San Francisco’s Planning Department has decided to add $2 billion in development fees to a project that seeks to “upzone the Central South of Market area,” which the city promises will result in more “affordable housing.”
According to the San Francisco Business Times, “San Francisco is seeking over $2 billion in fees from developers over 25 years as it plans to upzone the Central South of Market area to accommodate around 7,800 new affordable and market-rate housing units and 40,000 new jobs.”
The Times further notes that “[t]he draft Central SoMa plan unveiled on Thursday, which spans 260 acres bounded by Market, 2nd, Townsend and 6th Streets, is expected to usher in development there, and city planners want money from developers to help pay for community benefits like new sidewalks, open space and above all, affordable housing.”
However, as California Political Review’s Stephen Frank points out, the burden of those billions will ultimately rest with the end consumer and anyone who buys or rents something “from a tenant in this project, you will have the $2 billion as part of the purchase price.”
The Business Times notes: “Residential projects would have to provide between 16 percent to 18 percent affordable housing on-site, or between 28 percent to 33 percent affordable housing off-site,” which will be “below-market-rate” and will reportedly “require millions in subsidies to pay for construction costs and lower rents.”
According to Proposition C, which won approval during California’s June primary, 25 percent of new housing projects must be designated for affordable housing. However, the pending Central SoMa housing units were reportedly calculated outside of Proposition C, and the Times points out that the proposition “could be changed pending further study.”
Joan Meyer with Better Homes and Gardens real estate told Breitbart News that in the last six months, the average purchase price for a one-bedroom apartment in Central SoMa was $820,000. A two-bedroom goes for around $1,030,000.
The plan reportedly spans 260 acres and extends among Market, 2nd, Townsend and 6th Streets.
The bold $2 billion investment will likely drive up the average cost of homes in San Francisco’s already-sweltering and increasingly unlivable housing market. The onslaught of gentrification, ushered in by the booming tech industry, has also pushed many traditional residents out of older neighborhoods.
Such gentrification concerns have rattled the new plan. In an interview with the Business Times last year, April Veneracion, an aide to Supervisor Jane Kim, who represents SoMa, said, “People had thought that Sixth Street will never be gentrified, and I don’t think that’s true anymore. So how do we make sure SROs, which are a critical part of our affordable housing stock, will be maintained?”
The full plan can be found here.
Follow Adelle Nazarian on Twitter @AdelleNaz