i must say that the plan sounds positive as a supervisor this is important to me. and to be sure that this program delivers on the promise it puts out there. i want to thank mayor lee for working on the priority of housing in san francisco. last week we announced $5.4 million needed for elevate repairs in nine units. and i am working with the mayor's office to leverage $2.3 million on housing units and make that available for homeless families. i am excited with this rad program and that we understand what the program entails and the challenges in place.

and more importantly, i want to be sure that we have a clear plan and opportunities to the residents of public housing. i want to know in detail how rad will impact the 4,000 housing units involved, many of which are in district 5. and i hope that the mayor's office of housing can explain a few things. tenant rights and how they are protected. any fair housing implications, specifically should the nonprofit providers be required to report race, family size, etc. the demographics who is admitted. and how we can increase options for housing ladder as residents move up in income status. who from the city will be the person responsible to ensure

that housing providers comply with the rights and maintenance needs and all other things that we continue to have challenges with. and how will that compliance process work. how rad will improve the quality of life for job opportunities in san francisco public housing residents is of the most concern to me. as i said my primary objective today and going forward is to develop a clear, comprehensive plan for these questions, and other questions that many here may have. rad is a complex and potentially intimidating process. and we need a solid communication and outreach plan. there are multiple divisions involved with public housing, and we need a cross departmental collaboration, and we need to bring the answers to the residents. so they don't have to come to

city hall to find out what is happening with their homes. thank you for being here today. i know we have a few folks to present. before i open the floor to the departments, i want to provide supervisor avalos an opportunity to make comments. >> thank you, chair breed, and i will be very, very brief. i want to echo your comments you made in the introductory remarks for this hearing. public housing is an important resource in san francisco. looking at the numbers, who lives there, 22% of african-americans in the city is in public housing. and we haven't done enough to be sure that we stem the tide of african-americans. and our latino community, into better housing situations and better jobs. that's always a challenge.

but it's a main effort that our city is to be involved in to make san francisco a sustainable city for everyone. and housing is a big part of it. the rad program is one that creates a great deal of uncertainty about how we manage our property moving forward. key questions that come up for me are, how are we going to ensure that there is strong tenant protections that. we ensure that we have one-to-one replacement truly. when we talk about one-to-one replacement and with units, and do we replace housing units. and how to have the highest standards for workers. now we have workers with standards for prevailing wage and living wage jobs and benefits. but if we go to a model that contracts out that work, are we

losing those benefits and standards? i used to be an orgize -- organizer with local 577, and a lot of people did the maintenance work in public housing. and they spoke of enduring troubling work conditions, where they were faced with many, many units to work on and not enough resources to do that. i realize that they need to have the highest standards possible. if we are looking at there being fewer resources under the rad program. then we will be seeing a diminishment of people able to do the work under the code as supervisor breed is talking about. i am open to hearing how that is addressed by our housing authority. there are many, many key issues

to address. and i am very interested in seeing how a strong partnership can be made to oversee this public/private partnership, one that keeps the public's standards as high as they can. >> thank you, supervisor avalos, we will have presentations from the housing authority and from mr. torres, the president of the commission of the housing authority. and the director's mayor of houseing on. and we will have regina vascal from hud. we will start with you mrs. smith, if you can give us a presentation and go from there. and after we aare done with tha, we will open up to public comment. >> supervisors, good afternoon, this is a great pleasure to come

to you and talk about this collaboration that we have with other city agencies, workers and most importantly residents of public housing. i will give you a little background. and then we have our regional administrator here to talk about the rad program. and ultimately will be talking about the reenvisioning and rad for preservation of public housing in san francisco. and then we are going to talk about tenant protections and tenant engagement, which we feel is very important in this process. and also our labor communications and work with our employees and bargaining units. >> mrs. smith, before you go on, is the slide set up to show the public? >> sfg-tv, we have a powerpoint. >> thank you.

>> thank you. >> i am new at this -- i wonder if this works. it doesn't. so the san francisco housing authority was established in 1938, under california state government code. it's separate from the city departments. and it provides housing subsidies for over 27,000 households. that's both with the housing choice voucher program and public housing. we currently have 5,372 public housing units that we are managing. that serve close to 10,000 public housing residents. the average household income is just $14,639. and the average rent that our residents are able to pay at 30% of their income is $312, which

in san francisco, where the market rents are over $3,000 a month now, this is a very important resource for the city for low-income households. they could not compete in the market in san francisco. we also have 7,637 applicants on our public housing waiting list. and over 2,000 of those households are single. about 5,500 are two plus persons households. this is after we have done a clean-up of our wait list. these are people that are actively seeking public housing at this time. and the applicants were asked to self-certify their preferences. over half of the applicants did self-certify their preferences. we take applicants in based on

their preferences. and over 1500 of those applicants are actually homeless, single individuals, elderly and families. very high number. our housing was built mainly between 1941 -- >> sorry, mrs. smith, in order for the public to follow along, do you have a staff member who can help move these along? >> sorry, okay, our housings was built between 1941 and 1973, very old, and has $270 million of additional needs, and $50 million of additional needs because of age accrues annually. but yet the capital money that

we receive is 3.5% of the need. it would take more than $5 million of annual budget just to modernize the elevators. and that $5 million that we get is for our entire portfolio. the capital needs have continued to increase. as you can see by this chart in 1991, we received $24 million for capital improvements. and we are currently receiving, we have about $5 million for capital improvements this year. while the needs have continued to go up, the resources that we have available to address those needs has been declinindeclinin. there are other federal programs, and why we will talk about the rad program. that do provide ways of greatly increasing the resources

available to fix up our public housing. and right now our residents are living in conditions that really need improvement. and what we would like to do is pursue this rad funding, and provide better housing for our residents. make the kinds of improvements that the housing needs. and be able to preserve this stock on into the future, for future low-income households as well. our regional administrator will tell you about the rad program. thank you. >> good morning, supervisors, breed and avalos. i will take a few minutes to describe the rental assistance program. and it's set up on a national

basis of why we ended up with this new program. we have 1.1 million housing units across the country. and not much different than what mrs. smith described. the capital needs is $1.6 billion across the portfolio. the funding is received under the united states act, and while a steady source of funding many years ago, it's unreliable. per the cuts, it's a reflection of the appropriation process that congress goes on the budget. >> just on that, is there anything you can share at some point later with my office. how the funds have changed from

hud over the years, there was probably a stronger entitlement where the funds across the nation was rising and then over the years not around at all. historically that would be good to see the difference. >> the slide before my presentation shows your funding decline over time. if you factor inflation and things, we would be happy to come in and show you. the housing authority specifically and the overall federal budget how it's impacted over time as you take in inflation, be happy to do that. >> thank you, i am interested in before 1991. >> okay, and the other aspect of the way that the annual contributions contract between the federal government and the housing authorities that fund the individual housing authorities. also limited access to the capital market. as making it impossible to access the capital markets

called a declaration of trust on every public housing development. what we found we were losing 10-15,000 units a year due to disrepair and as they fell in decline. and couldn't be repaired. so when the hud secretary, donovan came in, one of his goals was to find a stable funding platform for public housing. that would not be subject to the annual budget process, and that deals with this aspect to access other sources. in 2012 congress passed in the act a demonstration program. it authorized up to 60,000 units nationwide to convert from public housing to this new program. it's a demonstration program to see what happens to this conversion of public housing to a long-term rental assistance

contract. with the intent to see if it preserves long-term rental assistance and affordability and improve the properties. enabling the housing authority to address debt. and to put in place a system that would allow for long-term capital needs to be reflect in the funding source that would come in. next slide. so what is interesting about this graph. you can see there was an initial interest in october, 2012, shortly after the program was implement and people could begin to apply. housing authorities could begin to apply. there was a period of time as was new not sure how it would work. but as more used the program,

you see that it shot up dramatically, december, 2013, we have hit the cap. and we have applications now for 170,000 units. well above the cap. the other units above the cap, are sitting in a queue. waiting either for applications that don't get approved. and they move up the queue. but the other issue, we have gone in asking congress to lift the cap. that's where we are in the process. i would note that san francisco is one of the top 10 applicants by housing authority. i think it's number six or so. in terms of the number of units submitted for the rad program. so i believe that ultimately and we'll be explaining how the san francisco housing authority will implement the program. i just wanted to set for you the context. how the program was developed.

and why it was developed. and happy to answer any questions now, i am afraid i have another meeting i need to go to. anything i can answer generally about the program. >> thank you. >> just briefly. you know we talk about, i hear that we are going to private developers will be managing, operating our public housing properties. or some of them. does that mean private for profit? nonprofit? what is the rad qualifications mean for san francisco or around the country as well? >> the housing authority establishes its process for selecting developers. in some it's through the housing authority and some for profit and some not for profit. it's the housing authority's

decision. >> have we seen housing authorities around the country part of rad is that selective? >> as that chart shows there is a huge uptake of housing authorities converting to rad. so is there a lot of interest in the program, 170,000 units is indicative of the units. clearly there is a lot left. as the cap gets lifted and as people have the opportunity to see the authority, we will see more. >> now we see san francisco, are there other cities you can mention or name? >> sure. the top 10, and i will hit a couple of highlighted numbers. chicago is number one, they are proposing to convert 11,000 of their units.

el paso, nashville and birmingham and greensboro. >> are we seeing that the cities and counties are doing the same model in san francisco, does that model vary greatly. here i see the list, includes nonprofits or are we seeing for profits and does that skew the models? >> what you see is people tailoring to resources in their community. san francisco has a housing trust fund, and not many cities have that, it's a source for potential financing. and tax credits, and there is a

number of ways that cities develop their program. you will use what we call project-based vouchers. and others choose what makes sense for their needs for repair. hard to say there is any one particular model. >> okay, looking around the country, are we seeing any main organization or company that is taking a large chunk of rad ownership or management? >> you know not that ti -- that i know of. there are for-profit developers who are appearing that have experience managing these developments through hope 6 or choice applications. i don't know that their is one

particular company doing the bulk of the deals. >> and here in san francisco? >> i am not sure who is all of your nonprofits and developers are, i think that olson can speak to that. >> i had a few questions about the requirements for the list. for example, when we, as we move forward and begin to implement rad. there is some confusion, and i know, the challenge i have right now as a supervisor, who is asking questions is there is so much information i know that will come as a result of this hearing. some of these questions may be answered as a result of future presentations. because you have to leave and i want to clarity around the issue, hud has a specific requirement how the list is maintained under the current housing authority. i want clarity. because there is uncertainty as to whether or not the list will

be directly maintained by the individual properties. are continue to be maintained under the housing authority. i wonder what the guidelines are as it relates to hud's requirement under the list of rad. >> you are talking about the waiting list? >> yes. >> my presumption is that the housing authority will continue to maintain the list. because you are vouchers. >> that can't be changed? >> it depends on how you set up, if you have project vouchers, the owner of the property can establish a list. i am not sure how you are intending to set it. >> okay. we can wait -- if olson is the one. i am trying to understand what the hud requirements are specifically. >> it depends on how you use the project-based voucher assistance. in some project based vouchers

the owner can establish a list. so it is possible. >> okay, that's something we would establish under this program as a city. >> yeah. pretty much you figure how you go with that. >> i know there is a commitment of $180 million potential dollars of renovation from the federal government under this new rad program. that's not familiar? so that's something that olsonvilolson will have to explain. >> yeah, the majority of the dhs will come from leverage, we are not providing additional capital fund for renovation. >> you will continue to provide the same dollar amount? >> what you will get, the dollars convert from a grant that you get from capital and operating funds. they will convert to

project-based rental assistance. they end up being equivalent, because you have that long-term contract you can leverage debt. that you wouldn't with a bank, i am not going to lend because i don't know how much money you will get next year. this stabilizes that. >> the last question is residents of public housing and the ability for them to get gainfully employed. can someone silence their cell phone, please? in past instances with public housing in particular, there are individuals who have gotten jobs that are residents of public housing. and in some cases they are a little above the requirement to stay in public housing. but they can't necessarily

afford another place to live in san francisco. so they end up getting priced out of their unit in public housing and some many cases forced to leave the city. for example, if the requirement is that you don't make over a certain median income to qualify for public housing. and if you get a decent income but not san francisco wage, you cannot stay in public housing, but you more than likely have to leave the city. so it doesn't encourage people to work or to be gainfully employed to better their situation. the reason i bring this up, i want to know if there is a possibility that we can work on making some changes to that? >> yeah, i think there may be some confusion. there is income limit to admitted to public housing.

there is not a limit to stay in public housing. your rent is based on your income. the housing authority should have flat rents, i presume they have flat rents. say i get a job and go from $12,000 a year to making 40,000. >> let's say 80,000. >> okay, 80,000 a year. do the quick math here. >> and you pay 30% of your income. if you make 80 or 100. >> let's use 100, that is easy. let's say 120,000 a year. you will take 30% of that, which is 3600 a month. that doesn't mean you have to leave public housing. the question is do you want to pay 3600 a month to live there, or go out in the private rental

market to get a property with more amenities. the housing authority should establish flat rents, and you cap out. but there is nothing that says you have to move out because you are making a certain income amount. >> okay. that's another discussion i guess we can have with housing authority staff. that has been somewhat of a challenge with individuals who have gotten higher paying jobs in the public housing developments in the past. >> yeah, i am not understanding why that is the case. >> so you can be wealthy and live in public housing as long as you started out not wealthy. >> yeah, you could get a property with more amenities, and people choose to move at that point. this has been in place for years, allows housing authorities to establish these

flat rents so they can keep higher tenants if they chose to stay. >> okay, i want to be sure that's an option, we don't want to penalize people for success. >> thank you. >> supervisor avalos, any other questions? okay, thank you for coming today. okay. director lee, are you next? >> i am next. >> under this same presentation? >> it's the presentation, on to the next slide. i will thank the regional administrator to leave all the tough questions for me. the mayor's housing of community development, before i start my presentation, i want to thank my staff to get us where we are

today. erin and leah in my staff have been working on this for a year, to organize the rental program and working with hud and our stakeholders at the housing authority. i want to take the opportunity to publicly thank them for getting us to this point. we are not over the start line but we are close to the start line. and it's a lot because of their dedication and hard work. and i want to thank sophie and kay who pulled together this powerpoint presentation and their efforts in our office. where do we start in terms of the questions of rad and why are we doing rad? it starts earlier, in terms of december of 2012, when the housing authority was declared troubled by the regional