This episode of Recovery Act in Action takes place in San Francisco, where the Recovery Act is bringing private capital off the sidelines and putting construction workers back to work on a major renovation project, all while helping seniors stay in their homes.
The scene is San Francisco's Tenderloin District, where construction crews are at work rehabbing two buildings, thanks to an infusion from the Recovery Act that brought private capital in from the sidelines. The $21 million project was delayed for years by frozen credit markets, but construction started this week and newly hired crews are already at work renovating both buildings.
The project is the work of Tenderloin Neighborhood Development Corporation, which bought the buildings in 2007 and has been trying to renovate them ever since. I spoke to Don Falk, the director of the TNDC, who told me--quite proudly, I thought--that hammers are now actively hitting nails: "I walked by this morning and scaffolding is up!"
It was a lesser-known piece of the Recovery Act that made these renovations possible. You see, TNDC got a tax credit for this project back in 2007 to help finance investment in low-income housing. Usually, TNDC would then turn around and sell that tax credit to a private investor to get the capital they need for the project.
That's never been a problem for TNDC, a solidly credit-worthy group. But when the credit market froze up during the financial crisis, Don told me that he could find no private investors to come in on the project and TNDC couldn't raise the needed funds. No funds, no rehab, no jobs.
But then the Recovery Act came along with a program that allowed the TNDC to convert these credits into an upfront grant that gave them the cash they needed to start construction. Moreover, once the Recovery Act dollars were in place, a bunch of private lenders liked what they saw, and provided the other half of the financing for the project. So now instead of tax credits sitting idle while construction workers are out of a job, the Recovery Act has put brought together public and private investment to put folks back to work renovating these buildings.
Don told me straight up: "We were saved by the stimulus program."
So if you happen to walk by Turk St. or Eddy St. down in the Tenderloin and see a bunch of hardhats at work keeping seniors well-housed, that's the Recovery Act in action.