Believe it or not, San Francisco is leading the pack when it comes to financing affordable housing. As a city, we’re putting some innovative pieces in place to subsidize housing for people at risk of being forced out because of exorbitant housing prices. Affordable housing finance whiz, Fay Darmawi will be giving a TED-style talk “Public Private is the New Public: An Affordable Housing Primer” at this year’s 10th Annual Spring Symposium on May 25th. Here’s a snippet of what she’ll dig into.
What do you mean when you say “Affordable Housing”?
Affordable housing is usually defined as rental housing with rents set at no more than 30% of a household’s income. But nowadays, most Bay Area residents pay 30-50% of their income on rent. You’d have to earn 6 figures or more to only spend 30% of your income on rent, assuming median rents are around $3,500 per month.
Affordable rental housing that’s being built is restricted to households earning 60% of the AMI or below, or around $60,000 per year. There are very few financing mechanisms that help the middle income – people earning $85,000-$120,000 annually if they are renting. If they are buying, mortgage interest deduction does little to help middle income households qualify for mortgages large enough to afford a home in San Francisco.
Why is 100% affordable housing so challenging to build?
100% affordable housing is difficult to build because lots of government subsidy and financial incentives for the private sector to participate is needed. All 100% affordable housing developments utilize at least 5 funding sources and sometimes up to 10-12 all with different funding cycles that are often times not compatible with each other. And to make matters worse, affordable housing faces the same high cost burden to build as all other types of housing. Lastly, affordable housing navigate the same entitlement approval hurdles as any other type of development.
What are the consequences if we don’t build more affordable housing?
If we don’t build more affordable housing, we risk losing our workforce, the ability to grow multi-generational communities and the battle to house our homeless. We will see overcrowded living conditions that lead to physical and psychological health problems. We will artists and ethnically diverse neighborhoods that make us unique. And we will see a lot more cars on freeways as folks commute further and further to find affordable housing in the exurbs and beyond. We will lose the ability to fulfill the promise of the Bay Area as a thriving, inclusive, economic engine.
Don’t miss Fay as well as two other expert speakers at this annual spring event and fundraiser. Join us for a fun evening of stimulating conversation and inspiration with people who care about San Francisco’s housing future. Tickets start at $40 – grab yours today!