Committee forwards $12M purchase of 1939 Market Street to full Board for affordable senior housing

SAN FRANCISCO — The Budget and Finance Committee on Feb. 5 voted to forward a resolution to the full Board of Supervisors that would authorize the city to buy 1939 Market Street for $12,000,000 and place the property under the Mayor’s Office of Housing and Community Development (MOHCD) to develop into affordable housing.

Chair Sandra Lee Feuer moved the item to the Board "with a positive recommendation" and took the motion "without objection." The purchase price is supported by an independent appraisal and would be paid from the Education Revenue Augmentation Fund (ERAF), with a $500,000 deposit credited against the price.

Joyce Lin, a project manager with MOHCD, described the signed purchase-and-sale agreement and said the office intends to develop the site as 100% affordable housing, with a current program concept emphasizing senior housing that is LGBTQ‑affirming. Lin said the city expects to close the acquisition by March 27, 2020 and to pursue construction in fiscal year 2022–23.

Dan Adams, acting director of MOHCD, told the committee the immediate priority was to secure the property to prevent an open‑market sale and that MOHCD would issue a request for qualifications (RFQ) to select a developer. Adams said the RFQ is likely to be issued in summer or fall and the winning developer would refine unit mix and income targeting during programing. He said the office aims to deliver "deeply affordable" senior units and to pair those units with subsidies so rents remain low for elderly residents.

Dan Goncher of the Budget Legislative Analyst’s office said the acquisition is consistent with the City’s general plan and Planning Code priority policies, and that the Planning Department found the purchase exempt from review under the California Environmental Quality Act (CEQA). Goncher summarized the property as a two‑story office building with approximately 12,050 square feet and noted the proposed leaseback to the seller for $5,000 per month over 24 months, which the BLA reported would generate roughly $616,642 in lease payments over two years and an estimated net income to the city of $221,876 for that period as presented in the report.

Committee members highlighted local need. Supervisor Rafael Mandelmann praised MOHCD’s quick action, saying his district faces high displacement and eviction pressure and pointing to nearby Mercy Housing developments that officials said produced about 119 units and drew long waiting lists. Adams estimated a likely yield for 1939 Market Street of roughly 80 to 100 units depending on zoning and unit mix.

An unidentified member of the public used the public‑comment period to criticize MOHCD’s reliability, call for audits of DAHLIA, and urge prioritizing people already adversely impacted by displacement; no response to those specific allegations appears in the transcript.

The committee did not record a roll‑call vote on the motion to forward the item; the chair’s motion was moved without objection and the matter will proceed to the Board of Supervisors for final approval and any required gap financing or ground lease actions. The BLA noted that gap financing and ground lease terms would return for future Board approval.