A fiercely contested housing proposal in the Sunset District moved forward at the San Francisco Board of Supervisors on Wednesday with the approval of a $14.3 million loan to support the project.
The Board’s Budget and Finance Committee voted to approve the loan for the seven-story, 100% affordable development at 2550 Irving Street that has sparked debate in and around the neighborhood for months. The loan, which is instrumental in ensuring further financing for the project, will advance to the full Board of Supervisors for a final vote.
2550 Irving would be the first entirely affordable housing development of its kind in the Sunset District.
At Wednesday’s meeting, dozens of callers voiced support for the development, saying it was sorely needed to address rising unaffordability and housing instability for working-class and lower-income families. Of the 98 proposed units, half are targeted specifically at families earning between $27,000 and $102,000 annually.
“I believe that affordable housing is the solution to combat the homelessness situation in the city,” said Julie Fong, who described herself as a Sunset resident and third-generation San Franciscan. “We have become a city with a reputation for unhoused people that we have more than enough power to help…please do the right thing.”
Opponents of the project cited a range of concerns: the impact on parking and congestion, a loss of sunlight, a lack of aesthetic appeal to the surrounding neighborhood and a toxin called Tetrachloroethene—common at former dry cleaning sites—which was found during an environmental review.
The developer, Tenderloin Neighborhood Development Corporation (TNDC), plans to acquire the site using loans from the city and other financiers and develop the 2550 Irving housing project over the next several years. A two-story, vacant building will be demolished and replaced with the seven-story, multifamily complex at a total cost of $94,064,992, or nearly $1 million per unit.
“Overall, for family housing the total development costs will be higher than a project for just single individuals because of the greater amount of bedrooms,” said Amy Chan, a director at the Mayor’s Office of Housing and Community Development, in response to questions about the seemingly high sticker price.
As part of the pre-development process, land developers must also conduct an environmental review of the site, disclose any potentially harmful chemicals and come up with a plan for containment or remediation. Discovery of toxins is common in housing development, and in California, developers submit remediation plans for review to the California Department of Toxic Substances Control (DTSC) for approval. TNDC expects that its remediation plan, which involves simply wrapping any toxic elements with safe materials, will satisfy any regulatory requirements.
On Wednesday, Supervisor Gordon Mar asked the budget committee to delay approval of the loan until DTSC approves the remediation plan, saying that the neighborhood needs to “get the details right.”
That request was denied by Supervisors Matt Haney and Ahsha Safai, who said that the city urgently needs affordable housing and that smaller plans won’t make sense financially for developers. In addition to funding from San Francisco, TNDC will likely acquire matching funds from the state and federal governments to develop the affordable project.
The 2550 Irving project is expected to move more quickly than prior, similarly-sized developments in San Francisco under Senate Bill 35, a bill enacted three years ago that streamlines approvals for affordable housing projects. For multifamily projects that meet a certain threshold of affordability, and are already zoned in residential areas, SB35 requires an approval process of 90 days or less.
San Francisco, along with California at large, is facing a protracted housing crunch that disproportionately burdens middle and low-income households.
Residential permit approvals plunged during COVID-19, according to the Construction Industry Research Board. In San Francisco, just 2,192 residential permits were approved last year, compared to 3,343 in 2019.
The city must amp up housing production over the next decade to meet a state mandate called the Regional Housing Needs Allocation. Under that mandate, San Francisco will likely be required to produce about 82,000 housing units suitable for varying income levels between 2023 and 2031.
In the meantime, San Francisco’s Planning Department is hammering out the details of a so-called Housing Element, or a local plan to meet the RHNA mandate. That plan will be finalized in 2022.