A developer whose 14-month effort to turn the vacant lot at 841 Polk St. in the Tenderloin into housing — 100% affordable is his dream — is no closer to making it a reality.
The vacant lot at 841 Polk St. could be a public service announcement for San Francisco’s desperate need for housing and the obstacles people face trying to build it.
It’s used as a makeshift parking lot by a mechanic next door as people sleep just outside its chain link fence. On Friday morning, the sidewalks of the adjacent Olive Street alley were grim. Piles of trash dotted the area, including one that looked like the charred remains of a fire. Old furniture was strewn between tents and other makeshift abodes. A man dozed on cardboard, his head resting on the pole of a No Parking sign.
A No Housing sign would be just as apt.
Coby Friedman, head of CF Contracting, bought the small lot a couple of years ago. Tellingly in this city where every price tag makes eyes water, he paid $1.1 million for a 2,900-square-foot patch of dirt in the middle of the Tenderloin. He wants to turn it into housing — 100% affordable is his dream — but 14 months after turning in plans to the city, he’s no closer to making them a reality.
His predicament is one example of why this week’s intervention by the state to remove barriers to construction in San Francisco was so welcome.
“It’s about time!” Friedman said of Gov. Gavin Newsom’s unprecedented move to investigate the city’s infamously long, burdensome, expensive process of permitting and building housing.
“This could be a win-win for everybody,” Friedman said of his plans to build housing on his lot.
It could be, but it’s well-documented that bureaucrats and elected officials over the decades have created a system that makes it inordinately expensive and time-consuming to build housing and has nearly ground construction of new units to a halt. It’s also a system with a marked pattern of delays and denials of new housing and one in which nosy neighbors get an unusual amount of say in what can be built near them.
On Tuesday, the California Department of Housing and Community Development named San Francisco as its first target of a “housing policy and practice review,” an investigation designed to determine why building housing in the city takes longer than anywhere else in the state and generates so many complaints to the state’s new Housing Accountability Unit.
The state also informed San Francisco it had turned down the first draft of its housing element, a legally required document that must show how it will build 82,069 units, including 33,000 affordable ones, by 2030. If City Hall can’t vastly improve its plan, it risks losing hundreds of millions of dollars in housing and transit grants from the state.
San Francisco has come under scrutiny for rejecting or delaying some major projects in recent months — most notably 495 housing units on a Nordstrom valet parking lot. But its expensive, cumbersome process for building housing also means many potential projects never even get started.
Just ask Friedman. He last built housing in San Francisco in the 1980s and then it was just single-family homes. This is his first attempt at a fairly big housing project in a city that makes housing construction a wildly frustrating endeavor for even those who have made their careers out of it.
Friedman has worked on other projects unrelated to housing in San Francisco over the years — and to be clear, his track record isn’t perfect. His company misplaced a decimal point in its bid to remake the playground at Mountain Lake Park, causing construction delays.
In this case, though, it’s mostly the inordinate expense of building housing in the city that’s causing the frustration. Under the city’s zoning rules, he can build high — 130 feet — but not dense. Just 23 units would be allowed. The lot is also so small, it would be hard to include the green space required by the city.
Friedman has proposed building more units with different plans, ranging from 60 to 84 studios, but even at that number, which would require special permission from the city, he can’t find an affordable housing developer willing to build it. That’s because building affordable housing is so expensive and time-consuming — costing, on average, $750,000 per unit and taking seven years — that developers usually turn down projects with fewer than 150 apartments.
So Friedman is caught in a Goldilocks-style dilemma with the city saying he’s seeking far too many units and affordable housing developers saying he’s seeking far too few.
Sam Moss, executive director of Mission Housing Development Corp., an affordable housing developer, said he had to turn Friedman’s offer down because it didn’t have enough units.
“It won’t kick off enough money to pay the rent,” Moss said. “That’s a shame, but it’s not wrong. It is sad because in my humble opinion, it has given our city bureaucracy cover to just say no to anything that isn’t a 150-unit type deal. It means we’re trying to make the perfect the enemy of the good.”
He added that it’s not all San Francisco’s fault. The federal government used to give more housing vouchers, which low-income tenants could use to offset the cost of rent.
Dan Sider, chief of staff for the Planning Department, said none of Friedman’s proposals so far have complied with city rules and the ball is back in his court. He said, “We are in regular communication with the developer, guiding them either toward maximum allowable density or legislative relief from the Board of Supervisors.”
Asked whether it’s simply impossible to build housing there and Friedman should just move on, Sider gave a flat no.
“Beyond any doubt, housing is an ideal use for this site,” he said.
The question, though, his how to get it approved and paid for.
Corey Smith, executive director of the Housing Action Coalition which seeks to build more housing at all income levels, has tried to help Friedman by introducing him to developers and walking him through the byzantine process. But he’s not surprised Friedman has so far been unsuccessful in a city that makes it so hard to succeed.
“The guy’s actively trying to build housing in a city that needs housing and is happy to build affordable housing,” Smith said. “It’s a good example of a symptom of our own illness. Why is it so, so difficult to do the thing that everybody claims that they want?”
Asked his prediction for 841 Polk St. in, say, a few years, Smith said, “More of the same.”
He imagines the dirt lot still vacant, homeless people still sleeping around it and the city still desperately needing housing. Let’s hope the state can help craft a brighter future.
Heather Knight is a San Francisco Chronicle columnist. Email: hknight@sfchronicle.com Twitter: @hknightsf
Heather Knight is a columnist working out of City Hall and covering everything from politics to homelessness to family flight and the quirks of living in one of the most fascinating cities in the world. She believes in holding politicians accountable for their decisions or, often, lack thereof - and telling the stories of real people and their struggles.
She co-hosts the Chronicle's TotalSF podcast and co-founded its #TotalSF program to celebrate the wonder and whimsy of San Francisco.