Mission District Housing Project Reaches 25 Percent Affordable

A market-rate housing project reached an unprecedented 25 percent affordable housing on-site at Thursday’s Planning Commission hearing after a last-minute attempt by its sponsor to quell community opposition.

“We heard loud and clear: 25 percent, supported by rational research and the data, is the number,” said Peter Schellinger, vice-president in Northern California for Lennar Multifamily Communities, the developer of the project at 1515 South Van Ness Ave. at the corner of 26th Street and South Van Ness Avenue.

That level was not enough for Mission District activists, however, who wanted more time to negotiate with the developer to bump up the affordable housing even more. They said the project would set a precedent in the neighborhood and that it should be held to a higher standard.

“This [project] deserves to be thoroughly vetted to make it work,” said Erick Arguello, the president of the neighborhood association Calle 24.

That opposition came just minutes after activists had unanimously supported a smaller, four-story project at 2600 Harrison St. at the corner of Harrison and 22nd streets. Activist support for market-rate projects in the Mission District is rare, and planning commissioners themselves were surprised at the cooperation between activists and the developer.

“I never thought I’d hear folks from this part of town talk about their support of a project,” said Dennis Richards, the vice-president of the Planning Commission.

Both market-rate housing projects — which will bring 176 units to the neighborhood — were approved unanimously by the commission and will likely be built in the next few years.

Housing Project a Template for Developer-Activist Negotiation

The 19-unit development at 2600 Harrison St. went first before the commission. The four-story building would replace a shuttered warehouse and create a small ground-floor light industrial space below housing.

Arguello said the project’s small size did not warrant the fighting that accompanies larger developments, and that early sit-downs between activists and the developer identified concessions that appeased activists and eliminated opposition.

Namely, the developer will pay a $1.1 million fee for affordable housing — in place of building below-market-rate units on-site — to the city’s Small Sites Program, in which the city buys buildings with less than 25 units, often keeping rental tenants in place and preserving the buildings as affordable housing in perpetuity.

Speaker after speaker supported the project, saying it should serve as a model for negotiations between housing activists and private developers.

“We think that this is the kind of process we’d like to see” for other projects, said Peter Papadopoulos with the Cultural Action Network, which formed to oppose the embattled 335-unit project at 2070 Bryant St. between 18th and 19th streets.

Arguello said “the most important piece” of the project was the small sites acquisition money. He would like to see the such fees paid by other housing projects in the neighborhood instead of the general in-lieu fee, which goes to a city-wide affordable housing fund.

The small sites money could be used to buy buildings in the Mission District, rather than fund below-market-rate construction outside the neighborhood, Arguello said. He praised the project’s sponsor for speaking to community groups early to strike a deal for the project.

The “Titanic Mess on South Van Ness”

The jovial atmosphere didn’t last long, however, when activists took to the podium to speak against a 157-unit development planned for 1515 South Van Ness Ave.

“The units that you’re gonna build ain’t for you and they ain’t for me, folks,” said Fran Taylor, a transit advocate who said the market-rate development would “squeeze out” those who could not afford the building’s high rents and “change the demographics” of the neighborhood.

Arguello and Papadopoulos, part of the organized opposition to the project, struck a conciliatory tone and said they needed a little more time to negotiate with the developer. They hoped to bump up the affordable housing on site and remedy other concerns, like the design of the building and its traffic impact.

The project calls for 157 units in a six-story building, with ground-floor retail space and six small trade shops that the developer said would be made available at 50 percent below-market-rate rents. The project would replace the shuttered McMillan Electrical warehouse and sits next to a planned fully affordable senior housing complex.

Of particular concern was the size of the project and the precedent it would set for development in the Latino Cultural District, an area from Potrero Avenue to Mission Street and 22nd Street to Cesar Chavez Street designated a “Latino cultural and commercial district” by the city in 2014 in a symbolic proclamation.

Supervisor David Campos called for a halt to market-rate housing in the area last week — a request that was ignored by the commission on Thursday — until a study could be done to note the impacts of such housing on the area’s residents and businesses.

Arguello worried that the larger 1515 South Van Ness Ave., unlike 2600 Harrison St. building, would set more of a precedent for development in the cultural district and that he wanted between 30–35 percent affordable housing on-site.

That came even as Lennar Multifamily Communities, the developer and a subsidiary of the housing giant Lennar Corporation, offered an unprecedented 25 percent affordable housing on-site, or 39 units out of 157. That level has not been accomplished in San Francisco without city subsidies or upzoning, Planning Commissioner Rich Hillis noted.

“This project has the highest level of affordable housing on-site that we’ve seen,” he said.

The percent affordable is identical to the requirements set in place by Proposition C, the ballot measure that set affordable housing levels at 25 percent city-wide for new projects.

The 1515 South Van Ness Ave. project, however, was grandfathered in and is not required to meet the 25 percent threshold. It went from 13.5 percent affordable to almost double in a last-minute bid to win community approval.

The 25 percent level was meant to be re-examined after a feasibility study was done that would note whether project could afford to build at that level of affordability. That study has been delayed until the end of August.

The below-market-rate units at 1515 South Van Ness Ave. would be reserved for both low and moderate-income tenants. Fifteen percent of the total units would be available to those making up to 55 percent of area median income, or $53,300 for a family of three, while the remaining 10 percent would go to those making up to 100 percent of area median income, or $96,950 for a family of three.

Speakers themselves were divided roughly half in support and half against, some saying the project was just one of many needed in San Francisco to curb soaring rental costs and put a dent in the city’s — and neighborhood’s — housing crunch.

“As much as some folks might want, it is not possible to address the Mission District’s housing problem by putting a wall around [the neighborhood],” said Tim Colen, the departing director of the Housing Action Coalition, a pro-development advocacy group.  

Planning commissioners heeded those calls on Thursday, saying the project had reached a good affordability level and approving it unanimously. Negotiations will continue between opponents and the developer, and opponents said they were not sure whether they would appeal the project but hoped to avoid the step and reach a deal instead.