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.
