A 100-percent affordable, 94-unit housing project for seniors at 1296 Shotwell Street ceremonially broke ground on Thursday, to the cheers – and, some would say, relief – of around 100 onlookers. Aztec dancers twirled to the beat of drums during a blessing of the grounds, and the golden shovels hit the dirt.
It was, indeed, the first affordable project to break ground in the Mission in a decade’s time. The project is also the Mission Economic Development Agency’s first of five planned developments to break ground since its foray into the real estate development business four years ago.
“We knew we had to transform MEDA from an organization that offered services to one that offered affordable housing,” said Luis Granados, MEDA’s chief executive, during a speech.
“You’ll see five new casas in the next few years,” he added, referring to the Shotwell Street project’s name, Casa Adelante, and the four other projects being developed by MEDA.
The nine-story tower at Shotwell and Cesar Chavez streets will reserve 74 of its units for seniors living on no more than 50 percent of the city’s area median income (which, in 2018, was $41,450 for a single individual), and 19 apartments for homeless seniors. The building is slated to be finished by mid-2020.
MEDA is developing the property with the Chinatown Community Development Center, and the total project cost is projected to be around $55 million.
The project’s financing is a complicated mixture of private and public funds. There’s $29 million from the Mayor’s office of Housing and a $30 million construction loan from Silicon Valley Bank to initially finance the project’s construction.
Once the project is built, a $22 million investment from Raymond James Tax Credit Credit Fund and $1.3 million from the California Community Reinvestment Corporation will begin to pay back the bank loan.
In the last four years, MEDA has transformed into something of an affordable real estate empire. It has acquired some 21 multi-unit apartment buildings comprising 151 units; manages five public housing properties representing 439 units; and has 543 units in the development pipeline.
Casa Adelante is one of eight 100 percent affordable projects slated to rise in the Mission over the next five years. In December, MEDA plans to begin construction on a 127-unit apartment building 2060 Folsom St. In February 2019, 143 units are slated to break ground at 1990 Folsom. Next June, 130 units are slated to break ground at 681 Florida St. Others are on the way.
“In the next 12 months we will have one building breaking ground every three to six months,” said Karoleen Feng, head of MEDA’s community real estate team. She mentioned that the organization had just secured financing for the project at 2060 Folsom Street.
In late April, District 9 Supervisor Hillary Ronen – who was present at the groundbreaking – called a hearing to figure out why affordable housing projects in the Mission had seemingly stalled. Since then, Feng said, the departments have come together to accelerate many of the affordable projects in the pipeline.
Some of MEDA’s projects, she said, would have had a more-or-less uncertain three to three-and-a-half timeframe to groundbreaking. “Now we know for sure they will be able to start construction in a three-year timeframe,” she said. “And then, moving forward, we’re trying to have our 2205 Mission Street development to be able to start in a 2½-year time-frame.”
Since Ronen exposed some of the city’s deficiencies in prioritizing affordable projects at hearing, Feng said, the city has been clearer about who in various city departments can help prioritize affordable projects.
Feng said some of the departments, such as the Department of Public Health and Public Utilities Commission, did not know they needed to prioritize projects and provide points of contact.
“And now they’re providing that direct point of contact,” she said.
In fact, the week of the April hearing, Feng said, MEDA was trying to secure financing for 1296 Shotwell Street. She said the hearing helped the nonprofit get its building permits that week, which allowed them to secure the funding that Friday.
“That would not have happened if the hearing didn’t happen that Monday,” she said.
Kate Hartley, the director of the Mayor’s Office of Housing, said that the Mission District experienced its 10-year affordable housing drought because there was little money available to support affordable housing after the economy turned in 2008 – except in redevelopment project areas like Mission Bay and in Bayview/Hunters Point.
“Other neighborhoods that didn’t have the benefit of that financing – there was very little money, if any,” she said.
She noted, too, that the Mission typically has smaller-scale buildings, and higher-density projects are necessary to attract financing. So, she said, “we’re looking at trying to do high-density, multi-family projects like Casa Adelante.”