Committee delays vote on MOHCD delegation to allow review of ground‑lease amendments

Supervisor Mirna Melgar and colleagues questioned a proposed ordinance that would delegate limited Board approval authority under Charter §9.118 and the administrative code to allow the city’s Mayor’s Office of Housing and Community Development (MOHCD) to execute narrowly defined ground‑lease amendments for 100% affordable housing projects.

Jackie Tso, director of asset management at MOHCD, said the delegation would apply only to amendments that align ground leases and loan agreements with MOHCD’s current residual‑receipts policy (adopted April 1, 2016), which directs two‑thirds of residual receipts to MOHCD with the remainder to the owner. Tso said 14 properties have applied for amendments; many will also require amendments to loan agreements. She described the scope as limited to terms related to residual receipts and lender protections and said any change would not increase city liability or change lease duration.

Supervisors raised transparency and oversight concerns. Supervisor Aaron Peskin suggested batching the 14 projects so the Board could review them publicly; Peskin also raised particular concern about leases assigned to the city after redevelopment dissolution that had not been previously reviewed by the Board. Supervisor Preston cited findings in a recent City audit (BLA) about the Affordable Housing Loan Committee’s transparency and pressed for clearer safeguards. MOHCD staff and Deputy City Attorney Anne Pearson responded that the delegation is intended to be narrowly defined, that city attorneys would be a backstop to ensure conformity with policy, and that MOHCD monitors projects via audited financial statements.

Public comment reflected divided views: a caller urged that the Charter does not permit delegation of §9.118 authority; Mercy Housing (Yelena) urged delegation to help nonprofit sponsors manage pandemic-era arrears and rising costs, citing Mercy’s unpaid-rent totals (about $2.7M at end of 2020, $3.7M at end of 2022, with nearly $2M of that in San Francisco). MOHCD agreed to supply a breakdown of the 14 projects (including which were assigned from redevelopment) and to report back by May 1. The committee voted 3–0 to continue the item to the May 1 Land Use & Transportation Committee meeting.

Next steps: MOHCD will provide the requested breakdown and additional documentation on how the narrow scope will be enforced and monitored; the committee expects to revisit the item on May 1.