Housing project on Divisadero falls through

After some seven years of planning, developers have abandoned their efforts to build a six-story apartment complex on the corner of Oak and Divisadero Streets — the site of the former Touchless Car Wash and gas station.

What's happening: The proposed 186-unit building — 20% of which was slated to be below market rate — would have been "by far the largest residential project on Divisadero Street or in the Lower Haight neighborhood," the SF Chronicle's J.K. Dineen reported when the city's planning commission approved the project in 2019.

• Rising construction costs and a weakening rental market in San Francisco were cited last November as reasons for building delays, though the developer, Genesis Living, did not respond to Axios' questions regarding their plans falling through.
• The Real Deal first broke news of the project's cancellation earlier this month after Genesis filed a "quit claim deed" in May, which transferred all rights back to long-time property owners, Roy and Patricia Shimek.

Why it matters: The 400 Divisadero St. lot, which is surrounded by a chain link fence, has sat unused since last fall.

• And for the time being, it won't be able to contribute to San Francisco's need for tens of thousands of new housing units over the next eight years to address its housing shortage and satisfy state requirements.

Be smart: Stalled housing production has been a concern across the city amid a cooling San Francisco real estate market, rising interest rates and inflated construction costs.

• The city is on pace to complete 2,800 new homes this year, which would fall short of the roughly 4,000 built in each of the previous three years, the SF Examiner reported this summer.

What they're saying: Supervisor Dean Preston told Axios that when he became aware the developer was not moving forward, his office "began working with nonprofit affordable housing developers, the property owner, and the Mayor's office about this as an affordable housing site."

• "There is broad support for affordable housing in the neighborhood, and we remain optimistic that the city will step in and create a 100% affordable project here," Preston said.

Flashback: In 2019, before Preston was District 5's Supervisor, he led a community group called Affordable Divis, which pushed for the 400 Divisadero project to have at least 33% of its units below market rate.

• At the time, then Planning Commissioner Richard Hillis told the SF Chronicle that 20% of the building being affordable was as much as could be expected from privately owned property without the city subsidizing the project.

What's next: Elizabeth Watty, a director for San Francisco Planning Department, told Axios that her office has received an inquiry from a 100% affordable housing developer "who is doing due diligence on this property."

• The department hasn't received any new applications yet, but it's "hopeful that a housing project will proceed at this site in the near future," Watty said.
• In the meantime, the lot will remain vacant.