Community Development Block Grant
Success Stories

San Francisco, CA - Mayor Willie Lewis Brown, Jr.

Child Care Facility Loan Program

In October 1998, San Francisco launched a new loan program to stimulate a rapid increase in affordable child care slots needed by working families. The Section 108 Child Care Facility Loan program combines $10 million in HUD Section 108 loans (leveraged by future CDBG funds) with local funds to spur the development of new child care centers. Working in partnership with non-profit community organizations, the effort is expected to create at least 675 new licensed child care slots for children, newborn through 12 years of age. In addition, it is estimated that it will result in 100 new child care jobs

The $10 million in Section 108 loan funds provide the base funding for the child care expansion. The City and County of San Francisco has pledged general funds to subsidize up to 80 percent of the loan costs of the non-profits, recognizing that child care centers serving working families and those moving from welfare to work could not support the loan debt without assistance.

The program is the result of a unique collaboration between the Mayor's Office of Community Development (MOCD), the San Francisco Department of Human Services, HUD and the private, non-profit Low Income Housing Fund (LIHF). HUD has worked closely with the City to shape the program so that it conforms with existing eligibility requirements and regulations. The Department of Human Services has added the cost of the annual debt service to its budget and is providing technical assistance to the community organizations. CDBG-funded staff members at MOCD are providing expertise on capital development and ensuring compliance with all HUD regulations. LIHF is administering the loan program, providing financial and technical assistance in marketing, and selecting the participating community organizations.

To date, nine non-profit organizations have announced their intent to participate in the program and, within six to nine months, San Francisco will benefit from the addition of 342 new affordable child care slots located in neighborhoods which are in particular need of additional child care. Compass Community Services, for example, is creating a child care center to serve 72 children from homeless and very-low-income families, and has raised over $2 million in other funds for the project. Catholic Charities is rehabilitating a vacant school building to create a new child care center that will serve 121 children of homeless and low-income families in the South of Market neighborhood. This project includes an infant center that will serve nearly two dozen infants and toddlers.

The Section 108 Child Care Facility Loan Program is a key component of the City's overall strategy to address San Francisco's child care needs. CDBG, along with the City's Children's Fund and other resources, is being used to support a strategy which includes an initiative to improve the quality of child care, increased inter-departmental coordination, and a facility fund that is available to family day care providers.

Contact: Pamela H. David, Director, Mayor's Office of Community Development, (415) 252-3100