Despite outdoor drug dealing nearby, new housing in San Francisco’s Mid-Market is filling up

You can see him walking down Central Market Street at dusk: One by one, the windows of new apartment buildings begin to light up.

Despite empty office buildings and rows of shuttered businesses — and an outdoor drug trade that grew so bad that in December the city declared a state of emergency — residents are settling in the heart long troubled main street of San Francisco.

At Prism, a 193-unit complex at 1028 Market St., 36 units have been rented since opening about six weeks ago. Next door, the 301 units at 50 Jones St., which debuted during the darkest days of the pandemic, are now about 85% rented. A block east, traffic from potential buyers to Serif condos at 950 Market St. has doubled since February as COVID cases began to decline. About 50 condos out of 242 were sold there.

“We see a lot of people moving to San Francisco for the first time, whose companies require them to come back to the office soon,” said Adam Tetenbaum, director of Olympic Residential Group, which oversaw the development of Prism.

For years, the injection of several thousand housing units along Central Market Street was seen as the missing piece of a revitalization that took off a dozen years ago when tech companies like Dolby, ZenDesk, Twitter, Square and Uber have taken over the vacant or underused slack. buildings. Tens of thousands of workers moved much of downtown San Francisco’s entrepreneurial verve north of SoMa and west of the Financial District. This brought retail, restaurants and a booming art scene.

But while around 2,000 new homes have opened at the western end of Central Market Street – including 100 Van Ness, Trinity Place and Nema – proposed Market Street developments between Mason and Jones Street have progressed much more slowly in the approval process. The result is that iconic housing projects at 50 Jones, 1028 Market and 950 Market missed out on the mid-market tech boom, instead opening up at a time when the pandemic had left office buildings deserted, foot traffic sparse and the windows closed.

“So many things have closed on Market Street during the pandemic,” said Simon Bertrang, executive director of the Tenderloin Community Benefit District. “It’s not a very active place right now.”

Developers Dan Diebel (left) and Adam Tentenbaum at Prism on Market Street in San Francisco. The building with 193 apartments and a green space on the roof opened its doors in January.

Scott Strazzante/The Chronicle

Businesses that closed included Popson’s Burgers, Equinox Coffee, Warm Planet Bikes, Huckleberry Bikes, Homeskillet and World of Stereo.

For the developers of 1028 Market St., a joint venture of Olympic Residential Group and Tidewater Capital, the hope is that the expected return of office workers will combine with new investment to kick-start the Mid-Market story to the point dead. And already there are glimmers of house. Ikea has begun construction on its $260 million mall at 945 Market St. A new Line hotel will open this summer alongside Serif condos at 950 Market. Next week, the city’s largest Whole Foods will open at 8th and Market, as part of the 1,900-unit Trinity Place project.

And even some of the closed restaurants are finding new life: the former Homeskillet at 1001 Market is now Gai Chicken & Rice while what was Popson’s Burgers at 988 Market St. will become Fayala, a French and Mediterranean restaurant.

Prism aims to attract younger, price-conscious workers. The building offers eight weeks free rent on a 13 month lease. Even without the incentive, Prism units are competitively priced. The most affordable studios rent for $2,275 per month, less than the city average of $2,423. A room starts at around $3,300, around the city average, but less than other similar amenity-rich buildings at Prism — which has a large rooftop garden, gym, and entertainment spaces.

William Deng, 22, landed in a Prism studio after moving from New York to San Francisco. A life science researcher, Deng recently landed a job at a biotech company in South San Francisco and wanted to be close to BART and Caltrain but also “close to the hustle and bustle of the city.”

He said he was drawn to Prism because it’s a new build. He said building staff had been accommodating, arranging residents’ meetings and offering free tickets to Harry Potter and The Cursed Child at the nearby Curran Theatre.

Deng is well aware of the street conditions in the Mid-Market and Tenderloin, but said it was “not as bad” as he imagined. He said he had already noticed more activity on Market Street in the weeks after he moved in. Foot traffic will only increase as offices open this spring and summer, he said.

“We are surrounded by countless businesses and apartments with people working from home,” he said. “Imagine how different and safer morning and evening commutes will be with all those people on the street.”

Rather than seeing its lack of parking as an inconvenience, Prism is using it to attract young, environmentally conscious workers like Deng, according to Tetenbaum.

“We are adapting it for people who want to cycle, walk and use public transport,” Tetenbaum said. “The bike path and Muni and BART are right outside the door.”

Overall, San Francisco rents have risen 9% over the past year, after falling about 25% in the first year of the pandemic, according to brokerage firm CBRE. The occupancy rate is now around 95%. Some companies planning to return to work in March — at least part-time — in buildings like Prism could benefit from new hires moving to San Francisco, CBRE research director Colin Yasukochi said.

“A lot of tech companies have done very well during the pandemic,” Yasukochi said. “They’ve hired tens of thousands of people and a lot of those new hires have never seen their home office. And housing is still scarce.

The question is whether the new investment along Market Street will help improve the lives of the 30,000 residents of Tenderloin north of Market Street who have long struggled with rampant drug trafficking, violent crime and littered sidewalks and alleys of rubbish, according to Bertrang.

“If we can’t provide clean, safe sidewalks…it will be a lost opportunity,” he said.

The historic Tenderloin “should be an attraction for people moving into the new buildings instead of something to worry about,” Bertrang said. “If the city can solve the fundamental issues of cleanliness and safety, it will support everyone. The intensity of the drug trade right now is truly damaging.

Tenderloin Housing Clinic executive director Randy Shaw said the contrast along Market Street is evident. On the one hand, buildings like Prism offer homes that took a decade to build. On the other hand, it’s hard not to be discouraged by a neighborhood that was bustling five years ago and is now more depressed and hard hit by the drug trade than it was five or ten years.

Even the land where Prism now stands was bustling with life from 2015 to 2017 when it was The Hall, a pop-up food court that offered after-school jazz, bluegrass and art programs for Tenderloin kids.

“I’m trying to figure out how we reclaim that scene,” he said. “There are good things on the horizon, but at the moment it is difficult.”

JK Dineen is a writer for the San Francisco Chronicle. Email: [email protected]: @sfjkdineen

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