Keller Grover Jumps on New Law for SF Housing Highrise

Keller Grover Properties wants to become the first developer in San Francisco to employ a new state law that could grant quick approval for a 23-story apartment highrise near the Castro.

The locally based developer has cited the newly enacted Senate Bill 423 for the 200-unit tower at 1965 Market Street, at the edge of the Duboce Triangle, the San Francisco Business Times reported.

Keller Grover had filed revised plans in April for the 23-story tower, with a 12-story annex, set back from the historic facade, according to SF Yimby. The building would incorporate a century-old, Mission Revival mortuary and chapel that Atlas Saving & Loan Association, the first lender in the nation launched by gays and lesbians.

Rendering of 1965 Market Street (RG-Architecture)

The project, designed by locally based RG-Architecture, calls for a 239-foot tower with 12 studios, 80 one-bedroom, 98 two-bedrooms and 10 three-bedrooms apartments, including 28 affordable units. A parking garage would serve 61 cars and 135 bicycles.

This month, however, a law firm hired by Keller Grover submitted a notice of intent to propose the project under SB 423, a law by State Sen. Scott Wiener that requires cities behind on their state housing goals to streamline the approval of most projects.

The law singled out San Francisco by putting it on a strict schedule to permit new home construction to meet its state-mandated housing goal of 82,000 units by 2031.

The city has permitted 831 new units this year — while needing to permit 10,000 a year to meet its required housing goal.

That put the city out of compliance, and in the crosshairs of Weiner’s law, opening it up to streamlined approvals in as soon as six months.

Chris Foley, a consultant for the property owner, told the San Francisco Chronicle at the end of June his team was working to assemble the SB 423 application; the law, he told the Chronicle, “takes the mystery out of the entitlements process.”

The pending development application, if submitted, would be the first San Francisco receives under SB 423.

San Francisco Planning Director Rich Hillis said July 1 applications for projects under the bill were “live,” describing the streamlining provisions enacted by the bill as opening the door for a “new era” of residential development in the city.

“I think there are projects that are waiting for this to kick in,” Hillis told the Business Times at a July 1 press conference hosted by Wiener and San Francisco Mayor London Breed. “If you’re going to submit a code compliant project a month or two ago and you know this was coming, I think you’re waiting.”

Residential projects submitted under the law can skip discretionary approvals, shielding them from review under the California Environmental Quality Act, as well as public hearings.

But the law has some strict conditions that could hamper some development applications.

To qualify for fast-track approvals under SB 423, projects must comply with existing zoning and include the number of affordable apartments dictated by the city’s affordable housing rules.

They must also be built by workers paid prevailing wages, which generally means union scale.

Projects higher than 85 feet in height must also employ a “skilled and trained workforce,” an even higher labor standard.

Michael Lane, state policy director for urban planning think tank SPUR, told the Business Times last fall that developers would have to weigh the advantages of using SB 423 against the costs the built-in labor requirements could add to projects during an era when building apartments is often financially unfeasible.

Keller Grover Properties, founded in 2010, is based at the same address as Keller Grover, the law firm founded by Jeffrey Keller and Eric Grover, according to state business records, which say it specializes in commercial leasing.

— Dana Bartholomew