1. Achieving Scale, Achieving Equity: Lessons from San Francisco’s RAD Conversion
RAD COLLABORATIVE PRACTICE DAY
NOVEMBER 16, 2016

2. 29 properties in 28 Limited Partnerships
RAD IN SAN FRANCISCO: By the Numbers
3,480 units
29 properties in 28 Limited Partnerships
2/3 senior disabled
1/3 family
8 private developer owner/manager teams
2 phases over 3 years
Affordability ensured through 99-year ground leases
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

3. Housing Authority Role Soft lender PBV administrator
SF RAD: What’s Different?
Housing Authority Role
Soft lender
PBV administrator
Not in ownership entity
Mayor’s Office of Housing and Community Development Role
Project manager
Asset Manager
Program Monitor
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

4. Transfer of assistance and rent bundling
SF RAD : Deal Specifics
Combination of RAD and non-RAD PBVs achieved through Section 18 Demo/Dispo of 8 properties
54% RAD units
46% PBV units
Transfer of assistance and rent bundling
$815 million in equity and $331 million in private debt leveraged
$700 million in rehab; average of $199K per unit
Bank of America Merrill Lynch (BAML) and Freddie Mac investor/lender for both phases; Aegon on 3 deals
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

5. Equity across projects – no special deals!
SF Portfolio Financing: “One deal, 28 executions”
Goals
Equity across projects – no special deals!
Coverage of all projects (including the “dogs”)
Ease of execution
One form of bond documents, ground lease, loan docs
Economies of scale on execution
Single schedule
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

6. Issue lender/investor RFP for all 28 projects
SF Portfolio Financing: “One deal, 28 executions”
Strategies:
Issue lender/investor RFP for all 28 projects
Include developers in selection process
Leverage CRA interest
Demonstrate City commitment to all projects and developers through $$ and staffing
Pitch as high profile project for hometown banks (BAML, Wells)
Complete due diligence ahead of time to reduce risk and maximize pricing
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

7. SIZE! Maxing out construction debt and equity
SF Portfolio Financing: “One deal, 28 executions”
Challenges:
SIZE! Maxing out construction debt and equity
Capacity and workload issues for all
Prior developer relationships with lenders
Herding cats Keeping on schedule
Interest rate risk
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

8. All residents and all properties benefit from RAD
SF Portfolio Implementation: Equity across all projects
Goals:
All residents and all properties benefit from RAD
All properties rehabbed to similar level
SFHA waitlist clients are screened in
Consistent resident communications across properties
Resident input into design of operations and transition
Supportive services added at all sites
Uniform RAD house rules
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

9. Uniform tenant screening guidelines with minimal barriers to housing
SF Portfolio Implementation: Equity across all projects
Strategies:
Convened developer “cohort” (Enterprise Community Partners): ongoing TA, peer support
8 RAD Working Groups convened by MOHCD with critical support from Enterprise Community Partners
Leadership team developed clear resident messaging, disseminated by SFHA staff and leadership, City, services partners, tenant advocates across all properties
Uniform tenant screening guidelines with minimal barriers to housing
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

10. Strategies, continued:
SF Portfolio Implementation: Equity across all projects
Strategies, continued:
Single RAD Relocation plan with uniform resident protections and benefits
Uniform house rules, vetted by residents in community meetings
Resident input into design of operations and transition on a project-by-project basis
Supportive services budgeted according to building size and tenant composition
RAD protections included in Ground Lease and loan documents
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

11. Minimal worker displacement Labor peace
SF Portfolio Implementation: Labor
Goals
Minimal worker displacement
Labor peace
Maintaining morale at agency post-RAD conversion
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

12. Engage labor partners early and often on RAD
SF Portfolio Implementation: Labor
Strategies
Engage labor partners early and often on RAD
Execute PLA with Building Trades Council for all construction work ($700MM)
Create additional City jobs for displaced workers
Require developers to interview SFHA staff (RFQ)
Transparency and consistency on severance, early retirement options
Retrain workers for new roles in HCV program
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

13. SF Portfolio Implementation: What It’s All About
Kitchen, Robert B. Pitts, before
Kitchen, Robert B. Pitts, after
RENTAL ASSISTANCE DEMONSTRATION PROGRAM

14. Senior Project Manager
SF RAD
Lydia Ely
Senior Project Manager
Mayor’s Office of Housing and Community Development
(415)
RENTAL ASSISTANCE DEMONSTRATION PROGRAM