This nonprofit is getting into San Francisco real estate to keep housing affordable
San Francisco’s Mission District was once a neighborhood known for being home to working-class immigrants. Now, it’s a hipster haven thanks to the tech boom.
As gentrification continues to push out long-time residents, a local non-profit is trying to do something — disrupt displacement, through investing in real estate.
There’s a special housewarming happening in the Mission-Castro. Seniors and people with disabilities are celebrating their newly remodeled 42-unit apartment. In the center of a small room on the ground floor of the building is a buffet, and residents are piling their plates with pasta, meats, and veggies.
Ernestine Moore moved to the building in 2004 and says the place was a dump.
“I had a big hole in my ceiling for several years, and that caused mold and everything, and my nose got all infected,” Moore explains
It might be hard to imagine living in these conditions, but Moore and the other residents stayed here because it’s affordable. Things have changed a lot for Moore after the remodel. Now she says, “I have a stove that automatically shuts off by itself in case I forget; it’s an electric stove.”
Why MEDA is Buying Homes
Karoleen Feng was one of the key folks who made the remodel happen. Feng heads up the real estate team at a non-profit called MEDA, which stands for Mission Economic Development Agency. Ernestine’s building is one of many in MEDA’s growing real estate portfolio.
Some people might think that a non-profit group supporting low-income people is the opposite of real estate magnates, but Feng sees it differently. She says, “Housing was really the key piece. Anybody who was earning less than $75,000 was rapidly getting pushed out of the neighborhood, and the rents that had increased in the neighborhood were making it so that anybody earning less than $75,000 would never make it back into the neighborhood.”
MEDA’s Real Estate Strategy
It was a big problem, so Feng came up with a big goal of building 2,000 homes by 2020. But how would a non-profit with no history of real estate development suddenly get 2000 homes? Well, it helps if your new hire has over a decade of experience with real estate. And that’s Feng.
But 2,000 homes in six years is ambitious. So, MEDA made a strategy with two parts. The first is with the federal government. It’s called Rental Assistance Demonstration, or RAD. Under RAD, San Francisco allows organizations like MEDA to rehab housing that are at risk of becoming unlivable. Remember the remodeled building where Moore got the new stove? That’s a RAD property.
The second is San Francisco’s Small Sites program. That’s where non-profits buy small buildings, with five to 25 units, off the private market using loans from the city. According to Feng, small sites in the Mission cost around $3 million, and large ones can cost upwards of $60 million. Feng says most of MEDA’s funding for starting up their projects comes from the City of San Francisco Mayor’s Office of Housing and Community Development. That tends to be the permanent financing too, but they also have other financing sources such as mortgages from private banks, financial institutions, state financing, and tax credit.
Through RAD and Small Sites programs, MEDA acquired 1,000 units by the end of 2017. Now, they’re going for 1,000 more units by 2020, and they’re looking on track to hit their goal.
As for MEDA’s outlook after 2020, Feng says, “I think the intent is to actually reach a steady state if we have been able to reverse displacement and gentrification.
Ernestine Moore’s New View
Back at the celebration of the newly remodeled apartment building, a ribbon-cutting ceremony is about to take place outside. Feng steps up to make the ceremonial snip, but she knows this day isn’t about her. It’s about the people like Ernestine Moore who MEDA is getting these buildings for.
“I have a little balcony, and I can look out as far as Dolores Park where the tennis courts are,” says Moore. “And it’s beautiful, especially at night with all the lights. I see the planes coming in to land and I just have a great time.”
That’s all anybody wants, really — a comfortable place to enjoy life.