SAN FRANCISCO — Toni Thompson once slept in shelters for the homeless, but today she and her 5-year-old son, Ruel, live in a spacious, well-tended two-bedroom house, its backyard lined with cheerful yellow and pink rosebushes.
The house is a miracle born of San Francisco's dot-com bust.
For years, living in the least-affordable city in America was close to impossible for those of modest means. But in the last 18 months, declining rents and a reinvigorated Housing Authority have spawned a boom in subsidized housing for thousands of families like Thompson's.
On a recent afternoon, she caressed the crisp white walls of her hallway, hunting for the slightest smudge. She beamed incredulously at the rosebushes, near the lemon and peach trees. True, Thompson can't afford any furniture, save the mattress she shares with Ruel. And the neighborhood has its share of gang members and crime. But still, Thompson is pinching herself.
"Now I can be Martha Stewart. Well, not be her, but I have a reason to watch her show," she said. "I love this house. If this program were to stop, I'd probably end up homeless again."
Steep rents forced Thompson's father -- an ironworker and third-generation San Franciscan -- into the East Bay in 1999. Thompson followed, part of an exodus that drained the city of lower-income families and hit African Americans particularly hard.
Soon she was sleeping on the sofas of friends and in shelters. The strain of homelessness forced her to give up her sales job at Marshall's, leaving her without hope of finding a place of her own. No more. After more than three years on a waiting list, Thompson, 22, recently obtained a federal housing voucher that pays $1,750 of her $1,800 monthly rent.
On Aug. 14, she moved into the freshly painted Bayview district house, where Ruel shows off his own closet and brags to his grandma that his backyard makes lemonade. (If Thompson's job hunt is successful, her portion of the rent will rise, maxing out at 30% of her total income.)
At the height of the dot-com bonanza, even those lucky enough to get their hands on the federal subsidy, known as Section 8, had a hard time finding landlords who would take them. Those were the days when young techies with glossy resumes lined up by the dozens to battle it out for $2,000 studio apartments.
But rents have plummeted 40% since 2000, according to the San Francisco Apartment Assn. Meanwhile, the vouchers disbursed by the San Francisco Housing Authority under the program have not been adjusted downward from their dot-com high, when the U.S. Department of Housing and Development last hiked them.
That means the vouchers are, in many cases, worth more than what the open market will fetch. At a time when vacancies dot the landscape and many residents are negotiating their rents downward, Section 8 tenants like Thompson have new appeal. Eighteen months ago, only 150 landlords listed their properties with the Housing Authority. Today, the list stands at nearly 4,000.
"Landlords who would not consider renting to our families a year ago are doing it now," said San Francisco Housing Authority Executive Director Gregg Fortner.
The softening in the rental market came just as the Housing Authority picked up the pace of its Section 8 program. Threatened by HUD with the loss of unused vouchers, the agency released nearly 3,000 to San Francisco families in the last 18 months -- about 40% of the citywide total. Of those families, 85% found housing in San Francisco.
The city is still starkly inhospitable to low-income families -- a problem that advocates say only a marked increase in new construction could solve. Although rents have come down, they remain the highest in the country. The residential vacancy rate of about 7% -- up from below 1% a few years ago -- now makes San Francisco about average, said Kate White, executive director of the nonprofit San Francisco Housing Action Coalition.
And even the Section 8 treasure trove has its limits: Almost all the city's 7,229 vouchers are now in use. Meanwhile, 26,412 families are on a waiting list that is closed to new applicants.
But the recent trend has brought relief to thousands of the less fortunate.
"Before the Section 8 boom, we had a very hard time," said David Kim, a program director at the Hamilton Family Center, which helps the homeless move into permanent housing. "We were going to Fresno, Modesto or Sacramento. We were taking these families there because we had nowhere else to go."
The gentrification of San Francisco was no secret. Between 1990 and 2000, the number of households earning $150,000 or more rose 323%.
Meanwhile, there was a 39% decline in the number of households earning $15,000 to $24,999, and a 28% drop in those earning $10,000 to $14,999.