At the northwest corner of two of San Francisco’s most traveled corridors, Market Street and Van Ness Avenue, a triangular lot has drawn attention from developers since at least 2009.
The interest has not been one-sided. Over the better part of two decades, city decisionmakers have sought to turn the property into housing. After initial environmental evaluations, developer Build SF proposed a 40-story, 304-unit tower in 2015, which the city’s planning commission approved. In 2022, the same developer wanted to go bigger: 460 homes, all market-rate. The planning commission again approved.
Dirt has still not moved. But momentum around a redevelopment seems to be. On Thursday, a planning commission filled with new faces will again vote on a housing project at 1500 Market Street, known as One Oak. This time, it is even larger.
The latest vision is a 400-foot tower with 541 market-rate homes. Local developer Emerald Fund has taken over the project, and, by way of loan default, Seattle-based Washington Capital is the new property owner.
City spokesperson Dan Sider, who characterized the project as “an odyssey,” said the city was prepared once again to approve the redevelopment.
“We are more than happy to keep giving them yes as an answer,” Sider told The Real Deal by phone on Monday.
TRD was unable to immediately reach Emerald Fund and Washington Capital for comment; yet, their latest iteration of this project offers a window into the changing assumptions around a housing development’s feasibility in San Francisco.
Since its inception, the redevelopment was slated to be 100 percent market rate apartments, with developers choosing to pay a hefty fee rather than including on-site affordable housing. A developer’s fee-in-lieu must equal the cost to build 16.4 percent of a project’s total units as affordable, or $20.7 million in this case.
Until earlier this year, the project was going to be mixed-use with 2,500 square feet of retail on the ground floor. Yet, in order to fit 541 units into a relatively similar footprint, Emerald Fund has stripped out the retail and will pursue a purely residential project.
A source close to the project who was unauthorized to speak publicly said the redevelopment needed to fit as many units as possible in order to pencil. Central to Thursday’s vote was also a request to push the structure’s bulkier podium from 120 feet to roughly 140 feet, allowing for more density and floor area.
Still, the source said the project’s ultimate feasibility will likely depend on how rents in San Francisco rise in the coming months and years. Despite the city posting the most rapid rent growth over the last year among major metros, developers have consistently argued that rents need to reach even higher in order for major developments to be underwritten.
The same source did point to the proposed halving of San Francisco’s transfer tax as a change that could help accelerate the project.