SoMa project for low-income, homeless residents gets $19.1 million funding boost
December 15, 2020

San Francisco Business Times, by Laura Waxmann

A 96-unit housing project for extremely low-income and homeless San Francisco residents slated to rise in the South of Market neighborhood is moving one step closer to construction with a $19.1 million funding boost from a union pension fund.

The AFL-CIO Housing InvestmentTrust said Tuesday it would help finance the development at 53 ColtonSt. as part of its $1 billion investment into Bay Area housing construction announced in September.

Demand for an already limited supply of affordable housing is expected to increase post-pandemic, and the pension fund’s investment and others like it are “going to be critical to our economic recovery,” Mayor London Breed said in a statement. 

“We all know we need to build more housing, because even while rents have dropped recently, they will begin to rise again as our economy recovers, unless we create enough new homes to keep up with demand,” Breed said.

The affordable project is being spearheaded by Strada Investment Group and the nonprofit Community Housing Partnerships and expected to cost $52.2 million in total. The rest of the financing will be provided by the Merchants Bank of Indiana and Century Housing Corporation, a community development finance institution located in Culver City.

“While many other capital sources are backing away from putting their funds into this market, we are committed to serve as San Francisco’s financial first responder by creating union construction jobs, and financing affordable places that people are proud to call home,” said AFL-CIO Housing Investment Trust CEO Chang Suh. “We do this while always working hard to produce competitive returns for our investors.”

Suh added that the loss of construction jobs is “one of the worst economic impacts” that the pandemic is having on San Francisco.

With its $1 billion investment in Bay Area housing, the pension fund projects the creation of some 12,000 jobs — a third of which will be union jobs — and 4,000 housing units in the Bay Area by 2025.

It is unclear when the 53 Colton project will break ground — its construction is part of a 2-acre redevelopment plan to transform the area around 1629 Market St. that includes adding 580 new homes across five residential buildings, public open space and a new Union Hall for United Association Local 38 Plumbers and Pipefitters. 

Breed’s office said in a statement issued in July that 53 Colton St. and another 190-unit building on Market Street at Brady Street will be the first residential projects to be constructed under that plan.

Construction on the union hall began over the summer and is expected to complete in 2024. That project is being privately financed by Strada.