Sup. Preston Brokers Deal to Acquire 600 Van Ness Site for 100% Permanently Affordable Housing

SAN FRANCISCO — Supervisor Dean Preston announced a deal today for the city to acquire 600 Van Ness to create up to 168 units of permanently affordable housing. The deal is part of a package to unstick the development at 98 Franklin Street, a proposed residential housing project that would sit atop a new high school, which has been unable to move forward since rezoning in 2020.

“It’s a win-win-win: a new high school, a new site in District 5 for 100% affordable housing, and good jobs for San Franciscans building new housing at 98 Franklin,” Preston said. “I am happy to be able to help deliver this outcome for the residents of my district and the City.”

Preston will introduce legislation today to increase the height and density at 98 Franklin, while allowing a land dedication to purchase 600 Van Ness, and securing an additional $1 million to jumpstart a long-delayed affordable project in Hayes Valley.

The 98 Franklin Street project was rezoned in 2020 by a unanimous vote of the Board of Supervisors, but because of rising construction costs and pandemic-fueled supply chain issues, the development has been unable to move forward to construction. Project sponsor Related California approached Preston’s office earlier this year to collaborate on a path that could deliver on 98 Franklin, which includes facilities for the French American International School, while providing more affordable housing than originally proposed through a land dedication.

Preston recommended 600 Van Ness, a project that received full entitlements and building permits from the city in 2018, but like 98 Franklin, has been unable to move forward. In October, Preston met with the property owner to explore the possibility of city acquisition for affordable housing. A 2020 ballot measure authored by Preston proved instrumental in making the deal happen. Prop I doubled the transfer tax on all deals valued at $10 million or more, but it waives the increased rate when owners sell to the city for affordable housing development, resulting in more than a million in cost savings in the case of 600 Van Ness.

“This is an important first step in moving 98 Franklin forward and brings us closer to constructing a mixed-use building that will bring a new high school and much-needed affordable housing to the Van Ness corridor,” said Matthew Witte of Related California. “We appreciate Supervisor Preston's leadership in working collaboratively with all stakeholders to bring this package forward."

Preston was able to secure an additional $1 million in fees that will help jumpstart an affordable housing project at Parcel K in Hayes Valley, the current Proxy site. The property is one of a dozen parcels in the neighborhood where the Octavia Freeway once stood, and when activists pushed the city to tear down the freeway in the late 1990s, the state transferred ownership to the city to create permanently affordable housing. More than 20 years later, the site remains undeveloped. Preston’s earmarked contribution, combined with his advocacy to build affordable housing on Parcel K, is designed to kick off the predevelopment phase, with an RFP for building the affordable housing on the site promised by the Administration in 2023.

The deal comes on the same day the Board of Supervisors will hold a hearing on the Housing Element, which will require the city to provide conditions to create more than 82,000 units, 57% of which must be affordable, over the next eight years.

“I am proud to push the envelope to create as much affordable housing as possible,” Preston said. “In this down market, with many private developments stalled or abandoned, the City should aggressively pursue site acquisitions for affordable housing. Bold pursuit of these opportunities is the only way we will meet our affordable housing goals.”

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