In San Francisco, land slated for a federal courthouse expansion was successfully transitioned into a 256-unit permanent supportive housing apartment through the Title V program, which mandates that surplus federal property be offered first to nonprofits and state and local governments for affordable housing and services for homeless people. (Rendering courtesy of Mercy Housing California)
When John Yazwinski got a phone call in June 2020 from a friend at the U.S. Department of Housing and Urban Development (HUD) about a free federal property, he was immediately intrigued by the opportunity.
Nearly three years later, Yazwinski—president and CEO of Father Bill’s and MainSpring, a Brockton, Massachusetts nonprofit that provides housing and services to prevent and end homelessness—was thrilled to oversee the groundbreaking of the new $19 million Housing Resource Center, a campus consisting of a day center, an emergency shelter, and efficiency apartments, in addition to space for wraparound services.
“I had never heard of ‘Title V’ before this, which is a program that offers federal surplus property for free to homeless services providers,” Yazwinski says. “We competed against other groups who were interested in the site, but we have experience in housing development, as well as services. We immediately began working with the mayor of Brockton, both of our senators, and the state delegation to Congress to get their support.”
Although the three-year process was arduous for Yazwinski and his organization, the outcome was positive. For others, the Title V program is both promising and aggravating.
“Title V has been in existence for more than 30 years, and it states that surplus federal buildings and property must be evaluated and made available to nonprofit organizations and state and local governments to serve unhoused people,” says Antonia Fasanelli, executive director of the National Homelessness Law Center in Washington, D.C. “In our experience, nonprofit agencies and state and local governments need developers to assist them when they want to provide housing for unhoused people.”
Yazwinski turned to the state government for funding.
“We explained [that] it was free land and that we were delivering a new model for homeless services with our housing resource center, since it has 24/7 services for preventing homelessness,” he says. “The site has more than three acres [1.2 ha], which meant we had room to build 30 new construction units of permanent supportive housing. Federal ARPA [American Rescue Plan Act] funds came to Massachusetts at just the right time, and we were able to show them that this was a shovel-ready project.”
Revisions requested for Title V
Developers, nonprofits, and advocates for homeless services believe that now is an ideal time to raise awareness of Title V. According to HUD, there were 582,462 people experiencing homelessness in January 2022.
“There’s an untapped potential for commercial real estate developers to partner with nonprofit groups who have the expertise to provide services to homeless people,” says David L. Winstead, a Washington lawyer; former public buildings commissioner for the General Services Administration (GSA) in Washington, D.C.; and a member of the Public Buildings Reform Board, an agency established by Congress in 2016 to expedite the reduction of surplus federal property.
“Title V is a rarely leveraged opportunity, partly because of a lack of awareness and partly because there are so many strings to untangle in the program,” says William Herbig, head of the Homeless to Housed initiative for ULI in Washington, D.C. “Homelessness requires both a housing production solution and space to provide services and amenities, which is why a partnership between developers and service providers can be so valuable.”
ULI is providing Title V training in partnership with the National Homeless Law Center and the Public Buildings Reform Board as part of the Institute’s Housing Opportunities Conference in Austin, Texas, February 20–22, 2024.
The Title V program of the 1987 McKinney-Vento Homeless Assistance Act involves three government agencies: HUD, the GSA, and Health and Human Services (HHS). And, according to people trying to work with the Title V program, that’s a problem: too many government agencies slow the pipeline—particularly HHS, an agency whose critics note its lack of real estate expertise.
“The GSA holds the land, HUD determines the properties’ suitability for adaptive reuse, and HHS reviews the financial applications,” Fasanelli says. “Unfortunately, the way the law is implemented now, it’s impossible to use low-income housing tax credits [LIHTC] and other traditional housing tools for financing.”
Fasanelli describes the situation as a catch-22 when it comes to using tax credits to finance the necessary redevelopment of federal properties.
“In order to use tax credits, the nonprofit must demonstrate [that it has] site control, but the federal government won’t provide site control without financing fully in place,” Fasanelli says. “While there are numerous success stories with Title V, they’re usually for emergency shelters, transitional housing, or services, rather than for affordable permanent supportive housing.”
Winstead, who is among the aforementioned critics of HHS, calls the agency understaffed and says that condition unnecessarily complicates and delays Title V projects.
“So, HHS is an agency that’s trying to do good work, but it isn’t used to real estate,” says Doug Shoemaker, president of Mercy Housing California in San Francisco, the largest regional division of that national nonprofit housing developer. “The GSA is more accustomed than [is] HHS to working with real estate, and most of us in affordable housing know how to work with HUD. The confusing part about this process is that HHS doesn’t help with funding, and there’s no ongoing relationship with them after an application is approved.”
In addition, Shoemaker points out, unlike HHS, HUD has experience with capital programs and operations.
Fasanelli, who previously served as executive director of the Homeless Persons Representation Project, knows firsthand how frustrating it can be to see empty property and be unable to secure it.
“There were two buildings in Baltimore that would have had space for at least 300 to 400 units of affordable housing, but we learned that we wouldn’t be able to use tax credits so we didn’t move forward on the buildings,” she says. “It’s too bad because that would have provided homes for 10 percent of the unhoused people in Baltimore.”
Alameda Point, a former naval base, already includes housing and programs for 500 homeless people. The Alameda Point Collaborative plans to expand its services with a clinic, a medical respite center, and housing for homeless seniors, but so far the planners have been unable to overcome the hurdles of the Title V program for this project. (Courtesy of Alameda Point Collaborative)
Availability of surplus federal property
Between January 2020 and June 2023, HUD listed 70 Title V–eligible properties. Ten applications were submitted during that period, with just three approved, according to data compiled by the National Homelessness Law Center.
“More federal properties are likely to become available because of the transition to hybrid work,” Winstead says. “At the same time, the homeless problem is a big challenge for cities. At the Public Buildings Reform Board, we’re expecting to have another inventory report on federal buildings next year.”According to a GSA spokesperson, the agency is looking into the possibility of reducing leased office space and is in the process of assessing individual federally owned assets for continued reinvestment or, possibly, disposal candidacy.
Overcoming challenges for Title V success
In San Francisco, land intended for a courthouse expansion was successfully transitioned into a new 256-unit permanent supportive-housing apartment building through Title V.
“The project was initiated and championed by the mayor’s office, which is how we were able to overcome some of the issues with the Title V program,” Shoemaker says. Mercy Housing California built 1064 Mission Street in partnership with Episcopal Community Services of San Francisco (among others), including space for health and dental care, along with a kitchen to provide food for residents and training through the Conquering Homelessness through Employment in Food Services (CHEFS) program.
“One issue that’s unique to Title V is that there’s an unlimited reverter clause, which means that if, at any time, the new owner fails to perform, the property [reverts] to the federal government,” Shoemaker says. “That’s a nightmare for financing, but we were able to overcome it because the city government backed us up.”
The National Homelessness Law Center and other advocacy groups have proposed adjustments to the Title V program, including a clause allowing investors, lenders, or new property owners time to fix any noncompliance issues before a reversion could take place.
“The reverter clause fundamentally doesn’t make sense, especially because the federal government displaces its risk onto a nonprofit, instead of reducing risk for local governments and nonprofits,” Shoemaker says. “I think a limited reverter clause would be more appropriate.”
Accomplishments, frustration for a Title V project
When the Alameda Naval Air Station, on Alameda Island in San Franciso Bay, closed in 1997, it was one of the first large-scale federal properties to become available under the Title V program, says Doug Biggs, executive director of the Alameda Point Collaborative (APC), a housing and services provider for formerly homeless individuals.
“Initially, there was a lot of community opposition to providing housing and services for formerly homeless people there, but the city gave us strong support,” Biggs explains. “Two hundred units of navy housing were repurposed between three nonprofit agencies to supply housing for formerly homeless people, including one section for victims of domestic violence and another for veterans.”
Today, there are homes for 500 formerly homeless people on Alameda Point, plus an urban farm, youth programs, life and job skills training, substance abuse counseling, and mental health counseling.“When we started, HUD was managing Title V, so we did a needs assessment, partnered with the city, and got approval,” Biggs says. “No financial analyst was involved, and we didn’t face a lot of federal requests. We just had to commit to serving homeless people.”
Winning approval, funding
Biggs and APC have struggled in recent years to win approval, through Title V, to build a new project on Alameda Point that would provide approximately 100 units of permanent supportive housing for seniors with medical conditions; an onsite clinic; and a 50-bed medical respite center for homeless people where they could recover, instead of staying in a hospital.
“We have funding from Alameda County, the state of California, and various foundations, and we’re working with HUD to release the land,” Biggs says. “But the barriers HHS has set up make it nearly impossible. It took us $400,000 to $500,000 just to do the application, and then HHS ignored it. Then they told us to provide a signed contract and agreement.”
Biggs says that although the law states a financial plan is needed to provide site control, HUD won’t provide site control without guaranteed funding.
“A lot of funders won’t commit until you have site control,” Biggs says. “Plus, the reversion clause scares a lot of funders and developers.”
The challenge for APC’s new project is that the organization needs to demonstrate a stream of funding for the respite care site and a stream of funding for the senior housing.
“GSA owns the property, and they agreed to an early transfer of the respite center site, followed by the senior housing site,” Biggs says. “But HHS says we need to provide all of this in one package, with a signed commitment letter from every funder. Some of our funding comes through LIHTC credits, so we can’t get past this. There’s no one single funder who would plop down 100 percent of the financing for this [project].”
Knowing that elderly homeless people suffer while APC awaits approvals frustrates Biggs. Still, he says, the Title V program is well worth it, especially in high-cost locations such as the Bay Area.
“There would be no way to buy the land on Alameda Point without this program,” Biggs says.
Advice for accessing Title V
Biggs says that developers who work with the Title V program have overcome the challenges that it poses.
“Developers should have confidence that changes in the policy will come, especially with the support of the Biden administration and the national focus on the homeless crisis that the pandemic brought to everyone’s attention,” Biggs says.
Even though Father Bill’s and MainSpring successfully used Title V for the new Housing Resource Center, Yazwinski says meeting some of the timelines of the program was difficult.
“We had to have all our funding in place within the first year after we signed our lease, and we have three years to be operational,” he says. “We’re simultaneously doing renovations on the old National Guard building and building new housing on the site to meet the fall 2024 deadline.”
The nonprofit needed to generate the political will for the project and address zoning issues, along with NIMBYism (not in my backyard).
“The site is part of a VA campus, which was key to making it easier to get approval,” he says.
Not in my backyard
Alameda Point confronted NIMBYism, too. Its backers faced a lawsuit and a ballot measure before getting community support.
“We did lots of outreach to address opposition before we could get approvals,” Biggs says.
But Shoemaker says he wouldn’t pursue another Title V project under its current limitations.
“The work of building permanent supportive housing is so hard already,” Shoemaker says. “But free land isn’t free when you have to work this hard to access it.”
For other developers, Shoemaker suggests proceeding with “open eyes.”
“Make sure you have a strong story, with municipal support and support from your congressperson and senator,” Shoemaker says. “Get your local government to be your backstop for financing partners to share the risk.”
If another federal property became available, Yazwinski says he would apply again.
“Developing affordable housing, in general, is really hard, and building permanent supportive housing is almost impossible; then you add in the timelines of the Title V program, and I can see why very few surplus properties end up serving homeless people,” Yazwinski says. “Even though it took years, though, getting free property is worth it.”
MICHELE LERNER is a freelance writer, editor, and author covering real estate, personal finance, and business topics for such publications as the Washington Post, USA Today, and others.
