An audit of San Francisco’s housing agency found it couldn’t spend affordable housing funds as fast as it collects them, with past projects delayed for more than a year.
The audit from the city’s Budget and Legislative Analyst found the Mayor’s Office of Housing and Community Development had a $537 million fund balance last fiscal year – with 7 percent unaccounted for, the San Francisco Chronicle reported.
One conclusion: It’s difficult to tell if the housing office is building homes quickly and efficiently because of incomplete information from the agency, according to the audit.
In the report, the office couldn’t break down how much of $313.5 million set aside for development this year was already paid out, versus what might be paid in the future.
This week, it told The Chronicle that most — $260 million — had been paid.
The audit said the office’s mandated quarterly reports on affordable housing production lacked sufficient details to comply with the law.
It recommended future reports include reasons for delays, goals on costs and construction timelines, as well as standards on how to make funding decisions.
The housing office told the Chronicle in an email that millions of dollars in pre-development loans for dozens of projects were waiting on state funding, which can take numerous applications to secure.
While funding delays are expected in the unpredictable sector of affordable housing, the backlog in funds was a symptom of the city’s infamously long project approvals, which have improved under state streamlining laws, according to the audit report.
Numerous affordable housing projects have faced delays of a year or more, the report said. A groundbreaking for one was set back 18 months; on another completion of the building was two years late.
The audit said reasons for delays were not clear in publicly available documents, which indicated a lack of “accountability for reducing or eliminating delays resulting from city processes.”
A quarter of the 29 projects that had start and end dates in reports experienced delays of more than a year. Another 14 were delayed less than a year.
The audit investigated four projects with the longest delays and found common threads that included uncertain state funding and local intervention.
The housing office said the largest hurdles were the unpredictability of state funding as a result of San Francisco’s costly affordable housing projects — ranging from $800,000 to $1 million a unit — and a struggle to compete for money with other cities.
Other hurdles were lag times in getting PG&E connections and neighborhood opposition. On one project, a district supervisor intervened, delaying the process.
Supervisor Dean Preston called the report alarming because it reveals a lack of clarity from the office on outstanding funds.
“They need to get their house in order,” he told The Chronicle. “The stakes are too high.”
The city must build 82,000 homes — 40 percent of them affordable — during the next eight years to fulfill its state-mandated housing goal.
While the Board of Supervisors can influence housing policy, the office in charge of affordable housing reports to Mayor London Breed.
Breed has taken measures to speed up production, having just issued an executive order to cut red tape. The city’s plan to implement the state building mandate also includes pledges to streamline approvals, but the audit reveals the city still has a ways to go.
Last fiscal year, the housing office issued $184 million in grants and loans to affordable housing developers. The city provides 37 percent of affordable housing funding, with state and federal grants providing the rest.
— Dana Bartholomew
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