“Former Redevelopment Areas Vital in SF’s Affordable Housing Goals”

SF Examiner, January 3, 2017

A little-known city agency overseeing the development of more than a third of the 10,000 affordable homes the mayor has promised by 2020 is ramping up construction.

San Francisco’s development boom is citywide, but a large portion of that development is occurring on land under the auspices of the Office of Community Investment and Infrastructure.

The OCII formed as a result of the Redevelopment Agency’s dissolution and is overseeing tens of thousands of market-rate and affordable housing units in the Transbay, Mission Bay, Hunters Point Shipyard and Candlestick Point neighborhoods.

In 2014, Mayor Ed Lee promised 30,000 new homes, of which 10,000 would be affordable.

“OCII is a key component of achieving that goal,” said Jeff White, OCII housing program manager, during a Dec. 20 hearing on that agency’s second-annual housing production report. “And of that 10,000 affordable units, about a third is in the OCII pipeline — some we have already delivered, some of it is in construction and some of it is in predevelopment.”

The agency has overseen the completion of 596 new affordable homes — both affordable projects and inclusionary units part of market-rate development. That includes last fiscal year’s 189 affordable units in OCII-funded affordable housing projects and 76 OCII-sponsored inclusionary units.

“We’ve made incredible strides this year,” OCII executive director Tiffany Bohee said.

There are another 858 affordable units in construction. Some 1,246 affordable units are in some stage of predevelopment, and 836 are in the preliminary planning stages.

“Our goal is to accelerate the production of affordable housing,” White said. He noted that in the prior year there were less units under construction, some 645.

All told, that’s 3,536 affordable homes expected to count toward the mayor’s goal, according to OCII’s Affordable Housing Production Report Fiscal Year 2015-16.

The OCII plans to oversee a total of 6,069 more affordable homes, with 3,631 in the Hunters Point Shipyard and Candlestick area, 980 in Mission Bay, 1,277 in Transbay and 192 in other locations.

Peter Cohen, co-director of San Francisco Council of Community Housing Organizations, a group of nonprofit affordable housing providers, praised the report for highlighting the balance between market-rate housing and affordable housing.

For example, of the 2,835 homes built to date in the Mission Bay North plan area, 24 percent were affordable, and of the 599 homes built to date in Transbay 32 percent were affordable.

“It’s not just about investment. It’s also about … actually having a balance of housing that’s affordable to different folks because otherwise the market is not going to deliver,” Cohen said during the meeting. “We’ve all seen what’s happening outside of your plan areas. It’s, frankly, a disaster.”

One dark cloud during the hearing was escalating costs.

“Right now we are really battling extremely high construction costs,” White said. “That is a large result of the high demand for construction contractors and labor.”

He noted recent development, such as Candlestick Point, has come in “just under” the newly imposed per unit cap cost of about $825,000 for tax state credit programs.

“As we go forward, it is just something that we will be closely watching and instituting cost containment measures where we can,” White said.

That could mean square footage decreases of units, common area reductions and toned down finishes.