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Planning Commission approves Parcel F deal that directs an in-lieu fee to fund Transbay affordable housing
Summary
The Planning Commission approved a development agreement allowing Transbay Parcel F (542–550 Howard St) to pay 150% of the usual affordable-housing fee into an OCII-managed fund, a payment sponsors estimate will exceed $45 million and could support roughly 170–235 below-market-rate units at Block 4.
The San Francisco Planning Commission on Jan. 28 approved a development agreement for Transbay Parcel F that replaces an on-site affordable housing obligation with a negotiated in-lieu fee. Planning staff and the project sponsor told commissioners the change is a technical one intended to make financing feasible and to speed construction.
Nick Foster of planning staff said the Parcel F project is materially unchanged from earlier approvals and includes 165 housing units, a 189-room hotel and about 275,000 square feet of office. Sponsor CJ Higley said delivering Parcel F and the promised affordable housing as legally separate projects is necessary to obtain financing; the sponsor proposed a fee equal to 150% of the city’s typical affordable-housing fee under section 4.15 of the planning code.
Higley said the amount will be “somewhere north of $45,000,000,” money that OCII would take and loan back to the sponsor to support construction of a 100% affordable podium at Transbay Block 4. The sponsor estimated the payment could fund roughly 170 to 235 affordable housing units in Transbay depending on AMI levels and financing structure, and said the change would still result in the same ultimate delivery of affordable housing compared with prior approvals.
Labor and housing groups spoke in support. Cynthia Gomez of UNITE HERE Local 2 and representatives from the Housing Action Coalition and Chinatown Community Development Center told commissioners the project will create construction jobs and deliver affordable housing and that they backed the sponsor’s community benefits agreement.
Commissioners asked about timing and site selection for the Block 4 affordable project; the sponsor said Block 4 schematic design and a DDA with OCII are underway and that Parcel F construction documents were nearing final sign-off, with a projected groundbreaking in the third or fourth quarter of 2021. Commissioners approved the development agreement, planning-code and zoning-map amendments, downtown project authorization, conditional-use authorization and office allocation in one motion that passed unanimously, 7–0.
The commission’s action authorizes the development agreement mechanism and the in-lieu fee; OCII remains responsible for receiving and administering the funds and for using them to finance affordable housing in the Transbay district.
