The empty lot at 1990 Folsom St., where the Mission Economic Development Agency hopes to build 140 units of affordable housing. Photo by Joe Rivano Barros.

Almost all of the money San Francisco dedicated to building new affordable housing in the Mission District has been allocated to a single project that will cost some $300,000 per unit in city funds.

Of the $50 million that San Francisco voters gave to the Mission District in November 2015 when voters approved Proposition A — a $310 million housing bond — about $43 million will go to a recently-approved fully affordable 143-unit project at 1990 Folsom St. on the corner of 16th Street.

That leaves just $7 million for future spending in the neighborhood, since all of the other funds in the housing bond for new construction have already been allocated to other housing projects citywide. Funds from the housing bond can still be used citywide towards loan assistance and renovation of public housing, but none for new affordable housing buildings.

The project will provide significantly fewer units than anticipated at a meeting held earlier this year by neighborhood non-profits and city officials, where more than 100 local residents voted to buy two to three sites with the $50 million and construct 200 units.

Instead, the neighborhood is getting 143 units at $300,000 each. Using the same per-unit cost for the leftover $7 million, the neighborhood could net up to 167 units, which is still 15 percent less than anticipated.

The total project cost is $103 million, but the city will only contribute $43 million, some 42 percent of the total.

The $300,000 per-unit cost in city funds is common for affordable housing projects in San Francisco, said Kate Hartley, the deputy director at the Mayor’s Office of Housing and Community Development.

Because projects receive different amounts of state, federal, and private funds, the per-unit city cost varies per project but ranged from just $150,000 per unit for 127 units at 2060 Folsom St. to $217,000 per unit for 157 units at 1950 Mission St.

The project at 1990 Folsom St. costs more because its developers — the Mission Economic Development Agency and the Tenderloin Neighborhood Development Corporation — are hoping to go to eight stories, which involves using more expensive building materials, Hartley said.

Moreover, they are building out a significant amount of space for a child care center, community space, and arts space, she said. Those uses reduce the number of units but keep building costs the same.

“It doesn’t translate to residential units,” Hartley said, “but there’s still significant community benefit.”

The project at 1990 Folsom St. will have 143 units of low-income housing reserved for those making up to 55 percent of area median income, or $53,300 for a family of three. A fifth of those units will be reserved for formerly homeless families making much less.

It’s one of seven fully affordable housing projects that have been planned for the Mission District in the last year and will come online likely in the next decade — though it’s the only project using Proposition A money that will be constructed in the neighborhood.

The Mission District does have other sources for affordable housing, but no dedicated funding for the construction of new buildings. Since 2014, the city has allocated $50 million to the Small Sites Program, which provides money for the purchase and rehabilitation of buildings with 5–25 units so they can be transformed into below-market-rate units.

Some $16 million of that money — including some from the Proposition A housing bond — has already gone toward purchasing 41 units in the neighborhood at some $390,000 per unit, like the Precita Eyes building on Precita Avenue.

Still, the use of almost all the $50 million in dedicated affordable housing funds dries up the only source for new housing construction in the neighborhood at a time when it has seen unprecedented construction of below-market-rate housing.

Since the summer of 2015, the neighborhood has seen more fully affordable projects approved than in the previous decade. Seven projects planned for the neighborhood will bring at least 632 units of below-market-rate housing reserved for low-income tenants in the next several years.

The rest of those projects secured funding apart from the housing bond and will still be built.

Supervisor David Campos, for his part, said that the 1990 Folsom St. project is an appropriate use of Proposition A funds, but that the level of such such funding should be determined in a dialogue with the community.

Other funding for new affordable housing construction would have to be found for the Mission District, Campos said, including regional and federal funds, and possibly another bond. The housing bond was never meant to be the sole source of money for the neighborhood, he added.

“We have explored different mechanisms that would allow for funding that specifically designated for the neighborhood,” he said. “It’s a complicated process that requires a lot of analysis and a lot of time and energy.”

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Joe Rivano BarrosSenior Editor

Senior Editor. Joe was born in Sweden and spent his early childhood in Chile, before moving to Oakland when he was eight. He attended Stanford University for political science and worked at Mission Local as a reporter after graduating, before spending time as a partner for the strategic communications firm The Worker Agency. He rejoined Mission Local as an editor in 2023.

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    1. The owners should pay,a 27 million penalty and not be able to build. Would create too much noise and create hurricane wind tunnels. They should be fines 27 million for stressing out nice honest working people who are being displaced. Do not vote Trump .. no good and racist.