Mission District’s Nonprofit Developers Build Housing Hope

A decade after dysfunction and political infighting brought low-income housing production in the neighborhood to a standstill, the Mission is about to become the city’s busiest neighborhood for construction of new below-market-rate units, with complexes popping up along Folsom Street, Mission Street and South Van Ness Avenue over the next three years.

Six affordable housing projects, four of them within a two-block area of the Inner Mission, are set to start construction over the next two years. The projects will inject 733 units into an area that is becoming as known for gentrification and upscale dining as it is for burritos, progressive politics and Latino culture.

And more is probably coming, according to Karoleen Feng, director of community real estate for the Mission Economic Development Agency, known as Meda.

“We are trying to put another 1,000 units in our pipeline,” Feng said. “We are looking at sites across the Mission that we can land-bank.”

The coming burst of affordable housing construction would not be possible were it not for big changes occurring at two neighborhood nonprofits: Meda and Mission Housing Development Corp.

For decades Meda was focused on helping neighborhood residents — mostly Spanish-speaking immigrants — with everything from computer training to business development to tax preparation to English as a second language. Over the past few years, however, it became clear that housing had become the top challenge facing families. In a 2015 survey of 1,600 Mission families with children, Meda found that more than 60 percent were spending half their income on housing.

“They said that their main challenge was not their kids’ academic success — that was important — but the fact that tomorrow they might not have a roof over their head,” Feng said. “That hit home for Meda.”

Since 2000, the Mission has lost about 27 percent of its Latino population, almost 8,000 people, according to a 2015 report by city chief economist Ted Egan.

Feng, who had previously worked with the East Bay Asian Local Development Corp., was brought on board, and the Mayor’s Office of Housing, which controls the city’s housing funds, gave Meda a chance to get into the housing business. First, the city picked Meda, together with Bridge Housing, to take over ownership and operation of 420 former San Francisco Housing Authority senior affordable units, which needed to be rehabilitated. Then, with Chinatown Community Development Center and the Tenderloin Neighborhood Development Corp., Meda was chosen to co-develop four properties of affordable housing.

Meanwhile, Mission Housing Development Corp. has rebounded in a big way. A successful affordable housing developer from its founding in 1971 into the 1990s, Mission Housing ran into trouble in the early 2000s when its board of directors fired a longtime executive director and most of its staff quit.

The city cut off housing development funds to the group, and by 2012 it was facing likely bankruptcy when Sam Moss took over as executive director. Moss was able to keep Mission Housing afloat by refinancing its 1,600-unit portfolio and regaining the trust of city housing officials, who tapped the group to develop two projects in the Mission, 1950 Mission St. and 490 S. Van Ness Ave., as well as the Upper Yard, a parking lot next to the Balboa BART station.

“The company that we are becoming now is the company we should have been all along,” Moss said. “If that had been the case, the Mission wouldn’t be dealing with quite the gentrification bomb that has gone off over the last few years.”

The six new buildings will include 50,000 square feet of commercial space, which Feng says is almost as important as the housing. At a time when nonprofits and mom-and-pop businesses are being squeezed out to make room for upscale restaurants, Meda’s space will provide homes for arts, after-school programs, and affordable retailers that can’t afford the high rents charged in trendy areas like along Valencia Street.

“We are looking at how we can re-establish the Mission as a family-oriented, Latino culture, whereas right now it’s transitioning very quickly to a young professional culture,” Feng said.

Supervisor Hillary Ronen, who represents the Mission, said affordable housing, along with combatting homelessness, is at the top of her agenda.

“Just like we want Chinatown to be Chinatown, we want our Latino cultural district to be a thriving business-and-arts district where actual Latino people will be able to continue to live and work,” Ronen said. “It’s a unique neighborhood in the entire world.”

Getting Meda and Mission Housing into the housing development business has taken time and effort, but has been worth it, she said.

“Having two strong developers in the neighborhood is exactly what we need to continue what I believe is the pace of affordable housing that we need in order to stop further gentrification of the Mission,” she said.

While gentrification, and the role housing development plays in a changing neighborhood, is a politically charged topic in the Mission, nonprofit developers such as Meda benefit from market-rate development even as they often oppose individual projects.

Two of Meda’s affordable projects, 2070 Bryant St. and 1296 Shotwell St., will be built on parcels that market-rate developers donated to the Mayor’s Office of Housing. Oyster Development donated the Shotwell Street parcel to meet its affordable housing obligation on Vida at 2558 Mission St., the most upscale condo complex built in the Mission to date. Developer Nick Podell gave the city a 21,000-square-foot site on Bryant Street to satisfy the affordable housing requirements of the adjacent 2000 Bryant St., which opponents had attacked as the Beast on Bryant.

Feng said that Meda is not opposed to market-rate housing but wants to make sure affordable units are added at a similar pace as higher-end units.

“The Mission has gone from being one of the most affordable neighborhoods in San Francisco to one of the least affordable,” she said. “San Francisco can’t be a sanctuary city if nobody making less than $200,000 a year can afford to live here.”

While the ground-up development projects regularly take three to five years to finance and build, Meda is also trying to stem the flight of low-income families by buying up existing rent-controlled buildings through Mayor Ed Lee’s small sites acquisition program, which provides funds for multifamily buildings of between five and 25 units. Meda bought six containing 44 units last year, and it has an additional eight buildings in escrow, all apartment complexes with longtime rent-controlled tenants that were on the market and seemed ripe for eviction. The program received $25 million in funding for the current fiscal year.

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Keeping on top of a hot apartment building market means scouring the neighborhood for buildings that are in transition. Feng and colleague Dario Romero look for run-down buildings that are suddenly being giving a fresh coat of paint.

“If your landlord is painting and asking for permission to do construction, you know they are probably looking to sell,” Romero said.

In those cases, Meda tries to get to the seller before a building hits the market.

Beatriz Garduño, who lives with her teenage daughter at 3800 Mission St., said she was sure she would be evicted when she saw a for-sale sign go up. But she and the other tenants persuaded the landlord — a friend and fellow Mexican immigrant — to go with Meda, even though another investor was offering slightly more money, $1.9 million versus $1.85 million.

“I told her, ‘Why do you want to make so much money? You know our story. You have known me since I came here,’” she said. “It’s not my building, I don’t own it, but after 24 years it feels like home.”