Because new development projects seek to recoup investments and pay off construction expenses, they usually hit the market with higher-than-average rents. Therefore it's something of a surprise when a residential development isn't readily classifiable as "luxury" housing or "affordable" housing. It's even more surprising still when such a development specifically aims to arrive with below market-rate rents, but the Business Times reports that's just the case with a not-yet-approved SoMa micro-unit project at 333 12th Street.
That project is being developed by the firm Panoramic Interests with a design by Macy Architecture. Panoramic tell the Business Times they're shooting for rents that would fall 30 percent below San Francisco city average, a figure that per Zumper was $3,590 per month for a one bedroom apartment as of June.
Panoramic Interests CEO Patrick Kennedy is known for building micro-units in San Francisco, such as the Panorama at 1321 Mission Street and Cubix at 766 Harrison. And the units at the 12th Street project are palatial by comparison 550 square feet on average, compared to 350 square feet at The Panorama and 300 square feet at Cubix.
"Middle-class housing is the biggest need," Kennedy tells the Business Times, chiming in with that politically expedient phrase. "We want to make the units affordable by design."
To achieve a lower price point for the 200 micro-units, in addition to the micro size, Panoramic Interests plans to cut construction costs and take advantage of state density bonuses. With no pools, gyms, or even parking planned for 333 12th Street, construction costs can be lower, and unit plans are relatively simple (there would only be three designs available).
As for the density bonus: The development would be afforded two extra floors in exchange for including 29 affordable units in the building. Yes, that's just 14.5 percent affordable, not 25 percent as would now be required, thanks to the timing of the proposal, which was submitted before January. Nice.