you just quoted, that was for a studio. if you look at two bedrooms for 80% of ami, 6% is affordable. ito go to a one bedroom for 80%, only one-third. >> right. supervisor wiener: for a two- bedroom, 40%, 16%. >> this reflects the number of two-bedroom and three bedrooms available so at the lower ami, the smaller apartments are the ones the become more affordable more quickly. as you look for larger apartments, it becomes more difficult even at 80% ami. it becomes much more challenging. the more bedrooms you need. supervisor wiener: even if you

are at 80%. even going from a studio to a one-bedroom is a dramatic account -- increase in -- decrease in affordability. >> a decrease from 54% of the studio's available. once you need a one-bedroom you are down to 30%. this is the same chart. supervisor olague: the low income set, those families who are in need of our bedrooms and units that are bigger than studios and one bedrooms, do you find a lot of very low income families are forced into small units in order to stay in san francisco? >> that is a good question. we do not have data on where people fall. it is a combination of people congregating within a smaller

number of bedrooms than would be optimal. there are other choices. if you are willing to go out you can find those larger apartments but it does not mean your rent burden will increase and those of the choices. either pay a great deal more money or you are going to live in a much smaller unit then you would otherwise choose to. supervisor mar: some are staying -- in anotgheher bedroom where a whole family is staying. >> this goes back to what we were speaking to before in terms of when is there no longer affordability gap between what the fair market rent and 80% ami would be.

as supervisor wiener pointed out, at the studio or one bedroom level, there are no longer the gaps between the fair market rent and what it -- is considered to be affordable but is -- as you go up in bedrooms size, there remains an affordability gap. when to get up to 100% of ami, the gap does tend to go away. again some people have looked at that and said that does not make sense because i have seen many apartments a go for much more than that. again, remember we're talking about what is the fair market rent and clearly we know that there are units priced above and below that. we will talk a little bit about what the city is producing in terms of production of rental housing. when we produce rental housing, we do our best attempt to

leverage outside funds. this represents the funding that was available over the past nine years or so. the sources of public financing for affordable housing, you can see, and i think we will highlight here. it is a little hard to see. over the past nine years or so, the city has put in 34% in terms of tax increment revenues and city general funds and has leveraged another 64% of outside sources. this gives you an idea out with our limited funds what we need to produce these kinds of units. supervisor wiener: a couple of slides back there was a comment for people making 100% of ami that there was no affordability gap at any level? >> this talks about the fair market rent so the fair market rent as set out by hud.

we are comparing the fair market rent to head with would be affordable to people at that rate. that does not mean that people have to pay more than that if they want another kind of unit. it just says this is what is on the market and this is what people can afford. supervisor wiener: how does that jive with the fact that at 80% of ami, 16% of to better minutes are affordable at 20%. 6% are for bowl -- 2% of one bedrooms, 79% at 120. it does not seem like there is no affordability gap. it seems like there is an affordability gap, i should say. >> what the challenge is here, what we are looking at here on the first chart, let's say 8%.

54% of all the units on the market -- but say a studio. 54% of the studio would be affordable to you. 54% of all the studios on the market. on this chart, if you look at the fair market rent of the studio, as compared -- and compare that to what is affordable, to someone who was making 80%, those numbers their equivalent. it is not comparing the same thing. d.c.? here is 100 units on the market. how many of those would be priced as a studio for someone making 80% ami, and we're saying those are 54%. the other number is looking at what is considered to be a fair market rent for a studio by hud which is 1238. if you look at what can someone

at 80% of ford -- afford. it does not mean they can afford every single studio apartment. supervisor wiener: when you look at the real world grants, there is an affordable gap -- affordability gap. we are talking about when you look at the actual rents, there is an affordability gap if you are making 100%. >> if you look at all the studios on the market and compare to what someone at 80% can afford, some of them will not be affordable to them. that part is true. supervisor wiener: it could be as high as 80% for two bedrooms for someone making 80% of -- 84% of ami.

>> we are not comparing can that person afford to buy all those houses or to grant all those units. what we're comparing to is what the media and is for all the studios on the market and does that match what that person could afford? it does mean there will be a substantial number of studios that are about what that person can afford. that -- we are not saying there is no affordability gap. that someone at one end% could afford to rent all of them. that is a gap about what they could afford to pay and what the fair market rent which is close to the median, that is all we're saying. supervisor wiener: when you look at the range for two bedrooms, 84% of the two bedrooms would be not affordable to someone making 80% of ami, if you look at the full range. >> yes.

supervisor olague: the lower your on the economic spectrum the fewer options you have as far as housing. >> yes. supervisor olague: is that reflected in this data? >> when you are looking -- when we are talking 50% ami, even at the steady rains, it -- only 6% of every single studio would be affordable to people at 50% ami. supervisor olague: it would be important to understand how this impacts the quality of life for families, particularly who are below the 50% ami level to find out where they're living and how. i do not know of that data exists but it might be good to do. we could export more deeply. -- explore that more deeply.

>> i will go back to the powerpoint here. we can go back to that side again. -- a that slide again. -- to that slide again. we are talking about the universe of rentals. there is 212,000 rental units. the number of the restricted affordable rental units the city has, that is 18,000. that is 80% of the total. of those, 76% of our deed- restricted rentals. 18,000 is the population. 76% target folks at the very low

income. another 16 target 50-60% and a small number, 7% serve the 60- 80% ami. within this, what is part of this deed restricted units include those units we produce through moe or sfra. ordoto give you how much we produce, we're talking about production. we have averaged 800 units in terms of what moe and sfra have produced. as you know the agency money is going away and that will go down to 400 units. on the bmr side, we have averaged 33 rental units per year.

this average 33 a year. in the pipeline, for bmr rentals, we probably have 725 units set to go within the next five to 10 years. something for people to think about is historically on the below market rate program, it is 72% or so have been ownership and maybe 20% have been rentals. that ratio is flipped. for the next five to 10 years, it will be closer to about 70% rental and 30% ownership because of what the owners feel. does something to think about. some people have passed about -- asked about the rental units. it is because of the poor leveraging ability. you might know we depend on

federal and other funding sources and you have state sources. for up to 60% ami, you are limited to di. here again, this is what we have talked about 0-50% have the of hardest but -- time finding an apartment. virtually no rentals available. from 60-80% their reigns difficulty finding an apartment. this population is unserved by city rentals. when you get up to 80%, the larger bedrooms, it becomes difficult and there is that gap that exists especially for larger families as you mentioned. but stopped about on the homeowner shipside.

this time i promise to get the figures right again. for owner occupied units is 36%. rental is 64%. to give people perspective, california is 57% and in the u.s. nationally it is 67%. our 36% is on the low side. we are not the lowest of all cities. nyc has a 33%. christsupervisor olague: what ws the other percentage? >> 67% nationally. supervisor olague: that is the total number of persons eligible. >> it is 67% vs. the rental.

california is 57%. san francisco, 36%. new york city is 33%. boston is 35%. l.a. is 39%. in terms of the surrounding neighborhood, 42%. berkeley, 43%. daly city, 59%. supervisor olague: where are you getting this from? >> it is from the 2010 census data most recently released. again i thought it was interesting that of the approximately 123,000 owner occupied units in san francisco, about 26% of those owner occupied units on their buildings for rian clear. about 74% have a mortgage. of the 74% that have a mortgage

if we compare what percentage of those are also burdened by their mortgage, they pay over 35% of housing costs, it is 40% of those individuals. here you see that no surprise, although the median sales price for a home has dropped dramatically from 837,000 to 668,000, all that means is that houses that were astronomically out of reach are now still out of reach. you can see that for 80% ami, there is a $390,000 affordability gap. even at 90% there is a $112,000 affordability gap. this is for a two-bedroom in terms of the median sales price and the ami is based on a three- person family. now, for 80% ami, a low income

family could afford only -- percent. only 7% of the homes in 2011 would be affordable to people at 80% ami, you have a greater percentage of likelihood of finding something affordable depending on the neighborhood. in the bayview, 46% are favorable -- affordable. in bayshore, 27% were for will. if you go up to 120% ami, you can see that chart. more homes become available. at 120%, 87% of the homes in the

bayview more affordable for people at 120%. at 150%, people at 150% can afford 39% of the homes for sale which is a slightly higher percentage. it can afford almost 40% of all the homes and it means in five different approach especially those down in the southern part in those neighborhoods you can afford 80% to 90% of homes for sale. it depends on where you would like to live. on the ownership side, what are we producing? two of those three programs are no longer in existence. you have the below market rate ownership program. the agency used to build a% of affordable buildings. what are -- we are left with is

the below market rate unit. over the past cannot -- nine years we build 760 ownership units, 84 units a year. you can see in the world of 124,000 units, our 84 units a year barely makes a dent. we have even fewer ownership units on line. we have 339 units in the pipeline. it will be a challenge as you can see. because there are not this kind of resources available for ownership production. it is a pie chart where you can see where this existing units, we had 2800 affordable ownership units. 58% are targeted at 120 ami and below add another 38% for below.

that is not a large percentage. why do we build more? we -- the leverage that is possible, there are two projects. you can see for mission walk, it requires 55% of the dollars to come from the city where as for mosaic it requires 35%. there is a difference of leverage that makes it more difficult to build. we have offered other kinds of financial incentives to families besides actual production. we do have downpayment assistance programs, programs targeting police in the community, teacher nexturf programs. that has reached almost 3000 middle and come families and

they go below the 90-100% that bmr gives. they go to 120%. with our assistance program, the average ami is 82%. an income of 65,000 the year. which seems remarkable that someone could purchase a home at 82% ami but they manage to bring it together. with all these numbers, again, we go back to the conclusions i talked about at the beginning. we talked about rental apartments out of reach and the target from 0-50% ami, the smaller affordability gap for 50-80% but there are fewer deed restricted units.

we are talking about ownership. for sale houses are out of reach. and our down payment programs to 120%. for above moderate, they are relatively well served by the met -- rental market. it becomes difficult at the larger bedroom size. there is a smaller ownership affordability gap. so in terms of some of the policies that director lee will talk about, we want to throw out some ideas for discussion. one item for discussion is a

possible restructuring of the bmr rental program that can serve up to 80% ami. we coul reserve a portion of that at the current affordability levels. require more units but not create additional cost of developers. there is some geographical concern if you go up to 80% because in some neighborhoods, 80% is market rate for rentals. and then for 80-120% ami looking for affordable ownership ties -- housing, again, we could talk about increasing the downpayment assistance loan program. we could talk about restructuring in part the below market rate program. currently it goes up to 90% or 100% ami. we could bring that up to 120% ami.

reserving a portion caps out at 90 to 100% ami. want to go past a certain point, ami does become market rate. supervisor wiener: how many bmr ownership units do we have? >> we have 1000 units. we're not going to be building a great deal more. those units are limited to resale and a limited number coming up under bmr. >> iowe have 1060 and we do not anticipate adding more. >> that is correct. supervisor wiener: the inclusion rental program is to lower income. tehe bmr program for moderate

income people it would be fair to say is sort of running out of steam a little bit? since it did not anticipate an increase in the number of those units targeted to 90%-100% of ami? >> it is still a valuable vehicle for producing a certain amount of below market rate but in terms of comparing the number of units that would be generated out of the bmr program to the overall number of housing units, it is a small percentage. >> you're going forward with 1060 and in the future will not add much more. >> we have 300 or so in the pipeline. more and more developers are choosing rental as their option as opposed to ownership. supervisor wiener: right. that option is not great to be as much -- robust as we may be once thought it would be? >> perhaps. unless the market turns around.

supervisor wiener: thank you. >>supervisor olague: it seems to me in many ways the bmr program has been effective in housing folks of median income to some degree. i was going to ask aslo -- also as far as below rate market rentals, have you seen much of an impact resulting from the pauma decision and who chooses in the developers -- who choose to go rental or has it had not much of the fact back -- and the fact? >> it has an effect and it is a complicated legal issue. i will leave it at that. supervisor cohen: if you were able to in your analysis, if you considered or started scratching the surface of looking at other assets.

there is discussion within the san francisco unified school district to look at the assets that the school district has to convert that into homes for teachers that are just starting out in the workforce. can you speak to that? is it part of the analysis and if it was not, why? >> we have not looked at those other assets. >> we have to look at a broader range. this is to make the data a bit more manageable. we imagined there would be suggestions. to examine other options. supervisor mar: the school had a

study that looked at other property and they looked at feinstein school and the old sites as potential sites. and looking for partnerships like that. that is an ongoing issue for the board of education and the superintendent. my guess is that they're talking with the city as well. >> before turning over to director lee, the last slide was 120-150%. we do not have existing programs for the 120%-150%. we looked at other financing product whether it was city financing or perhaps something that is equivalent to what has been put out for other city employees. for example, the police in the

community project is something that has been negotiated by the police department and has no income limit. the teacher next door program goes up to two under% -- 200% ami. they may not require city resources but we might be able to find some outside resources to subsidize those. >> one of the policy recommendations you made was to increase the down payment for the loan assistance program. i was curious if you had -- you were successful in identifying where that pool of money could come from. >> we wanted to leave that discussion for the policymakers. supervisor olague: thank you. >> with that i invite director lee to come out for the extended discussion.