Transbay Block 5 Rendering 2015

While the Mayor’s Office has agreed to spend a potential record-setting amount to purchase a Mission District development site in order to build 72 units of affordable housing, the City is poised to approve the development of a 550-foot office tower on Transbay Block 5 at the corner of Howard and Beale, a centrally-located parcel which was zoned and envisioned for the development of a residential tower as part of the Transbay redevelopment plan.

A 550-foot residential tower on Block 5 could have conservatively added at least 600 units to the city’s overall housing stock.  And if you account for the need to provide housing for just half the employees which the new 767,000-square-foot office tower will draw, the development will conservatively increase demand for housing by at least 1,000 units, a net negative impact of over 1,600 units by not building residential.

So why isn’t the City, which is in the midst of a self-proclaimed housing crisis, directing the development of a residential tower on the Transbay Block 5 site?

Well, as we first reported last year, San Francisco’s Office of Community Investment and Infrastructure determined that it was economically advantageous to sell the parcel for an office development.  Or to be precise, “economic conditions create[d] a strong preference for commercial development over residential and hotel development.”

Keep in mind, the $172 million which the city is poised to receive for the site has been earmarked to pay for the construction of the over budget Transbay Transit Center, not housing elsewhere to offset the loss of a high-density housing site.

And if San Francisco’s Planning Commission approves a coveted Prop M office allocation for the Block 5 tower this afternoon, the development team plans to start digging this fall and start building in early 2016.  The tower will take around 2.5 years to complete and will include 5,000 square feet of retail on the ground floor and 20,000 square feet of public open space, including the plaza in front.

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Comments from “Plugged-In” Readers

  1. Posted by Hmmm

    Actually, this site was always designated in the redevelopment plan as either office or housing.

    [Editor’s Note: It was slated for housing with the option to pursue an office alternative.]

  2. Posted by SFBayview

    This location is a perfect office location. We have plenty of location for housing. If you want, you can build 100k units in Bayview’s industrial land.

    • Posted by Flash

      Yeah, this is a strange Socketsite editorial.You could argue against any office or retail development on the grounds that it could be residential instead. But office/retail are important too, and this is a great place it. Plus there are already numerous residential towers planned and even under construction within a few blocks.

      • Posted by soccermom

        I think the point is that the city sold a parcel that could have helped to “solve the housing crisis” for marginally more money as an office project. That’s a rational use of city funds.

        But then why go overspend on a lot to get 60 marginal BMR units? If it is so urgent we encourage housing construction, then the city should be green lighting housing, not more offices. Personally I would rather have the jobs here. The point is that the city changes its tune so readily depending on the perceived political benefits. Making such an observation is pretty fair IMHO.

        • Posted by SFrentier

          ^ yuppers, I think the posting is rather clever in showing another angle of behavior by city gov.

          And I also prefer more office space. Keep bringing them highly paid worker bees, so they can keep renting my units. Damn, this city is good.

      • Posted by SocketSite

        This isn’t a counterfactual hypothetical nor a generic argument against any office development in general, but an actual situation in which the City is choosing to prioritize commercial development over residential.

        And this prioritization isn’t being based on a long-term plan or vision, nor the relative importance of office space, but rather the ability to generate more cash now despite the impacts – both direct and indirect – in terms of housing.

        • Posted by Orland

          Kinda weak, and I don’t think we need SS to weigh in on issues here like this.

        • Posted by moto mayhem

          they will use these profits to overpay by 600% for new tiny housing projects. its perfectly logical in bizzarro world.

        • Posted by Chris Brown

          SocketSite, have you not answered your own question? The city determined the higher amount of upfront cash outweighed any indirect or direct impacts with forgoing an opportunity for residential development on this parcel. Of course, you are welcome to come up with your own detailed cost/benefit analysis that reaches a different conclusion, but so far you do not seem to be offering any support for your accusation of hypocrisy.

          • Posted by SocketSite

            Except the determination wasn’t based on an analysis of the “indirect or direct impacts with forgoing an opportunity for residential development on this parcel,” it was simply based on the higher amount of upfront cash.

          • Posted by Orland

            As I thought I recollected. When the decision to convert from residential to office was first announced, “unforeseen circumstances” (something having to do with access to an adjoining property) were cited as ostensibly necessitating the change. Sounded weird then, but that’s their story. See your item on the subject published 4/03/14.

        • Posted by Chris Brown

          SocketSite, you state “except the determination wasn’t based on an analysis of the ‘indirect or direct impacts with forgoing an opportunity for residential development on this parcel,’ it was simply based on the higher amount of upfront cash.”

          But, what do you have to support this assertion? You have a quote supposedly sourced to San Francisco’s Office of Community Investment and Infrastructure that “economic conditions create a strong preference for commercial development over residential and hotel development on Block 5.” A single isolated quote does not support the conclusion that no other factors aside from money were considered in restricting the type of proposal the city would accept for the parcel.

    • Posted by JoeyJoJo

      Not so sure it’s that easy, considering the environmental rehab that land would have to undergo, not to mention its general detachment from the overall transit infrastructure of the city. It’s not just a matter of putting up a bunch of buildings.

  3. Posted by SFBayview

    I would support zoning all the land along BART/Market as office or commercial. It make the job opportunities available to millions of people. We can build many new houses in Bayview and let the new residents commute to downtown via T line. It is better to give priority to the jobs for millions of people.

    • Posted by moto mayhem

      the majority of growth in SF should be in the MISSION where there is the best public transport and the ONLY subway line in the city. every new building in the mission should be 10+ floors. the very area where a moratorium is being proposed is where building needs to occur, especially if you give 2 sh*ts about the environment and lowering the per capita rate of car ownership

      • Posted by SocketSite

        Public transportation to deliver you downtown? Perhaps to a job at Salesforce Tower, a block away from this site and to which any residents here could simply walk?

        • Posted by moto mayhem

          yeah, well that too

        • Posted by Chris Brown

          I know of no major (or mid-sized or small) cities where everyone walks to work. What is the problem with following the tried and true standard formula of having a large office district surrounded by residential areas? What is this obsession with trying to compact everyone’s freaking life into a couple of square blocks? Personally, I like not living right on top of my work. I live 2 miles away and that is perfect—easily accessible by public transit, but far enough away that I can separate my personal life from work, which is what most (sane) people want.

          • Posted by SocketSite

            Around 29 percent of people who live downtown walk to work. That reduces the commute time impact on both transit (34 percent of downtown residents versus 51 percent of the people who commute downtown) and roads (25 percent of downtown residents drive to work versus 37 percent of the people who commute downtown).

          • Posted by anon

            Pretty sure no one expects everyone to walk. However, there are many cities (including SF) where 10-20% do. What’s the problem with increasing that percentage a bit to account for those people that can separate work and personal life without needing a ride on a bus?

          • Posted by Chris Brown

            I never stated we should not have any residential development downtown, so I think anon’s comment is irrelevant. A large office district can (and I agree should) include some residential development, and SF’s downtown (which I define as more than just the Financial District) does so. That said, it is not a tragedy when a single parcel becomes office space instead of residential development. There are several new residential towers going up in the general vicinity of downtown, and within easy walking distance to employers located there. But, even still, I question how much this really helps out the city’s public transit system.

            I guess we could solve all our transit problems by getting everyone who currently lives and works in SF to walk or bike to work–the city is geographically small. For example, in my case, even living 2 miles from work, I could reasonably walk or bike (and I know some people who do, and I even had a former senior citizen coworker who used to bike from his home in Marin to downtown SF every day), but I choose not to do so, and this is a choice made by most people, unless there work is just a couple of blocks away. But, then can you really expect to house all the workers who come downtown within just a few blocks of their workplace?

            Unless you are going to build hundreds of thousands of mostly mid-priced housing units downtown, most people will not live downtown (and even if you built all that housing, there would still be several people who simply do not want to live in a sea of high-rise apartments). So, with the more likely scale of residential development downtown, the amount of stress removed from the public transit system will be negligible. Yes, it is great that a higher percentage of people who live downtown walk to work, but overall they make up a very small percentage of the people who work downtown. In short, one more or one less residential tower downtown has little impact on the city’s public transit system.

      • Posted by Bertie Anglis

        Muni has subway lines too, like the one that goes down Market to Castro, travels under Twin Peaks, and then emerges at West Portal.

      • Posted by NoeNeighbor

        The Mission may have the “best” public transportation in the City, but that really just tells you how horrible the public transit is. The public transit is great for getting you down the market street corridor, but if you want to go anywhere else is the the City it is pretty abysmal. That is why so many people in the Mission own cars and why parking is always such an issue with new developments there.

        • Posted by moto mayhem

          people in mission have cars because so many people commute to peninsula.
          but building large amounts of housing can support those working downtown. agre public transport sucks, but the city ahs no plans of making any real tranformative changes to public transport for next 20 yrs. we have the public transport in the Mission so that is where we should be building many 10+story, 500+ unit buildings. this will also provide the most help for affordable housing. If 10,000 units can be built in the Misison voer next 10 yrs, at least 2500 will be BMR. that a much better situation that today for current and future lower middle class and poor residents, and will most likely slow down people getting kicked out. it will also be the best move for the environment. so basically, Campos should be pushing for the exact opposite if he had any interest in making things better as opposed to winning votes.

      • Posted by NoeValleyJim

        Amen!

      • Posted by Sara Short

        Those with rent control privilege, want to keep any new residents out of the Mission. Once you get addicted to privilege, you never want to give it up.

    • Posted by Sierrajeff

      Well first, even zoning everything along BART and Mission for office (which would never happen) would not create “millions” of white-collar jobs. And second – *what* transit is going to get those 100,000s of people from Bayview to the FiDi and SoMa? Muni’s an overburdened joke as it is – when Salesforce Tower, etc. come online it’s only going to get worse.

      To be clear, I support public transit – I think we need more underground lines, particularly in SoMa, and then down Geary. But until the transit is in place, we’ll never really capitalize (pun intended) on the true value of downtown parcels, because they’re commute-constrained.

      • Posted by Alai

        Are they commute-constrained? I mean, they’re not sitting empty, so apparently the workers are getting there somehow. I’m absolutely for improving transit, but the very fact that rents are as high as they are shows that people seem to find the current level of service adequate, even if they complain about it, and I see no reason to put desperately-needed housing on the back-burner while waiting for transit improvements.

        • Posted by NoeNeighbor

          Is housing desperately needed? Everyone who works in those office buildings seems to have a place to live. Apparently people are willing to pay the rents and do the commutes, so there can’t really be a housing issue. Please re-check your logic and get back to us.

          • Posted by anon

            Check your logic, sir. Do the companies in these buildings have no job openings? Everyone working in an office clearly has a way to get there – we’re talking about people who have not yet been hired. Salesforce alone has more than 500 listed open positions – where are they to live?

          • Posted by Greg

            What SF rock have you been living under?

          • Posted by moto mayhem

            that was TIC, right?

  4. Posted by Hank

    This building on the left is 201 Mission and does not extend to Howard Street. It fronts Mission and Beale only. The image is not correct.

    [Editor’s Note: The image is correct, it’s looking south down Beale.]

  5. Posted by SFBayview

    An office tower will bring a continuous stream of revenue to the city, it is a correct decision to build offices at this location.

    Residential development does not bring a continuous revenue stream to the city. Instead, it will be a continuous sink of city funds. It makes sense financially to have more offices in the city and have a limited residential units in the city. This way, many people from other cities will commute into SF and creates value and tax revenue for SF residents, which we can use to build subsidized housing for each and every SF resident.

    • Posted by NoeNeighbor

      umm and who gets to be an SF resident?

      • Posted by Chris Brown

        I do, and I would assume based on your account name that you do, too, “NoeNeighbor.”

    • Posted by Anon

      Agreed, office is the best use for this location.

    • Posted by SocketSite

      You don’t seem to understand the basic economics of residential development (especially with respect to transfer, income, and property tax streams) nor the economic benefit of 1,000 new residents spending their time and money in the area.

      • Posted by J

        Bingo. That’s an incredibly important factor that no one seems to be comprehending. And then of course the whole NEGATIVE net units aspect, which is what is directly contrary to the city’s stated housing policy.

    • Posted by SFBayview

      It is very extremely expensive to support a SF resident. We need to provide these residents with health insurance, affordable housing, welfare, crime control etc etc. For every 1000 residents, we would have to provide subsidized housing to 600 out of these 1000 residents. How can SF get enough money to build affordable housing for 60% of the residents?

      SF already has an enormous population who demands subsidized housing. It will take many decades just to satisfy these population who already live in SF. If you continue to increase population, the gap for affordable housing will get bigger and bigger, our housing crisis will never get resolved.

      Instead, we should limit population growth and limit residential development, at the same time, encourage runaway commercial development for offices, retail, hotel which will only bring revenue to the city and will never ask for affordable housing. We can use these extra revenue to build affordable housing to help all the existing SF residents.

      Who will qualify as SF residents? All the people with a rent controlled apartment and all the people with 150% of median income or below.

      • Posted by soccermom

        Amit – I think you are missing the point about hypocrisy on the part of city government.

        • Posted by kbbl

          Indeed — there seems no stomach for this sort of coverage coming from anyone but Jon Stewart.

          But the speculation here on the decision criteria the city must have used is pretty delicious.

          I especially love that we’ve now to SFers pushing for the same “let someone else house them” tactic the Peninsula cities have largely been employing since Prop 13 passed.

      • Posted by moto mayhem

        why do 600 out of 1000 need to be subsidized? why not 100 or 200? even those people still spend money on food, transportation, other things that contribute to the economy

  6. Posted by Mike

    Very strange Socketsite editorial. Office in this location makes a lot of sense.

  7. Posted by Turin

    Block 5 is not strictly controlled by the city. It’s controlled by the TJPA, which has representation from the city, but also from the state, East Bay and Peninsula. The TJPA decided to open this parcel to office, not the city. So is it really fair to say the city is “choosing to prioritize commercial development over residential” in this particular case?

  8. Posted by John

    The single biggest hypocrisy is the insanely low height limits in areas like Central SOMA, Civic Center, and Mission Bay. The aforementioned areas are near public transportation at the foot of the city and would lend very well to building 500 ft+ high rises adding 1000s of new units a year. Instead, its zoned for 4-10 story buildings. Does that make any sense?

    We keep talking about this housing crisis, but at the same time proposing a block of 30 story high rises to replace a block of abandoned warehouses and gas stations in SOMA is totally taboo according to the board of supervisors

    • Posted by moto mayhem

      i think Western SOMA plan is the formeost piece of garbage ever written. the height limits there should be 3x what the plan calls for.

      • Posted by JR "Bob" Dobbs

        I’d give that award to “The Bridges of Madison County”

      • Posted by John

        For anyone wondering: The Western SoMa Plan

        It’s mind boggling how stupid and short sighted this plan is. It makes some very pious claims about ‘preserving economic diversity’ but it looks like its just meant to make the area a prime spot for homeless camps since there won’t be nearly enough housing to make the area an actual community.

        [Editor’s Note: A Short-Sighted Plan For Western SoMa?]

  9. Posted by Sam

    Thank you SocketSite for speaking the truth. No matter how many people deny it, converting this building to office space is hypocrisy. There is a housing crisis and a traffic crisis and the city eliminates several market rate residential buildings that can help the situation. It is shameful and hypocritical. The fewer residential highrises in SF, the more commuting there will be. SF is encouraging sprawling development from here to the Sierra. Shame on the city and on the progressive nimbys who stop all market rate housing.

    • Posted by John

      This is perfect office space location and the city desperately needs that too. If the city actually cared about housing, they would increase the worthless height limits in Central/Western SOMA and mission bay. 40 ft height restrictions in dense, transportation rich areas is hypocritical beyond belief.

      • Posted by moto mayhem

        agree that central and Western SOMA should be packed with 12-20 story residential develops. raise the height limits in return for 25% BMR from developers

    • Posted by Chris Brown

      The vast majority of new housing being constructed in SF is market-rate housing. I agree the city needs more housing, but not every parcel needs to be, nor should be dedicated to housing. The city also has a severe office space crunch. Plus, there are PLENTY of places to construct new housing. Note, this was not an existing building converted into office, or even a proposed residential building. There is nothing there and it is right in the middle of a bunch of office buildings. I am sure the city will survive just fine with one more office building and one less residential building built there—nothing prevents anyone from building one or even dozens of new residential towers nearby.

      So, instead of crying about the loss of hypothetical housing units, focus on getting housing built where there is actually a developer ready to build and/or protecting existing housing units.

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