Committee recommends delegation for certain affordable‑housing lease amendments

The Land Use and Transportation Committee voted to forward an ordinance that would delegate narrow authority to city staff — the Real Estate Division and the Mayor’s Office of Housing and Community Development (MOHCD) director — to approve specified amendments to a set of ground leases for 100% affordable housing projects.

Jackie Tso, Director of Asset Management at MOHCD, said the delegation is designed to streamline amendments that align older ground leases with MOHCD’s current residual‑receipts policy so nonprofit owners can retain more residual receipts for repairs, replacement reserves and capital improvements. "We've learned from sponsors like Mission Housing, Mercy Housing . . . that they've been generating residual receipts from properties that have been able to generate them, and have used them to fund replacement reserves," Tso said.

Committee members raised procedural and legal questions after a late submission added a list of 12 specific ground leases to the ordinance. President Aaron Paskin asked for the wording change to remove the phrase "enter into" and limit authority to "amend" existing leases; Deputy City Attorney Anne Pearson confirmed a narrow delegation of non‑discretionary approvals was legally permissible and volunteered to draft clarifying language. Several nonprofit housing providers, including Mission Housing and Mercy Housing, urged support in public comment, saying residual receipts were critical for building upkeep and operations.

After accepting committee edits (including striking "enter into" and adding a subsection clarifying that delegated amendments may not materially increase city liability or change lease duration), the panel voted to send the ordinance as amended to the full Board with a positive recommendation. The item will appear on the Board calendar on Oct. 17, 2023, unless otherwise stated.