Older ground leases include restrictions on surplus cash that constrain the financial dexterity of affordable housing providers and are inconsistent with current ground leases and MOHCD’s surplus cash policy.

The ordinance amends the Administrative Code to delegate Board of Supervisors approval authority to the Real Estate Division, based on MOHCD's recommendation, to amend certain existing leases regarding residual rent payments and lender protections for 100% affordable housing projects.

Delegating authority to the Director of MOHCD and the Director of Property to execute certain lease amendments will reduce administrative costs and make the City more responsive to the needs of affordable housing providers.

Amending surplus cash requirements under ground leases will provide financial relief for affordable housing providers that suffered operational deficits due to the COVID-19 pandemic and allow them to retain a greater portion of residual receipts for affordable housing purposes within the City.

The Board of Supervisors authorizes and delegates the authority to amend leases to the Director of Property, with the recommendation of the Director of MOHCD, without seeking further approval from the Board of Supervisors for the amendment, provided that certain conditions are met.

Amendments must be determined as necessary by the Director of MOHCD or designee, in consultation with the City Attorney, to mitigate financial shortfalls and to apply policy on distribution of remaining operational revenue or to provide reasonable protections to lenders to refinance the affordable housing project’s debt.