L.B. Stone to rent warehouse property to San Francisco for tiny home village

The City of San Francisco has cut a deal with L.B. Stone Properties Group to lease a warehouse property to build 60 “tiny homes” for homeless residents.

The city agreed to lease two warehouses from the investor on 2.25 acres at 2177 Jerrold Avenue, in Bayview, the San Francisco Standard reported.

L.B. Stone, based in Spokane, Wash., is poised to sign a 15-year lease with options to renew for the industrial property that once stored construction materials. Financial terms of the deal were not disclosed.

Plans by the city’s Department of Homelessness and Supportive Housing call for 60 prefabricated cabins and parking for up to 20 recreational vehicles or cars inhabited by homeless residents on the property. The two warehouses will be turned into community services offices.

The community facilities would include restrooms and showers and a warming kitchen, health clinic, community room and offices for social services. The buildings will also offer storage facilities for residents, and homes for couples and those with pets.

Should L.B. Stone want to sell the property, the city would have first rights to buy it. A timeline for construction of the tiny homes isn’t known.

L.B. Stone, led by Larry Stone, invests in industrial properties and bought the warehouse property in 2016 for $9 million. Both warehouses span a combined 24,500 square feet and include a 79,600-square-foot, fenced-off yard.

A major donor to conservative causes in Spokane who rents out a warehouse for a local homeless shelter, Stone paid for the signature-gathering for a city initiative to ban homeless camping within 1,000 feet of schools, parks and child care facilities, according to Inlander.

The city began talks with the property owner about the lease in February last year, according to Mark Geisreiter of Newmark, who helped broker the deal. SFYimby broke the news in August.

The warehouse property isn’t zoned for housing or office use.

To bypass local zoning rules, the city invoked State Assembly Bill 101, a law that streamlines the approval of developments to reduce homelessness.

During a declared shelter crisis, homeless shelter projects that satisfy certain requirements are allowed to bypass some zoning rules and environmental reviews, according to the Standard. The proposed structures must be either existing or temporary, and the site principally owned, operated or leased by the city.

Last February, San Francisco paused on a plan to build 70 tiny cabins in the Mission District, after neighborhood opponents cited the nearly $1,600 per square foot cost of building tiny homes for the homeless. Each 64-square-foot home would have cost $100,000.

There are 7,700 homeless residents in San Francisco, of whom 4,400 live in tents, on the sidewalk or in vehicles, according to a 2022 homeless count.

San Francisco has one tiny home village at 33 Gough Street, which has been touted as a relatively affordable way to get people off the streets.

Tiny homes across the Bay Area don’t work for most homeless residents, but are better than temporary shelters as a bridge to permanent housing, according to a study released in the fall of 2022. Less than half of residents find permanent homes after moving out.

— Dana Bartholomew