An affordable home in SF costs $750,000 to build. This developer has a plan to do it for $350,000 – with no public money


Builder Joey Toboni was swimming in the bay a few years ago when he looked at the water park and observed the scene.

Among the walkers and joggers, he noticed a school trip led by a few teachers. There was a home health aide pushing an elderly woman in a wheelchair and a team of National Park Service employees doing landscaping work. He thought about the wide range of jobs it takes to run a city – and the wide gap between what those jobs pay and what it costs to live in the city.

“It occurred to me that none of these people had a solution to staying in San Francisco,” he said.

While that revelation was hardly groundbreaking in one of the world’s most expensive cities, for Toboni it became the seed of an idea he couldn’t shake. “At that point, I realized there was nothing stopping me from being bold and trying to solve this problem,” he said. “I went home that night and started writing a business plan.”

What Toboni, 37, decided on was an idea that was perhaps as difficult as it was simple: build middle-class housing without accepting the kind of public subsidies – tax credits and affordable housing bonds – that fund most affordable housing in the city. By bypassing the red tape required for subsidized public housing, he figured he could be nimble and streamlined.

Toboni came up with a name – the Accessibility Project – and scoured the city to find a site to launch the concept on. He enlisted fellow town native Tim Szarnicki — they played basketball at St. Ignatius College Preparatory — who had spent seven years in various leadership roles at Immaculate Conception Academy, a low-income Catholic school in the Mission district.

On Thursday, the Planning Commission voted 6-1 to support the Affordability Project’s first bid: a 100-unit rental project at 5250 Third St. in the Bayview District.

Tim Szarnicki (left) and Joey Toboni, who played basketball together in high school while growing up in San Francisco, have started a new affordable housing development company that doesn’t take public funds.

Lea Suzuki/The Chronicle

On paper, the project looks like a typical HOME-SF project – a density bonus program where developers get two extra stories of height in exchange for making 30% affordable to a range of low- and middle-income families. What makes the project unusual, however, is that the developer has also pledged to set aside an additional 40% of the units for families earning between 80% and 140% of the region’s median income, or $110,000 to $194,000. $ for a family of four. Thus, the entire project will consist of 70% restricted action units.

The project received some opposition from building trades organizations who clashed with the Toboni Group, a housing builder founded by Joey Toboni’s father. Toboni, who focuses on building single-family homes in his for-profit business, said the affordability project is entirely separate from other family businesses. He said he can’t commit to making the 5250 Third St. project an all-union job, but hopes future developments will be.

In a city where an affordable unit can cost $750,000 to build, Toboni hopes to build the units for less than $350,000 a unit. Part of the cost savings comes from the land, as the Accessibility Project was able to purchase the parcel for $3 million, or $30,000 per gate, about a 90% discount to what other land sold in San Francisco.

Additionally, the group will save time and money by funding development privately through philanthropy, which Toboni says will be far more efficient than going through the time-consuming and competitive process of competing for tax credits and affordable housing bonds.

“The purpose of this organization is to get workers to have housing now,” Toboni said. “We believe that a private organization can be much more effective than government.”

A notice for a past public hearing is seen on a fence at a Third Street site that Tim Szarnicki and Joey Toboni hope to turn into affordable housing.

A notice for a past public hearing is seen on a fence at a Third Street site that Tim Szarnicki and Joey Toboni hope to turn into affordable housing.

Lea Suzuki/The Chronicle

The project will be a boon to Bayview businesses, according to Earl Shaddix, executive director of the Economic Director of Third, who lives in a below-market-rate unit at 4800 Third St. In the past 10 years, only 20 new units have been added along in the heart of the Bayview commercial district, he said.

While the neighborhood’s business district is doing better — the vacancy rate has dropped from 30% to 10% in the past few years — more foot traffic is needed to ensure the survival of small businesses. New businesses that have recently opened include Feline Finesse Dance Co., Gratta Wines and U3Fit Fitness gym – with several more expected to open in the coming months.

“There’s a huge desire to have more foot traffic and more hallway lights at night,” Shaddix said. “We desperately need it and we are achieving it by increasing the density. We know housing will mean more people in the hallway.

Toboni said the plan is to build 2,000 workforce housing units over the next 10 years.

“Tim and I both realize that this goal is extremely ambitious,” he said. “But if you don’t set yourself a high goal, there’s nothing to achieve.”

The accessibility project has raised much of the money and has pledged to a bank to provide a construction loan, although the group must raise an additional $6 million before starting. Hope to be under construction next spring.

Toboni said it was too early to say what the exact income eligibility of the additional 40 affordable housing units would be, but rents would be set to ensure essential workers like teachers and police are eligible. All profits from the project will be reinvested in the next affordable development.

A rendering of the proposed affordable housing project at 5250 3rd St., which would be built without any public money.

A rendering of the proposed affordable housing project at 5250 3rd St., which would be built without any public money.

Lea Suzuki/The Affordability Project

Former supervisor Katy Tang, who drafted San Francisco’s HOME-SF density bonus legislation, sits on the Accessibility Project’s board of directors.

As a veteran of the city’s development battles, Tang said she realizes building housing in San Francisco takes patience, money and political savvy. Although the affordability project has a rough road, it’s worth a try, Tang said.

“If we don’t try it, it absolutely won’t work,” she said. “The largest group of families leaving the city are middle-income families.”

Tang said she spoke to many businesses in Bayview. “What they keep asking is how can we get more people to visit the small businesses on Third Street? There isn’t currently a level of foot traffic to support local businesses.

Toboni said he continues to be driven by that realization he had while floating in the bay – that the families he grew up with in the Richmond district have no place in the city today. .

“My best friend’s parents growing up were an ironworker and a teacher,” he said. “There is a zero percent chance that people in these professions could afford the Richmond today.”

JK Dineen is a writer for the San Francisco Chronicle. Email: jdineen@sfchronicle.comTwitter: @sfjkdineen

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