On January 26, when SF Planning Commissioners cast a unanimous vote in favor of an 11-story tower with 189 homes at the northern edge of the Mission, the chamber erupted into applause.
Commissioners told the jubilant crowd to settle down, because they had to get on with other items on the agenda.
The celebration, although brief, was nevertheless appropriate. The incoming high-rise at 1500 15th Street, shepherded through San Francisco’s red tape jungle by developer Elsey Partners, is a rare case where the city’s business-as-usual housing politics did not in fact go as usual, despite having all the elements of a disaster in the making.
While 1500 15th Street is a win so far — there’s still bureaucracy and economic headwinds to navigate — it’s not necessarily a formula the city wants to follow going forward. A new state-mandated plan requires the city to build 82,000 new homes in the next eight years. The mayor’s housing team just released more details; waiting more than six years for approval of nearly 200 homes, as just happened with 1500 15th Street, isn’t part of the package.
Based on previous history, however, the project could have easily never made it this far.
Monsters and beasts
Stop us if you’ve heard this one before: An out-of-town developer (Elsey Partners is based in Kansas) wants to build a soaring new building in the Mission, with retail space and more than 180 new homes.
Back in 2016, Elsey proposed to turn this site, home to a parking lot and smog-check station, into so-called group housing, with 180-plus micro-homes (300 to 350 square-foot studios) sharing communal kitchen space on each floor. This kind of home zoning usually applies to old-fashioned boarding houses, but the Elsey plan upscales it for potentially hundreds of tenants.
Neighborhood groups under the banner of United to Save the Mission opposed the plan: Not enough of the units were affordable housing, they said, and new development would ruin neighborhood character and drive out longtime residents.
This is the same formula that ultimately forced developers to pull the plug on market-rate developments like 1979 Mission Street — aka “the Monster in the Mission” — and strike a convoluted deal to make it 100 percent affordable. (The Plaza 16 Coalition, which shares some members and supporters with United To Save the Mission, gave the Monster its name.) Projects like the “Beast on Bryant,” won through but required years of struggle, while others, like nearby 1515 South Van Ness, developers gave up on entirely.
USM does not always block new housing; just last year they backed a 50-unit plan down the street at a former auto center, in part because developers promised to replace ground floor commercial space with residential and increase the number of affordable units.
But 1500 15th Street got off to an ominous start. At a 2016 community meeting, one coalition member, Mission Economic Development Agency policy analyst Peter Papadopoulos, said of the proposed high rise, “This causes neighborhood displacement, no question.”
Elsey Partners promised that 25 percent of the units produced would be affordable, but they still struggled to find sufficient public support. This course to San Francisco’s vast development graveyard is well-trodden, but instead something interesting happened: everybody sat down and worked things out.
Key concessions
Developer Chris Elsey tells The Frisc that the secret to the success of 1500 15th Street is pretty simple: In a series of community meetings over several years, everybody talked out their problems. “It took a while, but the best solutions are those that are win-win. I think we’re happy and the folks are happy,” Elsey says.
Often these kinds of community meetings (a legal requirement in SF) get dismissed as cynical exercises, something developers do out of obligation, leaving neighbors with accusations that they haven’t been heard.
This time was different. The project’s amount of affordable housing is the same now as it was in 2015 — 25 percent, which USM initially deemed unacceptable. But Elsey also agreed to key concessions, such as reducing the rent on the retail spots so that local businesses can move in, and granting right of first refusal on all units, not just those below market rate, to renters who hold San Francisco Housing Authority vouchers. USM says the right of first refusal also applies to Elsey’s “mirror project” across the street at 401 South Van Ness Ave., which has not come up yet for Planning Department approval.
“Many developers try not to have these conversations, but he really came to know the community,” USM member Larissa Pedroncelli says of Elsey.
Even MEDA’s Papadopoulos, who raised fears of displacement in 2016, now has no objections. “The coalition is in agreement with the final provisions of the housing projects,” he tells The Frisc via email.
And although approval took years, Elsey thinks the plan will pencil out. “We perform as our own general contractor, we act as the architects, we do the design work [ourselves],” which helps drive costs down, he tells The Frisc.
Both the neighborhood and Elsey Partners deserve credit for making the deal happen, and the Planning Commission’s approval rides that wave of comity. But the story of this building still contains enough red flags to give pause.
Negotiations that span some five years aren’t a workable timetable for every new building down the line, especially in light of the city’s new ambitious goals. (USM’s Pedroncelli blames the long negotiation in part on the fact that plans for the building changed several times during the process.)
And even if the project still makes financial sense, as Elsey says, not every developer would be so lucky.
With the Planning Commission’s approval, the only thing that can stop the building going forward is an appeal to the Board of Supervisors. USM can’t do it; the coalition is contractually obligated not to interfere with the project as long as Elsey Partners stick by their end of the bargain.
Elsey still needs a building permit, however, which can take more than two years and possibly offer new opportunity for the bottom to fall out of the market, the project, or anything else; SF lawmakers have of late made noise about reforming the agonizing permit process to help mitigate these very risks.
Overall, the approval of nearly 200 new homes, a quarter of them affordable, is much-needed good news for San Francisco, and it could well have gone awry if the principal parties hadn’t heard each other out. Now, with SF on the hook for tens of thousands of new homes this decade, the process will have to get faster and more reliable.
At least by passing its housing element plan last week, the city has taken a step in that direction, something nearly every other Bay Area city has failed to do.
[Correction: The story has been changed from its original version to update the description of the ‘right of first refusal’ agreement; to note that the Plaza 16 Coalition came up with the name Monster in the Mission; and to correct the reasons USM approved the project at 1721 15th Street. ]
Adam Brinklow writes about housing and development for The Frisc.