An aerial view of a green square in the middle of a city.
The site of the proposed group housing project. Courtesy of Prime Company.

The long game may just be starting to pan out for the developer brothers Chris and Brian Elsey.

After four years, a 149-unit group housing project at 401 South Van Ness Ave. near 15th Street moved one step closer to development on Thursday, when the Planning Commission unanimously approved a special permit the project needed. 

The four-year process, however, also means the project can incidentally abandon its previous 25 percent affordability requirement and slash it to just over 15 percent, thanks to city legislation that took effect approximately two weeks ago. 

“Fortunately, this project is going to be one of the first ones out of the gate to be able to take advantage of” the new law, said land-use attorney John Kelvin of Reuben, Junius and Rose LLP, who spoke on behalf of the developers. Chris Elsey is opting to keep 15 percent affordability to access the state density bonus, Kelvin said, allowing the team to build taller and denser than they could otherwise have done. 

However, Elsey posited that even the market-rate units would be cheaper than other housing nearby. “We do have the mandated inclusionary component, but the rest of the units, we feel like, will be hitting within those [income] ranges to be attainable for residents within the community,” he said. 

This is the second of two formerly controversial group housing projects Chris and Brian Elsey, Kansas-based developers, floated in the Mission. On Thursday, Chris Elsey presented the latest project iteration of 401 South Van Ness Ave., which showed how the individual group housing units — typically a dorm-like setting — will have a kitchenette and an individual bathroom. The project, now undertaken by Elsey’s business, Prime Company, was submitted before a group housing definition was amended to exclude small individual kitchens, meaning it is exempt. The project also includes a co-working space, space for community groups, and a pool and spa, and will have ground-floor commercial.

It’s now the second project Elsey has moved forward in the same area. The notorious 189-unit “sister” group housing project, located at 1500 15th St., passed the Planning Commission this January after Mission organizations fought it for eight years. 

“This is the same song, second verse,” Elsey said. 

Whether the recent lower inclusionary requirements frustrate Mission neighborhood organizations is yet to be seen. Regardless, nothing can be done about it. Back in 2016, the Elsey brothers faced stark neighborhood opposition over the projects, specifically stemming from the group United to Save the Mission, which argued that the units and price wouldn’t be attractive to the Mission residents who are most at risk of displacement. 

But all may be in the past. As Elsey and his staff noted Thursday, eventually the developers penned a memorandum of understanding with the group, and agreed to change their original design to gain approval. It’s unclear, however, if the former opponents  were aware of the new lower inclusionary requirement.

Elsey highlighted that the project includes 21,000 square feet for community space, roughly 10 times the minimum mandate, he said. 

And, despite fewer affordable units, there were other concessions to United To Save the Mission, agreed upon previously. 

As presented Thursday, the 401 South Van Ness Ave. designers revised the project’s building shape, reduced bedroom sizes and increased heights, agreed to add murals, and will use carpenter labor for construction. A few public commenters, including union members and native Mission contractors desperate for work, voiced approval. 

The commissioners were impressed. “I, among commissioners, can grouse at group housing projects from time to time,” commission president Rachael Tanner said. “But, perhaps in contrast to some other examples, this one is very thoughtfully designed.” 

Tanner added that the project’s amenities seem more attractive than even some non-group-housing designs the commission had seen. 

While the 1500 15th St. project proposal mentioned the memorandum of understanding between Elsey and United to Save the Mission, it is unclear whether 401 South Van Ness Ave. also included one. To ensure the language was binding, Commissioner Kathrin Moore suggested adding the memorandum to the item before the commission approved its permit. 

Kelvin took the request in stride. “We’ve got a binding agreement, and we wouldn’t mind memorializing that,” he said. 

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REPORTER. 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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  1. “United to Save the Mission” is yet another shadowy astroturf group of nonprofiteers. Unlike Plaza 16, they are not allowed to extort as much. Do they really think that they’re fooling anyone by conjuring up yet another new coalition behind which are the same usual suspect faces?

    The Mission was upzoned in exchange for robust inclusionary value capture in UMU districts. Now that part of the deal has been abrogated, as has “mixed use,” it is all housing.

    Where were the USM nonprofits in organizing Mission residents against this legislative insult that steals value from the neighborhood? Yoked by the Mayor and CCHO to not jeopardize the nonprofits’ position, that’s where.

    I used to think that smaller units would be more economically accessible as housing, but it turned out that on a PSF basis, smaller units go for a ~1/3 premium over regular units when demand is high. When demand is slack, each new market rate unit that comes online pushes more recent homebuyers under water on their mortgages, gifting their nest eggs to Wall Street.

    Mission residents stand undefended against developers. As the market begins to improve, then developments moving forward will benefit from this “hair on fire” diminishing of affordable percentages.

    If Yet Another Coalition of the Same Old Mission Nonprofits were going to do the trick, it would have long ago.

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    1. Renters care that smaller units are more affordable overall, they’re not looking at PSF. Isn’t the aggregate savings what matters? As for homeowners being underwater, well – housing shouldn’t be so commodified. Collectively homeowners have fought against improvement to renters welfare for decades – excuse me while I fetch my violin.

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      1. Collectively, landlords have fought against tenant rights. If public policy is to throw homeowners under water, then production of rental housing will be all we see. To the extent that homeowners like Tom Ammiano, Calvin Welch, Sue Hestor, Tim Redmond, Hillary Ronen and David Campos have been alienated is due to the tendency of nonprofiteers to cast anyone who makes or is worth more than they as rich. Compared to the 1%, we’re all very low income. This is why the city funded nonprofiteers suffocated Occupy SF.

        Given that most people face retirement insecurity and that housing is the only means of the most minimal of wealth creation for most people, then you’re en endorsing generalized impoverishment rent peonage and wealth concentration.

        I don’t think that such policies would carry the day if put before SF voters.

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  2. What a disaster. There is an epic glut of vacant studios in the eastern neighborhoods that obviates any need for these ridiculous dorm-prisons intended for entry-level keyboard tappers. What the city needs, desperately, is family housing (3BRs and up) for lower-income families (you know, the essential workers who make the city function). Maybe we should ponder why coder-warehouses like NEMA (and soon Trinity) are going bankrupt before committing more of what’s left of our limited land to short-sighted debacles that will be an object of scorn for generations to come.

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  3. Isnt this just a glorified SRO? Does the Mission really need more SRO style units/residents? It needs 1,2 & 3 bedrooms units not mini-prisons.

    I can’t agree w/ low income 3-bed units, if you have a family you chose that expense. No one forces you to have kids you can’t afford to house. This city is expensive for everyone already.
    Since Covid, there are so many vacant units, we need a moratorium on building until the city needs it.

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    1. “No one forces you to have kids you can’t afford to house.”

      That’s a reaction of pure emotion, and it has nothing to do with “realism.” Might want to choose another name.

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