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Housing & Development

Potrero Yard, SF Muni’s Foray Into Housing, Takes a Big Step Forward

Written by Sarah WrightUpdated at Nov. 01, 2022 • 4:22pmPublished Oct. 31, 2022 • 11:04am
An officials inspects the buses at the Muni Potrero Division yard on Dec. 5, 2018, in San Francisco. | Santiago Mejia/San Francisco Chronicle via Getty Images

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At long last, the city settled on a slate of developers who might take on the daunting task of building nearly 600 units above an old Muni bus yard in the Mission District—an ambitious project that would mark the San Francisco Municipal Transportation Agency’s first time actually building and potentially making money off a housing development. 

But the agency is unlikely to make any money off of it—at least not in the short term.

At a Tuesday meeting, the SFMTA board of directors approved a group of developers—among them Plenary Group, Mission Economic Development Agency, Young Community Developers, Presidio Development Partners and Tabernacle Community Development Corporation—to take on the housing side of the project, dubbed Potrero Yard. 

The city hopes to begin designing the Potrero Yard project in the next year and complete it by 2027, acting Chief Financial Officer Jonathan Rewers said at the meeting, and acknowledged the six-month delay in choosing a developer team.

The selection of a development group marks an important step forward for the hard-to-finance and politically sensitive project, which places senior and affordable housing on top of an operating bus yard.

Potrero Yard—expected to include at least half affordable units—was initially estimated to cost at least $600 million, most of which will have to be financed up front by the developer. 

But rather than maximizing profits, the agency chose to prioritize the affordability of the planned housing—which means the project is unlikely to make a dent in the transit agency’s massive structural deficit anytime soon.

“We may make money from Potrero one day,” Rewers said on Tuesday. “It might be three decades from now.”

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The latest plan, outlined in the now-approved predevelopment agreement, is for 575 affordable housing units, just over half of which will be made affordable to residents who earn no more than 80% of the city’s median income, and the other half for people who make up to 120% of median. But the plan is contingent on the development team getting the money and permits it needs, and Rewers reiterated that the agency can ditch the housing portion if it threatens the completion of the bus yard updates. 

Developers worry that the ambitious project could become infeasible in San Francisco’s expensive building environment, which has even driven some developers away from the city entirely. 

Nonetheless, city officials cheered the milestone as a step forward. 

“Transit and housing should go together, whether that’s building dense housing on transit lines or recognizing opportunities like this to not only modernize a bus facility, but also how we think about building more housing while we do,” said Mayor London Breed in a statement.

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Sarah Wright can be reached at [email protected]


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