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‘5M’ project reaches landmark deal with 40% below-market-rate housing

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The site of a proposed development at Fifth and Mission streets in San Francisco. (Mike Koozmin/S.F. Examiner file photo)
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A major mixed-use project proposed in the South of Market neighborhood cleared its first hurdle at a Board of Supervisors committee meeting Monday after developers agreed to offer 40 percent of the housing at below-market-rate.

That number marks an unprecedented level of such homes included in a development on private land in The City, and is an increase from the 33 percent below-market-rate previously designated for the project, according to Supervisor Jane Kim, whose district includes SoMa.

The ‘5M’ project — led by development giant Forest City and property owner Hearst Corporation at 925 Mission St. and nearby parcels — includes more than 600 market-rate homes, offices, open space, parking and restaurants. Per the agreement reached over the weekend with Kim, 241 units will be earmarked at below-market-rate.

Of those below-market-rate units, 71 will be included at no more than 50 percent of the area median income at a housing site at 168-186 Eddy St. There will be 87 middle income housing units, meaning they will be offered at between 100 and 150 percent of the area median income, and 83 units will be for senior housing.

Supervisors Malia Cohen and Scott Wiener along with Kim offered support Monday for the project after hearing hours of public comment both in favor and opposition at the Board of Supervisors’ Land Use and Transportation Committee. The project will seek approval from the full board Nov. 17.

Kim, who had previously signed an appeal along with the various community groups seeking to challenge the final environmental impact report and other project approvals supported by the Planning Commission in September, acknowledged changes to the neighborhood are personal to many residents, adding that she lives two blocks from the 5M project site.

“I’m never excited about approving a project that isn’t 100 percent affordable,” Kim said. “[But] I do support us building development as long as that developer is committed to building for as many San Franciscans as possible.”

Rejecting the landmark agreement of 40 percent below-market-rate housing reached with Forest City, said Kim, would discourage other developers from offering as many of such homes. Earlier this year, Kim helped negotiate 40 percent of homes at the Giants’ Mission Rock development as below-market-rate on publicly-owned land.

The 5M project is also the first in The City to pay transit impact fees on residential units, totaling more than $12 million. Such a move is voluntary on behalf of the developers solely for the 5M project because it comes before San Francisco’s new transportation sustainability fee for residential developments takes effect.

“I think [this development] sets a great tone going forward to make sure that our projects in this city are paying into this fund, because we know that any kind of housing creates transit impacts and we need to make sure that our public transportation system as well as access by pedestrians and cyclists all keeps up with developments in The City,” Wiener said.

Mayor Ed Lee also touted the project following its approval by the board committee.

“The 5M project provides an unusual downtown opportunity that will transform four acres of underutilized land to create affordable housing, jobs, parks and other community benefits,” Lee said in a statement.

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