In February 2021, San Francisco officials announced plans to build a 100% affordable housing project in San Francisco's Sunset District. The Sunset District is located on the west side of San Francisco, an area that has seen little new construction of affordable housing developments in the past decade. The Sunset District is designated as the “4th District” based on the San Francisco Supervisory District Map. According to data from SFYIMBY, a nonprofit organization focused on the development of housing units in San Francisco, the 4th District saw only 26 net new affordable units and 64 total new units between 2010 and 2020. In addition, in fiscal year 2019-2020, more than 5,000 applicants for affordable housing in San Francisco lived in the 4th District. However, only 49 applicants were able to find housing during that period, and all of them relocated outside the boundaries of the 4th District.
Much of the city's west side is zoned for low-density single-family and two-family homes, making it historically difficult to build high-density apartment projects. The 100% affordable project to be built at 2550 Irving Street is proposed by the Tenderloin Neighborhood Development Corporation (TNDC), a non-profit developer focused on developing 100% affordable housing in San Francisco. The project was partially funded through Inclusionary Housing Fees, a fund overseen by the San Francisco Mayor's Department of Housing and Community Development (MOHCD). The fund was established to oversee and implement the Inclusionary Housing Fee fund. Projects that utilize Inclusionary Housing Fee funds, such as 2550 Irving Street, are required to build 100% affordable housing projects. The 2550 Irving project has been gaining attention in San Francisco in recent months as the Mid-Sunset Neighborhood Association was formed to fight the development in the community. Because this project utilized SB-35, there was no legal requirement to hold a community meeting with the Mid-Sunset Neighborhood Association due to the nature of the SB-35 petition’s approval power. However, according to a statement from Katie Lamont, TNDC’s Senior Director of Housing Development, while the project itself does not need to be put to a vote, they would like to hear from the community about the impacts of the building’s design. Ultimately, the Mid-Sunset Neighborhood Association filed a lawsuit alleging that the 2550 Irving Street project constituted breach of contract, negligence, and a breach of the “implied covenant of good faith and fair dealing.” Due to the nature of the SB-35 petition’s approval power, a lawsuit is unlikely to stop the development, but community opposition to the project could result in many more months of delays.
This article provides a brief look at how 100% affordable housing projects like 2550 Irving Street are developed in San Francisco, and the balance developers must consider regarding time-consuming community engagement as the need to increase the supply of affordable housing in San Francisco continues to be dire.
Proposed Project
The proposed 2550 Irving Street development would offer a seven-story building design with a total of 91 units. Of the total, 73 units would be allocated for families earning between $38,450 and $102,500 per year, and 17 units would be allocated for formerly homeless families. Additionally, the building would feature a 2,250 square foot ground floor community space and backyard. Renderings of the proposed design are highlighted below.
What is an inclusive housing fee and what role does Senate Bill 35 play?
The inclusive housing fee is one of three ways market-rate developers in San Francisco are allowed to meet inclusive housing requirements. For example, if a market-rate developer is proposing a project with 25 or more housing units, and the developer does not want to include affordable units in the development, they would pay an “inclusive housing fee.” As of the date of this article, the fee is calculated as $199.50 per square foot of gross floor area and applies to 30% of the project size. Based on data from the City-County of San Francisco's Department of Audit and Budget Analysis, the fees collected from this program were approximately $200 million from 2014 to 2019 (the most recent data available). The funds collected are set aside exclusively for the development of 100% affordable housing projects. In most cases, the funds collected are awarded to nonprofit developers, such as TNDC, to develop projects similar to 2550 Irving Street. From 2014 to 2019, 96 100% affordable projects were completed, totaling 6,112 units. Fees accrued and distributed to nonprofit developers are overseen by the Mayor's Office of Housing and Development (MOHCD). Typically, MOHCD identifies development sites within the city and requests qualifications. Nonprofit developers respond with qualifications and their vision for the project. Once a developer is selected and construction begins, MOHCD issues funds to the project, which typically equals 25% to 50% of the total project cost, based on the amount of other non-city funding sources.
San Francisco's charter states that all permits are discretionary, meaning that all proposed developments must receive a conditional use permit, even if the proposed use is a legal zoning use. For 100% affordable housing projects in San Francisco, a lot of community engagement has historically been required to build a 100% affordable housing project. At times, the community concerns are legitimate traffic, parking, and density issues, but within San Francisco, a NIMBY mentality surrounding affordable housing projects is also prevalent. In response to the lengthy entitlement and community engagement process for affordable housing projects in San Francisco and across California, State Senator Scott Wiener introduced House Bill 35, which was enacted in 2017. The bill included many housing initiatives, including changing 100% affordable housing projects to housing by right. Housing by right approval allows construction to begin on a development without receiving discretionary approval from the Planning Commission. According to Mission Housing Development Corporation Executive Director Sam Moss, the deed-on-deed nature of SB-35 projects has shortened the development process by months, if not years, for nonprofit developers to build 100 percent affordable housing projects. The challenge developers now face, including TNDC's 2550 Irving project, is whether community engagement is truly necessary now that the project is deed-on-deed. In the case of TNDC and the 2550 Irving project, engaging with the community on the project plans caused multiple delays, reduced the overall size of the project by 50 units, and led to a lawsuit filed against the developer by the Mid-Sunset Neighborhood Association.
Community Opposition to the 2550 Irving Project
After the 2550 Irving Street project was proposed, neighborhood groups formed to voice concerns surrounding the development. At a community meeting held at a local church in the Sunset District, 200 people opposed to the 2550 Irving project gathered to discuss their concerns. Local residents' concerns were expressed in messages held up by local residents such as “Be kind to our neighbors,” “Tell the supervisor to stop toxic waste,” and “Right to light for all neighborhoods,” which was also noted by a local reporter from the San Francisco Chronicle who attended the November 2021 rally. In addition, several members of the crowd chanted “Recall Marr, Recall Marr,” targeting Sunset District 4 Supervisor Gordon Marr. Anonymous attack posters were posted throughout the Sunset District and slipped into mailboxes. The posters read, “No Slums on the Sunset,” and “In just 2 years, 2550 Irving Street will be the best place to buy heroin in San Francisco,” as well as other attacks on the project, its tenants, and Gordon Marr himself. An image of the poster is highlighted below.
The fierce opposition to the 2550 Irving project highlights the challenges facing affordable housing developers in San Francisco, particularly in the city's western part, where affordable housing and multifamily development is extremely scarce.
The balancing act of community participation
The intense community opposition to the 2550 Irving Street project is clear. However, this opposition is not unique to 2500 Irving Street, but rather is consistent with the difficulties affordable housing developers face in all affordable housing projects throughout the city. According to local developers in the San Francisco area, many homeowners in San Francisco believe that 100% affordable housing projects being built today resemble some of the failed public housing projects previously developed in San Francisco, which resemble large 15-story concrete blocks. However, as Sam Moss, executive director of Mission Housing Development Corporation, points out, newly developed 100% affordable housing projects being built in San Francisco today typically resemble well-designed market-rate housing. People typically cannot distinguish between affordable housing projects and market-rate products. To combat strong community opposition to affordable housing in the city, nonprofit developers have historically engaged heavily with the community to gain preliminary approval.
One of the shortcomings of SB-35 is that it did not have time to take hold in the mindset of many of the city’s nonprofit developers. For decades, affordable housing developers have tried to blend into neighborhoods and make as little noise as possible to allow their projects to get through the lengthy approval process. In return, many projects had to make concessions on the number of units, ultimately reducing the supply of much-needed affordable housing units in San Francisco. The goal for 100% affordable housing developers and those responsible for entitlement of these projects is to be more receptive to the rightful authority that SB-35 gives to 100% affordable projects. History shows that communities in the city will continue to oppose 100% affordable housing development, especially in neighborhoods west of San Francisco that have seen very little multifamily development of any kind. Therefore, for the city to become a more affordable and equitable place, nonprofit developers may need to shift from a mindset of minimizing their presence to a mindset of using the power of SB-35 to create more affordable housing options at a higher density and at an accelerated rate.