Transcripts For SFGTV Special BOS Govt Audits Committee 102116 20161023

Government audit oversight go committee my apologies to supervisor breed were meeting these days everyday im supervisor peskin and joined by london breed. Madam clerk, any announcements . Yes. Items acted upon today will appear on the november 1st board of supervisors agenda unless otherwise stated. Thank you madam clerk call the first item. An ordinance amending did campaign and code to require the members of the commissions toe file the reports regarding the selection of charitable contributions. Thank you. This legislation is a proposal that i introduced in may of this year that will impose certainly reporting requirements on the city commissioners and some city boards which apply to wlektd r lektsdz officials via the state regulation our city has a Broad Commission and boards that are largely comprised of boards in various fields that have a lot of power to have license and land use sdwiements the legislation today is an incremental policy that will shed light on how the Public Officials yield their solicitation to a number of examples ill not call out names but definitely no shortage of names im personally aware of members of the commission have used their position to solicit donations from individuals that appear before their boards for charitable purposes that legislations does require the reporting of that behavior and in the years to come will help to inform this board of supervisors again additional steps this is is a half step i want to thank the Ethics Commission for their thoughts and deliberation on this matter as well as any commissioners and members of the Sunshine Ordinance Task force for their thoughtful input over the course of a number of hearings and particularly any staff lee who had worked and made many compromises to move this piece of legislation with that, maam, would you like to come forward on behalf of the Ethics Commission and make any statement about the legislation you wish. Well, good morning supervisor peskin and supervisor breed thank you for reviewing the legislation with the Ethics Commission we sent your comments without the proposal and a lot of that feedback was considered along what im sure other comments from others that are effected a couple of questions i will leave with you as the Commission Letter indicated we are clearly supportive of having such transparency and we want to try to insure the agency to insure the program as possible two clarifications or questions we will hope that you will consider in terms of language that is before you that that looks like it oozed used governmental and charitable purposes but not the same language for the charitable purposes has defined when we talk about the payment one thought to be the extent the same phrasing and language that helps us to convey advise to those individuals that are required to file when we look to the body of state law that is consistent request the language we use so that that might be a way to broolgs the language to help with compliance, and, secondly, one of the issues that little commission raised during our it discussion 89 need to make sure that we can deliver the online filings and online disclosure piece of that reporting requirement were charjd without appropriation for that challenge in a mooeveng way one recommendation to think about this morning the question of appropriation for this to help insure was we are developing our Electronic Filing system for the next several years that we will be able to center the resources develop this component as well help with the effect date of the operate is i can imagine 18 that will give us time this will be ignored the case of plagued with paper filing if we fund this ill leave it as your considers. Thank you as to the second comment that is precisely the reason we video an Effective Date so far out in the future to make sure that you have the appropriate resources to tackle this task and with regards to the first comment im do you have any language that you would like to suggest. Im just looking for a moment for i have to take another look where this language to clarify and may will have to turn to the City Attorney for guidance i want to make sure it was covered yes make sure that would cover when we talk about the donations and the report we are talking about the payments as used in Government Code Section to the capital small phrase. Why not i let you huddle with mr. Gibner and open up for Public Comment mr. Bush. Supervisor peskin and commissioner london breed im larry ambitious on behalf of the friends of Mission Street were in support of this lfshs and also the amendments that to track the language as exactly in state law no inconsistent one of the effects of doing according to the state law you have a body of opinions from the team and others what constitutes those categories and support the request for Additional Fund in order to implement this clearly implementation is as critical as policy and need this i appreciate the chairs comments about forthcoming and ask that you add an amendment to cover disclosure of contributions to applied entities and charitable and will governmental entities that is similar to what is already the law in los angeles and similar to harvey rose the budget analyst suggested in june of 2012 memo where in los angeles that was prohibition but that legislation is about disclosure we ask a disclosure of contributions to 527 entities busy directive or commissioners, i think what that will increase the transparent legislation thank you. And mr. Bush get to the staff and come to a conclusion where we should continue this and. Next speaker. Im bob plant hold the member of friends of ethics all a former Ethics Commissioner this represents a massive positive which was from the time i was open it is something that is helpful he agree that adding in the word legislative is important for consistency even if the city didnt know how to chaplain it the fact if so in state law legislation worked with that means that has a history of being understood by Government Agency i dont see why there is a problem i know some significant legislation by this disclosure can be ignored addressing a commissioner that is a lobbyist and lobbies are advocates on matters before the commission and seeks donation for charitable activities can be ignored in a very convoluted way that raise a question of are you kidding to disclosure will help the public and commissioners and city staff aware of transparency albeit and fulfilling our fiduciary duties as commissioners without effecting our other activities mr. Plant hold. Good morning, commissioners deb from the San Francisco Human Services network when you this legislation was introduced we supported the broad concept but had some concerns because many nonprofit persons serve on commission and have a conflict between their expertise and balancing their contributions they work for their day job and respect the donors skflt i want to say that supervisor peskin respond to those concerns with the proposal to limit the disclosure to interested parties this legislation further narrows the scope of the legislation it does apply to only Interested Party for appearances before the commission that are related to that interest we very much appreciate the response to our concerns a couple of minor concerns that the f pc for the broad list of folks not caught up in the legislation other than we believe this is a Good Government measure and narrowly tailored it is an actual importantly or are appearance of a quid pro quo and happy to support that. Thank you, ms. Letterman and working with my offices any other anyone wish to comment that wants to testimony on number one seeing none, Public Comment is closed. I know that a number of you have been upheld i huddling i think that we have potential language relative to what we call section independent expenditure committees or super packs for the purpose of influencing elections at the state, local or federal level so perhaps i will offer an amendment but ms. If you can remind me of the conforming language relative to california government code thank you supervisor peskin the huddling with the City Attorney trying to disforgive whether the new language is applies to Government Code Section 81 plus from the purpose to go beyond the charitable contribution by the board and members this is a policy that calls for the commission the commission supported the ordinance to have charitable donations reporting i would just request perhaps a positional time to talk with the City Attorney but no additional language well recommend at this time. The 527 question go others in the audience raised it. Id like to do add the 527 organizations and continue this item but deputy City Attorney gibner is shaking his head. Yeah. Im not sure what the 527 language will be ignored my office has not drafted that but government code which is in many ways limits the legislation the political contributions by appointed members of the board and commissions already govern this area there will be ignored significant overlap maybe not conflicting maybe conflicting probably not conflicting but over lapsing in the board requires disclosure of contributions and political contributions in this ordinance so i guess from the committee is interested in making that change and requiring disclosure of those teaches solicitations ill suggest continuing the item and the office will work out language and consider it at the next meeting. That sounds like the sensible pathway ill suggest that we continue this item the floor is yours. I want to talk about a few concerns i have and hopefully, theyll be ignored addressed before it comes back to the board supervisor peskin he know you didnt want to give any examples im trying to understand because we do have a lot of commissioners and we have a lot of commissioners who raise funds and my concern is trying to understand the specific examples of abuse that might exist or things that have been problematic you know maybe things that have been public in terms of the those kinds of incidents im trying to understand the issues here and why this is necessary and if you feel comfortable providing those examples or can give me a better insight the reason he ask ill clarify so i served as you may know as a executive director for a Nonprofit Organization and also was offered an opportunity to serve on the commission that the San Francisco Environment Commission and with an of the things i want to make sure before i agreed to serve on the commission that was definitely a great you know first of all, volunteer responsibility but a great responsibility to serve my community i was also concerned about my ability to fundraiser and whether or not something was a specific conflict and working with the attorney had made sure that not only was you able to continue to fundraiser but an appeared conflict with, of course, check with our attorney ask if it is appropriate to vote or not and make a determination to recuss myself but the organization he representative i want want to make sure i was able to serve as a good commissioner but making sure those conflict were discussed pubically and addressed in an appropriate manner so i guess just trying to understand because when we talk about commission and we talk about people that serve on the commission we talk about people that raise funds that help to serve the community im trying to understand why an additional layer is being at added that would be a burden potentially and something that would maybe create a i guess an additional layer of reporting that may turn some people off from serving so i guess ill trying to understand the abuses and the issues of people who are behaving unethically a consistent thing is that what were seeing on a regular basis and people that are doing business with the city should know better kind of and finally ill say that the other they know that is important to me is when people are doing business with the city or in the community as far as im concerned, i want to know what have you done for the communities have you transmitted to the organizations that help to serve people you know in my community what are those organizations are consistent and involved and active i know to know those things i guess part of it is im just trying to understand is that the right thing to do and are we adding more bureaucratic red tape and a better way to deal with this. Let me i appreciate those questions let me start at a highlevel why we as leshthd officials no modern times are required to file a behest payment report when we solicit a third party to make a donation to a nonprofit in this i go to at t and say hey will you do not 10 thousands dollars to the neighborhood district 3 for the betterment of children what have you im required to fill out a report which anybody can go online and see they can make a connection we obviously have to report when people make donations to the Campaign Cycle and see where the independent money the Budget Committee hetch hetchy say a contract were not approving a 50 Million Contract with at t shouldnt the public have the right at least to know that while they didnt give me a Campaign Donation but did something at my behest quite frankly la is ahead of us they would you cant do this is a half step in the case of you know the Redevelopment Agency and were all commissioners as ethical and interested in checking in city advertising to find out whether or not their doing the right thing but in that incidence and the way it is written 72 hours narrow remember it says section 2 point plus this is only reporting when the participant is involved in a prooekd that is before the commission not all but noriega it is only as someone who has Business Front of the commission that seems to be the place where people should know this is a wake up call for commissioners to say hey probably not okay at this time not prohibiting the behavior but people should know yes. The Redevelopment Agency is considering a contract with at t and at a particular commissioners behest donated 50 thousands to the charity of their choice thats what is it aimed at. He or she the other example ill bring up what from the commissioner didnt request it and it was done. Then theres nothing to report. But for example, we as a nonprofit director you know if at t a contract before me as a contractors and at t without my request depended on money to my organization it is proper for me to recuse myself from that vote that is the case with many commissions when things of that nature occur. I agree without naming names this is a number of years ago we had members of the one of the most powerful commissions the Planning Commission who quite regularly solicited contributions and eventually when you saw who was paying for things in an annual invitation to a diner and surmise which was going on the reality that individual commissioner was approving entitlements and at the same time that individual organization was getting sizeable charitable contributions i think the public has a right to know that. Okay. All right. And why a thousand dollars instead of 5 thousand dollars is consistent with. That was the trade off we have a 5,000 threshold as members of the board of supervisors but the trade off was that by narrowly taylor 2 to only folks that had a proceeding before that commission we voted from 5 thousand to one thousand were at 5,000 but have to report all behest payment above 5 thousand dollars in this incident only read the language if a commissioner directly or indirectly solicits a contribution or series of contributions from any party or agent or brarnt in all a proceeding regularly a series of license for the commissioner the commissioner shall file only about people that are asking the commission for a permit license, land use entitlement thats why we lowered it. Is it more appropriate to their the specific Commission Rather than basically required of all commissioners and i mean all commissions especially those commissions that dont necessarily deal with like either major contracts that or the kinds of things were talking about in terms of land use with the Planning Department and things like that. That point is welltaken the implicitly commissions that are approving licenses or land use entitlements it wont apply by definition and i want for ever ways and Means Committee the Airport Commission approves contracts all the time. I guess im thinking people we have an commission and run nonprofits a number of them including the recent Planning Commission person that we approved at the board of supervisors i want to ask mr. Gibner a question back to the example that we referenced you know for example, if there is a person that the director of a nonprofit theyre on the commission they received their organization without a request receives a large contribution my understanding it is not illegal for them to vote for or against that contract but to disclose it for full fahrenheit and john gibner, deputy City Attorney. That is basically right if theyre an employee of an nonprofit. Or board member. Or board member and person appearing before the commission made a contribution to that nonprofit whether or not it was solicited by the commissioner or board member that generally doesnt create a legal conflicting for the commissioner there or rare exception from the nonprofit basically fully funded or almost fully funded at t a nonprofit then the commissioner mate might have a conflict voting on an at t maefrnt but that sometimes is required to disclosure the relationship with the donor but not create a conflict. Back to that for example, the nonprofit that i served as a director for i mean first of all, all the information is public they receive a significant amount of dollars from the city and could that potentially be ignored preserved as a conflict when our voting on items or contracts or things from for example, another agency like the Redevelopment Agency as a relates to city contracts i mean especially because a significant portion of the funding for this particular organization came from the city that could be ignored preserved as a conflict as well i guess ill you know bringing up a number of points just because from my perspective i want to make sure that you know we are not adding additional layers by figuring out a more effective way to address the issues so it is completely transparent and from my perspective you know okay. You ask someone for something thats a different story and the other question were talking about well, thats a different situation i wanted to bring up those points and make sure that that we arent putting what i believe are really good commissioners who run Great Organization who do fundraising are ethical people in a position to add another layer of bureaucracy we have some people that are not behaving ethically so something to think about i know there is going to be amendments this will come back to this body and so i guess we can probably discuss it further at a time. Thank you supervisor breed no objection well continue to the call of the chair. Madam clerk item 2. Can we excuse supervisor yee. Id like to make a motion to excuse supervisor yee. Hes not coming. Can we take those amendments without objection . Thank you i item 2. Two the item on new policies to attract 9 belowmarket rate exit program and the Mayors Office of housing to be more effectively intervene with bmr a better im sorry at risk for foreclosing. Supervisor jane kim brought this hearing forward i believe has been cosponsored by the remaining two members of this panel welcome supervisor kim. Thank you chair supervisor peskin and supervisor breed for covering that important hearing this is the third hearing that we have called for asking for the Mayors Office of housing to report on the implementations and monitoring of our Affordable Housing program in particular our belowmarket rate program and many of the marketrate development we here on the board have fought for more Affordable Housing by increasing the inclusionary housing and supporting our bond last year our 350 million popped and also, we negotiate for more units, however, the preservation of our Housing Stock is as important as fighting for new housing earlier this year we working closely with the Mayors Office of housing to preserve the affordability of 101 apartment in any district 101 household families and seniors and teachers and restaurant workers are at risk ever losing their apartment working with the Mayors Office of housing were able to successfully save 101 households if eviction for every person that is lucky enough to win an Affordable Housing unit makes a difference it means staying in San Francisco and being able to live near where they work and near the square inches and near the services and friends and neighbors and remain a part of their community it means being able to spend 15 to 20 minutes to a work about a year ago we were notified about a foreclosing process in our indict we spoke with the Mayors Office of housing and the affordable counseling for intervention ultimately those two units were negotiated by on banks within the last 45 days within were less for sale that was bought in 2009 for 200 and 9 thousands belowmarket rate and bought at an auction no where seven hundred and 92 enthuse and listed at nine hundred and 50 thousands that is a homeowner unit for that one of your middleincome that is sold for almost one Million Dollars what im the problem that promoted this hearing is not yet the sale of of 101 plus lost units but to lose units for foreclosing if we dont have policies in place to prevent that in march of this year we were assured a new noticing procedure it prevents this from happening it in the future i ask a report from the Mayors Office of housing on the Huge Development and, see our director olsen lee and bmr director thank you both for being here. Any comments from colleagues. No, i mean i want to put this in a larger perspective since the early 2000s the city has been in the business of creating belowmarket rate units actually were in the business of creating bmr units about that one of the untold secrets we left many of them because in the old days were not doing them right and should talk about that i mean the reality is question did bmr unit long before my then colleague in this chamber in 2002 now sdmaert passed our first inclusionary law we had inclusionary guidelines 3w5ikd when sizing was a member of the San Francisco Planning Commission we lost these and we should talk about that but now that we firmly believe that we have a status quo bmr program learning that were losing some of those restrictions to foreclosing albeit it he was puc to our attorney mr. Lee we agree that is a very small percentage of our bmr units the fact 72 hours going on and the fact that since ive been back in office i think i first contacted our office within a week of having returned to this board in december of 2017 and at this point we lost one and substantially lost another and its been going on for a year i dont want to lose a single one supervisor kim was saying the other day how shes proud of her record where in certain instance we are able to get one blasphemy unit in negotiation with a developer that one unit even though not tens of thousands even if units is a victory when we lose with an it is more than a bummer i think you guys will have explaining to do with that and good morning mr. Lee. Good morning olsen lee director of the Mayors Office of Economic Workforce Development the bulk of our presentation will be ignored on the singlefamily program and sort of the transfer of the redevelopment assets to the Mayors Office of housing and this is the limited Equity Program but supervisor you asked to provide context on the whole notion of you know Affordable Housing production and whether we are evolving as a city as an agency and industry in trying to preserve long term housing as the supervisors know and as supervisor president london breed knows from her period on the Redevelopment Agency the city had basically two or actually three or four housing functions through the hires through the Mayors Office of housing and the Redevelopment Agency they provide a series of Affordable Housing in the best they knew how to do at the time and part of the evolution of our work was that we have found out that the need more Affordable Housing is ongoing and we the city and the agency had Affordable Housing restrictions that were not permitted and clearly the sfpuc is trying to make sure anything we assist or create through the inclusionary process or through funding along house taxing program is permanently affordable ill talk about that evolution and go back to the topic at hand the limit Equity Program you know so speaking first from the stand point of a Redevelopment Agency the Redevelopment Agency was seen as being a temporary Agency Within particular areas and they created Affordable Housing innovate meant to be permanent the restrictions were outlined for the period of owner participation agreement where after the work of the agency was done and the neighborhood was stabilized the Redevelopment Agency was done and really relied on the private market and to take after who was happening in the neighborhood one of the things that happened in the 90s was 20 years after the initial you know development and there are many of those developments in the western edition this was the first at risk crisis the city overall happened at the same time that was happening nationally bus over the course the urban Renewable Program and what was happening even though there were you know 40 year loans protruded to Affordable Housing developers with project and all that there was a 20year out those the buildings were on the 20 years and assessing well, this is San Francisco real estate why should you be ignored doing the Affordable Housing when i can had had at the irregularly of mayor brown took on the responsible of saying all the developments at risk of going to market because of this 20year window that was the beginning of a process where the Redevelopment Agency started using ground leases and having that ownership that ground meant you can control what was happening above the ground so in buying back many of the Affordable Housing sites we learned the Redevelopment Agency that purchased those units or sold those that land to the developers at 500 i was buying them back at 50 thousands really we learned from that lesson and said never again, its the origin where why we are doing ground lewis lease to permanently preserve Affordable Housing now on the city does through the Planning Commission we had in the past you know restrictions that lasted for 15 years we moved that to thirty and now the state of the art said 75 years for the leave of the project were learning through the process we need permanently Affordable Housing so and this applies not only to our singlefamily stock not only to our for profit versus but Nonprofit Developers theyve received in the early psychos and 70s and their affordability has been satisfied we have a list of prestigious that were once subject to your restrictions but because we give them funds with a 20 year affordability covenant not subject to you our requirements remain Affordable Housing but they are at the sort of the responsibility of those Nonprofits Organization to continue them as nonprofit housing but again, we learned from that experience and continuing to provide financing and provide financing in a way that will assure long term Affordable Housing whether it is the small sites program, whether any multi family projects, whether or not the inclusionary projects overall but as supervisor peskin said it has been an evolution and people have utilized the restrictions that they thought were appropriate at you know a point in time and some of the projects are still out there and some of the projects are transferred over a series of transitioned through 9 Redevelopment Agency and various mifrngsz within 9 Redevelopment Agency or as a solution 6 Redevelopment Agency their housing transferred to the Mayors Office of housing so lets talk about the the singlefamily portfolio from the Redevelopment Agency. Thanks just to clarify are those the only unit. That will be ignored high risk if foreclosed on. Is that why dollars a focus on the units in the redevelopment plan. Thats called the hearing to look at specifically at the limited equity units that traveled to the Mayors Office. You know i guess im asking; right would other belowmarketrate housing unit mixed if they were foreclosed on at the same risk as other units r or are they adjusted explain the distinction. The multi families are different and whether or not an aunt a. D. 20 lake the South Beach Marina question those clearly are at risk but for the purposes of this we focused on the singlefamily that was our understanding of the focus of this title of the hearing so. Olsen do i have hard copies of the program our screens are sorry. The hard copies of the so like why not go to the slide number 3. Which is where you are. Great. Yes. He can see why you need hard copies that is hard to read. Okay. So this chart ill describe this chart it is hard for the audience to read this describes sort of 3 buckets the all forms of shared appreciation or all forms of the redevelopment down payment assistance up to approximately 2 thousand 4 and on the restricted resale model which was the most current model of the Redevelopment Agency program fwra it was transferred and sort of in creativity to the Inclusionary Program requirements and walk through there as you can see the early forms of shared appreciation on the redevelopment dates back it 1981 the earliest down payment assistance they did some, some of those were you know small you know down payment assistance some of them were in conjunction with this first time homeowners development called the marinas village and the Hunters Point shipyard transferred as part of the development and the owners needed the down payment assistance in addition to their loans to make that happen and there were loans of no interest and due on sale and that was the San Francisco public works at this point and date if 19 i know 81. When you say some not a lot. I would say that the bulk of those loans at marines village an 80 Unit Development less than one hundred overall and really you know when they were sold they paid off the original principle amount no ongoing restrictions whatsoever the loan to help that individual get into a unit thats it no ongoing restrictions related to owner subpoena sisters. Or anything we do today and over time that changed the agency and this is about the time of poly high because i think the next sort of big phase of redevelopment are homeowners occurred as you may know you remember bill at mercy housing and at the director of the Mayors Office of housing he worked on poly high and created a restricted resalt program at the poly high and replicated that resale method in approximately 1990 that program was there until approximately about 2003 or 4 when the Redevelopment Commission moved from a shared appreciation structure to the limited inject or resale model and in part of the agency moved to that model because there was a great inflation you know building up in at a point i say shared appreciation well replace it was costing the agency between 3 and 4 hundred 240udz every time something was sold you have to think of Something Better because we cant afford to be spending that of money replacing the equity every time a unit sold were that spending more in terms of those units than subsidizing the long term Affordable Housing in 99 years thats at that urging staff came up with a limited Equity Program that was the Resale Program that tied the resale indirectly to whatever the future Interest Rates were and the change in the medium income not steak that way but the principle things that effect the resale of the units in the future and the other they know that was for the first time we included the hov hoa to make sure the units were affordable thats the form of Redevelopment Agency at the time of transfer and appear to the what is the section 415 Inclusionary Program and very, very similar because the current 415 was based in part on the Restricted Program and once the affordability level or affordability crisis was calculated inflated by the which i know in the ami without the consideration of hoa but they are very, very similar with the whole notion of trying to make sure that queer creating affordability without additional costs to maintain the affordability. Wrong way. Oh, could question go back one this one right here. Give a sense that context he apologize for jumping around on page 2 that gives us a sense of belonging how many singlefamily or homeowners not the seam family but homeowners loans we had in our portfolio so our the moe portfolio was approximately a total ill say 26 thousand units this is you know 24 of the 26 thousand 20 percent of the total number of units we have to monitor and in part those are sort of almost last week individual projects their individual owners and so we dont have on the multi family side i know 22 thousand plus units not 22 thousand owners on that side we have 46 owners on this side but this give us a sense of belonging our total portfolio and the redevelopment units are approximately 1 percent of that total portfolio. Okay. Okay. The next slide the homeownersship totals again as the supervisor pointed out redevelopment had been doing this for a while the forms are a collection of miscellaneous down payment assistance with a tech unit reilly started in terms of of form a and in terms of doing a shared appreciation or this is sort of a restricted we sale based on the change of middleincome and form b the most prevalence for the consideration of Transportation Authority Interest Rate for hoas 0 and income thats the number of total units product this is active some of these again, because they we have no rights of first right of refusal over and over no ongoing since the portfolio is new to our office weve lost four units to foreclosing that is less than one percent. And of those dont we get a notice of default. Were supposed to get a notice of dpauflt but not always at the maria talk about what we do what our procedures i think the concern that was expressed is have we improved our procedures for addressing those teaches units and figure out a way the one major difference how the Redevelopment Agency managed this portfolio versus the city managing this portfolio the city through the Planning Department was able to secure on each individual unit the the Redevelopment Agency didnt have the power to do that we have a first right of refusal and we were able to basically go down and stand on the city hall steps with the folks that were including but not limited to on the foreclosing to out by evidence everyone to get the parcels we did that to preserve the long term affordability of those units during the period of redevelopment as we went through the transition maria will talk about that confusion about the ability anywhere anymore i think we clarified that confusion and have the right to go out and bid on mropts and require to hold for future resale. When you and i met you indicated to me, you needing the authority i was happy to give you are before the second unit that was foreclosed on as maria will talk about we think weve clarified we dont need legislation there is we have a methodology in which we can now you know youre right to acquire the property not really going through the typical city reality process that means going to the board and the Reality Department but. Way that the City Attorney feels comfortable we can go and intervene in some of the foreclosures and preserve for long term housing let me have maria talk about what we are doing in terms of you know work on foreclosure preservation our experience and some of the foreclosures why they resulted in foreclosures and ill talk about some of the next steps im available to answer any questions. And olsen when did you come to 9 conclusion you didnt need legislation he was going back to the emails trail 2w7b any office a your office and kind of peters out in march and no response to actually no response i guess. Approximately in march. Good morning, supervisors. Im Maria Benjamin director of Home Ownership in the belowmarketrate housing he get the pleasure of working deregulation with the homeowners and others lessons and other partners and nonprofits on those programs those units were the dissolution of Redevelopment Agency happened at the height of the feeshg process and in respect unit that came that had four of units that foreclosed directing our time of monitoring the units two of them negotiated within months of dissolution and two others foreclosed that had been so over leveraged that person he now belowmarket rate because of the homeowners had during the time of the s f r a monitoring they had over leveraged meaning taking out second loans. I i get it but isnt there your interest senior to them and how do they take out seconds in this scenario dont i instrument that prevents that from happening. Not in the case of equity lines of credit last week as olsen mr. Lee explained we were some of the Older Program documents that was no notification with homeowner didnt have to have a loan subordinated to take out is an equity line of credit not the case were monitoring those now but did the agency in as late as 1981 was not able to figure that out this is not a new i mean the way fencing works has not changed in the last commissioner wiener any voter worthy their First Mortgage lenders didnt have to subordinate to 9 lenders of credit thats the mess we got into in the last 10 years folks were able to take out third and fourth liens without notifying anyone it was a problem that the Banking Industry has working on adjusting in many of our lenders have adjusted it the final two foreclosures that happened were from sadly from nonresponsive owners and at the time as mr. Lee alerted you we were not confident that we were didnt know we had the ability first of all, not the funds we have clarity now we have a program in place that question, alter future foreclosures thats the bad news the bad news but the good news neurology or during the same period of time we were able to halt 24 foreclosures from happening to our bmr Program Units and we did that many partnering with homeowners sf a lot of agencies that have expertise in Loan Modifications and negotiating with lenders resources like keep our home california and another riser that helped folks stay in their home those 24 units we also we spent on average of three hundred thousands a year to support those agencies that support your homeowners they also support our homeowners and put our homeowners through quarterly workshops for folks to come well attended quarterly workshops our bmr owners attend where they learn the allowable was to refinance their First Mortgage and learn about their rights and responsibilities under the homeowners association. They send out quarterly news letters to the bmr owners to gentle remind them of they are obligations under the program and theres a lot of confirmation between the sf r m a owners they throughout the Redevelopment Agency went away maybe any obligation went away were continuing reminding them of the theater obligations those agencies provide anglo oneonone homeowners counseling they provide legal representations in the homeowners are having problems with their hoa and provide hoa representation or advise when the building is 100 percent low income households and Housing Units and need assistance in executing their responsibilities under the cc rs. In house my staff works really hard to monitor and to make sure that were thats a great question our homeowners especially those ones that were the resale restrictions does not survive foreclosure we take very good extra care with those we know the importance of maya angelou that they stay within the portfolio were working with the City Attorneys office we have a notices files open record at the Records Office when a notation of defrost filed against them and restrictions recorded at title and over time these older documents dont come up when a new lenders say doing an initial title search by recording a new announcement in essence those units will have special restrictions and having that announcement come up sooner in lien of donates that are recorded on a property i think will assist us in making sure that none of everyone is aware of our restrictions and rights under the program. Are you assessing that we have policies of Title Insurance issued that dont reflect the citys n s rs. No. No, im not assessing that im saying when a homeowner goes to a lender and want to refinance their mortgage our restrictions dont always pop up in their initial search on that property and. For. Not until they do a full title report do our restrictions show up. Right presumably when they get a full preliminary title report that shows and they cant close the transaction. Absolutely were trying to prevent it before it gets to that point make sure that these units are identified before theirs any kind of title. Were offering Financial Assistance throats loan program and mouth program last week, a down payment assistance loan for a homeowner is in stress and a homeowner cannot afford the assessment at the hoa are had been behind on their mortgage but their income is instead and cant pay the big amount of money and maybe lose their homes we have Funds Available to make sure that the homeowners get the Financial Assistance they need we are very diligently or diligent with the title and monitoring probably much to the and i known as to homeowners we send out notices they prove they live there and the title they held in their name we preapprove all refinances or title changes prior to make sure their scomplient with the program and we also do a lot of foreclosure monitoring so we been working with the assessorrecorders office since 2013 and they provide us with a list of all the units throughout the city not just our bmr units but all units that received a notice of default the assessorrecorders office send out a letter to the homeowners and dont go you know theyre free assistance to help you in the city and go to homeowner sf for intervene services and every homeowners sf contacts you are bmr folks and says hey we can help you thats the first point of contact. I dont want to cut you off im delighted it sounds like 24 cases we were able to intervene and stave off foreclosure and keep the bmr restrictions in fact take it is the 4 or 5 foreclosures shooum assuming the information is correct it sounds like weve been aware of the foreclosure problem and have a robust regiment around it everything based on the record im seeing related to walk sf everything that could go wrong did individuals in the development that were affirmatively reaching out to mohcd and saying we have a problem they were calling a hotline and not called back and alerted us to problems relative to the occupant not or the bmr owner not be able the occupant and all of that is now in the record that is before me im delighted about the 24 i mean here we were those people are begging us to limousine and we blew it on the first one and second one when we came along after the fact think is foreclosure on the second one and researched out to mohcd if not for this hearing owe wouldnt know he never got a response after the couple of meetings you guys came to 9 conclusion dont need the authority in the board of supervisors as of 6 months ago you had that i mean, im delighted to hear it would have between happy to give you the authority were on the same page and Everyone Wants the bmr restrictions lost but what went wrong in mission walk. We actually applied the same next weeks to the two units at the medication walk and actually reached out and worked in both cases we had housing counselors, the hoa, even the Properties Maintenance people we knocked on the doors ourselves and in both cases the homeowners were noncooperative and we the difference between the scenario on that you have in front of you on Federal Street the homeowners were responsive and on berry street in the responsive and absolutely lirntd to all the reports that we had of problems are the units we knew about the problems with the units before we got the reports problems with the unit and did try tee reach out to the homeowners and can i followup on that question. So it seems like in the vast majority of cases a foreclosure mothers and fathers was able to successfully protect those units and keep them in the bmr program i suspect challenges where the homeowners are not coordinating with the Mayors Office in that situation from a citys perspective to keep the units within the bmr program at least for another family that may quality what can we do in the future to address that even if they are minority Agency Supervisor peskin said every unit matters it seems small isnt context of our Larger Program but that one individual person that senior that gets to move in. We work hard to make sure that happens we have to have something in place might have unresponsive homeowners in the future so i i feel confidence about the clarity we have today or that weve had for several months on how we can not have this happen again we will continue the resources and the measures that we do preventively to stop a feeshg feeshg in our current annual Budget Approved by the board includes funding to use to purchase units that would otherwise be ignored lost to feeshg thats a huge step forward and. When you say purchase. The units that are well have san jose purchase marketrate. Those are the ordinarily ones in the portfolio but in the section 415 and. The ones in the l ap in the section 415 we dont center to purchase those these units are held in survived foreclosure. Survived foreclosure. The units are turned around and sold to qualifying first home buyers. Thats the newly mission theyre protected even if their feesh foreclosed on like mission walk this pot of money allows us to intervene whoever is foreclosing on the household and exercise our right to purchase those units and were continuing to work with the City Attorneys office on coming up with processes to be able to resell those units should that that happen again and he really feel like at this point we have all the tools we need to step in to be able to avoid this from happening again. I think thats all of my presentation. Mr. Lee and i are here to answer questions or can you talk a little bit about the units in the limited portfolio where were at risk of losing the bmr program. Sure well in the total sf r a7 hundred and 21 let me get to this oh, thank you there are 4 hundred currently 4 hundred and 26 of the units that fall under the l e p and as the former o and a and b resell the reason that number it growing on the form c is because as a resell when the new owner comes in they bye into the form so we eliminate eventually elect those owners to stay in the units for 20 or 30 or 40 years and eliminate the falling of off of those restrictions starting with a new form c that will be ignored repurchased under the affordable price. Thats why you have more currently active units than produced. Right. Mr. Lee any you comments. We apologize for not staying in communication with our office we share the goal which is to preserve every single Affordable Housing we know is near and dear not only to the supervisors but to the city and little residents overall and were modifying our procedures to make sure that we dont lose another unit we cant guarantee well never lose another unit but trying our very, very best not to lose units on the singlefamily side or the multi family the. Today know who the lessons were in the case of two mission walk units. One a private investor the lenders sold to the private investor so youre saying the original seller took the paperback. No whoever held the original mortgage stockholders they are mortgage to a private investigator last week they do. And the second one . We think that was wells fargo. And wells fargo needs to give me us back to unit they dont own it anymore. All right. Were going to continue this hearing because i know that friday and my colleagues have other things they have to do any Public Comment . That want to testify on this matter mr. Rath born. Good morning, supervisors. Im grateful homeowner at mission walk and want to thank you and your colleagues and also the Mayors Office of housing for youre spectacular good work and creating spelling needed Affordable Housing now we have some Housing Units lost through feeshgz that wipes out millions of dollars dollars of taxpayers investment as well as denying housing for those that need it so i support our efforts nip this in the bud to protect Affordable Housing that is so hard to it create first place thank you. And thank you first year bringing those matters to the attention of my office and mohcd and supervisor jane kims office. Next speaker, please. Yeah, im ms. Cohen i think i supplied information to our aid supervisor peskin that is rather contradictory what i heard mr. Benjamin say people on mission walk on the hoa board and it in Property Management board were bringing up to the attention of mohcd there were units going into foreclosure and mohcd did not know that when we informed them i say we im talking about our hoa board. Whether i brought this to mr. Lees attention 2, 3, 4 december he was surprised you didnt know about that the documents we have here definitely contradict what weve heard ill get to the bottom of it and try to match it online. Ill be happy to help with that but im hearing we want to say one more thing they make it sounds like no big deal oh, well we lost a couple of units thats our communities and home and something was broken okay. A sense of belonging communities, a sense of belonging stuff we agreed it when we basketball into the limited Equity Program were now seeing two owners they can do things and we have no control over that okay. We have no control over things theyre allowed to do because they now fall outside the restrictions that apply to all the rest of us it is a b. C. To use it as very big deal there is outrage over there. Thank you, ms. Skooelg ill continue to determine what happened im delighted there is widespread agreement it to have the best practices Going Forward but the experience you had that is very well documented relative to your calls and notes and little exercise he had at your suggestion why i went down this road are similar which is largely not responsive and thats why were im learning more in the hearing than eave learned in the last 11 months so thank you for your work why not continue it through the chair anyone wish to comment testify seeing none, Public Comment is closed. Well continue this item through the chair supervisor kim thank you supervisor peskin and want to reiterate i think what ms. Cohen said any unit lost is a huge a lot of the we fought hard to insure that middleclass and middleincome and redevelopment was an important tool he look forward to working with supervisor Peskin Office to make sure that moving forward even in challenging scenarios were able to maintain and keep the units and just you know this is our third hearing we have discussed this issue long before the units were lost we had a unit lost to foreclosure in the south of market im hoping at the next hearing no further you unit lost. Thank you were adjourned could you please take your