Summary

Project Overview: 835 Turk Street Permanent Supportive Housing

This resolution approves a comprehensive plan for the rehabilitation and long-term operation of 835 Turk Street, San Francisco, transforming it into a 106-unit permanent supportive housing (PSH) development, plus one manager's unit. The property, acquired by the City in March 2022, will serve very low-income households, specifically targeting individuals and families experiencing homelessness or at risk of homelessness, with a priority for those with behavioral health challenges, serious mental illness, or substance use disorder.

Financials

The total cost for the acquisition and rehabilitation of the property is approximately $56.1 million. Funding sources include:

• City Loan: Up to $12,922,000 (0% interest, 55-year term, repaid from residual receipts) from local funds, specifically $9,629,000 from 2020 Health & Recovery General Obligation Bonds and $3,293,000 from Our City, Our Home (Prop C) funds.
• HCD Homekey+ Grant: Up to $13,729,907 from the California Department of Housing and Community Development (HCD) for rehabilitation and tenant relocation costs.
• Existing City Funding: Approximately $29.5 million from Proposition C revenues for prior acquisition and predevelopment costs.

Project Details & Timeline

The project involves a 55-year ground lease with 835 Turk LLC (an affiliate of Five Keys Schools and Programs) for a total rent not to exceed $1.00. Five Keys, with Tenderloin Neighborhood Development Corporation (TNDC) as a development consultant, will be responsible for the ongoing management, maintenance, rehabilitation, and operation of the PSH project. Rehabilitation work, estimated at $30.4 million, includes seismic upgrades, new ground floor offices, conversion of 12 existing units into 6 ADA-compliant mobility units (resulting in 106 residential units), window replacements, and life safety upgrades. Construction is anticipated to begin in January 2026 and achieve substantial completion by July 2026. The property is designated as "exempt surplus land" and the below-market rent serves a public purpose by providing affordable housing.

Operating Costs & Affordability

Annual operating costs in Year 1 (2027) are projected at approximately $1.8 million (or $17,242 per unit), covered by a $3,561,599 Homekey+ operating grant to Five Keys for the first five years, supplemented by the City's Local Operating Subsidy Program (LOSP) and Department of Public Health (DPH) behavioral health support. All units will be restricted to households earning no more than 30% of HCD Median Income, with flexibility up to 50% if needed, for a minimum of 55 years.

Citizen Impact

This project directly addresses homelessness by providing 106 units of permanent supportive housing at 835 Turk Street for very low-income individuals and families, including those with behavioral health needs. While 82 existing tenants will be relocated to comparable PSH units, 14 "legacy tenants" will receive financial assistance and have the right to return after rehabilitation. The long-term affordability (55 years) and on-site supportive services aim to provide stable housing and critical support for vulnerable residents.

Confidence

high