A future structure 401 South Van Ness may look like this. Its creators' designation of 'affordable market-rate' is confusing to many.

A parking lot at 15th Street and South Van Ness Avenue may yet become a 10-story building with 231 units — all marketed by its Kansas-based developers as “affordable by design.”

“The proposed group housing project is a modern-day version of the affordable SRO hotels that were populated by San Francisco’s working-class, transient laborers, and immigrants during the last century,” the plans say. 

The plans were submitted by Elsey Partners, LLC, a Kansas-based developer. The project would include 166 small studio apartments, with 12 of those being below-market-rate (the state density bonus is being evoked to sidestep city affordability requirements). 

Additionally, the project would include 65 “sleeping spaces” whose occupants would use shared kitchens, bathrooms and common areas. The plans describe a vast majority of the units as “affordable market-rate.”  

“Market rate” rent for a studio is around $2,569 per month — it’s unclear whether these apartments would be affordable for the “working class,” let alone “transient laborers.”

“If they have Section 8 vouchers, they could rent one of these units,” said Chris Elsey, a principal with Elsey Partners, LLC — though he acknowledged the vouchers are exceedingly difficult to obtain in San Francisco. 

Questions regarding the project’s affordability will likely prompt opposition from neighborhood activists. They have already placed terms on the table for Elsey’s nearly identical project across the street at 1500 15th St. The developers have been working to get that project approved since November 2016.

In exchange for not delaying that project, representatives of the nonprofit coalition United to Save the Mission asked for the project’s rent to be set at Section 8 rates — right now, $2,215 per month for a studio — “in perpetuity.” 

Carlos Bocanegra, a member of United to Save the Mission’s Community Development Committee, said the “framework would have allowed the project to equitably benefit the Mission community by offering Section 8 housing to its recipients, veterans, and other working-class families with similar subsidy, while ensuring profitability for the development team.”

But Elsey was not amenable to such a long-term commitment, he said — although he was willing to set his rents at those lower rates for three years. The parties did not come to an agreement. 

“I’m not willing to commit to something forever,” Elsey said, noting that the market can and likely would change decades into the future. “Who commits to a deal forever? Nobody. It’s basic Business 101.” 

In light of this, Bocanegra said the coalition has “no choice but to oppose” to 1500 15th St., though he hoped the two parties could work together in the future. Nevertheless, the newly proposed project at 401 South Van Ness Ave. may encounter similar resistance.

In addition to the housing, the plans include 2,978 square feet of retail space and 2,185 square feet for offices. The project’s estimated cost: $47.5 million.

Like many developers who have pitched plans in San Francisco and its Mission District, Elsey bemoaned the city’s yearslong process for development. 

“I hope it’s not another three years till I get close,” Elsey said. “Hopefully, someone can figure out how to build something faster.”

Editor’s Note:  Carlos Bocanegra, a spokesperson for United to Save the Mission, wanted a change to our story. Instead of asking for one or talking to the reporter about his concerns, he immediately attacked Julian Mark’s integrity — in comments on this page, in social media posts, and in emails to Julian, myself and Joe Eskenazi, our managing editor.

It took several emails and a phone call for me to get beyond the vitriol and understand what Mr. Bocanegra felt was left out.  

The article reported United to Save the Mission’s proposal that the developer of the project would set rent at Section 8 rates — right now, $2,215 per month for a studio — “in perpetuity.”  The agreement, according to Bocanegra’s statement also “would have guaranteed that the developer maintain the healthy profitability level that they had set for themselves (the DSCR) by allowing the project to potentially lease vacant units at full market-rate prices if it was needed in order to stay at the prescribed level of financial return.”  

We left out United to Save the Mission’s agreement to also allow the developer to “maintain the healthy profitability,” deciding that it was less important since the developer said the deal failed because he would not sign anything “in perpetuity.” 

Bocanegra saw Mission United’s willingness to allow for a profit as essential. It did not seem so to us, but readers have the full statement below or at this link and can decide for themselves.

We hope that in the future, issues can be discussed in a more civil manner. Name-calling and threats do little for discourse.   

Lydia Chávez, Executive Editor

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Julian grew up in the East Bay and moved to San Francisco in 2014. Before joining Mission Local, he wrote for the East Bay Express, the SF Bay Guardian, and the San Francisco Business Times.

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25 Comments

  1. To all who read this article, please know that Julian Mark has engaged in dishonest reporting as concerns the understanding of the agreement between the parties with regard to the project located at 1500 15th Street. Rather than make specific mention to the biased decision to intentionally omit important facts, I am posting the entire statement that was sent to Julian by USM with regard to our understanding of the agreement regarding the project at 1500 15th Street. Thank you:

    “The USM Community Development Committee has been working towards a Community Benefits Agreement with Chris Elsey regarding his project at 1500 15th St. for the last couple years. We have not yet discussed the project at 401 S. Van Ness with either of the Elsey brothers.

    We had thought we reached a verbal agreement that the 1500 15th St. project would set aside its micro-units for Section 8 tenants at government-prescribed near-market-rate rents in perpetuity. This agreement would also have guaranteed that the developer maintain the healthy profitability level that they had set for themselves (the DSCR) by allowing the project to potentially lease vacant units at full market-rate prices if it was needed in order to stay at the prescribed level of financial return.

    This framework would have allowed the project to equitably benefit the Mission community by offering Section 8 housing to its recipients, veterans, and other working-class families with similar subsidy, while ensuring profitability for the development team. Our team was excited that it appeared we had created a new equitable development model by working closely with the development team, and are disappointed that the Elsey brothers now appear to have stepped back from this commitment to the community. We appreciate their prior willingness to consider an equitable solution for their project and hope to have the opportunity to continue to work with them further.

    For now we have no choice but to strongly oppose their latest project proposal for 1500 15th Street, particularly in light of a recent housing study soon to be released by the University of Minneapolis which shows that renters in modest housing near new market-rate projects such as 1500 15th Street can expect their rental rates to increase as a result of the new housing project.”

    1. We are disappointed but hardly surprised by yet another United to Save the Mission broadside against the media and an ad-hominem attack on a reporter doing his job.

      In actuality, USM was given more than 24 hours to provide comment on this story — a journalistic concession that stretched into indulgence.

      Mr. Bocanegra ultimately produced the 294-word statement which was excerpted in our story and he has taken the liberty of pasting above.

      He is clearly peeved that this statement was not reprinted verbatim.

      With all due respect, if he wishes to write articles for a newspaper, we suggest he find one to work for.

      Newspapers, however, have editors. And his lengthy, turgid statement was, in fact, edited and rendered more coherent by our reporter.

      We would suggest Mr. Bocanegra throttle back with the unfounded attacks and ad-hominem character assassinations. It’s neither helpful nor necessary.

      All of this, in fact, was unnecessary. His comments made the story more complete and accurate.

      We look forward to more rational and straightforward interactions in the future.

      JE

      1. Joe,
        You make it exceedingly difficult to decide which I like more, the actual articles you write, or your comments here in the comment sections. There should be a “Journalist commenter of the year” award. Then you could hang yours next to your well-deserved Journalist of the Year plaque. You’re the best, in so many ways.
        Thanks for the work!
        Joe

      2. “With all due respect, if he wishes to write articles for a newspaper, we suggest he find one to work for.” This is priceless. Please keep up the great reporting, Joe.

        1. Hate to lose Joe but seriously – the dry wit – could be writing Saturday Night Live political satire sketches.
          JE interactive comments are one of the things that makes ML special.

    2. First of all, that is the most unreadable, self-important nonsense I have ever read.

      This is the type of delusional reply written by the type of delusional person advocating the type of delusional policies that have lead to the state of affairs we have now — market rents so high they justify evictions, gentrification that has become “us or them” instead of “all of us together”, and the collapse of the SF housing market.

    3. Another day, another faux-“progressive” NIMBY organization obstructing housing while providing nothing of value to the community beyond impossible demands and empty talk. Crazy that there are entire organizations passionately devoted to not building housing in the midst of the housing crisis — I call them “inactivists” because their entire activism is dedicated to maintaining the (terrible, unsustainable) status quo.

  2. “We had thought we reached a verbal agreement that the 1500 15th St. project would set aside its micro-units for Section 8 tenants at government-prescribed near-market-rate rents in perpetuity. This agreement would also have guaranteed that the developer maintain the healthy profitability level that they had set for themselves (the DSCR) by allowing the project to potentially lease vacant units at full market-rate prices if it was needed in order to stay at the prescribed level of financial return.”

    This is a really wacky paragraph. Whichever negotiator who left the table thinking they had reached a “verbal” agreement on the terms dictated above — rates in perpetuity? stay at the prescribed level of financial return? — must have been seriously delusional. Unless you somehow represent the regional government, there is no way this demand can be taken seriously by anyone.

    There have to be a better set of concessions that can be negotiated than trying to directly manipulate the profit and loss model?

    I’m also trying to understand why is it appropriate that the replacement of a parking lot with new housing should be saddled with the responsibility of low-income housing. If a SRO was being demolished and replaced there would be more understandable impact to the existing community, but new housing where there was none previously?

  3. Nativist groups like United to Save the Mission and Calle 24 are extortionists — plain and simple.

    We already have an elected government and a system of laws — and we don’t need another “shadow government” that operates through “irregular channels”.

    Aren’t we currently in the process of impeaching a president for the same reasons?

  4. “United to Save the Mission” needs a rebrand – to “United to DESTROY the Mission”. Their continued opposition to any reasonable project using demands that NO business should ever be required to meet show they don’t actually give a sh*t about the people they claim to care about. If they continue to win these battles, they will completely upend the Mission they claim to want to protect. USM is merely protecting the NIMBY anti-growrh landlords making bank off of artificially high property values and rents that are the ACTUAL destroyers of the Mission.

  5. Micro units?! What “families” fit in those? I’ve been looking for years for a three bedroom section 8 unit there are very few to none. This needs to change so families can stay in San Francisco!

  6. Still can’t seem to understand why some folks think 12 of 166 units at below market rate is good or acceptable? People complain and complain about homelessness, in particular on that block, but a developer comes around and all the sudden they forgot or choose not to see the inequalities in a project. Just saying…we could do better here. Not everyone works for Google or Salesforce in the Mission and can afford those crazy rents or wants to live in a closet.

    1. Rob, rents become affordable through rapid development of free market units without interference from extortion groups that don’t know economics like United to Save the Mission.

      Those 12 units were a bone to fools, but they actually make the problem worse, not better. Continually blocking development is only going to keep adding thousands in annual costs to rents

    2. So you would prefer 0 affordable units to 12? Not to mention the potential occupants of the other 154 units who will displace existing residents if no new housing is built. The fastest way to raise rents is to block new housing. If you need any evidence of that take a look around the mission (and SF in general), and compare it to cheap cities in the south and southwest that are building non-stop.

      1. These neoliberal market assumptions are wrong and lack any foundation. A recent housing study soon to be released by the University of Minneapolis shows that renters in modest housing near new market-rate projects such as 1500 15th Street can expect their rental rates to increase as a result of the new housing project. The problem is more complicated and nuanced. Your simplification of the issue is only a self-fabrication created to alleviate your lack of social responsibility and guilt. For those interested in having an informed discussion, please find the link to the article mentioned here: https://www.tonydamiano.com/project/new-con/uaa-2019.pdf

        1. This study you’re linking to only looked at Minneapolis, which has does not have rent control. Presumably, since “lower quality housing” in the Mission is generally old enough that it qualifies for rent control, this would limit the alleged rent-raising effects of new buildings that was observed in Minneapolis. This slide deck also says that “addition of new housing supply, even expensive housing, results in a net lowering of rents due to the shift in the supply curve” and that new construction results in “lower rents for higher quality buildings close to new construction”. So wouldn’t it follow that most effective strategy for lowering housing prices would be (1) advocating for strengthened tenant protections and (2) advocating for legalizing new apartment buildings in exclusive neighborhoods with “higher-quality buildings” like Noe Valley, Haight-Ashbury, Bernal Heights, etc — instead of obstructing the construction entirely?

          1. Kristof- It limits it in the same way that Vick’s limits one of the symptoms of a cold but doesn’t remove the cold or other symptoms. There will still be dishonest landlords who understand the power imbalance they have in the legal system, the profit they stand to make from evicting the tenant without valid reason (even after paying attorney and court fees for the eviction), and will continue to dishonestly evict rent controlled tenants who do not merit eviction. The way we mitigate this is by taking away the financial incentive that motivates them to evict the tenant.

            What you said is true, the addition of new housing will lower the overall cost of housing in the region but not in the neighborhood level in lower income neighborhoods. It will lower the cost of housing in upscale areas on a neighborhood level (“high-quality sub markets” is how they’re referred to in the study). Which is why we have to be smart and intentional about where we build.

            I personally agree with both your strategies. To be clear, USM does not advocate, and never has, for a moratorium of construction, but that construction that is majority market rate be built in the more upscale areas of the city where, not only can the existing housing stock shoulder the burden of the new market forces but, as you mentioned, will actually receive a net reduction in their rents. Intentional, responsible, and careful planning is what we need. Let’s be smart about how and where we build.

            Thank you for reviewing the study.

        2. Carlos Bocanegra claims: “These neoliberal market assumptions are wrong and lack any foundation.”

          Commonsense recognition of the benefit of markets is hardly “neo-liberal” — or rather it is as “neo-liberal” a position as Mr. Bocanegra’s position is “neo-Marxist”.

          I’ll take Liberalism over Marxism any day.

        3. Isn’t everything near 1500 15th Street already rent controlled, affordable housing or costs $3k+ for a one bedroom? How does University of Minneapolis study apply to this situation?

  7. I am severely disappointed in this paper’s lack of professionalism in not accurately describing facts. To be clear, this is not an attack against the media. Outlets like SF Examiner, 48 Hills, etc. actually uphold modicums of professionalism and publish all the facts regardless of the perspective of the article so that the reader can make an independent and informed judgement. That is exactly what is lacking here.

    In actuality, I was given less than 24 hours to respond to their request. An email was sent, not to me directly, at 2:00pm and I was given till the early morning to respond. It would appear this editor is not particular in ascertaining actual facts as much as casting baseless aspersions and assumptions. Probably because it’s reporting that comes without effort.

    Mission Local took excerpts outside of their context and placed them within their own fabricated narrative which created the necessity to print the whole statement, so that readers are able to have the whole picture of both sides’ position and can independently make their own decisions. Mission Local would to choose to keep facts from its readers with the likely intent to persuade them of their own position. This type selective dissemination is appropriate for editorial writing, not a professional news article. Should they choose to continue down this road of inequitable reporting, by all means, it is their right. But they should properly notify their readers of the paper’s transition so as not to mislead readers who intent is to receive actual news and not just opinions.

    What I am disappointed in is the writer’s decision to engage in dishonest reporting. Cherry picking lines from a statement and publishing them without establishing the proper context. Their failure to provide both parties’ understanding where a disagreement exists, is both lazy and negligent. It is a demonstration of this outlet’s unprofessional nature and laziness.

    It is an editor’s job to review articles and ensure the accuracy of the facts contained within. That Mr. Eskinazi fails to correct his writers mistakes and ensure all facts are equitably printed (regardless of their description of them) is indicative that this culture of laziness and lack of professionalism begins with him.

    It was not USM’s request to reprint the entire statement, but the reasonable expectation that they report the facts in their entirety were any quotes taken from our statement so that those statements extracted could be placed in their proper context. Mission Local is the only news outlet that USM has engaged with that has proved unwilling to honestly report all of the facts regardless of the article’s own spin. How strange that this agency would be unwilling to hold themselves to the same standards of professionalism.

    These are not attacks. They are actions of accountability to make sure that this agency engages in honest reporting of the facts. The fact that Mr. Eskinazi would take offense to this begs the questions as to whether a position as an editor at a tabloid like the Enquirer would be more appropriate for him than an actual news outlet.

    That facts must be printed in the comments section of an article instead of being contained within the article itself is deeply disturbing. I look forward to the day Mr. Eskinazi decides to hold himself and his writers accountable to the reasonable standards of professionalism in journalism. The day they choose to print all the facts and not just those cherry picked to fit their own editorial narrative. The day they choose to educate their readers, not propagandize them.

    Carlos Bocanegra

    1. I don’t really understand your complaint, or what “facts” he left out, or what was “inaccurate”. He excerpted the part of your statement with your terms accurately. Your response repeatedly claims dishonesty and inaccuracy but doesn’t identify what part of the article is inaccurate, dishonest, or which facts are left out.

  8. A.L.F- “United to Save the Mission asked for the project’s rent to be set at Section 8 rates — right now, $2,215 per month for a studio — “in perpetuity.”

    The above is very different than having an agreement- ” that the 1500 15th St. project would set aside its micro-units for Section 8 tenants at government-prescribed near-market-rate rents in perpetuity. This agreement would also have guaranteed that the developer maintain the healthy profitability level that they had set for themselves (the DSCR) by allowing the project to potentially lease vacant units at full market-rate prices if it was needed in order to stay at the prescribed level of financial return.”

    Even the developer would agree with the above description if Julian had bothered to do any fact checking. If the developer has a different understanding, there is a professional obligation to print the facts of each parties’ understanding if they choose to report on it. Julian failed to report on half of the material facts he received. Their description of those facts or spin of their story is another conversation. The fact is, Julian Mark was lazy and dishonest in his reporting and Joe Eskanazi was lazy in his editing.

    Imagine if Fox news reported the events in Ukraine, only providing the facts of Trump’s understanding of those events. Even a right-wing zealot news outlet like Fox news has the professionalism to report the facts of both sides understanding. Regardless of their spin or attempts to discredit the other sides’ position or person they received those opposing facts from. I would hope that Mission Local would hold themselves accountable to at least this basic standard of professionalism.

  9. Mr. Bocenegra,

    You are kinda hoisted by your own petard as pointed out by previous commentators.
    Verbal?
    Perpetuity?
    Potentially lease … if it was needed?

    Who would decide if the project needed to lease units at market rate?
    Would there be a legally enforceable contractual formula for adjusting to market rate or would the project have to come hat in hand to ask USM for permission?

    As pointed out by commentator Wi Tu Lo – the “plan” borders on delusional and, on the surface, seems constructed to be simply obstructionist.

    On the flip side – let’s see:
    First there was the removal/extermination of the indigenous population.
    The Chinese have held their own thru various restrictions and pogroms.
    American citizens of Japanese extraction got the boot.
    Their African American replacements in the Fillmore got a real quick heave-ho to the concentration camps in the Bayview.
    Now there is a sort of on going piecemeal cleansing of Mission folks not able to keep up with the economic demands of residency.

    Say what you will about Calle 24, MEDA, United to Save the Mission and their ilk.
    And their outrageous antics, demands, extortion’s and this most recent attack against the well-respected Mission Local crew.
    But – you gotta hand it to them.
    “We ain’t gettin’ hustled out of our hood the way of the black folk” – by any means necessary.
    Kooky, obstructionist, delusional or otherwise.

    On the other flip side – whether these tactics will result in keeping the Mission “as is” is debatable.

  10. The developer works hard, takes risks and shows incredible courage in order to make money. As a result, the City gets more housing on an otherwise vacant parking lot. That’s the type of person I want doing business in my neighborhood.

    On the flip side, Mr. Bocanegra hasn’t demonstrated any of those personality traits. He speaks with his words, not with his actions. He makes nonsensical demands claiming he’s entitled to them. He doesn’t appear to be the type of person I want to be my neigbor. Unfortunately he doesn’t realize that all he’s doing is just making it more expensive for everyone to live here by clogging the housing pipeline and wasting years of time and money. He’s hurting the people he claims to represent in this process and therefore is in fact acting delusional.

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