Laguna Honda Senior Housing Cut Again

Multiple Bait-and-Switches
Promised 375 Housing Units for LHH May Deliver Only 124

by Patrick Monette-Shaw

• • • • • • • • • • April 2025 • • • • • • • • • •

J“ust as Laguna Honda Hospital and Rehabilitation Center (LHH) lost 420 beds when it was downsized from its planned 1,200-bed rebuild to just 780 beds in 2010 (a 35% change reduction), the proposed “senior housing” planned for LHH’s campus now appears to face downsizing from its proposed 375 units to a probable 124 units (a 67% loss of planned housing units).

It’s the latest of several bait-and-switches that have befallen LHH, and an embarrassing sequel in downsizing.

To quell public outrage, the City is tossing in a childcare facility for 40 kids, now apparently reserved for employees of LHH and other City departments. This is despite former community outreach efforts to LHH’s surrounding neighborhoods that they might have access to childcare, hoping to prevent neighborhood opposition to the proposed housing project.

Three years after City Hall deep-sixed the project, the senior housing project for Laguna Honda Hospital’s campus was resurrected. The housing was sidetracked after LHH lost its Medicare and Medi-Cal reimbursement in April 2022.

Readers may remember that when voters approved the November 5, 2019 “Affordable Housing Bond,” then District 7 Supervisor Norman Yee swore up and down the project would bring desperately-needed licensed “Residential Care Facilities for the Elderly” (RCFE) capacity to San Francisco, specifically to LHH’s campus, after he managed to secure another $150 million for senior housing that was added to the $600 million bond.

Yee may have remembered that two decades earlier, an “Assisted Living Facility” promised as part of the $400 million General Obligation Bond to rebuild Laguna Honda Hospital. Though it passed in November 1999, it never received funding and was eliminated from the rebuild. Still, San Francisco’s Health Commission supported identifying future funding for an eventual RCFE on LHH’s campus.

Yee may have added the RCFE to lure voters into passing the $600 million “Affordable Housing Bond” in 2019 and to appease and win over the Health Commission. RCFE probably isn’t gonna happen, as it turns out, and it may now be another bait-and-switch of the senior housing portion of the 2019 Bond.

The LHH housing project sequel has worsened. Again.

Shrinkage of LHH’s Promised Senior Housing

The shrinkage of LHH’s housing project size is alarming.

Once voters passed the bond, the Mayor’s Office of Housing and Community Development (MOHCD) quickly issued a “Request for Proposals” (RFP) for the senior housing component of the bond measure on November 18, 2019. It promised to build approximately 700 units of housing citywide.

Mercy Housing’s response proposing to build up to 300 units of service-enriched low-income senior housing, with an even mix of studio and one-bedroom apartments, and at least 75 units of assisted living was dated January 22, 2020. The promised 375 senior housing units helped secure Mercy’s contract award.

Mercy reduced its promise of up to 375 housing units down to somewhere between 249 and 269 by the time its draft “Laguna Honda Senior Living Master Plan“ was issued September 21, 2021. Up to 124 units vanished.

Mercy’s proposed site, intended for a third “Skilled Nursing Facility” (SNF) tower, was eliminated because of massive cost overruns during the rebuild. This stripped SF of 420 of LHH’s former 1,200 SNF beds and dumped more elderly San Franciscans into out-of-county facilities. That site is among portions of LHH’s campus on California’s “Cortese List” of unmitigated toxic sites with hazardous materials, as reported in December 2021.

Supervisor Yee had only superficially engaged the Health Commission about his plans for senior housing zoned as “Public Land” for hospital facilities — for residential development.

It took until March 3, 2022 before the Health Commission first received a formal presentation about the proposed housing for LHH campus. It shocked the Health Commissioners, particularly Commissioner Edward Chow. Chow complained of Yee’s delayed consultation with the Commission.

MOHCD’s March 2022 presentation was another bait-and-switch, claiming the project would include “supportive senior housing,” not a licensed RCFE, and asserted again that up to 170 independent senior living apartments plus 95 RCFE “assisted living” units would be built for a total of 265 units.

But MOHCD, Yee, and Mayor London Breed weren’t prepared for LHH’s sudden decertification on April 14, 2022. The housing project was put on ice, where it remained for three years — even though LHH was recertified in June 2024.

Resurrected Housing Scaled Back

The 23-page presentation from MOHCD on the project on February 3, 2025, indicated Mercy would build somewhere between 130 and 170 independent living apartment units for “seniors” during Phase 1, plus potentially 90 assisted living units in a licensed RCFE or “enhanced supporting services” in highly supportive housing during Phase 2 — for a total of 220 to potentially 260 units.

Tim Dunn, an Associate Director at Mercy Housing, admitted during the meeting that the childcare facility “will be for LHH’s workforce.” Assurances made to neighbors that they might be eligible to access the childcare services on LHH’s campus during community outreach meetings between 2020 and 2022 may have been deliberately misleading.

Those neighborhood associations included the Greater West Portal Neighborhood Association, Midtown Terrace Homeowners Association, Forest Hill Association, the Woods Condo Association.

On March 17, 2025, MOHCD added details of the plan in another 31-page presentation to the Health Commission. Former District 7 Supervisor Yee, current D-7 Supervisor Myrna Melgar, former City Attorney Louise Renne made introductory comments.

Yee noted that the disappearance of assisted living facilities leads to the placement of seniors in out-of-county facilities and the need to assist with temporarily placing patients ready for discharge into housing. The childcare center would benefit LHH staff and help meet the needs of nearby families.

It’s not known why Yee believed the project might only temporarily house patients from hospital discharge. All along, we’ve been told, it’s supposed to be permanent housing.

For her part, Supervisor Melgar asserted the senior housing project helps patients by providing “step-down” units for discharged patients who would be close to LHH’s skilled nursing staff. The childcare will also help City employees in other City departments.

However, senior housing has always been for long-term, affordable rental to seniors, not as temporary “step-down units.”

During her turn at the microphone, Louise Renne, 87, claimed that during her tenure as City Attorney, “we won” the tobacco lawsuit used in part to fund the 2010 LHH rebuild project, but “we” had to eliminate the assisted living and Adult Day Health Care components from the rebuild project. That’s why those two components of funding from the senior housing project were added. Renne asserted the childcare facility would be a benefit for recruiting LHH staff. She mistakenly stated on the hearing video: “We had to terminate the assisted living [units] that we had at the time at LHH.”

On March 29, 2025 a San Francisco Chronicle article also attributed Renne as having said “Laguna Honda Hospital once had assisted living housing on site, but those units were demolished when the old hospital was torn down in the early 2000’s.” Renne’s recollections are confused. LHH’s Clarendon Hall building largely treated patients with various forms of dementia. It was not an “assisted living” facility. LHH has never had any assisted living units.

[Note: Renee didn’t mention she had been directed in 1996 by then-Mayor Willie L. Brown to prevent Board of Supervisors President Angela Alioto from passing the resolution to file the lawsuit against “Big Tobacco,” nor did Renne mention that Mayor Brown and Renne outsourced the lawsuit to the law firm Lieff Cabraser Heimann & Bernstein, LLP to prosecute for San Francisco. Renne’s nebulous “we” did not win that lawsuit. Renne just likes to keep taking misplaced credit for Angela Alioto’s legal strategy! See below.]

Then, MOHCD’s Senior Project Manager, Anne Romero, presented Mercy’s update. She asserted it would be possible for LHH to make referrals for affordable housing units for patients ready for discharge. Romero reiterated Mercy had been chosen for its experience incorporating childcare facilities and ADHC programming into senior housing.

Romero indicated that Phase I senior housing units and Phase II assisted living units will be placed in separate sub-divided parcels — the assisted living component in Phase II will most likely not be a licensed RCFE, and for good measure, LHH employees will get preference for the childcare programming (not neighbors).

In the month between MOHCD’s two presentations on February 3 and March 17, the total amount of housing was downsized again — to only 214 units, another bait-and-switch loss of 46 more units — reducing the 130 to 170 independent living units to just 124 one-bedroom apartments, rather than a mix of studios and one-bedrooms, plus the 90 RCFE or assisted living units.

And although the February 3 presentation asserted Mercy would pursue a licensed RCFE for the assisted living units in Phase II, by March 17, Mercy changed that to provide 90 housing units with “enhanced supportive services” that might “approach a similar level of service as a licensed RCFE to accept discharged residents from LHH,” another bait-and-switch.

Assisted living in Phase II was changed between February 3 and March 17 from senior housing to housing for “older adults with chronic health and long-term-care needs.” And suddenly, assisted living became a conduit for hard-to-place LHH residents. It changed who will be eligible for placement in the assisted living apartments to “older adults” who may not actually be “senior citizens” yet.

MOHCD stressed the importance of prioritizing the childcare programming as part of Phase I, and delaying the “Adult Day Health Care” (ADHC) facility to Phase II. That’s also outrageous, in part because ADHC programming for both outpatients and select LHH residents operated in the old LHH facility before the hospital’s 2010 rebuild. It shut down 17 years ago in anticipation of construction to prevent busloads of outpatients with dementia from coming to LHH’s campus during the three-year construction.

The ADHC programming was not reinstated when the replacement hospital opened in 2010, principally because no space had been designed for it in the architectural drawings for the new hospital, a conscious fiscal choice driven by massive cost overruns.

The sequel delaying ADHC programming to Phase II — which may never be built at all — is shameful, primarily because an ADHC is needed now, much more than a childcare facility.

Commissioner Chow indicated he wants additional information on what percentage of, and which LHH residents will be eligible for placement in either the independent living or assisted living housing projects. Chow indicated he’s concerned President Trump’s proposed tariffs impact on building construction costs of the housing projects — including 25% tariff’s on lumber and steel.

Chow also seemed distressed that the assisted living or RCFE project is delayed. He was a member of the Commission when it passed Resolution #16-07 in 2007, recommending an assisted living RCFE on LHH’s campus. And, Chow seemed to remain concerned that the housing projects may be too close to, and overpower, the Pavilion Building’s entrance to the main hospital.

Probable Funding Threats

Both the Phase I independent living apartments and the Phase II assisted living units currently rely on obtaining Low Income Housing Tax Credit (LIHTC) Equity and federal Housing and Urban Development (HUD) Section 202 Supportive Housing for the Elderly General Partner Equity. These provide capital advances and project-based rental assistance to support the creation and maintenance of affordable housing for very low-income elderly individuals.

Funding for Phase II is also premised on receiving a HUD/FHA 232 loan. The Phase II assisted living will also need “Assisted Living Waivers” from the State of California — which are in extremely short supply — along with PACE funding, and assistance from San Francisco’s “Community Living Fund (CLF).” The CLF and its leaders dislike Laguna Honda Hospital intensely, so it’s unlikely CLF funding will materialize.

Between February and May 2015, Elon Musk’s DOGE and President Donald Trump have taken their chainsaws to HUD. Initial reports showed plans to eliminate half of HUD’s field offices and cut HUD’s workforce by 50%. It’s extremely unlikely MOHCD and Mercy Housing will secure HUD funding for LHH’s senior housing components, given Trump’s hatred of California in general, and San Francisco in particular.

The earliest start of construction for the Phase I independent senior housing is in the Spring of 2027, “Pending successful state, tax credit and bond financing applications.” Mercy anticipates the earliest date of completion of Phase I would be sometime in 2029 — fully a decade after passage of the 2019 Affordable Housing Bond.

And Mercy’s presentation noted that the earliest start of construction for the Phase II assisted living units would also be in 2029, with at least a two-year construction period extending into 2031. However, Mercy’s presentation also acknowledged that the currently anticipated funding sources are very competitive, so “Phase II could be delivered and placed in service at a later date than currently anticipated.”

None of the Health Commissioners asked any questions about the HUD Section 202 funding nor whether the assisted living RCFE units might be delayed well past 2029 or into 2031.

Different Than Requested

We now know that rather than the type of assisted living initially envisioned back in 2007, the bait-and-switch is completely different.

Reconstruction was underway 18 years ago when the Health Commission adopted Resolution #16-07, which accepted the “Laguna Honda Hospital and Rehabilitation Center Assisted Living Feasibility Study.”

That feasibility study recommended that “the City expand its continuum of care on the Laguna Honda campus by constructing an assisted living facility that would have a total potential capacity of 240 residents, in buildings that meet the standards for a Residential Care Facility for the Elderly-Type II, and that the buildings should be constructed as [soon as] financing becomes available.”

The Health Commission had made it clear that it preferred having a licensed RCFE built on LHH’s campus to expand the continuum of care for the elderly. The Commission had not wanted just independent living apartments and a childcare facility “as soon as funding became available.” It desperately needed the RCFE, perhaps with an outpatient ADHC programming component.

Campus Inappropriate for Senior Housing

LHH’s campus is the wrong location. “Laguna Honda: Inappropriate Site for Housing“ argues, partly because an ADA-accessible sidewalk up a steep hill and doesn’t reach the proposed housing site.

Did Supervisors Yee and Melgar consider whether older people they want to house can comfortably walk more than one block up very steep hills, four or more blocks away from the Forest Hill MUNI station? The campus isn’t walk-friendly for many elderly or disabled.

A Department of Public Health 2014 transit analysis revealed over 30% of Potrero Hill Health Center (PHHC) patients cannot comfortably walk more than one block up a steep hill, 85% had at least one symptom impacting their ability to walk, and 26% reported using at least one assistive device (cane, walker, wheelchair, etc.). The PHHC is a safety-net clinic serving primarily low-income patients, the same type of seniors planned for LHH’s housing projects.

Lack of Neighborhood-Serving Retail

There’s absolutely no neighborhood-serving retail within a two-block radius of the LHH’s campus, or even an eight-block radius. There are no retail shops anywhere close to the campus. The two or three restaurants at the bottom of the hill near the campus typically close early each evening — assuming they are still in business after COVID.

The closest grocery store and pharmacy — Mollie Stone’s and CVS — are on Portola Drive, at least an eight-block walk up steep hills, and difficult to access by public transportation.

It’s not as if neighborhood-serving retail is going to come to the area any time soon, or ever, since LHH’s campus is surrounded by an enclave of single-family homes.

Inadequate Public Transportation

It’s unclear if MOHCD had concerns about the lack of transportation when it turned Yee down the first time in 2018 when he proposed housing at LHH, and it’s also unclear whether public transportation has been studied.

Does LHH still operate and fund a wheelchair-accessible shuttle van using hospital employees for patients, employees, and visitors between the Forest Hill MUNI Station and the hospital’s main entrance in its new Pavilion building?

The illustration of Mercy’s proposed housing reveals another tortuous six change-in-direction zig-zag along an ADA-accessible wheelchair path yet to be constructed between the new entrance to the main hospital. It’s up another hill to the housing that will be built. It will be another burden on seniors who use wheelchairs or have mobility problems walking.

Continued Myth-Making

During the past 15 years, I’ve tried to do my part to counter mythmaking by San Francisco public officials.

On July 4, 2010, I published an opinion piece on the then San Francisco Examiner website noting that speaker after speaker during LHH’s grand opening ribbon-cutting ceremony on June 26, 2010, mistakenly credited Renne for the tobacco lawsuit idea. Speakers included then-Mayor Gavin Newsom, District 7 Supervisor Sean Elsbernd, Congresswoman Jackie Speier, and other politicians. Each speaker who credited Renne for initiating the tobacco settlement lawsuit engaged in myth-telling.

My article tried to set the record straight that it had been former Board of Supervisors Angela Alioto who had developed a novel legal strategy in 1996, using a cause of action to sue tobacco companies as an employer of consumers, to get around California consumer product liability lawsuits against tobacco manufacturers, a California law authored by then State Assemblyman Willie L. Brown preventing Californians from suing tobacco companies for harms caused to consumers. By then, Brown had become mayor of San Francisco.

My July 2010 article was accompanied by a three-page slideshow featuring Alioto’s book jacket to her 1997 memoir, “Straight to the Heart: Political Cantos.” The slideshow included select quotes from Alioto’s book, noting that she had authored Board Resolution 469-96, instructing the City Attorney to sue the tobacco industry and outlining explicitly how Renne should implement the lawsuit.

Alioto’s book recounts that five minutes before the scheduled vote, Renne demanded an immediate closed-door private session with the Board, claimed the City didn’t have $1 million to file the lawsuit, and that the Board would have to come up with a million dollars from the City budget before Alioto’s Resolution could be passed. Three Supervisors were outraged at Renne’s transparent attempt to quash the legislation. Board President Kevin Shelley called it “sabotage.” The Supervisors returned to Board chambers and passed the legislation without a single no vote.

Mayor Brown and Renne chose to outsource prosecution of the tobacco lawsuit to a private law firm to “save face” for Brown. This myth Renne “won” the lawsuit will hopefully die someday.

Health Commission Should Just Say “No”

In practice, it’s unlikely the Health Commission will do anything. San Franciscans will be stuck with an affordable senior housing project at LHH that is a completely inappropriate project to meet the needs of the elderly. This sequel will probably continue to worsen.

Also of interest, between MOHCD’s June 2024 and December 2024 “2019 Bond Status” reports, a new category of senior housing has been added to provide 100 affordable housing units reserved for behavioral health seniors, out on isolated Treasure Island. Voters weren’t told six years ago in 2019 that the Bond would be funding housing for behavioral health patients, so this is yet another bait-and-switch.

The six-story project, titled “Treasure Island E1.2” is also being developed by Mercy Housing Corporation. It will be adjacent to a Department of Public Health behavioral health project under development on Treasure Island. A “Request for Predevelopment Financing” for the project was presented to the Citywide Affordable Housing Loan Committee in January 2023. It will reportedly receive a $2.7 million “gap loan” in the Spring of 2026, probably as predevelopment funding from the senior housing portion of the 2019 Affordable Housing Bond.

Why was this added to the Bond spending — five years after the Bond was passed in 2019?

Monette-Shaw has been a columnist for San Francisco’s Westside Observer newspaper for almost two decades and is a member of the California First Amendment Coalition (FAC) and the ACLU. He operates stopLHHdownsize.com. Contact him at monette-shaw@westsideobserver.com.

April 2025