If the Planning Commission approves a code amendment this week, the entire 85-unit development slated for 101 Hyde St.—the former location of the Civic Center Post Office—could become affordable housing.

The Planning Code amendment was introduced last month by District 6 Supervisor Jane Kim on behalf of Shorenstein Residential, the team behind the 304-unit apartment complex at 1066 Market St. that was approved by the Planning Commission in March.

Shortly after that approval was handed down, the Tenderloin Neighborhood Development Corporation (TNDC) filed an appeal, alleging that the 1066 Market project is "not necessary, desirable, or compatible with the neighborhood or the community," given that neither its 268 market-rate units nor its 36 below-market-rate units would be affordable to existing residents.

Under existing affordable housing requirements, Shorenstein is required to offer 12 percent affordable units onsite, build 20 percent affordable units offsite or pay a 20 percent fee. But under the proposed code amendment, it could instead satisfy the requirements through a land dedication, giving the 101 Hyde St. project to the Mayor’s Office of Housing and Community Development "to facilitate construction of an affordable housing project containing approximately 85 dwelling units."

According to the packet for Thursday's Planning Commission hearing, land dedications are currently allowed in some zoning districts, including the Mission Street Neighborhood Commercial Transit District and Urban Mixed-Use Zones, but not the C-3-G Zoning District, where this project is located.

In addition to giving the 101 Hyde St. project to the city, Shorenstein Residential is offering to donate approximately $6.5 million to a nonprofit organization. "The total value of the land and gift amounts to roughly $19 million—greater than the face value of both the on-site BMR at 12 percent or the in-lieu fee at 20 percent options ($17.6 million)," the packet states. Since those offerings are intended to replace the required 12 percent of on-site affordable units, it appears that all of the 304 units approved for 1066 Market St. would become market-rate.

The packet doesn't name the nonprofit that will receive the $6.5 million gift, but the Planning Department states that it will be used for the “promotion of the development of an affordable housing project sponsored by a nonprofit affordable housing developer that will include between seventy-five and one hundred units of affordable housing located in the vicinity of the Project (between Market Street and Larkin Street and between McAllister Street and Turk Street).”

Both Shorenstein Residential and TNDC have declined to comment ahead of the Planning Commission hearing this Thursday. However, the talking points that TNDC is distributing to community members ahead of the hearing call the potential deal "a great victory" for low-income people in the neighborhood.

In its packet for the Planning Commission, the Planning Department did not provide the Planning Commission with a recommendation on the ordinance as a whole "due to the lack of information and the request to consider the new proposed Ordinance prior to the Conditional Use authorization appeal which is currently scheduled for June 28, 2016." But it did support allowing the Board of Supervisors to consider the alternative affordable housing package.

One of the key issues that the Planning Department has flagged for the Planning Commission is the amount of added money and time the city will need to complete the 101 Hyde project as an entirely affordable development. The MOHCD has concluded that it will need an additional $21.5 million to fully fund the project, and with that gap in funding, construction wouldn't be completed for 8-10 years. In comparison, Shorenstein Residential originally expected to complete construction on the 1066 Market St. project by May 4th, 2018.

However, the MOHCD has also estimated that the project will be "well-positioned for state funding from both the Veterans Housing and Homelessness Prevention Program (VHHP) and the Affordable Housing and Sustainable Communities Program (AHSC). In reviewing a potential scenario from an affordable housing developer, the assumed state loan contribution from both programs is approximately $17.5 million. Under this scenario, the City’s gap funding could be as low as $4 million, in which case the project could be developed in approximately 4-5 years," the packet says.

The regularly scheduled Planning Commission public hearing begins at 12pm Thursday in room 400 at City Hall. This project is listed 15th on an agenda of 20 items.

We'll share the outcome and the next steps for the Planning Commission and Board of Supervisors hearings on this project following Thursday's hearing.