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Board approves OCII variation allowing developer to pay higher in-lieu fee; 69 affordable units to be built off-site
Summary
Supervisors approved a variation allowing 181 Fremont’s developer to convert 11 on-site affordable-homeownership units into a larger off-site affordable project by paying $13.85 million in lieu of the standard fee; the funds will support construction of 69 affordable units on a nearby block.
The Board approved a variation to the Transbay Redevelopment Plan on Oct. 28 that lets the developer of 181 Fremont convert a small on‑site affordable requirement into a larger off‑site commitment by paying $13,850,000 to support construction of 69 affordable units on a nearby Transbay block.
Supervisor Jane Kim, who sponsored the item, explained the context: 181 Fremont is a mixed-use tower with all residential units in a high‑cost product (condominiums). Under existing formulas the project would have contributed a smaller on‑site ownership obligation (11 units) or a lower in‑lieu fee (about $5.5 million). Negotiations between the Office of Community Investment and Infrastructure (OCII) and the sponsor produced a higher payment that OCII will use to negotiate an exclusive negotiation agreement with Related and Tenderloin Neighborhood Development Corporation (TNDC) to build more deep‑income affordable units on Block 8 (Fremont and Folsom).
Courtney Pash of OCII told the board the OCII Commission unanimously approved the variation and that the developer has agreed to support a community facilities district if needed and to pay taxes in lieu if a district is not formed before the project’s certificate of occupancy.
Supervisor Kim said the higher in‑lieu payment and the off‑site arrangement will yield a net increase of roughly 58 to 69 affordable units in the Transbay area and help the city meet its 35% affordable‑housing goal for the plan area.
The Planning Department and OCII supported the change; the Planning Commission conditionally approved the project’s other approvals. Supervisors approved the variation and related actions by roll call; the motion passed unanimously.
Why it matters: The decision is an example of using in‑lieu funding to generate deeper affordability (more and lower‑income units) in a high‑price central development, and of OCII leveraging negotiated payments to expand the affordable housing pipeline in the Transbay plan area.
What’s next: OCII will execute an exclusive negotiation agreement with Related/TNDC and direct funding to a dedicated off‑site affordable project on Block 8; the developer will proceed with 181 Fremont while the off‑site affordable project moves through its own approvals and financing.
