• Does a 35 percent affordable requirement make a project unfeasible for most conventional/market-rate developers?
  • The project site is the last parcel in the city approved for a more than 550-foot tall building.
  • By this time next year all residential developers in SF may have to set aside a third of a project's units as below market rate.

Developer Crescent Heights has walked away from a residential high-rise project in San Francisco’s Transbay District a month after purchasing the development parcel for $165 million.

The reason: The Miami-based firm is unable to comply with the project’s agreed upon affordable housing component.

In November, the firm’s bid to purchase the parcel came out on top because 35 percent of project’s units were to be priced below market rate and reserved for households making half the city’s median income, according to the Transbay Joint Power Authority.

The $165 million from the sale of “Parcel F” was supposed to finance the Transbay Transit Center, which is said to be $360 million in the hole for phase one of its construction.

Parcel F is the last development site in San Francisco zoned for a height of more than 550 feet. Whoever ends up developing the site must comply with the same 35 percent affordable unit requirement, with at least 25 percent of the units being affordable to low income households.

The 35 percent affordable unit requirement for the parcel is similar to proposed standards being pursued by city government.

San Francisco’s mayor and board of supervisors are pushing for a charter amendment to next November’s ballot that would require 33 percent of all new residential units to be below market rate.

Under the city’s current inclusionary requirements 12 percent of a project’s units must be below market rate, so long as the project features 10 or more units. Developers can also choose to pay a fee or build additional below market-rate units at another location.

This pursuit by Mayor Ed Lee comes after voters passed San Francisco’s largest ever housing bond, Proposition A, in early November. The proposition authorizes a $310 million housing bond, which will be used to construct and preserve low- and middle-income homes.

Email Erik Pisor

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription