San Francisco's Powerful New Tool for Affordable Housing

To save affordable housing, new law prioritizes nonprofits buying buildings
Han Li | 04/11/2019
Supervisor Sandra Lee Fewer, lead author of the Community Opportunity to Purchase Act
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Han Li

Nonprofits running affordable housing in San Francisco will soon to be granted the first-right-to-bid priority in the market if there are multi-units buildings for sale.


This new law, called the Community Right to Purchase Act (COPA), is sponsored by all 11 Board of Supervisors members. It will create a 5-day exclusive time window for the qualified nonprofits to put in an offer for the on sale residential property. Meanwhile, the landlords can receive a two-thirds transfer tax discount if they reach the deal with the nonprofits.


“This legislation would protect the apartments from being bought by the speculators and becoming unaffordable”, said Supervisor Sandra Lee Fewer, who drafted the law with a group of affordable housing advocates. “This will keep these apartments affordable forever.”


Amid the unprecedented housing crisis in the city, the affordable housing availability has long been criticized for its slow progress. According to the Planning Department 2018 Housing Balance Report, for the past ten years, 6,577 affordable housing units are built while 4,263 existing units are removed from protected status.


“We cannot afford to continue taking two steps forward, and one step back”, Fewer said during the Board meeting.


While the COPA law is new to the Bay Area, it originated from a Washington, DC model introduced in 1980. “Some of us look into that as an example, that we can implement here.” Seema Rupani, an anti-displacement attorney from the East Bay Community Law Center explained.


After years of research and negotiations, San Francisco finally welcomes this groundbreaking law, and Rupani described it as “serving the purpose of keeping tenants at their home and creating affordable housing”. A similar COPA law is also under discussion in the Berkeley City Council.


For the qualified nonprofit organizations in San Francisco, several prominent affordable housing operators are expected to be on the priority list, including the Mission Economic Development Agency (MEDA), Tenderloin Neighborhood Development Corporation (TNDC), Chinatown Community Development Center (CCDC), and San Francisco Community Land Trust (SFCLT).


Johnny Oliver from MEDA praised the law for allowing the 5-day right-of-first-refusal time. “We believe that COPA will help ensure that every building has an opportunity, to be reviewed by a nonprofit like ourselves”, he said.


Since the law only provides incentives, it wouldn’t shut down the opportunity for private purchasers with cash and higher bid price. The sellers can still reject the nonprofits’ offers and enter the free market.


“Well, that’s the question”, Fewer spoke of the concern that the hotly competitive market can still attract wealthy developers to invalidate the effort of the law. But Keith Cooley from the SFCLT is somewhat more confident. “It will provide us an important tool”, he said during the Board meeting, “by enabling nonprofits developers to compete on more equal terms in the open market.”