As we first outlined earlier this year, plans for a 24-unit, market-rate development to rise along Diamond Street, between the intersection of Diamond Heights Boulevard and 29th Street, overlooking Noe Valley, have been drawn.

And as drafted by Solomon Cordwell Buenz (SCB) for the Emerald Fund, the development as envisioned would rise up to 40 feet in height, with four (4) four-bedroom single-family homes averaging around 3,400 square feet apiece bookending the development and twenty (20) three-bedroom townhomes averaging closer to 1,950 square feet between, and a total of 29 off-street parking spaces, with two parking spaces for each of the single-family homes.

But based on Planning’s preliminary review of the draft plans, they’d like to see even more density on the site.

As noted by Planning: “The project proposes to add 52,480 residential square feet resulting in 24 units per lot, just short of the 25-unit threshold that would trigger the Inclusionary Housing Program (Planning Code Section 415), which requires payment of the Inclusionary Affordable Housing Fee or a percent of units to be provided as Below Market Rate (BMR) units on-site or off-site.” And based on Planning’s preliminary review of the draft plans and data, “the Department estimates that roughly 43 units could be reasonably provided on the site under the base zoning.”

As such, the department is requesting that the team explore “all available options that [would] maximize residential development on the site in a manner that meets all other applicable requirements and standards, including available density bonus programs” and “strongly encouraging” the team to increase the density of the proposed project prior to submitting a formal application to proceed.

Also noted, as the intent of a required Planned Unit Development authorization is to yield “one development site that produces an environment of stable and desirable character which will benefit the occupants, the neighborhood and the City as a whole,” the proposed subdivision of the site “is not supported [as proposed].”

We’ll keep you posted and plugged-in.

UPDATE (6/16): As correctly noted by a number of plugged-in readers below, while there is a marked increase in the inclusionary housing requirements for a development with 25 units or more, developments which would yield 10 to 24 units, such as the project as proposed, are subject to inclusionary housing contributions as well (albeit at a lower rate).

And while we have a feeling that Planning’s original feedback to the development team, as quoted above, was intended to highlight the “just short of the 25-unit threshold” nature of the project as proposed, Planning’s PPA letter has since been revised to remove said commentary at the request of the project team.

Planning’s “strongly encouraged” request to increase the project’s density, however, remains.

Comments from Plugged-In Readers

  1. Posted by Alex

    Great, so planning wants to bump up this development into a category that will require more BMR housing, which will be a reduction in the project economics. This will push already skiddish parties to abandon the project. Great job planning department, now we will have 24 units less of housing, and these higher income people will drive up prices elsewhere in the city. Mission accomplished planning department – Accelerate Displacement!

    • Posted by Neighborhood Activist

      Department policy (and maybe even the Planning Code) require that projects maximize the possible density (and yes, that often results in projects being required to provide some BMR units.) This is just a familiar example where developers attempt to avoid the BMR requirements by proposing fewer units or less density than the site will support. Bravo to Planning for not letting them get away with it.

      • Posted by Karl

        There is no such requirement.

        Planning cannot force a project sponsor to build more units — they can merely “request” it.

        The initial Inclusionary Housing (i.e., BMR) requirement kicks in at 10 units and then a higher Inclusionary requirement kicks in at 25 units. So this project would have to satisfy the Inclusionary requirements for a project containing 10 to 24 units — which, I believe is currently 13.5% on-site or a 20% fee.

        The problem is that for larger projects, the BOS, in their infinite economic wisdom, has basically set ever higher % requirements (with “automatic” yearly escalations) and this results in rendering many projects unfinanceable. (The NIMBYs, of course, love this fact.)

        For instance, if the project sponsor was to provide 25 units, then the Inclusionary requirement would jump up to 20.5% on-site or a 30% fee. No sponsor in their right mind is going to do that.

        If the City really is interested in creating more housing, they should eliminate the higher Fees.
        Alternatively, if their intention is to have less housing then, by all means, keep jacking up the fees and Inclusionary requirements.

        • Posted by Neighborhood Activist

          Sorry, my wording was sloppy, and you are correct. But I think it’s Planning’s policy to push for the maximum density a site will support, and particularly when a project comes in just under a higher BMR threshold that the developer is trying to avoid crossing, just to improve their profits. It’s not Planning’s job to maximize developer profits. It IS their job to ensure that new development is making the biggest contribution possible toward our housing deficit.

          I don’t buy the argument that a larger project with a more significant BMR requirement can’t pencil out. But I’m sure it’s less profitable. I guess we’ll see whether the developer walks away. I doubt it.

          • Posted by SF Dede

            By your last statement, all projects should be profitable, the question is to what degree. I don’t know of any business, let alone real estate development, where some degree of profitability is guaranteed. You describe a reality which does not exist. Potential projects do not proceed all the time because they don’t make a sufficient return, or no return at all. Fees such as for affordable housing, construction costs, financing costs, and potential future rents or sales revenue, are all examples of elements which could make a project not pencil.

          • Posted by Karl

            Well, if I was the developer of this particular parcel, I would definitely look into the subtext of Planning’s “suggestion”, i.e., I would propose starting with the 43 units allowed in the underlying zoning ( i.e. 1 unit per 800 sf of lot area), then since the parcel meets PUD criteria increase that number to 57 (i.e., 1 per 600 sf of lot area; minus 1; so it’s technically not an “up zoning”) and then apply the maximum State Density Bonus Law percentage (35%); which would result in 77 units.

            Accordingly, this approach would maximize the amount of housing allowed on the parcel per Local and State laws (while also maximizing the amount of inclusionary housing and fees) and, since State law overrides Local law, would have the additional significant benefit of not being held hostage to any neighbor objections, thus greatly reducing entitlement uncertainty and risk.

            Based upon the unusual/narrow configuration of the parcel this would likely result in a long. slab-like building that would rise to about 65 to 85 feet above Diamond Heights boulevard.

            All NIMBYs should be very careful regarding what they wish for!

        • Posted by SF Dede

          I think they proposed something that the neighbors would support, or at least fight less against.

          The proposal seems in line with existing neighborhood density and unit type. I can see maybe neighbors supporting some increased density at the south end, but the affordable penalty for one or a few more units will be a big barrier to project viability.

          Density at the requested levels would result in a very different project, especially unit mix given site constraints. It would have to become a unit mix biased towards smaller less family friendly units – and that’s if it would be viable at all given the affordable housing requirement at all.

          I’ll be supporting the project as proposed. More housing is better than an empty lot.

          • Posted by SF Dede

            And I couldn’t agree more with Karl’s post above which strangely I cannot reply to. Nails the opposite extreme.

    • Posted by Miraloma Man

      Don’t worry. Everyone is leaving. Build it in Burlingame.

  2. Posted by sparky-b

    Planning department statement has that wrong I think, it’s not that the developer is trying to propose zero BMR. It is that they are proposing 20% BMR vs. the 33% for over 25 units.

    From section 415.5: For housing development projects consisting of 10 dwelling units or more, but less than 25 dwelling units, the applicable percentage shall be 20%

  3. Posted by Scott F

    This is a 3.8 acre site, so the proposal is 6 dwellings per acre. Not a typo. Six.

    Planning’s suggestion of 43 homes is 11 dwellings per acre. That’s still a suburban level of density that belongs in Los Gatos Hills, not San Francisco.

    If the politics or economics can’t support at least 200 homes, it would be better to keep this undeveloped until they can. 400 homes would be better. Muni service is temporarily reduced for COVID-19, but let’s not forget that this site is normally at the intersection of two transit lines with rail connections – the 52 to Glen Park BART, the 35 to Castro station. It’s also a walkable neighborhood with Safeway, Walgreens, various restaurants, a vet, and more, 5 minutes on foot.

    This land is part of a city; let’s not throw it away on pseudo-suburbia.

    • Posted by hmmm

      Good observation. I’m not sure about 400 or even 200 units here, but six units an acre and an average of 2,200 sf per unit is pretty obscene. I thought we had a housing crisis, not a McMansion crisis. The City may or may not be able to twist their arms to build higher density, but they should be shamed for this. There is no shortage of homes available in SF for those who want 3,000 sf homes. It’s one thing to stick a few penthouses atop a dense tower, it’s another to give up scarce land in the middle of City for a few luxury single family houses. This kind of project is not exactly a good poster child for the pro-housing argument.

    • Posted by Alai

      Hmm, that doesn’t sound right. Using the measuring tool on Google Maps, it looks like the lot is just about one acre, which makes it a moderately dense rowhouse neighborhood by SF standards.

    • Posted by SocketSite

      The project site is actually 34,714 square feet, or 0.8 acres, in size.

      And as such, the density of the project as proposed is roughly 30 units per acre (not six) while Planning’s guidance would yield closer to 54 units per acre (not eleven).

      • Posted by Scott F

        Ah, happy to be corrected. 54 dwellings per acre is much more reasonable. It looks like the assessor summary on the Planning Department’s website was for a larger parcel that was recently subdivided, even though only this project site was shown on the map.

    • Posted by Miraloma Man

      Sadly, those bus lines are probably never coming back. Sigh.

  4. Posted by SocketSite

    UPDATE: As correctly noted by a number of plugged-in readers above, while there is a marked increase in the inclusionary housing requirements for a development with 25 units or more, developments which would yield 10 to 24 units, such as the project as proposed, are subject to inclusionary housing contributions as well (albeit at a lower rate).

    And while we have a feeling that Planning’s original feedback to the development team, as quoted above, was intended to highlight the “just short of the 25-unit threshold” nature of the project as proposed, Planning’s PPA letter has since been revised to remove said commentary at the request of the project team.

    Planning’s “strongly encouraged” request to increase the project’s density, however, remains.

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