Heritage 50: Preservation Loan Program

January 28th, 2021 No Comments »

San Francisco Heritage is celebrating its 50th anniversary all through 2021. Each week we will share a short chapter of our history. Read the previous post about the Haas-Lilienthal House.

by Woody LaBounty

In 1977, Heritage devised a program to help lower-income San Franciscans preserve or restore the architectural character of their houses. The Preservation Loan Program (PLP) was established with a $200,000 Community Development Block Grant (CDBG) from the city with intent to make or guarantee below-market-rate financing for low-income borrowers. The CDBG funds were leveraged to obtain other grants and create a more than $300,000 preservation loan pool. Partnering with Crocker Bank, Heritage would guarantee 60% of the loans, and use the repayments to replenish the program.

Staircase and windows rebuilt and restored with help from the Preservation Loan Program.

The late 1970s was a very different financial landscape than today. The prime rate at the time was almost 9%. Crocker Bank initially offered loans at 8%, but after negotiations, agreed to 6%. The annual income of applicants could be no more than $10,750 for a one-person household and $15,350 for a family of four.

Rick Masseno, Heritage’s program administrator, publicly announced what the San Francisco Chronicle called “old home-repair loans” in 1978. Dorothy Berry, who lived at 940 Page Street with her four grandchildren, was the first recipient, taking out a $10,000 loan at 6% interest to make repairs on her 1888 Victorian.1

Rick Masseno and Dorothy Berry at 940 Page Street at the Preservation Loan Program’s public launch. (Heritage News, July 1978)

PLP was more than a loan guarantee. Heritage assisted in planning a work program for each project, doing historical research and preparing architectural drawings, specifications, and bid documents. Heritage also helped locate qualified contractors and monitored construction. The pro-bono consulting secured equaled an estimated $380,000 in construction fees by 1984.

Some of PLP projects were dramatic, such as the façade restorations of a stucco-smothered Noe Valley cottage, while others were new paint jobs or simple and sensitive repairs to staircases.

But successful preservation sometimes requires simple work. Peeling paint and wobbly staircases (along with a good deal of institutional racism) tagged much of the Western Addition as slums in the 1950s and justified the subsequent redevelopment that demolished thousands of historic buildings and dispersed entire communities.2

Facade of a Noe Valley cottage restored with help from the Preservation Loan Program. Guidance for the re-created detailing came from an archival photograph.

After PLP’s first year, rehabilitating houses in the Western Addition and the Bayview District, applications for the loans and assistance more than doubled. Heritage offered information on other loan programs and home
improvement in general to inquirers who didn’t meet the program’s qualifications. The California Council of the AIA recognized the program with an award citing “the impressive and influential effort which has inspired a widespread participation in historical preservation.”

But this inspiration soon tapped out the innovative program’s resources at the same time the financial world radically shifted. The prime rate began to shoot up, reaching an astonishing all-time high of 21% in 1980, making 6% loans impossible to secure. Heritage quickly responded not by retreating from the mission of PLP, but by finding ways to adapt and expand the program.

Instead of preserving historic and affordable living spaces house-by-house, in 1982, Heritage’s new Preservation Loan and Technical Assistance Program began partnering with nonprofit agencies to use preservation as a tool to save larger buildings with dozens of units.


Notes:

1. “Home Loans,” San Francisco Chronicle, June 27, 1978, page 11.

2. Redevelopment was often described in newspapers as a “slum clearance project.” See “No Cause for Delay,” San Francisco Examiner, October 18, 1952, page 12.

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