For nearly 20 years, the corner building at 18th and Mission has sat empty — and derelict. Not much remains of the structure, which was modernized in the 1930s with a sleek curved front, neon clock and large windows and that once housed the largest stove store on the West Coast. It has become a canvas for graffiti, wheatpasted advertisements and the backdrop for street vendors.
Then, in 2017, it became a symbol of some small hope: 63 below-market-rate condos for teachers were to be built on the lot, part of a push to make living in San Francisco affordable.
That project is now on hiatus. More than a year ago, after nearly a decade of trying, the city quietly hit pause on the Mission Economic Development Agency’s plans to build teacher housing. The city cited a lack of both funds and a feasible financing plan, according to emails obtained by Mission Local.
The emails, from Feb. 21, 2025 to April 9, 2026 between MEDA and the Mayor’s Office of Housing and Community Development, show that the project’s future has been very much in doubt for over a year. MEDA’s efforts to secure funding — first up to $9 million in federal tax credits and then $15.6 million in federal grants — have proven unsuccessful.
This is a story of how MEDA’s attempt to create teacher housing came to a standstill, one of a changing economic environment in which MEDA tried — and is still trying — to keep it afloat.
Unlike the 135 units at Shirley Chisholm Village in the Sunset that opened in 2024 for teachers and other school district workers, the project at 2205 Mission St. was envisioned as an ownership model, open to teachers with a household income of up to 120 percent of the city’s median income, or $136,150 for a single person and $194,500 for a household of four.
MEDA bought the building in 2017 from a former Facebook executive for $6.4 million, using a $5.7 million loan from the nonprofit Low Income Investment Fund with the intention of turning it into teacher housing.
The first big blow to the project came in the summer of 2024, when its application for a federal tax credit grant failed. This was expected to bring up to $9 million into the project, but the application failed because despite being eligible, the Mission District was not considered to be in “severe distress” (defined as, among other things, an area with a poverty rate 30 percent or more), which was a requirement for the funding.
In the latest American Community Survey data, which covered a period from 2016 to 2020, the Mission in fact saw a decrease in poverty and unemployment rates, and an increase in median family income — all metrics that went into the federal government’s designation.
MEDA then scrambled to get an Environmental Protection Agency grant in November 2024. Sheila Nickolopoulos, the mayor’s housing director of policy and legislative affairs, called it a “longshot.” Indeed, a few months later the application proved unsuccessful, according to a representative from the federal agency. The representative said the project failed an “eligibility review” but declined to elaborate.
By the summer of 2025, the project’s future seemed uncertain. “As you know there is no identified path forward for the project,” wrote Lydia Ely, deputy director at the mayor’s office of housing, in an email sent to coworkers on Aug. 15, 2025.
The failure to get the federal funding in turn cost the nonprofit additional dollars it had been counting on.
MEDA had secured a promise of more than $5 million in funding from two sources, each with its own deadlines for the start of construction: $2 million from the regional affordable housing program (a May 2025 deadline) and $3.1 million from the state’s CalHOME program (a June 2026 deadline). Time has run out on both.
Emails between city staffers and MEDA over the last year illustrate the developer’s increasing concerns about funding, and confusion among the mayor’s housing officials about some of the nonprofit’s requests.
In the spring of 2025, for example, MEDA requested half a million dollars to cover the building’s demolition. MEDA had previously planned to maintain the building’s facade — an example of Streamline Moderne — but, by 2024, MEDA was ready to let it go. It applied for, and received, a demolition permit.
In its response to the request for demolition funds, however, the city could not see the reasoning. “MEDA’s overall rationale for demo’ing the site is not compelling,” wrote Ely in a June 9, 2025, email to her colleague. She recommended declining the developer’s request.
MEDA argued that demolition would save $12,000 a year in holding costs (insurance, maintenance and security) and would benefit the surrounding area because the empty property had become a nuisance.
“We are not going to move forward with this request,” Ely emailed her colleague on June 25, 2025.
Still searching for funds, MEDA emailed the mayor’s housing office in July 2025 asking to discuss several items: a $112,076.93 request for holding costs, and either increasing the income levels for potential buyers or changing the housing model from homeownership to rental.
José García, MEDA’s chief real estate officer, said the nonprofit sought to raise the income qualification in order to sell more expensive condos and potentially close the funding gap.
At the proposed income levels — 130 percent of area median income — potential buyers could earn $168,600 for a household of two and $210,750 for a household of four. That, Garcia said, would make a significant difference. “Let’s say, instead of selling them at $600,000, we would sell them at $700,000.”
The income change was rejected, and while officials explored the possibility of changing the project to rentals, the city attorney rejected it. The project had received its initial $12 million in funding based on an application for condominiums. Changing to rentals would require returning the money and a new application process, the city explained.
Still, officials seemingly tried. In an August 2025 email, Ely also asked a colleague, “What if we wanted to abandon the educator housing concept and just do straight rental?”
As to paying holding costs, Ely told her colleagues in an email holding costs were “ineligible” for city funding per the original loan agreement.
At the same time, MEDA was facing shortfalls elsewhere in its portfolio. In October 2025, the Board of Supervisors approved a $37.8 million rescue package for its small sites program, one that purchases small buildings with low-income residents and seeks to preserve them as affordable housing.
It’s unclear if these developments impacted the city’s view of MEDA’s new requests. But by November, city officials were making pointed suggestions that MEDA consider letting go of the teacher housing project.
“At this point, the loan agreement requires MEDA to either proceed with development and construction of the educator homeownership project, or if the project cannot move forward, then transfer the property to another project sponsor,” wrote Ely on Nov. 1, 2025.
Ely then presented three options to MEDA:
- Keep the land “in anticipation of favorable changes to homeownership market conditions,” like better interest rates or other funding opportunities, and use the lot as parking, office space or arts space to cover some holding costs. (It is unclear how this would have worked since there was no office space on site.)
- Sell the land and repay the city’s outstanding loan balance.
- Transfers the property and assigns the loan agreement to a new nonprofit developer, with city approval.
García said that MEDA did not consider selling the property because the sale price — $6.4 million — would have been lower what it owed on the city loan. (MEDA had already used about $9.5 million of the $12 million loan in predevelopment costs.)
And García did not see the logic of transferring the property to another developer, since it would leave MEDA with no say in it.
On March 31, MEDA presented two potential paths forward in a memo to the city: a $28 million city subsidy to close its funding gap and get the project off the ground, or a deal in which MEDA would transfer the land to the city in exchange for $3.4 million it had already put into the project, but which the city had not reimbursed.
The mayor’s office of housing responded that it had no authority to increase MEDA’s funding to that degree.
The very next day on April 1, housing staff emailed each other and said that MEDA wanted its money back. Nonprofit developers like MEDA typically front some of the cost of a project and are then reimbursed by the city — the $12 million was going towards those reimbursements. MEDA says it has some $3.4 million outstanding.
Both potential paths were rejected by the city. The path forward was unclear.
What is clear is that MEDA felt increasing financial pressure. By April 20, it announced it was cutting expenses by 21 percent for “long-term sustainability.” In doing so, MEDA laid off 12 employees and reduced salaries. Luis Granados, its CEO, took a voluntary 43 percent cut for one year.
What will happen to the project — now on pause — is unclear. García, for his part, said that MEDA might team up with another organization to move it forward, but said it was too early to provide details.
