Feds Give San Francisco Green Light to Raze Public Buildings

Uncle Sam will allow San Francisco to bulldoze a dozen public housing buildings at the center of a corruption scandal involving an apartment manager who allegedly pocketed tenants’ rent.

The city’s Housing Authority got the go-ahead from federal housing officials this week to raze the World War II-era apartments at the Potrero Terrace and Annex at 690 Texas Street, in Potrero Hill, the San Francisco Chronicle reported.

The public housing complex is the focus of multiple investigations focused on a former property manager who allegedly rented out units illegally. The units should have been vacant before their redevelopment.

During a special hearing late last week, the San Francisco Housing Authority Commission approved a construction license agreement with master developer Bridge Housing that allows it to bulldoze part of the 600-unit Potrero Hill site between Wisconsin, Pennsylvania, 25th and 22nd streets.

The U.S. Department of Housing and Urban Development this week signed off on the plan, according to Housing Authority Director Tonia Lediju. Demolition is expected to start by year’s end.

The 61 two-story apartment buildings across the 38-acre property will ultimately be bulldozed as part of the city’s Hope SF redevelopment project.

The Hope SF program aims to replace World War II-era housing at four public housing developments — Alice Griffith, Hunter’s View, Sunnydale and Potrero Terrace & Annex. When completed, Hope SF will replace 1,900 public housing units with 5,300 apartments, some slated as market-rate.

Of those, between 1,400 and 1,600 units are proposed at Potrero, where locally based Bridge Housing has completed a 72-unit apartment building. A 157-unit complex is expected to be completed next spring, with the remaining units built by 2034.

But there’s a catch: while the 800 affordable units at Potrero are on track, the 800 market-rate units may be in jeopardy. Given a downturn in the housing market, project stakeholders haven’t secured a market-rate developer for the site, according to the Chronicle.

The timeline for the market-rate housing isn’t dictated by agreements related to the Potrero project. Bridge Housing officials said that, given the challenging market after the pandemic, it’s not clear when the market-rate component could move forward.

“There’s nothing happening on the market-rate side, and not just in San Francisco, but across the Bay Area,” Smitha Seshadri, a senior vice president of development at Bridge, said at last week’s hearing.

— Dana Bartholomew