Yesterday, City Attorney David Chiu of San Francisco announced a win for affordable housing. An arbitration ruling has secured the continuation of 76 affordable housing units in Rincon Towers as low- to middle-income residences until a minimum of 2050, according to a City Attorney of San Francisco press release.
City Attorney Chiu emphasized the crucial role of preserving affordable housing in preventing homelessness. Eric Shaw, Director of the Mayor’s Office of Housing and Community Development, also highlighted the importance, not only of constructing new housing but preserving the affordability of existing properties.
The San Francisco Redevelopment Agency and the original Rincon Towers developers entered into an original obligation in 1985. Owners promised, "to rent or sell" 76 units of affordable housing onsite. The CP III Rincon Towers, LLC, real estate investors, acquired the property in 2010. Upon the dissolution of California’s redevelopment agencies in 2012, San Francisco's City and County took charge of the former Redevelopment Agency’s affordable housing.
In 2021, CP III Rincon Towers, LLC sought to evade their responsibilities under the development agreement, following the termination of the Rincon Point-South Beach Area Redevelopment Plan on January 5th. They claimed the affordable housing commitments expired with the redevelopment plan and sought to charge market rates for the units. This potential outcome endangered the future of 76 low- and moderate-income properties.
The City contended that the affordable housing responsibilities were still valid and it invoked an arbitration clause in the 1985 agreement to settle the dispute. The City, to prove that the agreement is still enforceable, presented archival evidence from the Redevelopment Agency exemplifying the original developers' intentions for long-term affordable housing beyond the redevelopment plan's expiration.
The Arbitrator, Justice Nickolas J. Dibiaso, ruled that the owners of Rincon Towers must continue renting the 76 affordable units or sell them as permanent below-market-rate condominiums, favoring the City. Over 2022 and 2023, several individuals from the San Francisco Deputy City Attorney's office committed to preserving these housing units for needy families.
