Joe and Joey Toboni stand atop one of their buildings in progress. Photo courtesy Michael Keeney.

For years, the father-and-son developers from the Toboni Group championed numerous projects in the Mission and vowed to pour funds back into affordable housing. Now, it appears, they limited it.

Two Toboni projects underwent sudden changes post-approval and delayed the construction and occupancy of affordable units. However, gaps in the planning code make these issues hard to remediate. 

To close off these gaps, the Board of Supervisors passed a new ordinance that limits developers from making certain last-minute project changes that could jeopardize affordable housing. Supervisor Hillary Ronen introduced the legislation with the Toboni projects in mind. 

Still, Ronen’s legislative aide, Amy Beinart, said the ordinance affects numerous projects and is “definitely not targeted at a single developer.”  

Indeed, the Planning Department witnesses developers who do “a lot of flip-flopping,” according to Carly Grob, a senior planner at the Planning Department. In the past six years, seven projects across the city attempted to switch from on-site construction of affordable units to in-lieu fees, according to the department. And in recent weeks, at least four developers sought to change their units from ownership to rental or the reverse. 

Yet while the new ordinance applies citywide, two Toboni projects have the dubious distinction of being explicitly mentioned in a press release as reasons why this ordinance was sorely needed.  

The examples include a housing development at 600 South Van Ness Ave. and another at 2100 Mission St. On each, developers requested alterations to construction plans, and prevented low-income residents from taking advantage of the onsite affordable housing, according to the press release. 

It was Toboni’s 27-unit building at 600 South Van Ness Ave. near 17th Street that was particularly egregious, and helped motivate Ronen to close the gaps in the city’s planning code. 

The initial permits for 600 South Van Ness Ave. were approved with the understanding that all units, both market-rate and affordable, would be owned. Nevertheless, Toboni rented the market-rate units, and sought to sell the four affordable condos.

That move created a financial barrier to low-income families attempting to purchase the units; banks generally won’t give mortgages to low-income first-time homeowners if fewer than half of the units in a building are owned, said Grob during a Planning Commission meeting

So the Tobonis had their market-rate units rented and the affordable units stood empty — for four years.   

“For nearly four years, this project failed to meet its obligations. This is four years of very real impacts on people who are struggling to stay in San Francisco,” Ronen said in a press release. “The city and my district lost. We can’t allow this to happen again.” 

No matter that the Tobonis had already violated the planning code requirement that developers lease affordable and market-rate units simultaneously. The city couldn’t force Toboni to rent the below-market-rate units, or sell enough market-rate ones, officials said. 

So, instead of providing affordable units at 600 South Van Ness, which community group Plaza 16 Coalition fought hard to win, the Toboni Group will now pay an in-lieu fee. 

To avoid similar issues, the new ordinance forces future mixed-income projects to be either completely owned or rented, and requires hearings on post-approval changes. 

Joe Toboni, founder of the Toboni Group, declined to comment on 600 South Van Ness Ave. 

His son Joey, however, told the Chronicle in July in a prepared statement that, “Our intent from the beginning was to sell the below-market-rate units to fund our nonprofit organization, the Affordability Project, which is currently entitling a 70-unit below-market project in San Francisco.”

The statement blames the failure to sell the units on the city, and says it was the city that “asked us to in-lieu the units, despite us publicly speaking about our desire to sell them, going back to 2017,” Toboni continued. 

Indeed, the Toboni Group made headlines in years past for their ideas to sell below-market-rate units and pocket the funds in a self-launched nonprofit to construct more affordable housing. 

“What the public and especially the less fortunate would consider to be the government’s role in helping people in need is not happening. It’s just not happening,” the elder Toboni told Mission Local in 2018.

When Toboni spoke to Mission Local, he hoped the sales on 600 South Van Ness Ave. and another project at 19th Street and South Van Ness Avenue would set the stage for millions in funding

Turns out, the unsold homes at 600 South Van Ness. Ave. won’t contribute. 

But that project wasn’t the only Toboni development called out in the ordinance’s press release. Although the situation is complicated, the Tobonis are also attempting to back out of a previous plan that guaranteed on-site units at  2100 Mission St., near 17th Street. The previous building developer promised four on-site affordable units, but then sold it to the Toboni Group. Toboni wants to drop that obligation and pay an in-lieu fee before starting construction.

During the Planning Department’s review of that request to switch, the affordable housing units remain in limbo. 

The new ordinance states that if a project plan is already approved and then a developer seeks to switch from building on-site to paying an in-lieu fee, a hearing would be required. 

Again, the Tobonis are not the only developers to bait-and-switch during the development process. Grob said at the meeting that several developers “modify” plans, even “after a [housing] lottery has been completed.” This could mean potential low-income tenants or owners won the housing lottery, only to find their units in question. 

To bypass these obstacles, the ordinance establishes clear timelines for construction, pricing and marketing plans. 

From here on out, the ordinance’s supporters hope it dispels any confusion on affordable housing rules. 

“Overall, what we’re looking for is to reinforce the developers’ affordable obligations to make sure the process is both transparent to the public and ensures the affordability,” Beinart said. “Developers know what is expected of them, and our constituents can know what they expect as well.” 

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Annika Hom is our inequality reporter through our partnership with Report for America. Annika was born and raised in the Bay Area. She previously interned at SF Weekly and the Boston Globe where she focused on local news and immigration. She is a proud Chinese and Filipina American. She has a twin brother that (contrary to soap opera tropes) is not evil.

Follow her on Twitter at @AnnikaHom.

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4 Comments

  1. Is it ‘bait-and-switch’ if the ‘in-lieu fee’ is an option for the developer? Seems more an indictment of the city’s inability to capture the value from the in-lieu fee scenario in a timely manner. I’m curious why the units sat empty for four years – was it tied up in a legal battle with the city? inability of the Planning Commission to enforce the ‘same time’ ordinance?

    1. It’s “bait and switch” because as part of getting approval the developer chose on-site BMR housing instead of the option to chose “in-lieu fee”. On-site units are preferable because they’re built sooner than in-lieu units. Choosing on-site saves the developer up-front money.

      The article makes clear why the units have sat empty. They were permitted as condos but potential buyers couldn’t finance them because the developer decided rent the other units in the building. And the developer decided not to rent the BMR units. They couldn’t be sold and the developer didn’t want to rent them. So they remain empty.

      Apparently there’s a loophole in the current same time ordinance. It’s indifferent to whether units are offered for rent or for sale as long as they’re offered at the same time. But realities of finance are that BMR units offered for sale won’t be sold if more than half the units are rented by the developer.

  2. My HUD/vash sociaol worker and I arrived at Avalon Ocean last year
    They advertised on Zillow
    halfway through the building manager joined the leasing agent and started to make a lottery preference claim
    Did I tell Him HUD/Vash does not recognize the lottery but in any event, the Zillow advertisement vanished the next day

  3. Same situation in Santa Cruz, a city of rising homeless and real estate prices. Several new multi-storied buildings were built in the last 10 or less years; many of them were empty for many of those years. Those, except one, promised 4-10 low-very low income units and I don’t believe they sold or leased any of them as they remained empty for years. Why do these developers play with the lives of people? It’s a disgrace and ignoring the problem will only create ever greater problems.

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