If you're wondering whether Mayor Ed Lee's affordable housing ballot measure, Prop K, is going to mean anything, critics will be quick to point to a recent negotiation with a big developer as proof that it will not. As we reported earlier, the Jay Paul Company was looking to skirt the city's requirement that it set aside 15 percent of the new condo units it's building at 181 Fremont as affordable. And now, as the Chron reports, the deal has been struck, and the developer is agreeing to pay a whopping $13.85 million ($1.26 million per unit they're not setting aside) to avoid the affordable requirement.
Affordable housing advocate Jane Kim says she's behind the deal because, she says, this is an exceptional case where the bottom floors of the building will be office, all the residential floors will have multi-million-dollar views, and ultimately the HOA burden on any lower- or middle-income buyers would be too great, with HOA fees for the luxury units all expected to start around $2,000/month.
But, of course, this sets a certain precedent for other developers looking to skirt the requirement as well, and there's no promising that, in the hands of the city, that $13.85 million will be well spent, i.e. it may got toward repairing the city's existing, crumbling affordable housing projects rather than toward constructing much needed new housing.
Kim had been advocating for a much stricter new law, via the ballot box, that would have raised the burden on new developments to 30-percent affordability. She compromised with Mayor Lee and thus we have Prop K, which, as the League of Pissed Off Voters says, is essentially just a "non-binding pinky swear to build affordable housing."
Mayor Lee's housing task force has, to its credit, come up with a set of proposals for incentivizing more affordable housing construction. These include things like creating partnerships between market-rate developers and non-profit developers for on- and off-site construction of their required affordable units; and loosening the rules around how and where these units get built, such as the rule that required developers to construct off-site units within a mile of the project they're building. The current, stated goal is to build 10,000 new affordable units in the city by 2020.
181 Fremont, meanwhile, is set to be a very pretty, 52-story, mixed-use building with 37 floors of office space and 67 luxury units sitting atop those, all of which will be selling for many millions of duckets.
Previously: New Condo Tower 181 Fremont Skirts Affordable Housing Requirement