Committee forwards $108M increase to Tenderloin Housing Clinic master-lease contract amid tenant concerns

The Homelessness and Behavioral Health Select Committee on Sept. 8 voted to forward to the full Board a second amendment to the Department of Homelessness and Supportive Housing’s contract with Tenderloin Housing Clinic (THC) covering master-lease hotels and supportive services.

Clerk materials show the amendment would extend the agreement through June 30, 2026, and increase the not-to-exceed amount by about $108.7 million for a new total near $241.6 million. HSH Deputy Director Emily Cohen said spending rose in the prior year because the department funded higher case-management ratios and raised frontline staff wages; the amendment also covers one-time capital improvements. Cohen presented THC’s performance measures, noting strong results on tenant stability and occupancy: 90%+ stability and occupancy metrics meeting or exceeding contract goals in recent years.

Nick Menard of the Budget and Legislative Analyst said annual budgeted spending for this grant has increased by roughly $10 million per year, driven largely by staffing and compensation increases; he also reported some increases in legal-fee line items for specific properties but recommended approval. The BLA noted the department has delayed planned reprocurement of the housing portfolio until 2026, a policy consideration some supervisors pressed on.

Public commenter Jordan (recorded by the clerk as Jordan Davis) urged the committee to continue the item pending review by the Homelessness Oversight Commission, raising concerns about eviction rates at THC properties and legal fees that, she said, could facilitate evictions. Tabitha (deputy director at Tenderloin Housing Clinic) and THC representatives responded that legal spending covers leases, legal documentation and compliance needs and that outsourcing legal work has increased costs; they said evictions are generally handled with a settlement-first approach.

Supervisor questioning focused on the balance between low-barrier housing objectives and building management challenges, eviction rates, and how reprocurement and monitoring could address performance issues. Mandelmann moved to forward the item with a positive recommendation; the clerk recorded two ayes and the motion passed. The amendment will be considered by the full Board on Sept. 12.