Weekend Interview: EAH Housing’s Bianca Neumann On How We Fund Affordable Housing

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Bianca Neumann is no stranger to affordable housing. 

As she says, she came to affordable housing as an industry from a very personal place.

From growing up in San Francisco’s South of Market neighborhood to working in the two most dense cities in the country, she’s seen housing policy and financing from many angles throughout her career. 

Neumann saw SOMA change during the dot-com bust in the early 2000s, as neighbors were displaced or bought out, but then all of that change halted when the funding dried up.  

She stayed in San Francisco after college and found her passion for housing policy through a fellowship that turned into a role at the mayor’s office of housing. 

She moved to New York City with her now-husband a few years later, where she worked in the city’s housing preservation and development office. There she worked on the special underwriting and financing of projects.

Eventually, she moved back to San Francisco to start and raise her family closer to home. She has worked in business development for affordable housing groups for the past six years. She previously was at MidPen Housing Corp. and then moved into her current role as the director of business development at EAH Housing.

EAH Housing is a nonprofit housing developer based on the West Coast with 230 properties in California and Hawaii.

She lives in Bernal Heights with her husband and two children. 

This interview has been lightly edited for length and clarity.

Bisnow: I wanted to start with the topic of how we fund affordable housing. How do you find investors and funding to get a project together and work through all of the requirements that need to come to fruition to make an affordable housing project work?

Bianca Neumann: We have debt and equity in affordable housing. The debt is incredibly restricted because our rents are restrictive, so the revenue that we're generating that can support debt is typically pretty small. Our equity comes in the form of Low-Income Housing Tax Credits. And that's a whole other very complicated conversation. But they come in two flavors: 4% and 9%. They've [both] been oversubscribed and have also now become a competitive source of funding.

And so between debt and equity, maybe you cover 50 or 60% of your capital stack if you're in a lower-interest environment, right. We all know interest rates have gone up. And then we have this other piece that we call our gap that we have to cobble together the pieces for, and right now, there are local bond measures. So sometimes you'll have a local government who has funding available to support projects. But a lot of places have to seek funding at the state level. And for the state, we have this Super [Notice of Funding Awards] program that was meant to streamline and make things easier so that we weren't having to go after all of the different programs with different timelines and different applications. 

Bisnow: How has that program and other state programs been working to fill the gaps?

Neumann: For 2024, they're saying there will be only one round [of Super NOFA funding], so we only have one shot at those core gap fillers. There's other programs from the state so there's Affordable Housing and Sustainable Communities funding which are funded by carbon credits. That's a bit more consistent because it's not based on bond financing. But it still is only a once-a-year application.

All of these other funding sources tend to come with their own rules. And if you're using multiple of them, you have to layer all of the rules on top of each other. You have to bend your project to meet the requirements of those programs. I can't make a decision for a project strictly based on the market need in that area. I have to make my decisions on the project that I'm building to tailor it to the funding sources available and all of the policy initiatives that are being supported through that funding.

Bisnow: Are there actions that the federal government could take that would be helpful to organizations like yours? Whether that be policy or sort of telling local authorities they have to use their federal dollars in certain ways?

Neumann: The first thing that jumps to my mind right now is something that we're all worried about, and that's the availability of vouchers. You know, right now with what's happening with the federal budget, there is talk of severely limiting voucher availability. And those make a really big difference on the operating side for projects to move forward. So that is certainly something that I think would go a long way to help. Then it's complicated. There's a lot of reform that could happen to the Low-Income Housing Tax Credit program, but I don't know that I want to dive into that. 

Bisnow: Are there specific efforts, either nationwide, in California or maybe during your time in New York, that you would highlight as being successful, whether that be a program or policy, that could be scaled elsewhere?

Neumann: So one of the things that I thought that New York did very well was they really encouraged a lot of market-rate development and a lot more inclusionary housing. And part of how they did that was by providing tax incentives even for market-rate developers that included a sufficient amount of affordable housing within their development. And so it's difficult because we're kind of in a time where we're in a huge budget constraint and so the idea of giving up any sort of tax revenue is difficult, but it really did spur a lot of growth. I think that that is something that could make a big impact because I don't think that affordable housing is the only solution. I think we need to be creating all of the housing. It’s compounding the problem of the need for affordable housing because we're just not building enough housing, period, right?  So anything we can do to sort of support or push for more development globally helps us all out.

Bisnow: I have two specific questions. One is about Super NOFA. You know, what does that process do to your workflow?  How many EAH housing projects received funding from Super NOFA last year and how much funding did that amount to?

Neumann: You have to go in for that state funding before you go for your tax credits. That's part of this whole timing thing. But with it being once a year, that means everyone is on the same timeline. That means the consultants in the industry, the attorneys, everyone is getting everything at the same time because if you get your funding, great, then you're going to the tax credit round. And hopefully you get funded in your tax credit round, and if you don't, you're waiting for the next round. The good thing is tax credit rounds, there have been historically three. For 2024, they've said there will only be two, but you at least get a second shot. … Then we all have the exact same number of days from the time we received the award to start construction. That means we're all then moving on the same timeline, and you have a state full of people on that same timeline. And so you're really stretching the resources for the pool of consultants, the financial consultants, the attorneys, all of it. It creates a lot of traffic jams.

The Super NOFA 2023 awards have not been released, so none [have been funded] at this point. 

Bisnow: Several state laws in California became effective at the start of 2024, specifically exempting some development from parts of the California Environmental Quality Act. I'm curious if there are changes you're more excited about that might make a difference this year and for years to come in California?

Neumann: I want to be excited about the entitlement changes, and I think there's been a lot of focus on improving the entitlement process and trying to limit CEQA from being used as a weapon by [Not-In-My-Backyard activists].

While I want to be more excited about these things, if we entitle projects but we can't fund them, that still isn't meeting the need that's there. To take that back to the Super NOFA — it's once a year, and it's bond-financed. This is the last year we know that there's funding. And in the last couple of years, for every dollar that was requested to fund a project, there were $10 that were requested that were not funded. So that tells me that we have projects that are ready to go, but we don't have the money to get them built.

Bisnow: Do you know approximately how many projects EAH has in the Bay Area or Northern California generally that are sort of stuck right where you're describing?

Neumann: We are currently seeking funding for eight projects.

Bisnow: How can local ordinances or laws impede affordable housing development in California? Do you have specific examples that you'd point to in either San Francisco or San Jose to sort of illustrate that point?

Neumann: San Francisco is a little special in that it’s exempt from a lot of the laws just because of the way that it does its planning survey processes. So it doesn't follow the typical entitlement construction permitting rules. All of it goes in at the same time, and you get a planning permit and then you get amendments to your permits all along the way. There have been things at the state level to specifically address how San Francisco is exempt from things.

I think where we get into trouble is when we get into protectionism, and when we are working in communities that hold things as precious and are not open or welcoming to change. Now, it’s really important that we design to build within local contexts. There are people who will disagree with me, but going into a neighborhood that’s three stories and putting in a 20-story building, even though it would make a huge impact and give a ton of housing in that area, might not be the right thing. But pushing it to five stories or six and making that sort of incremental push can make a big difference. The local ordinances come from a real place of wanting to respect and protect communities, so it’s hard.

Bisnow: There’s a real tension between new development and local character in many San Francisco neighborhoods, which you can hear in public meetings about proposed projects.

Neumann: Honestly, that’s a lot of my work life and what I do. Because I do new business, which is finding new projects and figuring out if there’s a path forward for funding and entitlement and carry it through that entitlement period. I am doing a lot of that forward-facing interaction. You can’t do that without really understanding or respecting the other side of what’s being said. Even if you don't agree, in most cases, I don’t think people are coming at it from a place of malice. They care about their community. 

Bisnow: Give us your bold prediction for the rest of the year.

Neumann: I think we’re going to see a huge slow in housing starts this year.

Bisnow: Why? 

Neumann: I think on the market-rate side, I don’t think people are comfortable yet even though interest rates have come down slightly. I think there’s still a lot of nervousness there. And then on the affordable side, I think we have a lot that’s ready to go, but we don't have enough funding to go around. We’re looking at big budget cuts at the state and federal levels, so I think that’s going to trickle down. We’ll see a real slowing down. There’s not going to be a lot of housing starts this year.

Bisnow: What is your weekend routine or your favorite weekend activity?

Neumann: I have two small kids. I have an 8-year-old and a soon-to-be 4-year-old. And I would say my husband and I are very local, so we really like to explore the city and adventure with the kids. We’ll typically pick a neighborhood in San Francisco, and we’ll go to a coffee shop, a new playground and go to the library. San Francisco has this great thing where the libraries have passports, and you can go get a sticker for every branch of the library you go to. My daughter is obsessed. I think at this point we’ve been in 12 of the branches. We have quite a few just in walking distance, so we’ll do that and pick a restaurant. And for us, it’s just a bunch of reminiscing and taking them to do things we did as kids. Catching the bus is always very exciting for them.