SAN FRANCISCO—More than 1,400 public housing units will be repaired and preserved by the San Francisco Housing Authority and its developer partners. Bank of America Merrill Lynch was selected as lender and tax credit investor for this public housing transformation project. This effort is part of the Department of Housing and Urban Development's Rental Assistance Demonstration Program (RAD), and pursues Mayor Edwin Lee's 2013 re-envisioning public housing goals. Construction is slated to start by November 1, 2015, with completions scheduled between August 2016 and April 2017.
Under HUD's RAD program, Bank of America Merrill Lynch will provide new community-based nonprofit owners access to approximately $770 million in financing, in partnership with Freddie Mac. In response to a competitive request for proposals issued by the city in March 2015, Bank of America Merrill Lynch submitted its winning bid, which includes approximately $350 million in construction financing; approximately $300 million in low-income housing tax credit equity; $20 million in subordinated, forgivable debt; $2.2 million to provide services to public housing residents; $500,000 to enterprise community partners to assist the RAD developers; $5 million for predevelopment loans; and approximately $100 million in permanent financing from Freddie Mac.
Maria Barry, community development executive at Bank of America Merrill Lynch, tells GlobeSt.com: “We are pleased to work with the city of San Francisco, the San Francisco Housing Authority and Freddie Mac to provide comprehensive, innovative debt and equity financing that will restore 1,400 units of affordable housing in San Francisco. The revitalization of these properties will have a transformative impact on the residents by improving the properties where they live and providing accessibility to programs and support to help them succeed.”
Bank of America Merrill Lynch community development banking provided more than $3.2 billion in new debt and equity to more than 550 clients in 2014, creating more than 13,000 housing units for individuals, families, seniors, students, veterans and other at-risk groups across the country (12,500 of those units were affordable housing). From 2005 to 2014, the bank financed nearly 170,000 housing units through debt and equity platforms, of which more than 140,000 were affordable units.
“Freddie Mac is a leader in providing financing for HUD's RAD program and we are pleased to work with Bank of America Merrill Lynch to provide almost $100 million under our direct purchase of tax-exempt loan offering to support the city of San Francisco's efforts to transform its public housing stock,” said David Leopold, Freddie Mac multifamily vice president of affordable housing production.
Community development banking includes the Banc of America Community Development Corp., (BACDC) which serves as a development partner, and provides debt and equity financing for properties in low- and moderate-income communities across the country. In 2014, BACDC completed more than $55 million in developments and began construction on more than $83 million in developments. This project demonstrates the bank's commitment to the Bay Area, where it has provided $654 million from 2002 to 2014 in economic development financing and financed more than a third (36%) of low-income units in the city.
There are 14 total projects at 15 properties in neighborhoods including Chinatown, Tenderloin, the Mission, Bernal Heights, SOMA, North Beach, Lower Pacific Heights, Duboce Triangle, the Richmond District, Hunters Point, Forest Hill Extension, Civic Center, Western Addition and NoPa. Development partners include Chinatown CDC, Related California, TNDC, Community Housing Partnership, BRIDGE Housing, Mercy Housing California and John Stewart Co.
Program services will include leading the effort to change how public housing is managed, engaging with residents in decision making, implementing thoughtful anti-poverty strategies and increasing accessibility for public housing residents to the broader community and its resources. Ongoing support and communication to residents will be provided after the RAD conversion is complete.
Affordable housing continues to be an issue in the Bay Area, as discussed at last month's RealShare Bay Area.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
