A four-month impasse over a key Mission District housing project is headed toward resolution after the developer agreed to new community benefits including discounted “trade shop” space for local businesses and a $1 million contribution to a cultural district formed in 2014 to preserve the neighborhood’s Latino heritage and community.

In a deal hammered out with Supervisor Hillary Ronen, Lennar Multifamily Communities has committed to leasing out its six 700-square-foot trade shop spaces at 1515 S. Van Ness Ave. for 50 percent of the market rate. The $1 million contribution would be made through the San Francisco Foundation to a cultural stabilization fund that could be spent on building or acquiring sites for affordable housing.

In addition, Lennar, which had previously agreed to make 25 percent of the 157 housing units affordable and to use 100 percent union labor, has agreed to let the city use the current building that is on the property as a navigation center — a pop-up shelter for homeless services. That would last roughly nine months to a year, or until Lennar is ready to start construction.

“Housing projects that both add to our housing stock, and protect what we love about the (Calle 24) Latino Cultural District, is exactly what the Mission needs,” Ronen said.

The project is one of a pair of market-rate projects that were appealed to the Board of Supervisors after winning approval at the Planning Commission. Opponents argued that both projects — the other is at 2675 Folsom St. — would accelerate the frenzied pace of gentrification that over the last decade has transformed the Mission District into one of San Francisco’s trendiest and most expensive neighborhoods.

While Erick Arguello, President of the Calle 24 Council, has frequently opposed market-rate development, he said he felt comfortable with the 1515 S. Van Ness deal.

“Preventing displacement and preserving our rich Latino culture are our top priorities,” Arguello said. “When developers work with us and our supervisor to accomplish these goals, we can feel good about moving these projects forward.”

The project will include 39 units affordable to a range of families making between 55 percent and 120 percent of area median income, or $59,000 and $129,000 for a family of four.

With this deal in place, it will be interesting to see what happens to the second project at 2675 Folsom St. As with 1515 S. Van Ness, opponents of that development argued that city planners failed to take into account the impact the complex would have on displacement and gentrification in a district that has been the heart of the city’s working-class Latino community.

Under the state’s byzantine California Environmental Quality Act, proposed developments require a detailed analysis of everything from noise to air quality to traffic to historical and biological resources. Up to now, however, efforts by antigentrification advocates to argue that displacement is an environmental impact have gone nowhere. And that point was reiterated last week when the Planning Department released a report on 2675 Folsom, saying that project would not result in “indirect displacement of existing residents or businesses as a secondary effect of gentrification.”

The report was seized on by pro-housing advocates, like Sonja Trauss of the San Francisco Bay Area Renters Federation, which is in favor of more housing at all income levels.

“The upside of all of this is we have yet another report saying what is true, which is that development is symptomatic of rising population and rising income levels, it doesn’t cause it,” said Trauss.

Attorney Scott Weaver, the appellant in the 2675 Folsom case, said that the study didn’t reflect the reality that new high-end condos are changing the neighborhood. After 40 years of representing Mission tenants in eviction cases, Weaver scoffed at the notion that high-end housing doesn’t bring with it higher rents, more expensive restaurants and fancier shops.

“That is just wrong,” he said. “Development makes a neighborhood more desirable, and rents go up. Any Realtor will tell you that.”

While she supports 1515 S. Van Ness going forward, Trauss said the project-by-project deal-making undermines city planning laws.

“If we are going to do deal-making for every project, I don’t know what the point is in having zoning in the first place,” said Trauss. “It’s the opposite of planning.”

Arguello said that he is more comfortable supporting a 75 percent market rate development like 1515 S. Van Ness in part because there are six 100 percent projects totaling 733 units in the pipeline in the Mission.

“But even though we have more than 700 units coming, we are still in a hole,” he said.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @SFJKDineen