Building Up Allows Affordable Housing

By J.K. Dineen
Of The Examiner Staff

The builders of a 300-unit condominium project at Fourth and Freelon streets in the South of Market have agreed to buy a lot on Brannan Street, where they will construct a 56-unit building and hand the keys over to the Tenderloin Housing Clinic free of charge.

The Brannan Street building, located near Ninth Street, would represent The City’s first example of the co-called “density plus” housing model, touted by some housing activists and the Residential Builders Association as an innovative way to create housing for the poor. 

The Fourth and Freelon model, approved by the Board of Supervisors last February, allows developers to exceed height and density restrictions, in exchange for building an offsite apartment complex and giving it to a nonprofit housing group such as the Tenderloin Housing Clinic. 

Under city inclusionary housing laws, 12 percent of all market-rate developments must be affordable. If the affordable component is built off-site, that percentage rises to 15 percent. 

Under the plan, builder Joe Cassidy won permission to build 300 condos on a Fourth Street lot slated for 188 work/live lofts and was allowed to exceed the 56-foot-height restriction by 30 feet.

Cassidy, an ally of Residential Builders Association President Joe O’Donaghue, said he plans to spend about $9 million on the affordable housing component of the project. He said it would be entirely up to the Tenderloin Housing Clinic to decide what to do with the building.

“Who else do you know that is going to give away a $9 million building,” he said. “I need my head examined.”

Cassidy said the deal could be replicated in other city neighborhoods.

“This deal could be worked out anyplace — the Richmond, the Sunset, the Marina,” he said. Cassidy said the model should become “policy across the board.”

“Give height bonuses in exchange for affordable housing, that is the only way to get deals done,” he said. “Otherwise it will all be government subsides.”

Although the Fourth and Freelon project passed unanimously, some residential groups complain that relaxing density and height restrictions would damage neighborhood character and that building the mandatory affordable housing away from the expensive market-rate housing would “ghettoize” poor people.

But Tenderloin Housing Clinic Director Randy Shaw said developers of high-end apartment buildings rarely rent to working-class families and that nonprofits are much more likely to rent to families who most need the housing. It also makes sense to have family housing near the churches and schools that tend to be concentrated in working class neighborhoods, rather than chic precincts near downtown.