The San Francisco Housing Accelerator Fund scored a major funding injection to help make affordable housing construction more feasible for developers.
The Financial District-based nonprofit has raised $50 million for its Bay Area Housing Innovation Fund, bringing the total investment to $100 million, the San Francisco Chronicle reported.
The Bay Area Housing Innovation Fund launched last year with an initial $50 million investment from Apple, Sobrato Philanthropies and Destination: Home. The fund was created to provide developers with low-cost financing to aid in paying construction costs for affordable housing projects. The new round of funding includes commitments from Valhalla Impact, the Harry and Jeanette Weinberg Foundation, philanthropists Leah and Ben Spero and congressional candidate Saikat Chakrabarti.
Flush with $100 million, SFHAF’s Bay Area Housing Innovation Fund will reportedly help to finance and build more than 1,000 affordable homes in the next two years.
The Bay Area Housing Innovation Fund offers traditional first mortgage loans as well as second mortgage loans repayable from projects’ residual cash flow. The fund centers around developments that “utilize innovative design, construction and financing approaches to deliver homes faster and at lower cost compared to traditionally financed projects, targeting completion twice as fast and at cost savings of 25 percent or more,” the Housing Accelerator Fund said, per the Chronicle.
Case in point: SFHAF’s first project, a 145-unit residential property in San Francisco for formerly homeless seniors, cost $525,000 per unit — a deal considering 17 of the last 23 affordable housing projects in San Francisco that received state tax credit funding in recent years cost more than $900,000 per unit. That development at 1633 Valencia Street is set to complete later this month.
Another project, dubbed Harvey West Studios, is underway in Santa Cruz. When completed next year, it will be Santa Cruz County’s largest permanent supportive housing development.
With a beefed-up Bay Area Housing Innovation Fund, the Housing Accelerator Fund is looking to invest in several new endeavors, already committing to Affirmed Housing’s transit-oriented development plan next to the Berryessa BART station in north San Jose. That 195-unit project will consist entirely of affordable residences and is expected to cost less than $750,000 per unit.
Other affordable projects tied to the Housing Innovation Fund are reportedly being considered in Alameda, San Mateo and San Francisco Counties, according to the Chronicle. Those developments are expected to be announced early next year.