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In developer’s pitch to build tiny apartments, opponents rally for ‘family housing’

March 30, 2015

By Cory Weinberg : bizjournals -excerpt

1700 Market St., designed by Forum Design, would include studios as small as 295-square-feetmore

A developer pitching a housing project filled only with tiny studios and one-bedrooms on Market Street got a chilly reception from the Planning Commission on Thursday.

Paragon Real Estate Group’s 48-unit market-rate project was seeking the first exception in recent memory to the city law that requires builders in the Market-Octavia area to build 40 percent of the project as two-bedroom or larger units. Warner Schmalz, the project’s architect, said the property at at 1700 Market St. was relatively small and triangular, making two-bedroom units “distorted.”

The developer now will go back to the drawing board to present updated designs with two-bedroom units after the Planning Commission voted 4-3 to push back the project’s fate by a month. Paragon also said at the hearing that it would reverse course and build some on-site affordable housing, instead of paying a $2 million fee to the city as first planned. It still needs a conditional-use authorization to build a different unit mix than the planning code requires.

“By not building two-bedroom units, you’re precluding families from even getting a unit,” said Dennis Richards, a member of the Planning Commission. He added: “I don’t think giving money to the Mayor’s Office (of Housing) is illegitimate, but in Upper Market we’ve pushed for units on site so we have a real rich fabric for the neighborhood” and we are not segregating “people based on where they can afford” to live.

The Commission wasn’t looking to shoot down the project – just modify it. But the debate cut into several questions hanging over some development fights across San Francisco: Should developers get leeway if their market-rate projects include smaller units to make them “affordable by design”? Should they pay to build their own affordable units under the inclusionary housing law instead of paying a fee to the city? And are these questions slowing down projects and cutting back on the housing supply at a time when new units are desperately needed?

Some opposition to the project bubbled up at the last minute. The Hayes Valley Neighborhood Association’s letter to the Planning Commission to oppose the project’s two-bedroom exemption was filed Thursday, although the group had previously voiced its disapproval to the developer. (The group would support the same project if it adhered to the Market-Octavia zoning rules, said head of HVNA Jason Henderson.)…

Fernando Marti, co-director of the Council of Community Housing Organizations, an affordable housing advocacy group that opposed 1700 Market, said neighbors may support these kinds of projects as long as they still helped pay for low-income housing and public open space.

At 1700 Market, the core issue wasn’t the size of the units but the mix of the units. The project also drew ire from Supervisor Jane Kim’s office. April Veneracion, a land-use aide in the office, told the Commission that “the supervisor is concerned about the policy precedent this sets. The 40 percent two-bedroom mix in Market-Octavia and other neighborhoods ensures the city has a mix of units as development occurs.”… (more)

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