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Faster, cheaper: SF saves by building housing for homeless with modular construction

San Francisco approved 145 supportive apartments Tuesday for formerly homeless people at a South of Market site, despite some opposition from building unions. It’s the first time San Francisco is using modular construction for this type of project, which shaves millions from the cost of the project as well as a year or more off the timeline.

The project comes as the city has struggled with spending up to $800,000 per unit on affordable projects and three to five years to get them built as the housing crisis has worsened and homelessness has skyrocketed.’

Unlike most affordable housing development in San Francisco, the project is not subsidized with city money. Instead the Housing Accelerator Fund, a public-private fund that raises money to build new affordable housing and protect existing units, invested $35 million of a larger philanthropic donation from Tipping Point Community to acquire the lot, fund design and approvals, and start construction. The developer, Mercy Housing California, will finance the rest of the project with low-income housing tax credits and tax-exempt bonds in partnership with Citibank and the state of California. The city will pay up to about $2 million a year to lease the building.

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