Development gives preference to the displaced 

Underscoring the demand for affordable housing in San Francisco, an opportunity to purchase one of 12 below-market-rate condominiums in a new Fillmore district development has reaped more than 700 requests for applications.

The new homes are within the Heritage on Fillmore development, slated to open in April, which also includes 68 market-rate homes expected to range from around $500,000 for a one-bedroom unit to somewhere in the $900,000s for a three-bedroom condo. Within the bottom level of the building will be a "Jazz Heritage Center," as well as a jazz club/restaurant and another restaurant/lounge.

The below-market-rate units are available due to San Francisco’s "inclusionary housing" laws, which require developers to offer 15 percent of the units of any building at BMR prices, according to Matt Franklin, who oversees the Mayor’s Office of Housing.

Alternately, developers can build the equivalent of 20 percent of the units at another location, within one mile of the primary development, or pay an in-lieu fee equivalent to the cost of that 20 percent.

With the Feb. 3 deadline to apply for the affordable units fast approaching, dozens of applications are coming in each day, according to Kelly Dearman, co-owner of Haight Street Mortgage, the company overseeing the sales of the Heritage’s BMR units.

"We’ve already received 300 completed applications, and right now we’re getting about 40 a day," Dearman said. "It’s great to see that so manypeople are excited about this project."

The 12 BMR units within the Heritage on Fillmore development will cost between $169,685 and $309,329, depending on the unit size and the income of the purchaser. Buyers will also have to pay homeowners association dues, estimated to range from $350 to $400 per month.

To qualify for the BMR housing, applicants must be first-time homebuyers, be able to provide a 5 percent down payment and have the credit and steady income to qualify for a loan.

Applicants must also have a qualifying income of no more than $73,428 for the one-bedroom units and $91,200 for a family of four.

Buyers must also commit to using the property as a principal residence and agree to a limited equity provision, which says they can only sell the house in future years at the rate of the area’s median income growth, meaning it must remain affordable for the next low-income buyer.

Franklin said The City is doing all it can to create more affordable housing. Last year, about 200 BMR units were put on the market. This year, the number is expected to increase to 250, with up to 350 a year going forward, Franklin said.

"We’re doing much much more, but it’s not enough," Franklin conceded. "The demand for affordable housing continues to outstrip the supply."

Ricky Johnson was only eight years old when his family was forced to move out of their Western Addition home on Sutter Street due to redevelopment in their neighborhood in the mid-1960s, but now he’s ready to use his right of return to move into a new development in the Fillmore.

Johnson has a San Francisco Redevelopment Agency Certificate of Preference, a document given to individuals and families displaced by redevelopment at that time that promises they’ll be at the head of the line to rent or purchase other available redevelopment property. Forty years later, the certificate is still good, and it gives Johnson first crack at buying one of the new condominiums within the Heritage at Fillmore development.

Now 50, Johnson is married and has three adult children and two stepchildren, along with five grandkids. He lives in Suisun City, which is where he was able to afford a house, but he works in San Francisco as a garbage man for Sunset Scavenger Company and supplements his income by selling Negro League baseball apparel at Giants games. His two daughters and his son all live in The City.

"That’s what my life is all about now, living to make it better for my kids and my grandkids," Johnson said.

Since Johnson is a homeowner, he is not eligible for the below-market-rate units in the Fillmore development, but, if he qualifies financially, he can get one of the market-rate units.

Johnson, who remembers the Western Addition as a peaceful, predominantly black neighborhood, said the certificate is only "somewhat of an injustice undone."

Kelly Dearborn, co-owner of Haight Street Mortgage, which is overseeing the sale of the below-market-rate housing in the Fillmore development, said that through outreach efforts, her office has found 10 certificate holders.

"We’re very excited. If we can get those homes filled with certificate holders, we’ll feel like we did something great," she said.

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Bonnie Eslinger

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