City to buy 1515 South Van Ness for 100-percent affordable housing development - Jonathan Cartu Industrial & Residential Real Estate Firm
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City to buy 1515 South Van Ness for 100-percent affordable housing development

City to buy 1515 South Van Ness for 100-percent affordable housing development

After the homeless Navigation Center located at 1515 South Van Ness vacated in June 2018, the building sat inactive, waiting to be demolished and transformed into a mostly market-rate development.

Only, nothing happened. For a year.

Today, Mayor London Breed announced that the city will be purchasing the site in order to build a 100-percent affordable housing development — “potentially 150 new family units,” as Breed put it on Tuesday morning.   

“We know that this community has a goal of getting to 2,500” affordable units, Breed said to around 30 community members gathered at the site. “This is a step in the right direction.”

A source said the city would be paying Lennar Multifamily Properties around $18.5 million for the 32,000-square-foot site. The San Francisco Chronicle reported the same figure. The Mayor’s Office of Housing and Community Development would not confirm the purchase price.  

The mayor’s office of housing did say that the city will purchase the site using the so-called “windfall” cash from booming property tax returns, as well as money from the Metropolitan Transportation Commission’s JumpStart fund. Breed cautioned, however, “We have the money to buy the site, but we don’t have money to build it.”

Some of the money could come from Breed’s $600 million housing bond if it passes in November, the mayor said. Only after the Board of Supervisors approves the purchase and the city finds construction funding, will the city select a developer.

Mission Housing Development Corporation is ready. “Without a doubt, Mission Housing is interested and has already been working on putting together the best community development team that we can,” said executive director Sam Moss in a telephone interview. “It is imperative the eventual project that is built there accurately reflects the community struggle and community efforts that went into getting us here.”

The Mission Economic Development Agency, which has five projects in the pipeline — including a 94-unit project in construction next door to the site — will be lining up as well. “We are eagerly anticipating bidding on 1515 South Van Ness when available, as part of our cultural place-keeping strategy for the Mission,” said Karoleen Feng, the nonprofit’s director of community real estate.

For community activists like Roberto Hernadez, it was a moment of reckoning. “On this land, we fought Lennar — and this is a happy ending,” he said.

Lennar Multifamily Communities, which bought the property in December 2015 for $12.8 million, had initially proposed the 157-unit project in 2014. The proposal was met with forceful community resistance and the nickname “Titanic Mess on South Van Ness.” The city finally approved the project after Lennar struck a deal in March 2017 with neighborhood leaders with the help of Supervisor Hillary Ronen.

That included a 25 percent affordable housing percentage, $1 million paid to a neighborhood group, affordable ground-floor space, and for the site to be used as a homeless Navigation Center for nine months.

Despite playing a heavy role in helping the strike that deal, Ronen on Tuesday said she was happy with the outcome. “The deal we had made with Lennar was an excellent deal for a market-rate project,” she said. “But market-rate projects are never as good as affordable projects.”

Ronen noted also that she is working to have Mission-based arts organizations who have been pushed out of their spaces, like Galería de la Raza and Carnaval, to utilize the now-vacant building, formerly the site of McMillan Electric Company. “While this sits vacant and derelict, let’s activate it use it for that purpose until we break group and demolish the building,” she said.

It’s unclear whether Lennar’s city-approved site plan will be used for the would-be affordable project. Kate Hartley, the director of the mayor’s office of housing, said affordable projects have different requirements than market-rate developments. Some of the financing used on affordable projects, for example, requires a community room and other similar amenities.

“So we have to look at [Lennar’s] entitlements, look at how we can adapt it to meet our requirements, and then do the best design in the fastest way possible,” she said.


Commercial Real Estate CEO Cartu Jonathan

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