After a decade in planning purgatory, construction of a 107-unit affordable apartment building a block from Alamo Square is finally advancing, driven by millions from city, state, and federal coffers.
The Mayor’s Office of Housing and Community Development intends to release $45 million in federal funding next month to build the project at 650 Divisadero St., which would convert a two-story former auto-body shop leased by a seismic retrofit company to a 10-story apartment building for homeless families and low-income residents.
It’s the latest project to move forward in one of the most desirable neighborhoods in the city, which has been dotted with stalled housing sites in recent years.
The 650 Divisadero development is slated to have 27 units set aside for families experiencing homelessness, with the rest earmarked for households that make up to 50% of the city’s median income — just under $55,000 for one person or under $80,000 for a family of four. The median income for Alamo Square’s 94117 ZIP Code, which also includes Cole Valley, Buena Vista Heights, and the Haight, is $175,000, according to 2023 census data.
The city approved a loan of $15 million for developers Jonathan Rose Companies (JRC) and Young Community Developers (YCD) to acquire the property in early 2024 from Divco Group, which had long planned a 66-unit project on the site. Under the previously approved Divco plan, only 20% of the housing would have been affordable.
The development is expected to cost just over $101 million, or about $1 million per unit, in line with typical affordable housing costs in the city. New York-based JRC and YCD, a Bayview housing and jobs training nonprofit, are sponsoring the development alongside MOHCD.
The developers did not immediately reply to a request for comment.
JRC, which specializes in affordable projects, has built 18,000 units in 17 states. It is currently building its first San Francisco project: 112 units of affordable housing in the Hunters Point Shipyard development.
The city in 2021 selected JRC and YCD to build the affordable housing component of the 88 Bluxome St. project in SoMa, which has yet to break ground. The plan for the block-sized former Bay Club San Francisco Tennis complex includes 150 affordable units out of 1,500 from developer Strada Investment Group.
Construction on the corner lot at Divisadero and Grove, next door to music venue The Independent, is scheduled to begin in late 2026, according to an April request from the developers to the city for an additional $6.25 million in gap funding. The request was approved by the city that same month.
In addition to the federal and city funding, the project is primarily being financed through low-income housing tax credit equity, wherein companies provide funding for affordable housing in exchange for federal and state tax credits.
The project will have no parking spots or retail component, but bike parking will be available, in addition to resident services proposed to be offered by Lutheran Social Services. The site has been in the planning process in some form or another since 2014.
Even with groundbreaking a year away, and move-ins not due to start until 2028, the project is among the furthest along of any major development around Alamo Square, which hosts the Painted Ladies, a lively retail and restaurant corridor along Divisadero, and several development sites that have yet to come to fruition.
A 203-unit market-rate complex was approved in December for the long-vacant Touchless Car Wash site at 400 Divisadero, but no date for the start of construction has been announced.
A four-story Edwardian a block away that was ravaged by fire three years ago also sits untouched as the owners and former tenants battle in court over who is liable for the losses.
A few blocks away, at 1377 Fell St., the city’s only Department of Motor Vehicles facility may become another affordable housing site. Gov. Gavin Newsom in October announced a plan to build 372 affordable units there, but no timeline has been announced.
While the Divisadero project is the area’s most likely housing development to move forward, it’s still far from a sure thing. The project is awaiting approval for state and federal funding, according to a MOHCD representative, so the “timeline is still fluid at this point.”