San Francisco may finally tear down barriers to home construction.
This month, Mayor London Breed and Supervisor Matt Dorsey introduced a motion to help restart a stalled development by Australia-based Lendlease to build a 47-story condominium tower at 30 North Van Ness Avenue, in the Civic Center, the San Francisco Chronicle and San Francisco Standard reported.
The deal with the developer would nix the 25 percent on-site affordable housing requirement baked into the 2020 approvals for Hayes Point. It also represents a willingness by city leaders to work with developers to “juice a lethargic housing pipeline,” according to the Standard.
The Lendlease project called for the tower’s top 38 stories to contain 333 condominiums — 83 of them affordable — while the building’s bottom nine stories would contain 290,000 square feet of offices, shops and restaurants.
The $1.15 billion project had paused in March last year, then officially stalled in August, with Lendlease citing poor market conditions. In May, Lendlease put the unfinished project up for sale after announcing it was pulling back from overseas construction, according to regulatory filings.
The pending city legislation would create a special district that allows relief from land-use regulation, according to the Chronicle. The 83 affordable condos would be built at market-rate.
Claire Johnston, Lendlease’s chief executive officer for the Americas, said the city has agreed to bring the project “in line” with others that are benefiting from the recent policy changes, by scrubbing its requirement to build on-site affordable homes.
She added that $40 million already paid in impact and other fees now “essentially represents a large overpayment.”
“Rather than have those funds returned by the city, we are seeking to simply have the $40 million, along with all of the other fees we have already paid, be considered as our total affordable housing offering,” Johnston told the Chronicle, saying the deal gives “us a viable chance to succeed once the market normalizes.”
Last year, the city’s Board of Supervisors passed the Housing Stimulus and Fee Reform Plan, which temporarily reduces affordable housing requirements for select projects depending on the neighborhood.
While such modifications can help, officials are quick to stress that ultimately the onus still falls on developers to follow through, according to the Standard. Capital markets are still key to moving projects forward, developers say.
Arden Hearing, who leads Lendlease’s West Coast development arm, said the firm still needs to attract more capital before breaking ground at Hayes Point.
— Dana Bartholomew
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