San Francisco is getting creative in its quest for a scarce commodity: land where it can build affordable housing.

An overheated real estate market is forcing city officials and nonprofit housing developers to pursue sites and parcels that have been seen as off-limits because of their current use or an unwilling seller. They include a Muni bus maintenance yard, a Chinatown banquet hall and a parking lot owned by the federal government.

•Near Fisherman’s Wharf, the San Francisco Municipal Transportation Agency is taking a new look at developing the Kirkland Yard, a 2.6-acre diesel bus maintenance yard that the agency had long refused to make available. A 2004 city Planning Department study estimated that 220 units could be constructed on the site.

•In Chinatown, the Mayor’s Office of Housing and Community Development has agreed to pay $5 million to buy the Pacific Avenue home of the New Asia restaurant, the largest remaining banquet hall in the neighborhood. The plan calls for the current structure to be replaced with about 70 units above a new version of the restaurant.

•Behind the James R. Browning U.S. Court of Appeals at Seventh and Mission, the federal government is entertaining a city proposal to develop 250 units of housing for formerly homeless people on a surface parking lot that the Tenderloin Neighborhood Development Corp. had pursued unsuccessfully for years.

“Given the scarcity of land, and the high cost of purchasing it, the city is looking at all avenues available to get affordable housing,” built, said Jeff Buckley, senior adviser to Mayor Ed Lee on housing issues.

After five years of explosive development across the city, a period during which rents and land values have skyrocketed, opportunities for places to build badly needed housing have grown scarcer. Developers have picked off the obvious sites: shuttered gas stations, empty lots, struggling laundromats, stand-alone fast-food joints with an acre of parking.

The sites that are left over are left over for a reason: They come with complications.

Supervisor Aaron Peskin, for example, wants to see affordable housing built using the air rights of two city-owned sites: the Kirkland Yard and Fire Station No. 13 at 530 Sansome St. Both projects would need to incorporate the current uses at the street level with housing above. While housing has been constructed above firehouses and bus-storage facilities in other cities, both projects would be firsts for San Francisco.

But with the housing crisis as bad as it is, Peskin said the city has no choice but to chase the two properties, which are among the few potential development sites in his densely populated district, which includes Chinatown, North Beach, the Financial District and Russian Hill.

“There are other soft sites here and there, but they are all small and constrained,” Peskin said.

It also helps if a site is owned by a willing seller. Peskin had tried to get housing built on the Kirkland site in the early 2000s. The MTA was initially a willing participant and was exploring moving the bus yard to a site in the Bayview. Ultimately, after years of study, the MTA decided it didn’t want to move after all. This time the agency itself has been proactive in looking at housing development opportunities, not just at the Kirkland Yard but also on parking lots at Balboa Park BART Station, the Castro, West Portal and South of Market.

MTA spokesman Paul Rose said the agency is open to mixed-use development.

“We want to do our part to help find a solution to the housing crisis,” he said. “That is why we are exploring all these options.”

The parking lot at 1068 Mission St. has also long been on the radar of developers. The federal government bought the Mission Street lot in 1996 for expansion of the James R. Browning Courthouse, a project that never went forward.

Five years ago, Tenderloin Neighborhood Development Corp. Executive Director Don Falk acquired an adjacent lot at 1036 Mission St. and worked with Rep. Nancy Pelosi, D-San Francisco, to try to persuade the federal government to sell the 1068 Mission lot, which would have allowed for a much larger and more cost-effective project. The 1036 Mission project is a tight 83 units, and the additional land would have allowed another 200.

But the General Services Administration, which oversees federal property, was unwilling to let go of the property. That has now changed — the government having decided that expansion of the courthouse is not needed. While the city estimates the land is worth $35 million, GSA said it is open to San Francisco’s proposal to obtain it for $1 if it’s used to house the homeless.

Back to Gallery Scarce land in SF forces city to seek creative housing... 7 1 of 7 Photo: Noah Berger, Special to The Chronicle 2 of 7 Photo: Noah Berger / Special to The Chronicle 3 of 7 Photo: Noah Berger, Special to The Chronicle 4 of 7 Photo: Noah Berger, Special to The Chronicle 5 of 7 Photo: Noah Berger, Special to The Chronicle 6 of 7 Photo: Noah Berger / Special to The Chronicle 7 of 7 Photo: Noah Berger / Special to The Chronicle 2017













Under the McKinney-Vento Homeless Assistance Act of 1987, homeless services providers are given first access to surplus federal property. On Jan. 27, 2017, the Department of Housing and Urban Development published a notice of the property’s availability for homeless-services use.

The city did not hesitate to respond.

“The opportunity to get a site for a dollar is something you should never pass up, especially when it involves housing the homeless,” Buckley said.

Meanwhile, construction is well under way at 1036 Mission — construction crews were pouring the fourth floor last week. Falk said he is thrilled that 1068 Mission has finally been made available, but wishes it had happened sooner.

“My gosh, if we could have combined it with the lot next door, we would have been a lot better off. It could have been a great integrated approach.”

Other sites the city has been chasing also have complications. Neighbors are pushing hard against plans to build affordable senior housing at 250 Laguna Honda Blvd., in the Forest Hill neighborhood. Another plan to build on the Bridge Motel site on Lombard Street in the Marina stalled out after it was clear that Supervisor Mark Farrell wouldn’t support the height increase needed to make the development work.

Gail Gilman, executive director of Community Housing Partnership, which develops housing for the formerly homeless, said her group no longer has the Bridge Motel under contract.

“To make it pencil for affordable housing you need more height, otherwise you can only get 45 units,” Gilman said. “It’s unfortunate, because there is not that much real estate in San Francisco.”

While the Bridge didn’t work out, Gilman said it’s crucial to snap up land for future affordable projects, even if there isn’t immediate funding available or a will to build.

“One of the reasons we are in this housing crisis is when the market was slow, or at least not as hot as it is now, we didn’t land bank sites,” she said.

Land banking is the name of the game with the New Asia in Chinatown. The restaurant has about five years left on its lease, so it’s likely the city will be its landlord during the time it takes to get a project designed, approved and funded.

“The New Asia deal shows we can move quickly on something when we find the site in the right neighborhood at the right value,” Buckley said.

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