San Francisco Approves 1,100-Home Balboa Reservoir Project

Balboa Reservoir, San Francisco, Mission Housing, Habitat for Humanity San Francisco, Pacific Union Development Corporation, Avalon Bay Communities
Image Courtesy of Balboa Reservoir

By Meghan Hall

Five years and more than 50 meetings in the making, the San Francisco Board of Supervisors has approved a major redevelopment project that will transform a current parking lot into thousands of units of housing. Known as the Balboa Reservoir project, the public-private partnership will develop a 17-acre parcel of land owned by the San Francisco Public Utilities Commission.

San Francisco officials selected a joint partnership of Bridge Housing and Avalon Bay Communities back in 2017. From there, the companies are working with Mission Housing, Habitat for Humanity San Francisco and Pacific Union Development Corporation to develop specific parcels and buildings. 

The project will feature 1,100 residential units, of which 5500 will be affordable to low- and moderate-income residents. 100 for-sale townhomes adjacent to Westwood Park are also included, as are 4.2 acres of total open space, with a two-acre central park. A child care center that can accommodate about 100 children is also part of the plans. $10 million in fees and various pedestrian and infrastructure improvements are also planned.

The approval came Tuesday after the Board of Supervisors heard an appeal, made by City College staff and students. The appeal challenged the project’s final environmental impact report (FEIR) and was backed by the Public Land for Public Good. Both City College and Public Land for Public Good were advocating for 100 percent affordable housing at the site.

While the Board recognized the concerns laid out in the appeal, it moved forward with approving the FEIR and a general plan amendment that will rezone the site.

“It has been a very long journey to get to this point,” said Supervisor Norman Yee, who represents the district in which the Balboa Reservoir project is located. “I understand the desire for a 100 percent affordable project. On a level of principle, I do not think anyone on the Board would disagree. But in evaluating all of the circumstances that we have gone through on this site…it would not work for this particular project.”

According to Yee, in order to make the project 100 percent affordable, the City would have to deplete its entire $600 million housing bond—a move that officials did not believe was feasible long-term. Instead, the priority was on making the affordable units permanent. The City plans to sell the project site to the development team for $11.4 million and is working to get the land deeded back to the City in the future.

Housing availability—at all income levels—continues to be a challenge throughout San Francisco. Even though housing production reached new heights in 2019, demand has steadily outpaced supply. The most recent report found that construction of new housing in 2019 totaled more than 4,850 units, an 81 percent increase from 2018. The year’s numbers represent the second highest production total in the past 20 years and includes 4,461 units added through new construction and an additional 397 units added through conversion of non-residential uses and expansion of existing structures. 

Affordable housing production was also up last year, with 1,456 units delivered. The number is more than twice the amount of housing units completed in 2018 and is 50 percent above the five-year average of affordable units produced, at 980 units. New affordable units made up about 30 percent of new additions to the housing stock. 83 percent of new, affordable units are affordable to very-low and low-income households.

However, the number of units approved decreased 52 percent in 2018, and further economic uncertainty posed by coronavirus could strain supply even further. Construction delays can also translate to less product coming to market, all while demand for units remains high.

West Coast Commercial Real Estate News