With Funds from Historic Prop I Budget Deal, City Moves Forward with Purchasing Five Sites for 100% Affordable Housing

SAN FRANCISCO — Last year, the Board of Supervisors and Mayor London Breed agreed to a groundbreaking spending package for affordable housing, predicated on the hundreds of millions raised by Supervisor Preston’s Prop I ballot measure, including $40 million to acquire land for development of 100% affordable housing. Today, the city is announcing five sites it plans to acquire for an estimated 550 units of affordable housing, including an auto-repair shop at 650 Divisadero Street in Preston’s district.

“Our vision with Prop I is to create new funds for affordable housing, with an emphasis on piloting new strategies to meet our goals,” Preston said. “I am thrilled that we are moving forward today with acquiring sites that will create hundreds of new units of permanently affordable housing, and that we’re delivering for the residents on the Divisadero Corridor.”

In July 2022, the Board of Supervisors approved a spending package totaling $112m for a range of affordable housing strategies, including site acquisition, new construction, and life-safety repairs in public housing and co-operatives. The $40 million for acquisition created the first dedicated funding source for the city to acquire land to create affordable housing.

In January, the Mayor’s Office of Housing and Community Development sought proposals from affordable housing developers for site acquisition. Today, MOHCD announced the sites to be acquired from this competitive process, including the 650 Divisadero site.

Prior to being elected supervisor, Preston advocated for more affordable housing on the Divisadero Corridor, co-founding a neighborhood group called Affordable Divis in 2015. When the 650 Divisadero proposal was before the Planning Commission seeking approval for private development, Affordable Divis demanded increased affordability.

“I’m thrilled that we will be developing affordable housing at 650 Divisadero,” Preston said. “For years, neighbors on the Divisadero corridor have demanded more affordable homes. This is a major step forward in making good on those demands, and creating more opportunities for working people and their families to have a place in this community.”

Like many projects citywide, the property at 650 Divisadero is fully entitled for private market rate housing development, but due to the pandemic and market changes, has been unable to move forward. Preston’s office has consistently pushed for acquisition of sites like this that are fully entitled but not being developed, seeing them as opportunities for the city to step in and purchase the sites to develop 100% affordable housing. Preston laid out this strategy in a District 5 Affordable Housing Opportunities Sites report in January 2023 and has pressed this point repeatedly in housing hearings at the Board of Supervisors.

“By creating additional funds at the ballot, we have resources for the city to buy sites and not rely on the private market to provide the bare minimum of affordability, and instead to invest in 100%, permanently affordable housing for low-income and working class San Franciscans,” Preston said. To date, Prop I has generated more than a quarter billion in revenue, and is projected to raise another $100 million this year.

The site acquisition comes six months after the city adopted its new Housing Element, which sets a benchmark for new housing production for the next eight years. These new targets – to create 46,500 new affordable homes for working San Franciscans by 2031 – are significantly higher than any previous goal set by the city.

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