OCII approves variation for 181 Fremont, accepts $13.85 million for area affordable housing

The Commission on Community Investment and Infrastructure voted to conditionally approve a variation allowing the developer of 181 Fremont to convert 11 required below‑market‑rate (BMR) for‑sale units into market‑rate units in exchange for a $13,850,000 payment to OCII for affordable housing in the Transbay redevelopment area.

The change, approved after public comment and staff presentations, aims to produce more affordable units overall in the project area than the 11 on‑site BMR units would create. Christine Maher, senior real estate development specialist for OCII, described the payment as "the net additional revenue that would accrue to the developer if these 11 on‑site affordable housing units were converted to market rate units." Maher said the Concord Group’s valuation analysis formed the basis for the $13,850,000 figure.

Why it matters: Staff and the Mayor’s Office told commissioners that the BMR units’ placement at the top of a 52‑story tower and very high homeowners association (HOA) fees create practical difficulties for long‑term affordability. Maria Benjamin, director of homeownership and BMR programs for the Mayor’s Office of Housing and Community Development, said high HOA fees (estimated at more than $2,000 per month) would artificially depress the mortgage amount for BMR buyers and complicate future resale affordability. "So, for the big bang for your buck, I think, would be much more useful to have those extra 44 units because of those large in‑lieu fees," Benjamin said, and urged the commission to "take the money and run."

Staff estimates said the $13.85 million contribution could subsidize roughly 55 stand‑alone affordable units assuming $250,000 per unit in OCII subsidy, or more than 69 units if a $200,000/unit subsidy is used in a rental project — a net increase compared with the 11 on‑site units the project would otherwise provide. OCII staff cautioned that these yield estimates depend on subsidy levels and project type.

Public comment: April Veneracion Ng, legislative aide to Supervisor Jane Kim, said the supervisor supports the variation as a unique circumstance that would advance the Transbay area’s 35% affordability goal. Fernando Marti of the Council of Community Housing Organizations said his group supports the variation but flagged concerns about precedent and the in‑lieu math: "This is averaging, I think, about $1,400,000 per unit," he said, noting the difference from typical citywide per‑unit subsidy assumptions.

Outcome and next steps: Commissioner Singh moved approval and Commissioner Bustos seconded; the motion passed by roll call vote (3 ayes, 1 absent). OCII’s approval is conditioned on subsequent approvals: the Planning Commission and the Board of Supervisors must consider related development agreements and a Board action is required because the change would materially alter OCII’s affordable‑housing program. The Planning Commission and a Board land‑use committee were scheduled to consider related items in mid‑ to late October.

Provenance: Topic introduced SEG 043; presentation and findings discussed SEG 078–381; public comment SEG 383–456; motion and approval SEG 462–488.

Ending: The commission’s action creates a path for the developer to pay $13,850,000 to OCII in lieu of providing 11 on‑site BMR for‑sale units; the Board of Supervisors and Planning Commission will review and must approve related development agreements before the change takes effect.