For years, San Francisco’s transit agency has planned to replace Potrero Yard, the 109-year-old bus depot and maintenance hub in the northeast Mission. The facility has problems you might expect from a century-old facility; it’s seismically unsound, with a roof too low to raise buses and trolleys for repairs. It also serves dozens more vehicles than called for in its original capacity.
A state-of-the-art replacement is finally in sight, and it could come with a sizable bonus: hundreds of new affordable homes, many of them large enough for families. It would be a small but welcome contribution to the tens of thousands of new units San Francisco has promised to make way for in the next decade.
But how many hundreds of homes will end up at Potrero Yard is a moving target, and potentially a much smaller one than originally envisioned.
In late 2022, the project got the “predevelopment” green light from the SFMTA board, and after 140 community meetings (that’s right, 140), its environmental impact report was unanimously approved by the Planning Commission last month.
Year after year, though, the number of housing units has shrunk. The most recent version is down to 465 homes, and even that comes with a caveat: The project doesn’t yet have the funding, and there’s enough concern that a plan B with only 104 homes has been drawn up.
SFMTA has money for the new bus yard, as public affairs manager Bonnie Jean von Krogh said last month; it should be in service in 2027. If all the housing funds come through, 360 homes will be built on top of the yard, with more than 100 in a building on Bryant Street.
If the housing “cannot be financed and built in a reasonable time frame,” SFMTA spokesperson Michael Roccaforte tells The Frisc, plan B will take effect: A five-story depot with no homes on top, and with the top floor reserved for paratransit vehicle service. Just over 100 homes would still be planned for the Bryant Street building, which would rise to 13 stories.
Neither Roccaforte nor other city officials would get more specific about the “reasonable time frame,” but the bus yard construction this year will start the clock. Developer Potrero Neighborhood Collective, a chimera of local and out-of-town companies headed by megadeveloper Plenary Americas US Holdings, deferred all questions about finance and timelines to the SFMTA.
The first downsize
The idea to build affordable homes above a revamped bus depot is the kind of bold thinking SF will need to reach its ambitious housing goals. More than half the 82,000 new units the city is planning for must be affordable. Usually the Mayor’s Office of Housing and Community Development takes the lead on below-market-rate projects; in an email to The Frisc, MOHCD spokesperson Audrey Rivera called the Potrero Yard idea innovative and noted that it was entirely an SFMTA proposal.
But how did we end up with this version? The earliest proposals yielded a very different concept: In 2019, SFMTA’s long-term planner said the site could potentially accommodate as many as 800 or 900 units, emphasizing the estimate was “broad brush strokes.”
It was imagined as an inclusionary housing project, with 50 percent affordable and 50 percent market-rate homes. One person who worked on the project says there was expectation at City Hall for every agency to do its part on the housing crisis, and this was SFMTA’s homegrown idea.
While the site could feasibly hold 800 or 900 units, the plan moved ahead in 2019 with more than 500 units, as SFMTA got reality checks from planners and designers. Originally, the assumption was a 50 percent market-rate model would generate revenue for transit. (SF’s city charter mandates that the transit agency always be seeking new revenue sources when possible.) But the agency ditched that idea in 2022, in part because a fully affordable proposal would be an easier sell to the Board of Supervisors.
Sup. Shamann Walton, in whose district the bus yard previously sat, encouraged the increase. “Our office pushed extremely hard to make sure the bottom floor is 50 percent affordable, up to 100 percent,” Walton told the SF Chronicle. (Walton did not return our requests for comment.)
“It became clear that public sites are where we should be building more affordable homes,” former SFMTA planner Sarah Bernstein Jones tells The Frisc.
The city charter bars the agency from investing in a joint development in a case where MTA will generate zero revenue.
SFMTA chief strategy officer Jonathan Rewers
But subsidized housing development is often like a game of five-dimensional chess, a race against time and red tape to combine different piles of money (mostly from the state), all while doing complicated accounting to qualify for additional grants before previous ones expire.
In SF housing terms, 500 affordable units is a big lift. Most years, according to the Planning Department, the city adds only one or two projects of that size, and some years, like 2022, the most recent on record, added none. As far back as 2018, one SFMTA manager warned that “SFMTA would not be able to do this alone” if the build turned out to be 100 percent affordable homes.
To reach its maximum yield, Potrero Yard has a fraction of the funds it needs so far — at least what’s been disclosed. And the SFMTA, already under budget duress, won’t be pitching in.
Charter blocker
At an SFMTA board meeting in November, commissioners asked chief strategy officer Jonathan Rewers if the Potrero Yard project would put a financial burden on the agency. Rewers said no, and explained that the city charter bars the agency from investing “in a joint development in a case where MTA will generate zero revenue.”
That is, while the SFMTA serves as chief fundraiser for the project, it can’t put any of its own money toward it, which agency spokesperson Roccaforte confirmed based on this charter language. (To underscore the fragility of the project’s housing count, Rewers said three months ago that the tally was 513 homes. It’s now been reduced nearly 10 percent to add larger, family-friendly units.)
For history buffs: The charter language was codified in 1999 when voters approved a measure to create the modern agency and put guardrails around its spending. “On the surface, it would seem to be a very sensible policy,” says SF transit historian and former Muni planning director Tom Matoff. It also reflects a bygone era, when a transit agency helping to build housing was regarded as a wasteful boondoggle instead of a forward-thinking plan.
“This is an agency that never has enough money,” says SPUR CEO Alicia John-Baptiste. If, before COVID’s economic blow, the project had remained a mix of market-rate and affordable, there’s no crystal ball to say it could have moved ahead even if SFMTA had been allowed to pitch in.
But today’s reality is this: What might realistically have been 500 homes or so, half of them affordable, is now at risk of being just 100 below-market units. If SFMTA can’t assemble complicated funding in an era of fiscal crisis, almost all the housing potential for this project, creatively conceived to address an unprecedented housing emergency, might end up whittled away through years of public concession.