Preston Announces Deal to Acquire 600 McAllister Street for 100% Permanently Affordable Housing

SAN FRANCISCO — Supervisor Dean Preston announced a deal today for the city to acquire 600 McAllister Street to create up to 196 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 was approved today at the Land Use and Transportation Committee.

“I’m thrilled that we are creating affordable homes for hundreds of working San Franciscans and their families at 600 McAllister Street,” Preston said. “It’s a huge win and I want to thank everyone who has helped bring this housing package to reality.”

Preston’s legislation proposes to increase the height and density at 98 Franklin Street, while allowing a land dedication to purchase 600 McAllister Street, and securing an additional $1 million to jumpstart a long-delayed affordable project in Hayes Valley. All told, the package will help create up to 671 homes, more than 42% of which will be permanently affordable housing.

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 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.

“We’re pleased to see this legislation move forward that will help bring 98 Franklin one step closer to reality, eventually creating a new mixed-use building and much-needed affordable housing in the Hayes Valley neighborhood,” said Matthew Witte, Senior Vice President of Acquisitions and Development with Related California. “We want to sincerely thank Supervisor Preston for his work to make this happen.”

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 property, currently used by outdoor venue Proxy, is one of a dozen parcels in the neighborhood where the Octavia Freeway once stood. When activists successfully advocated for 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 Mayor’s Office of Housing and Community Development in Fall 2023. MOHCD estimates the site will yield between 80-90 units of affordable housing.

“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.”

Leaders at the French American International School noted their gratitude. “We want to express our appreciation to Supervisor Preston for his assistance in helping us inch closer to making our new state-of-art high school a reality so we can continue to grow and remain a part of the Civic Center and Hayes Valley communities,” said Melinda Bihn, Head of French American International School.

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