When a proposed condo building at 490 South Van Ness Avenue received its approvals last fall, it was meant to have 72 units, including 12 that would be below market rate. Today, however, that all changed. The mayor's office announced that Mayor Ed Lee has introduced an agreement in which the city will spend $18.5 million to purchase the former gas station site in order to build a seven-story housing development that will be entirely and permanently below market rate. The new development is set to hold at least 72 rental apartments set aside for families of three that earn up to $55,000 or families of four earning up to $61,150. The Board of Supervisors will vote on the purchase on July 28.
If the purchase of the building is approved, the city will put out a request for proposals to developers to build out the site. If it does ultimately hold 72 new units, the city will spend around $257,000 per unit on the land purchase, plus several hundred thousand more dollars per unit on construction.
The per-unit land cost of $257,000 is quite steep, even for this city. The oft-cited estimate that one housing unit in San Francisco costs $469K to build relies on a per-unit land cost of $120,000, less than half of what the city is paying. Then again, this lot is already entitled, and J.C.N. Developers has already sunk money into the design and entitlement process, which could explain the higher price.
The new building is, of course, in the Mission, which has been at the center of the city's affordable housing debate over the past few months. The announcement comes a day after the San Francisco Planning Department released a report showing that the city's growth in affordable housing since 2005 has been nearly matched by the disappearance of rent-controlled units, primarily via Ellis Act evictions and owner move-ins. There have been 6,559 new below-market-rate units built over the past decade, and 5,470 rent-controlled units have disappeared, as the San Francisco Business Times notes. Those numbers mean that these new units are just a drop in the overall bucket, but they are still a big deal in a neighborhood where affordable housing is the topic of the moment.
· Finally! Approvals for Long-Delayed Condos at 490 S. Van Ness [Curbed SF]
· The Real Costs of Building Housing [SPUR]
· SF Loses Affordable Housing Almost As Quickly As It Builds It [SF Business Times]