing Authority to use the Restore Rebuild program across our portfolio. And I'm also the project manager for 1303 Larkin Street with the Chinatown Community Development Center. So we're asking for sort of A few things here in this transaction from the Housing Authority. We're updating the existing HAP contract. There are 15 PBVs at the property as well. There's also the restore, rebuild evidentiary documents, and then the resolution saying that we will convert those units that are going to be in the traditional public housing program to RAD convert them prior to really leasing up. So that's sort of the three-step process here. It's sort of unique that we have both flavors of subsidy at the building, and it's a rehab, and we're converting SROs. So it's all the fun parts. So we could do the next slide. So this is 100% affordable housing property. It was developed by the Chinatown Community Development Center in the 1990s. It's on an air rights parcel sitting above the Pine Street post office. And it's currently 63 units. But as part of this development, we will add five units and convert all but 20 of the units to one bedrooms or studios. They're currently SROs. But this comprehensive redevelopment will allow us to do that. And there will be 47 units will have some sort of income-based program, either the HAP contract or the Restore Rebuild. All the units are restricted at MOCD, 60% AMI. But the average AMI at the property is 17%. The property is already serving some of the lowest income members of our community. But we just have flat rents. So some of those super low income households are significantly rent burdened. And this will allow us to greatly reduce the rent burden on those households. As I mentioned, we're adding five units, which by using old community spaces that are sort of underutilized throughout the building, it's sort of an odd. They're SROs, but they're relatively large units. If you're familiar with any of some of our other portfolio that are like 80 square feet, that's not what we're working with. We have a lot more space. to add these amenities, and converting and adding kitchens and bathrooms, replacing the exterior to ensure long-term waterproofing, and updating the windows, plumbing, and mechanical systems. And there's a significant outlay from the city in our investment in this across a number of sources. We are providing the permanent mortgage through our past loan program. We put in $2.5 million for pre-dev and immediate repairs, and then we are recasting some existing debt. These subsidies are what allow us to support that permanent mortgage, which we otherwise wouldn't be able to do this full scope. And we also got 4% tax credits. And CCDC is making a sponsor loan of $1 million to cover the prepayment of the air rights lease with the Postal Service. We're going to begin construction in December of 2025, because we have to, to preserve our qualified census tract basis boost, which will expire on December 12. And that gives us 30% more tax credit equity than we would otherwise be able to access. And that is true for this project and for the additional project that my colleague Jenny is going to talk about in a minute. We expect to finish construction in March 2027. Lease-up will be complete by May. We have four phases to the development. We're doing it in sort of sections to reduce the amount of relocation. We will do sort of as little relocation as we possibly can in any off-site relocation. CCDC has identified a property just down the block that they will put people in. And that is all I have. I'm happy to answer any questions about the project or the Restore Rebuild program.

All right, commissioners, questions?

I'm curious who lives in these units now.

The project has been targeted towards seniors. It's a relatively diverse group that sort of trends Chinese American. And this will, while as part of to conform with the Section 8 statute, we are removing the senior restriction on the property. It will still be a senior preference building and will continue to serve seniors. And so that was just a navigation of some fun HUD rules. Other questions, folks?

Mr. Wilcox, what's a pass mortgage?

Oh, yeah. So we took this in 1992. The voters of the city and county of San Francisco passed the preservation seismic safety loan program as a general obligation bond. And then no one really used it. They passed, I think, over $300 million in authority. But it had lots of fun rules. It was contemplated that private market actors would use it. So in 2016, we went back to the voters. And we said, can we use this money differently? Can we use it to make loans? And it has to be permanent mortgages, hard debt payments. Can we use it to make loans to affordable housing properties? And so since then, we've issued and spent maybe, we got about $260 million that we have to use. And we've spent about $200 million of that. And it produces a 40-year mortgage with a subsidized interest rate. The interest rate is set as a percentage of what we go out. We sell the GO bonds. And then at about 60% of that geobond coupon rate, we write a 40-year mortgage at that amount. So it's deeply subsidized. We can only use it for rehabs and acquisitions. So we use it in our small sites program. And then we've started to use it for these LIHTC rehabs as well, because these are the projects that have the hardest time getting credit support from a private lender. And so it allows us to greatly stretch this out and gives the city a lot more flexibility to work with the borrower and ensure the long-term stability. For example, during COVID, we had some of our smaller projects that were only like four or six units where vacancies or nonpayment became an issue. And we were able to do some loan workouts to resolve that that maybe a private lender wouldn't have been able to support. Thanks so much.

Could you talk a little bit about the resident transition in communication? And you indicated they're primarily Chinese-American. Are they monolingual, non-English speaking? Are they sort of different Asian group? Because you said it was also diverse, which makes it more challenging in terms of communication.

Absolutely. And Yoni can share more about the exact resident engagement process. But I've been there to the resident meetings. As part of the RAD process, you're required to hold a number of resident meetings before you file at various stages. I've held a number of them. We have copies of all of the documents on every one. who attended and then were provided information afterwards. Then the relocation consultant has been engaged to individually meet with people and provide them sort of a plan and assistance and make sure everyone knows what is available, what will be happening, and how it all works so that no one is blindsided, scared, or feels that they aren't informed about it. Do you want to share more?

Hi, everybody. This is from Chinatown Community Development Center. I'm the project manager there. So just to recital what William mentioned, so monthly we have resident meeting with the tenants. And we have a really good relocation team internally on site. at CCDC. So we manage that relationship through our relocation team. And we also have the relocation plan being approved by the city and also by HCD. So we are navigating the relocation activity under this UMR and also as well as are we always provide translation services. So we currently have around 48 tenants. I believe there is only five that they didn't speak Cantonese. So the remaining five, I think three of them speak Spanish. So every meeting, we have Spanish on-site translator. And there is one Russian speaker. provide Russian translation paperwork, but the specific tenant mentioned about they are going to communicate through their son and daughter who can understand English. So in our resident engagement activity, we had bilingual translation happening in real time and on the side with translation services provided.

I think that in some situations, individuals have to sign off before having their families serve as their interpreter or translator. But I'm familiar more in sort of social services and health situations where there might be confidentiality. Does that apply also in this setting, or is that?

So we started to engage tenant almost a year ago. And we have a holistic tenant interview one-on-one to talk with their relative with a tenant one by one. And that meeting is accompanied by our resident service department and also our property manager. And also, we have a five-day outside community health manager in that type of conversation as well. And also, per our relocation plan, we have to notify the tenant 90 days ahead of their moving date and also 30 days ahead of their moving date and seven days ahead of the moving date. And we will make sure that in the seventh day of the move-out date, they have to sign some sort of agreement to understand their right and also understand what kind of benefit we will provide and also subsidize the situation for the relocation.

Thank you.

OK, so the basic steps of the restore-rebuild process begins with submitting the application requesting the anticipated RAD rents, which we have done. Those identify the post-conversion rents. Next, it's submitting the mixed finance development proposal, then constructing the project and bringing it online as public housing, and then finally, immediately converting the project to project-based Section 8 via the RAD program. We're here today in regard to the second step of the process. And we are seeking board approval and authorization for the acting executive director of the Housing Authority of the City in San Francisco to submit certain evidentiary documents to HUD for the Restore Rebuild Program for 1303 Larkin Street to be developed by Larkin Pine Limited Partnership, provided for operating subsidies for 32 public housing units that will be converted after construction to units receiving project-based vouchers under the HUD rental assistance demonstration program, and to execute certain evidentiary documents relating to the foregoing, including the mixed finance amendment to the consolidated annual contributions contract, the declaration of trust and restrictive covenants, and the regulatory and operating agreement. And then I will also mention that, as William said, currently in our administrative plan in chapter 4, exhibit 4-2, Larkin Pine, as it is now referred to, is a restricted building to seniors 62 and up. And so in next year's annual plan process, that will need to be changed. And so the restrictions will be removed from the building. And it will require an amendment to chapter 4, section 3.c.2d, which is the PBV site-based waiting list section, where the preferences, once we have determined what exactly the preferences are and what the preference points are to get referred to that site, it would be listed under there instead. But the building itself will not be restricted anymore to seniors.

I have a corporate finance question, so I don't know if it's best directed to you or to the CFO or Dan or Mr. Adams, I guess. Does this process, both the initial restore, rebuild process and then the RAD conversion result in a budget augmentation from HUD? Or how does this affect our overall budget?

When we applied for this one, there was a pilot project that HUD was doing. And if you wanted to be able to augment non-moving to work agencies that wanted to be able to augment rents, had to put in their applications for NAR by September 30, I believe it was of 2024, which we did. So we do have the option to augment using HAP reserves if we have them at that time. We're not sure. By the time they get ready for conversion, we will see what the HAP reserve situation is. Mamadou, our CFO, can speak more to that. But we have committed to the potential of augmentation, and we are allowed for augmentation under the application if we have the finances to do so. Up to 110%. That's a lot.

So these, good afternoon, Commissioner. , CFO of San Francisco Housing Authority. So through this program, HUD is providing RAD rent. And RAD rent usually typically are almost probably half of the PPP rent. It's low. But through this program, HUD is allowing PHA to augment that rent up to the payment standard, so 110% of the FMR. But in the PHA, we need to have some reserve during the calendar year to be able to augment the rent. So right now, we're in shortfall. So next year, we also project to be in shortfall, so depending on the budget that's going to be passed by Congress for 2026. So we'll come back at that time. We complete the conversion. If you have some reserve, we'll be able to augment that rent up to the FMR.

I appreciate the explanation. And I'm sorry if I'm being a little slow. So it's a great program. I think we're all, I'll speak for me. I'm incredibly enthusiastic about it. And I'm a little confused about, we had one situation probably when we applied. And we're in another situation now given everything that's going on. So are we at increased budget risk as a consequence of moving forward on these because of the fact that we don't have HAP reserves?

There's no obligation, no. So HUD is going to provide the funding at the RAD rent level for this.

But HUD is required to provide new funding for the RAD rent.

Yes, they provide a CHAP. They provide funding for this program, yes. So we'll get some additional funding, but at the RAD level.

So I'm just going to say it back to you, and I'm sorry if I'm not tracking. So we are getting a corporate budget augmentation from HUD in the sense that HUD is automatically giving us the RAD rents on top of where we were previously. And in order to pay more than that, we would have to dip into HAP reserves that we may or may not have because we're in shortfall. Correct. Okay.

And that's only for the first year, too. So then the advantage of being a non-MTW PHA and using this program is that we make that first-year allocation from the reserves, and then the budget is increased to cover that in future years. By HUD.

Yeah, with all due respect, Mr. Wilcox, we aren't getting paid by HUD for the amount. So that's a conceptual and theoretical framework, but not necessarily a real one, right? So right now, we're in a situation where, as Mr. Wilcox said, in future years, we may or may not be in a situation where they make good on this. But at the moment, we're in shortfall, and they've swept our funds. If we were to try and make good on this broader payment, it would be at the expense of other things within our portfolio.

Could you clarify the anticipated amount of HAP reserves that would be needed to be deployed for the augmented rents for this project?

For the first project, for Larkin Pine, because it's a small project, only 31 units, the amount of reserve that's going to be needed for the first year is around $400,000.

Yeah, we remark it's 330 or so.

Yeah, so it's not a, we don't talk about a lot of reserve. Right. But some of the project, like the next one, that's 121 unit, that's going to require a lot more reserve. I think that one's like 2.

I just want to clarify here. Thank you for those. The project anticipates, given the quite small amount of HAP reserves anticipated to be needed for the rent augmentation. We do hope and expect to be able to allocate those reserves in order to augment the rents for this project. It's essential for the success of the project as a whole and we're excited at the opportunity to move forward with these augmented rents there's no obligation today but I do want to be clear that it is our hope and expectation to be able to use what is in fact a very small amount of our reserves to augment rents for this project the project that will follow is in a separate category we do not anticipate rent augmentation it's a much larger project we'll get to the specifics on that project for precisely the reasons that you've been outlining, that the risk to our financial position based on federal uncertainty is such that we wouldn't want to anticipate that rent augmentation. But for this very small project, it is underwritten with the hope, again, there's no obligation taken today, but with the hope that those reserves will be available for augmentation.

The HUD recap team assured us that this would be treated like it was an existing AHAP. when it was considered for next, like it was existing project, when they consider it for next year's budget, so that it would be factored into any short, the coverage for this would be factored into the shortfall funding.

Yeah, again, Mr. Wilkins, I totally appreciate what you're saying, but like I would take anything I heard from the HUD team at this point and toss it in a canister, and that's what I would view it. I just, I don't think we can make decisions as a commission with the expectation that we can count on the federal government to do things that aren't in statute or in writing. I'm sorry, I don't mean to be dismissive, but I think we're just in a position where we have to be incredibly conservative as a group about what may or may not happen. And so I don't know, Director Adams, if you have a different view on that, but just we had all our funds swept last year, and so we're in shortfall, and I think it behooves us as a commission to not be overly optimistic about what may or may not happen on the basis of any of these things. So I'm just trying to understand what we can and can't.

But the request today doesn't cover that rent augmentation. So that's going to be at a later time. After they close, that's when we will come back to the commission for step three. That's when we're going to figure out, based on our reserve, what can we provide as augmentation. If we're able to augment the rent up to the 110% of FMR or something lower. But given this is a small amount, we hope at that time we'll have enough reserve to cover that.

And one other clarifying question is the Housing Authority has various access to reserves. Is the ability to augment rents exclusive to the HAP reserve that was swept?

Yes, for this program, we have to have HAP reserve to be able to augment rent. But we know HUD was working on some additional guidance because there's been a request from different PSHA to use Because MTW are able to do that, but not MTW. Right now it's limited to HAP Reserve. You have to have some, yeah. That's helpful.

So just to put another fine point on that, there is a request to have flexibility in allocating other non-HAP Reserve funds for the augmentation. It's hard to overstate the value of augmentation because we can use one year's worth of reserves and have then a continuous flow of HAP payments to the project sort of in perpetuity. So it's a great investment if we can find 300K when it's needed. We augment the rents and then the federal government is obligated to pay those augmented rents. because it figures into our baseline. So the housing authority provides reserves in the amount of $330,000. Then that is calculated in the ongoing baseline for renewals year over year. So the flexibility that's being pursued I think is going to be really advantageous. Again, when we're looking at really very modest investments for significant impact at the community level. I think it's a very different equation as we're looking at much higher reserve obligations. Ideally, we will live in a future where we can make those kinds of commitments, but certainly at this time we don't have that.

I just asked another basic question. In terms of augmentation, once you, you're saying once you lock it in, it's going to be paid out of baseline, like a baseline sort of payment from HUD, and that's sort of that bucket is less risky than sort of everything else that we're sort of, we're talking about here in terms of payments from HUD and the sort of risk of, is baseline, are we feeling more secure about our sort of baseline payments or anything that gets lumped into that?

Well, I couldn't make that assertion. Yeah. I mean, I think it fits within, it is then just part of the financial obligation that the Housing Authority, like every other Housing Authority, has across the country. So we would just be continued to link arms. I will say again, just not to minimize, I think these are very appropriate questions. If we were to, the kind of catastrophic scenarios that we have to contemplate, given uncertainty at the federal level. Hopefully those don't materialize. They won't hinge on $330,000. So again, I think part of the request here, and again, we're not committing to this augmentation, but the This project really relies on, will benefit greatly if we can deliver on this very modest investment. And again, I think the next project will be an important comparative case where we will not be asking or do not anticipate asking for augmented rents given its scale.

Well, that's helpful. Thank you, Director Adams. I guess the confusion, and maybe just in response to my fellow commissioner's question, I think you weren't on the commission when we got the budget, I think, presentation, right? No. So I think one of the challenges we have is that we're looking at federal proposals from the Senate side and the House side, which are funding this baseline budget at a fraction of its budget value. So while it's true that it becomes part of the baseline, if we only get funded at 90% of the value, it doesn't matter whether it's in the baseline or not, practically speaking. I think I don't want to overstate that, Director Adams.

I think it means that we would only get 90% of our reserve contribution. Fair enough. OK. Excellent point.

But I think the overall point that you made at the end is helpful for us because the introduction to this item suggested that we are going to see a lot more of these. And so I guess the question is, are we going to see a lot more of these with the augmentation component, or are we going to see a lot more like the item that's coming that doesn't have the augmentation?

I think it depends on whether you're wearing your rose-colored glasses or not. I think if we imagine a beautiful future in which our federal government reverts to some level of normalcy I think and the flexibility on the the reserve allocation the soap under under a more stable future I think we would love to be able to be strategic and creative about allocating reserves. Again, this one-time investment brings multitudes of benefit over time. So that's the impact. And through William's leadership and the work of our colleagues, both at Housing Authority and MOCD, we have sort of a reserved capacity of augmented rents that we could, should we have reserves in the future, we have this great ability to provide these augmented rents. We don't live in that world yet. But we do want to take advantage of the RAD rental income stream when we can. Because even though it's low, it is better than nothing. So that's where I think, even though the augmented rents are really the holy grail, they really provide the most financial benefit to a project. But even at the lower RAD rents, I think we'll want to revisit this question just to capture that income stream, even though it's at a lower level.

OK, so with that in mind, and I don't know whether to ask you in your SFHA hat or your MOCD hat or Mr. Wilcox. I'm wearing both hats. Is there a schedule that you or Mr. Wilcox could provide us so that we could understand what to expect? Because I think it would be imprudent as a housing authority to continue to approve augmented rents during this moment in time when it looks incredibly likely, not just a little bit of a chance, but incredibly likely, that we are going to get a federal budget in which we are going to be well below our budget level.

The only anticipated augmented rent request on the horizon that we have now is Larkin Pine. That is the only one. Very helpful. Until things change in a significant way, we will not bring requests for augmented rents.

Well, that's helpful to understand. OK. All right. I, for one, appreciate the clarification. But it sounds like, Mr. Wilcox, you have a schedule that goes out for other projects that you hope to bring in the future.

Yeah, so there's sort of two levels to that. We came up with, and I presented at the Housing Authority Commission before, an initial cohort of six projects that we identified and started working with people based on where their timeline was and how it all worked out. And these were the projects that were first and had all of their other funding together. We identified them based on projects that were early enough in pre-development that integrating a complex federal funding source was feasible. We had to do NEPA. So we had these time feasibility aspects. So we have four other projects where we've been working with the sponsors to make sure that it's integrated in their project. Each of them is still vying for state funding subsidy from HCD. And that isn't looking so good these days. It remains the biggest outstanding issue. So none of those are close on the horizon. I think what we found with 2970 16th Street is also a very valuable use of it paired with loss of this subsidy that can be used regardless of without augmentation. instead of leveraging debt. So we have those four. And then we filed these NAR applications, the Notice of Anticipated RAD Rents Reservations with HUD, when originally they said this is a pilot program augmentation for non-MTW PHAs. So I filed for 3,600 units going out into the farthest reaches of our pipeline of what we dream of building. Those are all projects that we may do in the future, but aren't close at hand. And so we just wanted to make sure that we had the flexibility to use that. Since then, HUD has introduced that that is no longer a pilot program. It is now an ongoing aspect. So we have all of those in hand, but we would update them and can update them in the future.

I do want to just add that the timeline for the balance of the projects that are in this kind of pilot cohort that William was just describing is very speculative. Certainly at the state level, but our own subsidy sources are also running out. And so I think all of these projects will rely on a more stable future than the one we are seeing today. So I don't think it's actually too useful for this committee to have a schedule that would imply a precise timeline when there are so many That's super helpful.

I think as long as we as commissioners know that there's not something that you guys have planned for the beginning of calendar year 26 that would help us frame and contextualize this decision, I think it sounds like that's not the case.

It is not the case. And I mean, this is a great conversation. And should it become the case, we'll be sure to get in front of this commission in advance of an action item, I think.

That would be great. It would be great. So what I'm hearing you say is, Because most of us, I don't think we're here, Mr. Wilcox, when you probably presented that, although the staff may have been, most of us are probably unaware of the planning work that you did. And so should you get to a place where it looks like the future is rosier, it would be great to bring that back as a non-action item, either to a committee or to the full commission. That's a great idea. That's what I hear you saying. Yes, yes. Great. We'll look forward to that. Excellent. All right. Mr. Bennett, I've taken us on a long journey here. Now we can come back. I think you can take public comment.

Yes, any public comments? And this is for item 9F.

Hi, Margaret McNulty from Resident Council Advisors. When the dust settles on this project, approximately March 2027, I would encourage 1303 Larkin to encourage the collective voice of resident councils and subsequently rely on our company, Resident Council Advisors, to train the resident councils and help implement the voice of the people. Thank you.

Thank you. Any additional public comment?

I just can't help but think you're about to do karaoke. I just feel that's not the case, right?

Sorry, the mic's a little unnerving. No karaoke, but is there a motion to approve item 9F?

Motion to approve.

And a second.

Second.

Roll call vote. Commissioner Pikes?

Aye.

Commissioner Kim? Aye. Commissioner Satili? Aye. Commissioner Cancino? Aye. And President Shoemaker?

Aye.

So moved. Thank you. As referenced, item 9G. Resolution approving and authorizing the acting executive director of the Housing Authority of the City and County of San Francisco to submit certain evidentiary documents to the U.S. Department of Housing and Urban Development for the Restore and Rebuild Program for 2970 16th Street to be developed by the Mission Housing Development Corporation and the Mission Economic Development Agency, providing for operating subsidies for 122 public housing units. that will be converted after construction to units receiving project-based vouchers under the HUD rental, a census demonstration program, and to execute certain evidentiary documents related to the foregoing, including the mixed-finance amendment to the consolidated annual contributions contract, the declaration of trustee-restricted covenants, and the regulatory and operating agreements. So, what do you want to get?

Okay. Again, in the 2025 annual plan, the authority identified the initial cohort of pilot projects for the first group of mixed finance proposal in Restore Rebuild. And one of those projects was 2970 16th Street, formerly known as 1979 Mission PSH. And I will welcome William up here to do his presentation on that project.

I've managed the restore-rebuild side of this, but Jenny Collins, who's the project manager at MOCD, is going to give the presentation because she's much more familiar with all of the project details. Bennett has the presentation.

Oh, great. Thank you.

SFGov TV, we do have slides for this item as well. Thank you.

Thank you. Good afternoon, commissioners. And hi, Diane. How are you? I'm here today to present the 2970 16th Street Permanent Supportive Housing Project for your consideration for restore rebuild financing. So the actions are the same as what you just adopted for Larkin and Pine. But just to give you some background on this project, it is 136 units. And I think you can go to the next slide, actually. Yeah. 136 units of formerly homeless housing for one and two bedrooms. 122 of those units have applied for the restore rebuild vouchers. This is the same kind of deadline situation as Larkin and Pine, where we have to close by December 12 in order to preserve a QCT, Qualified Census Tract, status that gives the project a basis boost of 30% and garners the project another $10 million in tax credit equity that they otherwise would not get. MoCD is contributing $61 million in financing for this project, 16 million of which state No Place Like Home funds. And the developers received an award of tax credits and bonds just in August of this year. And they received budget and finance approval yesterday for the project, and the project was recommended for approval. on consent to the Board of Supervisors next week. I think that's it. Mission and META are the sponsors. And I have Carlos Melgoza from Mission Housing today to answer any questions. And I can certainly answer any questions you have. Thank you. Oh, sorry, one important point. In this case, since we do have the base rents, the restore rebuild base rents, this project will actually include a loss subsidy for project operations for a 15-year period to make the project feasible for the long term with the base rents.

So just to provide it. So the local operating support subsidy program provides subsidy ongoing operating subsidies for units that are for formerly homeless households in San Francisco. It's a long established program funded through the general fund. And so this is actually a really great marriage between bringing in a federal resource as an operating subsidy that helps to lower the otherwise obligation that would accrue to the general fund. So we're mixing the two and layering the two operating subsidies in order to take advantage of federal funding and to reduce the reliance on the general fund for subsidy. Thanks, Dan.

You'll be happy to know that I've exhausted myself. I've got no more questions on my side.

I was very happy to go after Lurkin.

Yeah, yeah, exactly. I'm tired out. I don't have anything left in me. All right, anybody else with questions?

There's no additional commissioner's comment. We can open for public comment on item 9G.

Thank you.

I'm not seeing any. Is there a motion for approval?

Wait, Bennett, I hadn't finished the presentation. OK, so for this one, again, we're on step two of the process, which is the mixed finance development proposal process, which does not have a financial impact on the authority at this time. We're just asking for the approval for the Acting Executive Director to execute the documents to submit for the mixed finance proposal to bring these units into as public housing units. So here we go. We want to submit certain evidentiary documents to HUD for the Restore Rebuild Program for 2970 16th Street to be developed by the Mission Housing Development Corporation and the Mission Economic Development Agency, providing for operating subsidies for 122 public housing units that will be converted after construction to units receiving project-based vouchers under the HUD rental assistance demonstration program, and to execute certain evidentiary documents relating to the foregoing, including the mixed finance amendment to the consolidated annual contributions contract, the declaration of trust and restrictive covenants, and the regulatory operating agreement. And then there will be an update to the administrative plan in the next administrative plan process to include this building. in the PBV exhibit in 2026.

Thank you.

Since Wadi wasn't done with the presentation, just double checking any public comment, item 9G. OK. Closing public comment, is there a motion for approval?

Motion to approve.

And a second.

Second the motion.

Thank you.

I'll call about Commissioner Pikes.

Aye.

Commissioner Kim. Aye. Commissioner Satili. Aye. Commissioner Cancino. Aye. President Shoemaker. Aye. So moved. Thank you. Item 9H, resolution approving and authorizing the active acting executive director of the Housing Authority of the City and County of San Francisco to enter into an agreement on behalf of Plaza East Associates LP with Valdez Painting Inc. for painting services to the exterior of all buildings constituting the Plaza East Apartments for a total contract amount not to exceed $1,217,000. And we have Karina Suarez, the Housing Authority's procurement analyst, to present.

Good afternoon, commissioners. Karina Suarez, procurement analyst at the San Francisco Housing Authority. This item, we're asking on behalf of Plaza East Associates to enter an agreement with Valdez Painting Inc. for painting services for the exterior painting of all the buildings for a total contract amount not to exceed of $2,000. I'm sorry, $1,217,000. In August 4, 2025, the board approved and authorized the acting executive director of the authority to enter into a contract with Glenn's Home and Commercial for a contract amount not to exceed $1,217,000. $1,118,000 on behalf of the owner. Glenn's Home and Commercial did not bid per federal wage determination, including fringe benefits. After adjusting for a total wage determination, Glenn's Home and Commercial were determined to no longer be the lowest bidder. Per procurement rules, the authority staff therefore decided to select the lowest responsive and responsible bidder, which is veiled as painting ink currently. Are there any questions?

If there's no comment from commissioners, we can open for public comment. Item 9H. Closing public comment. Is there a motion for approval? And a second.

Second.

Roll call vote. Commissioner Bikes? Aye. Commissioner Kim? Aye. Commissioner Satili? Aye. Commissioner Cancino? Aye. President Shoemaker? Aye. So moved. Thank you. Our last action item is item 9I. This is the resolution approving and authorizing the acting executive director of the Housing Authority of the City and County of San Francisco to enter a Microsoft Enterprise License Agreement with Inside LLC for a term of three years and a contract amount not to exceed $1,500,000. And this will also be presented by Karina Suarez.

So the Housing Authority of San Francisco currently uses Microsoft products to perform its basic office administration daily functions. And we're asking for a three-year agreement with Microsoft for a not-to-exceed amount of $1,500,000 within three years. So that would be $500,000 annually. And any questions in regards to that?

In the report, is this listed, the different products that are covered under the enterprise?

That is correct. We do use a lot of Microsoft products, like Microsoft 365. We do use them for emails, MS Project, as well as various Microsoft Visio, SharePoint, Windows Server, Microsoft Teams. We use a lot of different Microsoft softwares.

Co-pilot part of this?

It is, yes. I think there's a... Actually, it's not listed there. I'm sorry.

Any additional commissioners' comments? Then we can open for public comment. Item nine, aye. And is there any public comment? Then we can close with a comment. Is there a motion for approval on item nine, aye? Approve. And a second? Thank you. Roll call vote. Commissioner Pikes? Aye. Commissioner Kim? Aye. Commissioner Satili? Aye. Commissioner Cancino? Aye. And President Schumacher? Aye. So moved. Thank you.

Thank you.

That leaves item 10 for any additional commissioners' comment or report.

With that mic, I just feel like you're going to have to learn a song. I don't know what it's going to be, but at some point you're going to have to sing to us. I just feel that.

Not on public record. All right.

OK.

Then we just have item 11 for adjournment. President Shoemaker? So moved. OK. Sorry, the time is 5.16 PM. Thank you, everyone.