Parque Niños Unidos will be getting a four-story, market-rate housing neighbor soon, after a 5-2 vote Thursday at the Planning Commission approved a 117-unit project at 2675 Folsom St. near 23rd Street.

Neighborhood activists and a planning commissioner, however, said the project was out of scale and would exacerbate the neighborhood’s affordability crisis.

“There’s a whole context for why there’s opposition outside this project,” Myrna Melgar, one of two new members of the body. She agreed with local activists who said the project was one of several market-rate developments that would change the neighborhood and its residents unless mitigations were put in place.

Melgar also said the project would bring in too many residents and was out of scale for the area.

“Folsom Street is a street that is fairly low density, there are consequences to putting a very large residential building there. It really changes the neighborhood,” she added, before voting against its approval.

The heart of the opposition was the same as accompanies almost all market-rate developments in the Mission District: An influx of wealthy tenants will accelerate gentrification and lead to the commercial displacement of “mom and pop” shops. Residential and commercial rents will rise, and long-time tenants and businesses will be replaced.

“We are already tired of the crumbs that we are getting from the developers,” said Dairo Romero, a community planning manager with the Mission Economic Development Agency. Romero said that tracts of land in the Mission District are rare and should be used for fully affordable housing complexes to combat gentrification.

“What we need to do is we would like to have this piece of land,” he said. “This is a perfect place for families and teachers that they don’t have a place to live.”

The Folsom Street project would bring 117 units next to the Parque Niños Unidos in a 40-foot tall building and is being developed by the Axis Development Group, a San Francisco firm with a few other projects under its belt, including a 69-unit building at 14th and Stevenson streets and a planned rooftop restaurant near Union Square.

A planned mid-block alley would stretch from Folsom Street to Treat Avenue at 2675 Folsom St. Design by David Backer Architects.

A planned mid-block alley would stretch from Folsom Street to Treat Avenue at 2675 Folsom St. Design by David Backer Architects.

The developer would make 23 of the units — 20 percent — below-market-rate and affordable to those making up to 55 percent of area median income, or $53,300 for a family of three.

That’s more units than required by city law, but less than the 25 percent required for new projects under Proposition C. The project was grandfathered in because it was underway when those requirements were instituted.

As a concession to neighborhood activists, the developer will give some 5,300 square feet of arts space in the building to a non-profit for $1 a year for 55 years. The non-profit, which has yet to be chosen, would be in charge of programming a gallery on Folsom Street and could commission statues and murals for a mid-block alley planned in the building that stretches from Folsom Street to Treat Avenue.

The building would also have 65 off-street parking spots in a basement garage and 174 bicycle spots within the building, as well as a gym, dog wash, and roof deck for tenants.

It sits a block away from a 19-unit development at Harrison and 22nd streets that was a shoe-in at the commission in August because its developer sat down with local activists early and made concessions that brought them on board.

Developers of the Folsom Street project — dubbed the “Evil Axis” by activists — had no such luck on Thursday, however, and were called out for bringing in a majority market-rate building into a neighborhood experiencing gentrification and displacement of its low-income population.

“Let’s take a walk down Valencia Street, where you can get a chocolate bar for $8, a croissant for $6, and a luggage bag for $200,” said Scott Weaver, a tenants rights attorney. “This is what gentrification looks like, and it wouldn’t exist without the presence of high wage earners.”

Still, opposition to the project was more muted than last year, when a neighborhood meeting saw activists shout down its developers. On Thursday, only a handful spoke against the project and were resigned to its passage.

Commissioners did not weigh in directly on the claims that new market-rate housing would exacerbate displacement, but Kathrin Moore did say that while the project had made notable changes, she could not support something that drew organized community opposition.

She and Melgar were the only two opposed, however, and the rest of the commission said preventing new construction was not an anti-displacement strategy.

“Not approving housing is not the way to go,” said Christine Johnson.

Others urged the commission onto its final vote. Corey Smith, an organizer with the San Francisco Housing Action Coalition, said years of under building housing has led the city, and the Mission District, into its current crisis. Repeating the mistakes of the past would not prevent gentrification, he said.

“The best time to plant a tree was 40 years ago, the second best time is today,” he said. “We should’ve built this housing 40 years ago. We didn’t.”

“This project needs to move forward,” said Tim Colen, the executive director of the Housing Action Coalition. “It appears that there are people for whom no project is acceptable if it includes market-rate housing.”

Commissioners Rodney Fong, Dennis Richards, Richard Hillis, Joel Koppel and Johnson voted for the project, while commissioners Moore and Melgar voted against.