Did you know affordable housing exists in San Francisco? Yes, you read right. Affordable housing (also known as inclusionary housing) exists, although it takes some work, patience and digging to find it and nab it.
I personally benefit from affordable housing. And it’s good — quality housing in safe neighborhoods — which is the opposite of what some might assume. I moved into my unit, in a new building, in 2014. Of the 98 units, 15 are designated as “affordable.” While I was lucky to get my place, the product was two years in the making and the whole process took several years to complete.
How to Know if Affordable Housing Right for You
How do you know if affordable housing is right for you? Well, there are income limits which are based on the housing area’s median income as well as the number of people in your household. Additionally, if you’re in the market to purchase a home (and go for inclusionary housing), you have to be okay with the fact that while you pay less than market rate, when you sell, you don’t get the same value of appreciation as a market rate home. Essentially, it’s like having controlled rent while establishing equity.
How Affordable Housing Is Created
Inclusionary housing comes into existence when new developers propose their bid to build a residential project in San Francisco. When presenting their plans to the SF Planning Department they have the option to do the following:
- Allocate a percentage of units in the new building to be rented or sold at below market rate
- Allocate a percentage of units in another building they build to be rented or sold at below market rate
- Pay a fee
- Dedicate land for future affordable housing
- A combination of all of the above
Inclusionary housing units are then rented or sold via lottery. The winners choose the unit of their choice based on the priority in which they were drawn. As of this writing, there are over 3,000 affordable units in San Francisco.
If you’re interested, the first thing you need to do is check the San Francisco’s Mayor’s Office of Housing and Community Development (SFMOHCD) website for listings. These listings may also appear on RedFin, Zillow, etc. SFMOHCD offers units to either purchase or rent, and there’s an application process for whatever you choose. Priority is often given to those who work and/or live in San Francisco.
While there are hoops to jump through, the work is worth it in the end.
If Buying: Attend a First Time Homebuyers Workshop.
The definition of a first-time homebuyer according to the California Housing Finance Agency (CalHFA) is 3 years without owning and occupying a home. The Mayor’s Office of Housing wants you to be fiscally responsible. Actually, I’ve noticed that many first-time homebuyer programs, in order to be eligible, require that you receive some sort of credit counseling. While it is a “to-do,” the good thing is that you learn a lot about different programs that can help with down-payment assistance as well as what you can afford.
If Renting: Visit the DAHLIA Housing Portal
You will be able to see listings available to you based on your household income and size. Then skip to Hoop 3.
Find an approved lender who you’d like to work with.
A list of approved lenders is on the SFMOH website. These people work in conjunction with SFMOHCD, are really nice, and know their stuff. In my experience, they are very vested in helping individuals and families find housing that suits their needs.
Complete the SFMOHCD (buying) or DAHLIA( (renting) application.
Dot all your i’s and cross your t’s. While the application to buy requires pre-approval from an approved lending agency, both applications require documents verifying your income and work/living location.
Submit your application.
You’ll submit your application to the housing development office/agency hosting the lottery or through the portal. Once you’re issued your ticket, check SFMOHCD and DAHLIA for dates of the lottery as well as the day of, as that’s where they post the results (you don’t need to be present to “win”). If you are a lucky winner, the property manager or leasing agent will contact you based on your lottery rank order, and the process of purchasing or renting your home begins.
What helped me most in the process of all the hoop-jumping was having a good community loan officer AND taking advantage of all the down payment assistance that I qualified for. Without down payment assistance, I wouldn’t have been able to afford anything in San Francisco.
Other Bay Area Programs
And while many of the programs offered through SFMOHCD cater to first-time homebuyers, there are other programs out there for those of us keen on staying in the Bay Area, yet not necessarily in San Francisco. They include Onehomebayarea.org for rentals and additional grants and loans for homebuyers in San Francisco and neighboring counties.
Happy home hunting!