The Market-Octavia mess

A remarkable thing is happening in the area surrounding Market and Octavia streets

EDITORIAL A remarkable thing is happening in the area surrounding Market and Octavia streets: middle-class neighborhood groups, often accused of being NIMBYs, are actually asking for more affordable housing and less parking.

The Duboce Triangle Neighborhood Association, one of the oldest community groups on the east side of the city, and the Hayes Valley Neighborhood Association, want the city to make some important changes in the sweeping Market-Octavia plan, which will transform the area with close to 6,000 new housing units.

And what they're asking for is eminently reasonable, entirely in sync with the city's existing planning policies, and perhaps the only way to make the comprehensive area plan acceptable. The City Planning Commission refused to go along with the neighbors; the supervisors need to change that.

This isn't a tiny neighborhood issue: the Market-Octavia plan is not only a huge policy issue involving a large chunk of the city; the outcome will set the stage for the epic battle over the Eastern Neighborhoods plan, which will guide development in the city's last urban frontier.

City planners have been working on the document since 2000, and it's gone through many different drafts. The current version, which will come before the Board of Supervisors next week, has the elements of a progressive plan, developed with neighborhood input. But it's badly lacking in several key areas:

<\!s>Affordable housing. The plan calls for constructing 5,960 new residential units over the next 20 years — and 460 of those will be built under the direction of the Redevelopment Agency whether the plan is approved or not. So the Market-Octavia plan by itself involves 5,500 units — and only 960 of those will be sold below market rate.

Let's remember here: market rate is upward of $500,000 for a studio or small one-bedroom unit. And only a fraction of the "affordable" units will be available to people making less than about $70,000 a year.

So most of what is planned here is housing for the rich. And if the pattern we've seen with market-rate condos downtown and South of Market continues here (in a neighborhood with easy access to the freeway), this will be housing for rich commuters who work in Silicon Valley, and rich out-of-towners who want a pied-à-terre in the city.

The city's only General Plan — the document that's supposed to drive all land-use policy — states very clearly that 64 percent of all new housing ought to be affordable. If that standard were applied here, 3,520 affordable units (not 960) would be included in the plan. That means the plan is 2,560 affordable units short of meeting existing city policy.

Housing activist Calvin Welch has put together a work sheet on this, and he concludes that developers would have to pay about $60 per square foot to the city to meet that standard. Over the 20 years slated for the Market-Octavia project, the cost of meeting those affordability goals would reach $1.3 billion.

There's another side to this too: A December 2006 study by Keyser Marston Associates, prepared for the Planning Department, shows that every 100 new market-rate condo units built in San Francisco creates an additional demand for 25 new affordable units. Why? The new wealthy residents spend money on goods and services (from restaurants to laundry) that create much lower-paying jobs. Those workers need a place to live too — or they wind up commuting from the far suburbs, placing additional pressure on transportation systems and undermining efforts at building an environmentally sustainable community.

Part of the Market-Octavia plan includes new retail outlets. Where will those workers live?

Welch, the neighborhood groups, and Sup. Ross Mirkarimi, who is spearheading the drive for more affordable housing, agree that it's probably unrealistic to force developers to pay $60 a square foot.