Committee advances Melgar���s Housing Innovation Program for further amendments and tenant talks

The Land Use & Transportation Committee discussed an ordinance to implement a $10 million Housing Innovation Program aimed at supporting low- and moderate-income homeowners to build accessory dwelling units, prototype housing and limited-equity co-op ownership, and to provide down-payment assistance targeted to family childcare providers.

Chair Supervisor Mirna Melgar, the author, said the funding "is mostly geared towards house rich and cash poor homeowners" and emphasized an intent to reach neighborhoods and populations historically underserved by existing programs, including Districts 7 and 4. She described programmatic areas that would include grants for outreach and education, 0% interest loans for ADU construction, down-payment assistance for tenant-to-owner conversions (including family childcare providers), and loans to fund share purchases in limited-equity cooperatives.

Sheila Nicholas of the Mayors Office of Housing and Community Development presented program alignment with existing homeownership and BMR (Below-Market-Rate) programs, noting the Dream Keepers initiatives focus on Black households and the potential to pair the innovation fund with existing down-payment assistance efforts. MOHCD proposed issuing an RFP in spring and aiming for an August/September program launch.

Supervisors questioned protections for tenants, how loans would interact with bankruptcies, and whether the program could be misused for speculator-driven conversions. Supervisor Aaron Peskin urged tightening language on eviction lookbacks and warned about the risk of converting rent-controlled or co-op units into ownership in ways that could displace tenants. Melgar and MOHCD staff said the loans would be income-tested, structured as repayable deeds of trust (not permanent deed restrictions like BMR covenants), and that the sponsor welcomed further refinements.

Public comment included broad support from early-childhood educators and childcare advocates who said the program could prevent displacement of family childcare providers and preserve childcare slots. Tenant-rights groups asked for a continuance and stronger tenant protections; the Anti-Displacement Coalition requested additional amendments and said some provisions warranted further scrutiny.

The committee approved non-substantive clarifying amendments and voted to continue the ordinance to the call of the chair so authors and staff can meet with tenant advocates and finalize language to avoid unintended displacement. Chair Melgar said she would return with refined language and that the $10 million appropriation already exists from the budget vote.

Next steps include staff follow-up on draft amendments, stakeholder meetings during the continuance, and an RFP process if leadership agrees to the proposed operational model.