Tenderloin Nonprofit Landlord Selling Four Buildings

Tenderloin Neighborhood Development Corporation long vowed to buy or build affordable housing and hold onto the properties in perpetuity — a commitment it is now poised to break.

The nonprofit landlord plans to put four Tenderloin-area buildings on the market, which would mark the first asset sales in its history as the organization works to stabilize its balance sheet, the San Francisco Chronicle reported. The nonprofit has not disclosed expected asking prices and is soliciting broker proposals to market the assets either individually or as a package, with listings expected in January.

The soon-to-be-for-sale properties include the Dalt Hotel at 34 Turk Street, the West Hotel at 141 Eddy Street, Civic Center Residences at 44 McAllister Street and 270 Turk Street, which the nonprofit acquired in 2019 specifically to preserve long-term affordability. Together, the properties contain 581 units serving formerly homeless residents, seniors and tenants with health or substance abuse issues.

Jennifer Dolin, CEO of the Tenderloin Neighborhood Development Corporation, framed the decision as a necessary “pivot” to preserve the rest of the organization’s more than 50-building portfolio.

“Like any real estate holding company, there are risks… and unfortunately, the headwinds and what’s happened to us as a society has just made it impossible for us to keep pace,” Dolin said. “We find ourselves in this really unfortunate and difficult position where we have to explore all possibilities.”

The buildings are contending with vacancy rates between 12 and 22 percent, the Tenderloin Neighborhood Development Corporation said. About 175 permanent supportive housing tenants live in 183 units and receive rent subsidies and access to on-site services, while other apartments are capped for households earning up to 50 percent of area median income. City tenant protections generally prevent resident displacement during a sale. It remains unclear whether all affordability restrictions would remain intact over the long term as units turn over.

The strain on the Tenderloin Neighborhood Development Corporation’s portfolio is affecting its development work as well. The organization is pausing two of its major construction efforts: a 199-unit senior housing project at 1234 Great Highway and a 120-unit affordable housing project at 149 Pennsylvania Street, Katie Lamont, COO for the nonprofit, said.

The sales by Tenderloin Neighborhood Development Corporation could be an early warning sign for San Francisco’s affordable housing sector.

Tenderloin Neighborhood Development Corporation “is the canary in the coal mine,” Malcolm Yeung, executive director of local nonprofit landlord San Francisco’s Chinatown Community Development Corporation, told the Chronicle. “This isn’t a ‘them’ thing; it’s a ‘we’ thing.”— Chris Malone Méndez