Budget committee advances $14.3 million loan for 2550 Irving affordable housing amid contamination concerns

The San Francisco Budget & Finance Committee on July 14 voted to forward to the full Board a $14.3 million loan to the Tenderloin Neighborhood Development Corporation to acquire the site for a 98‑unit, 100% affordable family housing project at 2550 Irving Street.

Supervisor Gordon Mar, who represents District 4 and led public questioning, described the project as "a historic moment" for affordable family housing on the West Side but pressed MOHCD and the project sponsor on high per‑unit costs and an ongoing environmental review. Jacob Noonan of the Mayor's Office of Housing and Community Development said the $14.3 million loan would come from Proposition A bond funds reserved for acquisition and predevelopment and that the project aims to serve families, with 25% of units set aside for formerly homeless households.

Much of the committee’s discussion focused on reports of perchloroethylene (PCE) soil vapor at the site. Katie Lamont, speaking for the project sponsor, said the Department of Toxic Substances Control (DTSC) had preliminarily approved a draft response plan that includes an engineered vapor intrusion mitigation system under the building, utility corridor plugs, confirmation sampling prior to occupancy, a land‑use covenant requiring ongoing maintenance, and monitoring. Amy Chan of MOHCD said the plan was under DTSC public comment and that loan closing was conditioned on DTSC’s final approval.

The Budget Legislative Analyst (Nick Menard) reviewed the appraisal and underwriting and recommended approval, noting the acquisition price is consistent with the appraisal and that projected cash flows meet the Preservation and Seismic Safety Loan coverage requirement. BLA also recommended an amendment recorded in the resolution clarifying the city’s intent to take ownership of the land and enter into a ground lease with the nonprofit sponsor.

Public comment ran for more than two hours and included roughly a hundred callers. Supporters urged the committee not to delay a rare 100% family affordable project on the West Side; callers from housing advocacy groups and neighborhood coalitions urged approval and maximum unit count. Opponents and nearby residents raised concerns about the seven‑story scale, parking and transit impacts, the appraisal and acquisition price, and health risks tied to the PCE plume. Several callers, and Supervisor Mar in his remarks, urged postponing the loan until DTSC completes public comment and issues a final approval of the response plan. Some commenters also alleged insufficient neighborhood outreach by the project sponsor during the NOFA and predevelopment process.

Chair Matt Haney and Supervisor Safaee joined Supervisor Mar in accepting a package of amendments from Mar that added findings on neighborhood outreach, direction to MOHCD and TNDC to continue meaningful community engagement on design and scale, and explicit language about DTSC oversight. Despite Supervisor Mar’s request to delay a final vote until DTSC completes its process, the committee voted 3–0 to send the item to the full Board with a positive recommendation and the amendments; the resolution conditions the loan closing on DTSC’s final approval of the response plan.

What happens next: the loan and associated amendments will go to the full Board of Supervisors for final action. If approved, the loan would secure site control so TNDC can complete predevelopment and apply for the larger construction financing needed to build the 98 units. DTSC’s public comment period remained open at the time of the committee meeting; MOHCD and TNDC said they will continue outreach and incorporate public input into design and permitting.

Key figures and constraints: loan ~ $14.3 million (MOHCD/BLA figures); project size 98 units (family housing); 25% set aside for formerly homeless households; acquisition price reported in the file ~ $9.0 million (appraisal); total project development costs underwritten by MOHCD are substantially higher (BLA cited comparisons to other MOHCD projects). DTSC oversight and final approval of the response plan are explicit closing conditions for the loan.

Speakers quoted: "This project addresses urgent needs of the Sunset community," Supervisor Marr said, while adding that "the environmental oversight and response plan timing is very important." Amy Chan (MOHCD) said DTSC has been engaged and that "the draft response plan has been reviewed and preliminarily approved" and will be finalized after public comment. Katie Lamont (TNDC) summarized the five components of the DTSC response plan and said monitoring and maintenance will be required to protect residents.

This committee action secures the city’s role in site acquisition and moves a controversial but city‑prioritized 100% affordable family housing project toward the full Board’s consideration.