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$160M, 450-unit group housing project proposed in Potrero Hill

By auran Waxman, Staff Reporter, San Francisco Business Times

DM Development has proposed a 450-unit group housing project on Potrero Hill, saying it will provide needed middle-income housing in the neighborhood.

The San Francisco company filed an application for the $160 million project at 300 De Haro St. on Monday. The developer is working to acquire the site, now home to a one-story, 17,000-square-foot industrial building.

The proposed units are just under 300 square feet and include kitchenettes. Amenities include a coffee bar in the ground-floor retail space, a co-working space, gym and outdoor space. A public hearing on the proposal has yet to be scheduled.

DM is changing course on previous plans to build as many as 290 regular-sized apartments in a seven-story building at the site.

Mark MacDonald, co-founding principal of DM, told me Wednesday that group housing is cheaper to build and can therefore deliver increased affordability. The developer has proposed invoking he state density bonus law to boost density in exchange for a greater number of on-site affordable units, and MacDonald said 40% of the units, or 181, will be on-site affordable housing.

"This was a very big objective of the project and one of the motivating factors for the recent change — to create a significant amount of middle-income housing in a transit and amenity-rich neighborhood that city leaders have been pushing for," he said, adding that the project will be 100% privately financed.

Designed by BAR Architects, the project would feature a 6,986-square-foot landscaped podium. The new building — clad in textured thin brick to give it an industrial feeling compatible with the neighborhood — is just three blocks from the California College of the Arts and sits across the street from the World Gym at 250-290 De Haro St. That property is also pegged for development  into a five-story laboratory building by Aralon Properties.

The proposed units are smaller than the 350 square feet required under city code, but MacDonald said the smaller units are permitted under the density bonus program, according to.

The size of new group housing units in the Tenderloin in recent months has drawn the ire of community groups and affordable housing providers that operate in that neighborhood.

Their advocacy for family-sized housing in a neighborhood that is lacking such options has delayed two group housing  projects so far: a 316-unit group housing development planned at the site of a church at 450 O’Farrell St. and a 101 unit development at 468 Turk St. While the latter was advanced by the Planning Commission this month, the former is still awaiting its stamp of approval.

MacDonald said that the landscape and demographics in Potrero Hill are different than in the Tenderloin, where much of the city's single room occupancy buildings are located.

“I think the great thing about Potrero Hill is that it's a very diverse neighborhood in terms of household size —you have families living and single-family homes, couples and singles living in market-rate apartment buildings, and there have been a number of those recently delivered in the last few years. But there still has been just a massive gap in housing that is affordable for the middle class and middle-income workers,” he said. “What we're trying to do is to deliver something that doesn't exist today — it's market-rate, middle-income, you know, for middle-class households.”