San Francisco, CA — Today, Mayor London N. Breed joined City officials, local leaders, and development partners to celebrate the groundbreaking of 1633 Valencia Street, a new 100% affordable housing development at the border of Bernal Heights and the Mission District of San Francisco for seniors experiencing or at risk of homelessness.
Upon completion, 1633 Valencia will provide five floors of 145 affordable apartments serving low-income seniors earning up to 50% of the area median income (AMI), with residents paying no more than 30% of their income in rent. The ground floor features a residential lobby near elevator access, resident-serving common spaces including a community room, two offices for property management, a supportive services suite, and bike parking.
1633 Valencia is the first project to receive funding through the newly announced Bay Area Housing Innovation Fund, a $50 million investment vehicle to accelerate affordable housing development launched by the San Francisco Housing Accelerator Fund (HAF) in partnership with Sobrato Philanthropies, Destination, Home, and Apple.
The planned development builds on efforts to increase housing across San Francisco as part of Mayor Breed’s Housing for All strategy that fundamentally changes how the City approves and builds housing. The Mayor’s strategy lays out an action plan for the City to meet the bold goal of allowing for 82,000 new homes to be built as part of the State-mandated Housing Element.
“Building more housing is at the heart of our work to ensure our residents, including vulnerable populations like our seniors, can afford to live in this City,” said Mayor Breed. “I will continue to work aggressively to remove the barriers that get in the way of housing construction, so we build homes like those at 1633 Valencia that are providing the services and support to keep people housed and stable. And we can’t do this alone. I want to thank the founders of the Bay Area Housing Innovation Fund and project development partners for working with the City to ensure projects like this can become a reality.”
Located on a former Sears parking lot between Cesar Chavez and Mission Street and overlooked by the CPMC Mission Bernal Sutter medical campus, 1633 Valencia is served by a number of neighborhood-serving businesses, including a grocery store and pharmacy. The development, one of eight new 100% affordable housing projects that have broken ground in the Mission since 2018, is also served by several MUNI bus lines and is less than a 10-minute walk from the 24th Street Mission BART station. Construction is slated for completion in December 2025, with residents moving in by May 2026.
“Our community’s unhoused seniors deserve to age well in dignified housing. I am so proud that we are breaking ground at 1633 Valencia Street today and that 145 homeless seniors will soon have compassionate, permanent, and supportive housing right in the middle of District 9,” said Supervisor Hillary Ronen. “I am deeply grateful to the project team’s incredible work in advancing the project’s milestones and breaking ground so quickly.”
The San Francisco Department of Homelessness and Supportive Housing (HSH) selected Mercy Housing California to develop the project under Chapter 21B of the City’s Administrative Code which allows procurement of homeless services without a competitive solicitation to bring permanent supportive housing units online quickly. As part of the lease-up process, the City will support neighborhood prioritization in the referral of unhoused adults from the Mission neighborhood or with ties to the Mission through Mission Action’s (formerly known as Dolores Street Community Services) Adult Coordinated Entry Access Point. Approximately $80.7 million in operating subsidies will be provided through the City’s Local Operating Subsidy Program (LOSP) to support the project over the next 19 years.
“These new homes at 1633 Valencia Street will provide life changing stability for 145 older adults exiting homelessness in our city,” said San Francisco Department of Homelessness and Supportive Housing Executive Director Shireen McSpadden. “With close proximity to a drugstore, public transit, groceries and a hospital, older adults will be empowered to age in place safely and comfortably for years to come.”
The HAF and Mercy Housing California proposed the 1633 Valencia project as a replication of Tahanan Supportive Housing (833 Bryant Street) in the central South of Market area, delivered by HAF and Mercy Housing in partnership with Tipping Point Community. 1633 Valencia utilizes the same floorplan and efficient design as Tahanan, as well as other cost-saving and time-saving measures. This innovative approach diversifies the housing production model to produce 145 permanent supportive housing units more quickly and cost effectively.
“Our success with modular housing at Tahanan showed that San Francisco absolutely can build affordable housing quickly and cost-effectively,” said Doug Shoemaker, President of Mercy Housing California, the affordable housing nonprofit that will develop, own, and manage 1633 Valencia Street. “Now, we’re bringing many of those innovative cost-saving efforts to site-built housing.”
Nonprofit housing provider Sequoia Living offered Mercy Housing the opportunity to develop this project on a portion of a larger one-acre site previously acquired in 2021, ahead of constructing its own 126-unit, low-income senior housing development alongside 1633 Valencia, which will break ground in 2026.
“The Sequoia Living Board of Directors had the vision to be the catalyst for enabling over 250 units of affordable housing by taking the risk to land bank back in 2021. We’re thrilled to see this strategic partnership take off with the first of the Valencia projects breaking ground so soon,” said Sara McVey, President and CEO, Sequoia Living.
Utilizing philanthropic and private funding, the per-unit cost of building the $84.6 million project is at least 20% less than comparable permanent supportive housing and senior developments. 1633 Valencia is financed through a combination of 4% Low Income Housing Tax Credits, tax-exempt bonds from CalHFA, and a $16 million below-market permanent loan provided through the newly launched Bay Area Housing Innovation Fund.
“We are incredibly proud to be working alongside such a dedicated group of partners to build on Tahanan’s successes to make this new supportive housing development for seniors a reality. From design replication to a design-build contract to its capital stack leveraging the new Bay Area Housing Innovation Fund, this project proves that innovation in affordable housing is possible,” said Rebecca Foster, CEO of the San Francisco Housing Accelerator Fund, “Beyond the impacts on the residents it will serve, we hope 1633 Valencia also sets a scalable precedent, enabling more vulnerable community members to move into quality homes faster.”
The construction of 1633 Valencia will be overseen by San Francisco-based general contractor Cahill Contractors. Additional local design and development partners include David Baker Architects, Fletcher Studio, DCI Engineers, Luk and Associates, and Engineering 350, with community outreach services provided by Mission Action.
