In May 2017, Tipping Point Community announced the Chronic Homelessness Initiative (CHI), a $100 million initiative to halve chronic homelessness in San Francisco in five years. As part of CHI’s efforts to create more housing and optimize the process of doing so, Tipping Point partnered with the Housing Accelerator Fund (HAF) to create the Homes for the Homeless Fund (HHF). Tipping Point invested in HHF as part of CHI with the goal of piloting a new approach to developing permanent supportive housing (PSH) that would reduce the time and cost per unit. This brief describes the financing and development model used for Tahanan–the first HHF–financed PSH development–and shares the results of an analysis comparing its timeline and cost data with those of other PSH developments in San Francisco.
Why This Matters
Tahanan (a Tagalog word meaning “home”) was the largest single CHI investment and the first HHF investment. Tipping Point’s goals for Tahanan were to use an innovative financing and development model to complete the project in less than three years and at a cost of less than $400,000 per unit—substantially faster and less costly than other new-construction PSH developments in San Francisco. The model’s success at reducing the time and cost of development could have important implications for the system of financing and developing PSH—and affordable housing more broadly—in San Francisco and potentially other parts of the region and state.
What We Found
- Tahanan’s total residential development costs were approximately $377,000 per unit, 5.7 percent below the $400,000 per unit goal.
- Development partners nearly met the goal of three years, completing development in three years and one month.
- When compared with similar developments, Tahanan’s costs and timeline were substantially lower and shorter.
- The per unit costs for the Tahanan ($377,000) were substantially lower than the median cost per unit of a comparison group ($642,000) consisting of 25 new-construction PSH developments: an approximately $265,000 or 41 percent reduction in costs.
- The timeline for Tahanan’s development, from the date of entitlement approval to the placed-in-service date, was 41 percent shorter than that of comparison PSH developments.
Each component of Tahanan’s unique finance and development model contributed to these achievements:
- A commitment to the timeline and cost goals permeated the decisionmaking process at every phase of the project.
- Flexible up-front resources, streamlined entitlements, and local government commitments to long-term property lease payments enabled early decisionmaking and finalization of the project’s efficient designs.
- Modular, off-site construction contributed to reductions in the project timeline.
How We Did It
Tipping Point engaged the Urban Institute to evaluate CHI’s implementation and outcomes, with a primary focus on CHI’s success in helping San Francisco halve chronic homelessness and make long-term, systemic improvements to the affordable housing system. Urban was also tasked with documenting and evaluating discrete CHI components, including HHF. To conduct this evaluation component, Urban partnered with the California Housing Partnership because of their expertise in housing preservation and development in California, specifically in approaches to increasing housing programs’ efficiency and social impact.
This analysis uses both quantitative and qualitative sources to evaluate whether Tahanan met its time and cost goals. For the quantitative analysis of development timelines, we compared components of Tahanan’s costs and timeline with those of comparison developments. To understand the key drivers of costs and timelines, the California Housing Partnership conducted interviews from June 2022 to October 2022 with Tahanan’s project implementers as well as affordable housing professionals in San Francisco who were not directly involved with Tahanan. Review of secondary materials such as internal reports and presentations from project implementers complemented data collected during the interviews.