SF Market Rate Housing Project Goes Fully Affordable

After four years of acrimony, these condos are going to be affordable housing after all.

A former gas station on the corner of 16th Street and South Van Ness Avenue that was slated for market rate condos will now be affordable housing, Mayor Lee and District Supervisor David Campos announced today.

The 72-unit project at 490 South Van Ness originally included only 12 affordable housing units. Now, they will all be affordable.

The project took four years to get city approval and it was slated to break ground this year, but the turnaround means the city will purchase the land  from J.C.N. Developers LCC for $18.5 million. It will then put the project up for bid.

J.C.N Developers originally paid $2.5 million for the property in 2009 or $180 per square foot, meanwhile the city will be paying $1,298 per square foot. Another way of meassuring it is per unit (at 72 units) which in this case it costs the city about $260,000 per unit.

“I know it seems like a lot, but that’s actually a pretty good deal,” said Louis Cornejo from the Urban Group. “A property in the Dogpatch sold for almost the exact same amout. I am actually surprised the city got it.”

The hard part, he said, is getting the city to approve the project. If it takes more than three years to get approved than the developer assumes more risks because the real estate market, like everything, is at the mercy of boom and busts cycles.

Paying for the construction of the building is contingent on voters approving a $310 million housing bond on the November ballot. A chunk of that bond — $50 million — will go towards building projects in the Mission, including the South Van Ness project.

Mayor Ed Lee and Campos said the effort is a way to tackle the ongoing housing crisis. The announcement comes on the heels of a Planning Department study showing that the city is losing as much affordable housing as it is building.

“A few weeks we did a walk through South Van Ness for the purpose of identifying land that we could, as a city, purchase to build affordable housing,” said Campos. “Whatever land is available we want to build housing.”

He called the deal, “a credit to the work that we have been doing in the Mission and a credit to the community.”

Campos pushed hard at the Board of Supervisors to impose a moratorium on market-rate housing in the Mission. That effort failed to get enough votes, but an initiative calling for a moratorium is likely to be on the November ballot.

The project would mostly likely be a combination of low and middle-income housing, though those details have not been worked out, Campos said.

This will be the fifth affordable housing project in the Mission that either the city or a non-profit are developing. The others include 1950 Mission St., the parking lot on 17th and Folsom Streets, and the property on Shotwell and Cesar Chavez streets.

The delays in those projects have been considerable.

What makes 490 South Van Ness. Ave. different is that it is a shovel-ready project because it has already been entitled by the city, said Olson Lee of the Mayor’s Office of Housing. That means it has gone through the necessary approvals to begin construction.

It too, however, will require a bid process and it’s unclear how quickly the housing office will get the bid requests out.

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18 Comments

  1. Juan Antonio Valdez

    So we are looking at over $250K for each unit before ground breaks? How is that affordable?

    • Tom Colbin

      Not a good use of City money. At this rate that $310M housing bond will benefit maybe 500-1000 people. If 5,000 units of non-subsidized housing were allowed, we’d get at least the same amount of affordable housing included for free.

    • “Affordable” means affordable to the renter/buyer. We don’t know what that cost is going to be.

      So, Mr. Hernandez, please tell us! What’s the cost of each unit? Has “affordable” been defined?

      Hoping this is good news. My child’s school is around the corner and heaven knows none of the luxury buildings that have been springing up like mushrooms are accessible to the vast majority of the families or staff there. They’re not driving the Audis now being sold at 14th and Van Ness, either.

      It’s certainly a sweet deal for the developer, but that’s the bed we made when we decided to turn SF into a city for rich people only. I hope this is a turnaround.

      • joizy

        I don’t know if the decision was ever made to turn SF into a city for rich people only – if you’ve been paying attention, you may be aware that the income gap has grown dramatically since 2008 – the rich are richer and the poor are poorer and the middle class is disappearing. This is not just a problem in SF – it’s nationwide.

    • Ms B

      Well, mortgage payments and HOA fees would probably come in under $1700/mo. Not bad. Can’t rent anything like that in this city.

  2. Robert Dhal

    Vote no on this bond in November and vote out the politicians! Oh, but this won’t happen. SF’s outdated rent control allows a vast majority of it’s population to vote on bonds that will be paid for by their landlords without ever having to worry about the costs being passed along to them. The system is broken.

    These units are not “affordable” housing, they are subsidized housing built on an extremely expensive corner lot in the mission. It would make more sense to build an affordable housing project in an area of the city with less expensive land and that doesn’t require and 18.5 million (yes million!) dollar buy-out to a developer.

    • Landlords can pass along bond costs to tenants, so tenants will be paying for the bonds too.

      • Robert Dhal

        Visit the SF tenant Union site for a list of allowable increase. Bond measures are not included.

    • That “extremely expensive corner” is one in which people pull their pants down to openly defecate. I should know, I have a business on 16th and Capp. This will sound strange to you no doubt, but building affordable housing in what has been historically a low income community keeps the fabric of the community from disintegrating–that has long term value on many levels. An ecosystem is not made up of just hard dollars and cents, it’s made up of many layers… and those layers should not be trampled on. These are difficult times and making it harder on those that already have it very difficult is not only shortsighted–but immoral!

  3. Activism and organizing works. https://www.youtube.com/watch?v=Q_M6Sqsb898

    Let’s keep it up by promoting debates with Ed Lee for the 2015 Mayor’s race. Take this survey if you believe that this Mayor’s race should be more than a cakewalk: https://www.surveymonkey.com/s/sf2015mayoraldebates

  4. mmsierra

    This is good news
    Every bit of affordable housing helps
    No, it won’t solve everybody’s housing issues, but it’s a start
    I’m voting yes on the housing bond this next election and hope it leads to more projects like this one

    • Juan Antonio Valdez

      Good news? This lot was sold 6 years ago for $2.6 million. The city just paid $16 million more than that. The developer was including 12 affordable units on site already so the city, in reality, is paying over 300K for each unit. They could have paid 36K per unit if they bought it in 2009. The city could have used the money far more wisely and provided homes for many more people than these 60 units will. This city, the families in need of affordable housing, the tax payers, and everyone else besides J.C.N. Developers LCC got hosed.

      • This smells pretty corrupt. Not to mention that this lot sat empty and blighted for years. I invite everyone involved in this deal to sleep on a street corner.

        • Guest

          The lot did not sit empty and blighted for years. There were two businesses operating out of that site for decades. Green Cab was headquartered there and as well as a car repair operation.

          Those businesses were closed when the environmental remediation work was done in 2011 or so on the underground tanks, work that unleashed an array of aromatic hydrocarbons into the atmosphere in the neighborhood. The DPH had to be called several times to get JCN to do the work correctly.

          Now the SFPD herds the homeless to live around that parcel. One guy was caught last year setting a fire under his tarp next to a tank of oil.

          It is about fucking time that the MOH and Campos got their asses in gear to stop the conversion of PDR space to luxury condos. Now that this might not be not a for-profit project, hopefully they can figure out how to slash parking down to the bare minimum.

  5. Chris

    So the city paid top of the market cycle pricing for a project for which it cannot afford to build without a voter-approved bond initiative to pass? If the voter initiative does not pass, I predict the city sits on the land until the next market downturn occurs and then, needing money due to the city’s typical poor money management, sells the lots to a market rate developer – at a loss.

  6. Halle

    Are any of these housing projects happening at all, ever? The Folsom & 17th site is a full parking lot with no signs of development. Vida is open but the housing at Chavez isn’t built. Now instead of a developer building 72 units (12 affordable), there is no schedule for anything to be built because a bond has to pass, and then a decision making process will have to begin to decide what gets built. The other 4 projects in the Mission that have been waiting longer are still waiting for the money also, right? How is this actually getting any housing built that people can move into? Seems like we just lost units.

  7. jmz

    Depends on how the project works out in the long run, but if the city takes years to get anything built (a consistent pattern), you can essentially say that they paid 18.5 million to remove 12 affordable housing units off the market. Less of a big deal if they got a good price on the land, but if the market slips, this is bad money management.

    Would have been great to use that money to get construction started today on one of the other empty lots already allocated for affordable housing.

  8. Bob Evans

    There is no “affordable” housing in San Francisco, nor will there ever be. As this article proves, there is only expensive subsidized housing, that a few lucky economically segregated lottery winners can claim. Total unfair waste of public funds for the special few.

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