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San Francisco Makes $100M Commitment To Modular Affordable Housing

In a push to build more affordable housing — and sweeten the deal to establish a modular housing factory in the city — San Francisco Mayor London Breed announced a commitment Monday for the city to buy $100M worth of affordable housing produced by the future facility.

A modular unit is lowered into place at the Second Street Studios project in San Jose.

The timeline on the commitment for this first production order is not a short one. The city determined in January to work with the San Francisco Building Trades Council to explore finding a location for a new modular housing facility with union support. Modular construction, which is being used on several Bay Area projects, including multifamily, supportive housing and hotels, helps streamline construction time and curb costs.

“We are in a housing crisis and the reality is we need to produce affordable housing much quicker than we currently do, or we will continue to see displacement of our low and middle-income communities,” Breed said in a statement. “By building a modular housing factory in our own backyard, we can create housing faster and more cost-effectively, while also creating great union jobs in partnership with our labor leaders.”

Affordable housing, and San Francisco's lack of it, was a key part of Breed's campaign for election.

The city has selected international design firm Nelson Worldwide to study the feasibility of putting the factory on industrial lands controlled by the port. The firm has been holding stakeholder meetings, collecting data and doing analysis to determine the amount of capital investment, operations, staffing, and supply and demand targets.

“Providing new homes for people experiencing homelessness as fast as we can is essential to creating a compassionate and livable city for all San Franciscans,” Kate Hartley, director of the Mayor’s Office of Housing and Community Development, said in a statement. “We are thrilled to be working on a new modular production facility that will create jobs and homes for San Franciscans.”

A single affordable unit in San Francisco typically costs between $750K and $800K, including the cost of the land, the San Francisco Chronicle reports. The city usually covers just under half of that cost. Modular construction could save about $50K on the cost of each unit, Hartley told the Chronicle.

She said the city's $100M commitment could build around 400 units over a year or two once the factory is built.

Other Bay Area cities could also buy from the factory, she told the Chronicle.