City OKs modular housing project
145 formerly homeless people would move into supportive units
San Francisco approved 145 supportive apartments Tuesday for formerly homeless people at a South of Market site, despite some opposition from building unions. It’s the first time San Francisco is using modular construction for this type of project, which shaves millions from the cost of the project as well as a year or more off the timeline.
The project comes as the city has struggled with spending up to $800,000 per unit on affordable projects and three to five years to get them built as the housing crisis has worsened and homelessness has skyrocketed.
A lease for the building — its foundation is already being excavated on a surface parking lot across the street from the Hall of Justice at 833 Bryant St. — won approval from the Board of Supervisors despite worries that opponents would derail the project.
The Bryant Street project will be built with prefabricated modular units, which are currently under construction at Factory O/S, a housing production facility on Mare Island in Vallejo. The 833 Bryant project is one of three in San Francisco for formerly homeless people using modular units fabricated at Factory O/S, a model that has been opposed by some of the building trades unions.
The two other projects have not started construction. One is on
Treasure Island and the other is behind the federal courthouse on Mission Street.
The new units will help fulfill Mayor London Breed’s pledge to open by the end of 2024 more than 1,000 new permanent supportive housing units for people exiting chronic homelessness.
“We need to keep creating more housing in San Francisco and doing so as quickly as we can, be
cause housing is the solution to homelessness,” said Breed in a statement, adding that the housing would open up shelter space for other people currently on the streets.
Tim Paulson, secretarytreasurer of the San Francisco Building Trades Council, said that the construction unions remain concerned that factorybuilt, multifamily complexes will lead to lower wages, compromised quality, and harm for the unionrun apprenticeship programs through which most construction workers learn their trades. But he decided that the 833 Bryant St. project was not the one to go to battle on.
“We have some very serious concerns about lowering the standards of construction in San Francisco as modular housing becomes part of the fabric of the city,” he said. “We want to make sure that there are longterm plans that take into consideration those concerns. Politically, this wasn’t the time to fight that fight.”
Unlike most affordable housing development in San Francisco, the project is not subsidized with city money. Instead the Housing Accelerator Fund, a publicprivate fund that raises money to build new affordable housing and protect existing units, invested $35 million of a larger philanthropic donation from Tipping Point Community to acquire the lot, fund design and approvals, and start construction. The developer, Mercy Housing California, will finance the rest of the project with lowincome housing tax credits and taxexempt bonds in partnership with Citibank and the state of California. The city will pay up to about $2 million a year to lease the building.
In a statement, Daniel Lurie, chairman of the Board of Tipping Point Community, said the project shows that private philanthropic groups have the ability “to act quickly and take risks to identify bold solutions to some of our community’s greatest challenges.”
“This project is a great example of how private donors can provide risk capital for a proof of concept, and work with government to sustain the solution for the long run,” he said.
The total project cost is about $55.8 million, or $385,000 per unit, and the use of modular building type saved at least $100,000 per unit, or $14.5 million, according to Mercy Housing. In addition, modular construction, along with the unique private funding mechanism, shaved two to three years off construction time.
“By deploying modular construction and an entrepreneurial financing approach, this project demonstrates the potential for time and costs savings for developing affordable housing,” said Doug Shoemaker, president of Mercy Housing California.
Rick Holliday, a partner in Factory O/S, said the Bryant Street units are currently on the assembly line and will be delivered to the builder in the fall, once the foundation is built. He said that Factory O/S has 10 projects for formerly homeless in its pipeline, including six for Los Angeles.
The factory, which is staffed with roughly 200 union carpenters, can build a supportive housing unit for under $400,000, and can get through the entire process in two years. In San Francisco, several similar projects have come in at nearly $800,000 a unit and can often take three to five years to get through entitlement and construction.
“It makes a lot of sense because we can build a more standard unit more efficiently than conventional construction,” he said. “I am done fighting with the unions but for them to be jumping up and down and saying, ‘Housing should cost $800,000 a door,’ is odd. Outside of San Francisco, those guys don’t have as loud a voice, mostly because the (homeless) problem is just so bad.”
At the end of the lease term, the city will have the option to purchase the land for $1, and the building will be permanently affordable and owned by Mercy.
Supervisor Matt Haney, who represents the district of the project, said the city needs to address building trades concerns “to ensure that wages and safety standards are maintained,” but that it was important that 833 Bryant St. continue to move forward.
“This project will get 145 people off our streets and into housing,” he said. “It can’t happen fast enough.”
Residents are expected to move in by the fall of 2021.