Planning Commission approves 182‑unit Parcel P in Market Octavia with labor and street‑improvement conditions

The San Francisco Planning Commission unanimously approved a conditional use authorization for Parcel P in the Market Octavia plan area on Thursday, clearing the way for a mixed‑use infill project that would replace a surface parking lot and part of the Hayes Valley Farm with 182 dwelling units, about 3,800 square feet of retail, and 91 off‑street parking spaces.

Under the motion approved by the commission, the sponsor must comply with existing First Source hiring and prevailing‑wage commitments recorded in the purchase and sale agreement and pursue an in‑kind agreement to fund improvements to Hickory Street. “A portion of the fee is used citywide,” Olsen Lee, director of the Mayor’s Office of Housing, told commissioners when explaining the administration’s preference that inclusionary‑housing fees remain flexible rather than restricted to the immediate plan area.

Supporters said the project delivers infill housing near transit and includes significant funding for affordable housing. “This has been a collaborative effort,” Lou Vasquez of Build Inc., one of the project partners, said during the presentation, and AvalonBay’s representative emphasized the team’s commitments to prevailing wages, apprenticeship standards and local hiring in the executed purchase and sale agreement.

Neighbors and labor groups pressed the commission to require on‑site inclusionary units and a concrete local‑hire/enforcement plan. Multiple labor speakers and union representatives requested a written compliance plan before approval; staff and the deputy city attorney explained the legal distinction between the city’s proprietary role (the purchase and sale agreement requires an economic‑justice covenant and recordation) and the commission’s regulatory authority (where the motion can reference First Source hiring). Planning staff noted that the sponsor is permitted by code to request the parking and design modifications before the commission and that staff found the requested exceptions to be relatively minor and consistent with Market Octavia policy.

Commissioners balanced design praise with concerns about enforceability of labor commitments and on‑site affordability options. The approved motion includes a clause urging the sponsor to pursue an in‑kind agreement for Hickory Street improvements and retains the standard First Source/hiring condition. The commission also required staff to pass along technical corrections to the draft motion (dates and heading corrections were noted). The vote was unanimous.

Next steps include final permit processing and coordination with the mayor’s office on recorded covenant requirements; staff said the buyer must record the economic‑justice covenant required by the executed purchase and sale agreement prior to closing.