Director of Community Real Estate Karoleen Feng
(Follow Karoleen on LinkedIn)
Director of Fondo Adelante Nathanial Owen
(Follow Nathanial on LinkedIn)
Many cities across the nation struggle with gentrification and its subsequent displacement of low-income communities of color, but nowhere is this more evident than in San Francisco’s Mission District. This vibrant neighborhood — long a welcoming hub for immigrants from Mexico, Central America and South America — is at the epicenter of income inequality, whereby households with skyrocketing incomes around $130,000 a year pushing out longtime households annually earning an average of $52,000 (Source: Social Explorer – ACS 2017 – Five-Year Estimates).
As MEDA pivoted to combat displacement in the last five years, our organization recognized that to maintain the Latino presence in the Mission we needed to focus not just on stemming the displacement of residents, but also securing and expanding small businesses, nonprofits and arts & cultural institutions.
It’s taking our work from generating family wealth to fostering community ownership.
For MEDA, community ownership is expressed as: owning real estate that is permanently dedicated for the community (community real estate); providing capital that does not displace (non-displacement capital); and wrapping the neighborhood’s resources around our schools (community schools).
In this three-part series, MEDA will speak to our comprehensive — not piecemeal — community-development strategies that are reversing this trend of overall displacement. Our social and cultural fabric is the foundation for community development. We discuss our cultural placekeeping approach as integral to the housing, health and economic needs of a neighborhood. This successful, scalable model can be replicated in other urban centers.
Following is Part 3 of 3.
Mission-based organizations, while fundamental to the neighborhood’s identity and rich with hard-earned social capital, often lack the capacity to grow in a sustainable manner with new and diversified funding streams. This presents complex challenges in implementing capital and real estate-intensive strategies for cultural placekeeping. We have been forced to learn, refine and grow our community-development skills and approach toward community ownership.
By late 2017, our mixed-use portfolio and pipeline had secured over 100,000 square feet of commercial space for nine small businesses and nonprofits to stay in the Mission. In the pipeline, MEDA is developing a quartet of nine- to 13-story buildings — comprising 494 homes and over 50,000 square feet of commercial space — to supply affordable housing for families and to add arts/cultural and industrial space. Each of these buildings were hard fought for as a community benefit. When completed, the investment will represent approximately $55 million in the commercial portion of over $400 million in building these new assets. Each new property will have over 10,000 square feet of affordable space for arts organizations and commercial tenants, with these spaces thoughtfully integrated with below-market-rate apartments for families. These Casa Adelante properties are all within walking distance of each other, and will create landmarks anchoring numerous city blocks with early childcare and education services, arts & cultural programming and youth outreach. We are already seeing the impact of the temporary programming from HOMEY and Galería de la Raza on these blocks, as they have established interim homes while waiting to move into their new facilities in 2021.
Additionally, we took on the role of a neighborhood backbone organization by serving as a community-development partner to legacy Mission-based groups that were struggling to stay or expand in the neighborhood. Many had given cultural, artistic and educational support to the community for decades, all on a lean budget focused on maintaining operations year to year, with most renting. Since California does not allow rent control for commercial spaces, once a lease expires the landlord can raise the rent to whatever price they believe the current market can bear, often leading to displacement of arts & cultural organizations and longtime nonprofits. Given MEDA’s own trajectory as an organization that in 2008 bought 21,000-square-foot Plaza Adelante — a neighborhood center for our own permanence and that of six other nonprofits — we knew that transitioning organizational leadership from focusing just on operations to securing a permanent location is extraordinarily difficult. We also knew that permanence begets expansion: If done properly, an organization that gains community ownership can expand both its services and its political voice in advocating for its constituents.
When we first made the switch from being a peer-service agency to many of these nonprofits to leading the charge of keeping such nonprofits in the Mission, we knew we had to be thoughtful about affirming the self-agency and autonomy of these organizations. To assess the need and prospects for sustainability, in March 2018 MEDA convened 17 longtime Mission-based community organizations serving Latinos.
Three main learnings came out of this convening:
- Our commitment to the Mission’s Latino families is our collective priority. What makes organizations in the Mission unique is their ongoing commitment to the Mission as a place, and centering the needs of Latino families to thrive in the neighborhood. Through their various programming, these organizations all build cultural, social and political power for infants, youth, families and seniors. A collective understanding emerged about the paradox of the displacement challenge in the neighborhood: Displacement of residents implicates the need for services to expand beyond the Mission, while displacement of local-serving nonprofits exacerbates the displacement of Latino residents. Leaders stated that they need to be where their clients are located, even if that means having to open satellite offices outside the Mission or evolving from a neighborhood-based organization to a regional one. Despite challenges, our nonprofit partners reiterated their belief in the importance of maintaining a permanent home in the Mission to continue serving Latino families here and contribute to the cultural placekeeping of this community.
- Financial strength is the primary obstacle to our sustainability. Nonprofit leaders clearly demonstrated that they were aware of the financial challenges they face in terms of having the organizational capacity to enter into a long-term lease or ownership agreement. Their understanding of financial management and adherence to financial best practices varies widely across organizations. Additionally, there was wide variance in the strength and engagement of governing boards among the nonprofits. It became clear that a critical component to pursuing community ownership for many of these organizations would be nuts-and-bolts nonprofit financial consulting.
- A collaborative approach is key to community ownership. With the displacement and financial challenges apparent, there was genuine interest from the affected nonprofits to continue working collaboratively to develop a neighborhood-wide strategy for cultural placekeeping. The leaders recognized that a collective approach would be in the best interest of Mission-based Latino families and artists and the nonprofits who serve them. Nearly all showcased interest in co-locating with other nonprofits. Beyond this, the organizations asserted a desire to elevate the importance of community ownership as a collective public policy priority for the Mission.
With the needs ascertained, MEDA is now pushing forth its cultural placekeeping strategies all the more, knowing that the Mission’s longtime identity is at stake. That means reframing our collective message as cultural placekeeping, as well as reframing permanent commercial tenancy as community ownership.
Reframing the message as cultural placekeeping is shifting the public policy conversation from a desired wish to a must-have in order to keep the social fabric and economic ecosystem strong in the Mission. Ironically, this cultural vibrancy is what attracts many new residents and businesses to the Mission in the first place. These 49 square miles of urban dynamism are worlds apart from the suburbs — and marketing by the City of San Francisco highlights this fact. Yet, ironically, we will lose that dynamism if we do not keep the cultural fabric of the neighborhood. Homes for nonprofits, artists and cultural organizations are not an ancillary need: They are foundational for maintaining a healthy and vibrant neighborhood. What we have learned with our community partners is that we have to continually frame the value of place and culture for our City leaders, and for the general public.
Reframing commercial tenancy in pursuit of community ownership has required us to re-examine the typical approach to commercial tenancy by both City policymakers and affordable-housing owners like MEDA. We have engaged in conversations to meet community allies where they are at — using our human-centered design approach — to understand their commercial legacy and space needs. We are shifting our leasing approach from merely collecting commercial rents and serving as a benign landlord to having over the last few years engaged in dozens of separate and collective conversations with community organizations to determine what permanency looks like. Out of these conversations, the terms that are acceptable to both the tenants and our community-development lenders and investors have evolved. We and partner organizations such as Northern California Community Loan Fund are also working together to help prepare organizations to be healthy tenants that can take on permanent commercial tenancy. These are all steps that will lead to financial sustainability for the properties and the organizations they house, as well as reliability for the thousands of families who depend on our local-serving nonprofits and arts and cultural institutions.
MEDA’s strategies will evolve, as we continuously assess need and devise strategies to ensure cultural placekeeping is an integral piece of our community-ownership work so that the Mission’s vibrant Latino culture remains strong.
That is our vision.
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