The 17-acre parking lot next to CCSF and nearby the Balboa BART Station (pictured in green) has the potential to become homes for thousands of residents, integrated with open space, ground floor retail and walkable streets. For almost two years, the Office of Economic and Workforce Development (OEWD) and the Planning Department have been working with the local community to develop the parameters for this site that integrates the existing residents’ interests while planning for the needs of a growing city. Last Friday, OEWD presented to our Regulatory Committee the latest timeline and update.
Balboa Reservoir, owned by the SF Public Utilities Commission (SFPUC) is one of four sites under the City’s Public Land for Housing Program. OEWD plans to reach at least 33 percent affordability, with a goal of 50 percent, without using subsidies from the Mayor’s Office of Housing and Community Development (MOHCD). MOHCD’s resources are committed to several other 100 percent affordable projects, so the hope is that this target can be met through cross-subsidies with market-rate housing and tax credits.
The other Public Lands parcels on this map are all single building sites, making Balboa Reservoir a unique development in this program.
Monthly community meetings with the Balboa Reservoir Citizens Advisory Committee (CAC) are guiding OEWD to create a list of development parameters that will be part of a RFQ/RFP, which will be out this summer. These preliminary guidelines can be found in the link to the presentation at the bottom of this blog. Two key factors to keep in mind: height limits and affordability.
The community has asked that the buildings max out at 65 feet, stepping down to 25 feet near Westwood Park neighborhood, which will make it more challenging to achieve 33 percent or more affordability due to the lower economy of scale. Several of our members noted that 85-feet would make it easier to increase affordability. Fred Pollack of Van Meter Williams Pollack mentioned that the building code is about to change to allow for 5 stories of wood frame over two stories of concrete podium, which would build 75-foot buildings in areas that allow for Type V construction. These were helpful tips that OWED will bring back to the CAC.
OEWD is confident 33 percent could be met with the more traditional tools of tax credits and market-rate subsidies. Reaching 50 percent will require a lot of creativity. Creating an Infrastructure Finance District (IFD) has been considered as one tool. Tom Lockard, currently of Fundrise, formerly of Stone & Youngberg, thinks the scale of the site is insufficient to support an IFD.
“After setting aside acreage for parks/open space, streets, and any other public rights-of-way, the net taxable acreage may only be approximately 10 acres. This is dramatically smaller than any of the City’s former tax increment revenue producing redevelopment project areas.”
A more effective method, he believes, would be for the SFPUC to sell the land for less than fair market value. Currently, the charter requires the SFPUC receive a market price for the land. Mr. Lockard continues,
“If there is a Charter provision preventing the SFPUC from selling property for less than fair market value, give some consideration to amending the Charter to permit transfer of the property at less than fair market value when the land will be used for the creation of affordable housing.
Private and public financing will realize better execution if the land is transferred in fee and not as a leasehold. A leasehold inserts a complicating layer of legal requirements. This legal complexity may not prevent a transaction from closing, but it will add costs in terms of legal documentation and private as well as public finance underwriting.”
OEWD estimates the site could host between 500 and 1,000 units of housing, much fewer than the SFHAC would advocate for on a 17-acre parcel. For comparison, the Shlage Lock site in Visitation Valley, approved in 2014, is just shy of 20 acres, and will include 1,679 units of housing with 15 percent affordability. Are we aiming too low for Balboa Reservoir and selling ourselves short on this housing opportunity?
Click on the link below to see OEWD’s full presentation from Friday’s meeting. If you’d like to receive SFHAC’s Regulatory Committee email announcements, sign up here.