200 Folsom Street: 335 Affordable Homes Rising Next to the Salesforce Transit Center

What if I told you that one of the most ambitious affordable housing projects in San Francisco is almost done — and it might actually change how we think about building homes for people who need them most?

Three hundred and thirty-five apartments. One hundred percent affordable. Seniors, families, formerly homeless residents — all of them steps from the Salesforce Transit Center, right in the heart of downtown.

We're talking about Transbay Block 2, and here's what caught my attention, Naomi. The senior building? Already finished. The family building? Concrete's rising. Retail spaces are hitting the market right now. And there's a childcare center baked into the ground floor.

This isn't your typical affordable housing project that turns its back on the street. They designed a pedestrian walkway, stoops, active corners — they're basically betting that affordable housing can make a neighborhood *better*, not just fill a gap.

So today — what's actually happening at Transbay Block 2, who's moving in, and could this be a model for the rest of the city? Stay with us.

Good morning, I'm Holden Carter.

And I'm Naomi Zhao. It is a big day on the show.

So, Naomi, if I say "Transbay Block 2" to you, what comes to mind?

Honestly? Construction cranes. Lots of construction cranes. That whole stretch south of the Salesforce Transit Center has been a hard-hat zone for what feels like forever.

Well, here's the thing — it's not just cranes anymore. We are talking about 335 brand-new affordable apartments going up on a single city block in San Francisco's East Cut neighborhood. One building for seniors, one for families. And as of right now, one of those buildings is done and the other is closing in fast.

And this isn't your typical affordable housing story. This project has a pedestrian walkway slicing through the middle of the block, a childcare center built right into the ground floor, retail spaces that are actively being leased out — like, right now, today. It is trying to be a neighborhood, not just a building.

Exactly. So here's what we're going to cover. First, we'll break down the two buildings — Block 2 West, the senior building led by Chinatown CDC, and Block 2 East, the family building from Mercy Housing California. Who's moving in, how many units, what the timeline actually looks like.

Then we're going to dig into the design, because the architects made some really deliberate choices about how this block meets the street. Stoops, retail corners, that mid-block mews — we'll explain why that matters.

We'll talk money — the layered financing stack, the tax credits, the state funding that made this pencil out.

And we'll look at what's happening around it — the Block 3 park, the new stretch of Clementina Street, the bigger vision for this district.

Because this isn't just about apartments. It's a test case for whether San Francisco can build affordable housing that actually makes a neighborhood better.

Big stakes. Let's get into it.

Okay, so to really understand what's happening at Transbay Block 2, we need to rewind. Because this land has a history. This whole area — we're talking about the blocks just south of the Salesforce Transit Center in SoMa — used to be part of the old Transbay Temporary Terminal. Remember that?

The bus depot. Yeah, basically a giant slab of concrete and diesel fumes for years while they built the new transit center above.

Exactly. So the city had this master plan — the Transbay Redevelopment Plan — to turn all of that former terminal land into a dense, transit-oriented neighborhood. New streets, new parks, mixed-income housing, the whole vision. And the agency managing that process is OCII — the Office of Community Investment and Infrastructure. They're the ones parceling out these blocks to developers.

And Block 2 specifically — where does it sit?

It's a full city block bounded by Beale, Folsom, Main, and what will be the extended Clementina Street corridor. So you're literally steps from BART, steps from Muni, steps from the Salesforce Transit Center rooftop park. It is arguably one of the most transit-connected sites in all of Northern California.

So who's actually building the apartments?

This is where it gets interesting. It's not one developer — it's two. The block is split into two separately financed buildings. Block 2 West, the senior building — 151 units — that's being led by Chinatown Community Development Center, CCDC. And Block 2 East, the family building — 184 units — that's Mercy Housing California. Together, 335 affordable rental apartments. And Naomi, I want to underscore this: one hundred percent affordable.

Not "includes an affordable component." Not "twenty percent set-aside." Every single unit.

Every single one. And within that, there are set-asides for people coming out of homelessness — 30 units in the senior building, 40 in the family building. That's 70 formerly homeless individuals and families getting permanent supportive housing in one of the most expensive zip codes in America. [PAUSE: 2s]

Okay, so how do you pay for something like this? Because 335 units of affordable housing in downtown San Francisco is not cheap.

It is not. And the financing is this layered stack that, honestly, is its own kind of engineering. Back in December 2023, the California Tax Credit Allocation Committee recommended about nine million dollars in annual federal Low-Income Housing Tax Credits just for the family building alone. On top of that, you've got state funds through the Affordable Housing and Sustainable Communities program, local gap loans from the city, and operating subsidies specifically for those supportive housing units. Malcolm Yeung, the executive director of Chinatown CDC, put it this way at the groundbreaking — he said, quote, "Our seniors deserve great design, transit, green space, and walkable neighborhoods."

And that groundbreaking was May 2024, right?

May 29th, 2024. Mayor Breed was there, state officials were there. She said these homes would "provide stability to seniors, low-income families, and formerly homeless individuals" while adding "vibrancy to downtown." Now, the key players beyond the developers — you've got Mithun and Kennerly Architecture on design, Swinerton handling construction on the senior side, and the whole thing is being shepherded through OCII's redevelopment framework.

So give me the timeline. When did shovels actually hit dirt?

Block 2 West, the senior building, broke ground around March 2024. Block 2 East, the family building, followed in June 2024. And the original city projections at groundbreaking were Block 2 West done by winter 2025, Block 2 East done by spring 2026.

Has that held?

Mostly. The senior building — multiple project team sources now list it as completed in 2025, which lines up with that winter target. The family building has slipped slightly — construction updates from late 2024 started saying "summer 2026" instead of spring. As of the most recent reporting, concrete is rising, the structure is taking shape, but we're looking at a few extra months.

Which honestly, for a project this size and this complex, a couple months of slippage is almost miraculous by San Francisco standards.

That is a fair point. And there's a reason this matters beyond just the unit count — it's what's happening at street level. But we're going to get into that design piece next.

Alright, let's get into the details here because this project is bigger and more interesting than the headline suggests. Transbay Block 2. We're talking about an entire city block in San Francisco's East Cut neighborhood, just south of the Salesforce Transit Center, and it's being transformed into 335 affordable rental apartments. Not market rate. One hundred percent affordable.

And this isn't one building. It's two. Block 2 West is the senior building, 151 apartments, led by Chinatown Community Development Center. Block 2 East is the family building, 184 apartments, led by Mercy Housing California. Two different developers, two different financing stacks, one shared city block.

So where do things stand right now? Block 2 West, the senior building, is done. Completed in 2025, right on schedule with the city's winter 2025 target. Clark Pacific, one of the major suppliers on that project, lists the year completed as 2025. That building is built, it's finished, seniors are moving in.

Block 2 East, the family building, that's the one still going up. And the timeline has shifted a little. At the groundbreaking back in May 2024, the city was projecting spring 2026. By December 2024, SF YIMBY reported the building was about twenty percent complete, and the schedule language had shifted to "potentially by summer 2026." So we're looking at a few months of slippage, which honestly for a project this complex is not unusual at all.

And as of late May 2025, concrete was actively rising on the family building. So this is not a stalled project. This is a project that's moving.

Now here's what I want people to understand about who these apartments are for, because the numbers tell a really important story. Of those 151 senior units, thirty are reserved for seniors who have experienced homelessness. Of the 184 family units, forty are set aside for families coming out of homelessness. So we're talking about seventy permanent supportive housing units woven into a broader affordable housing community, steps from BART, steps from Muni, in the heart of downtown San Francisco.

Malcolm Yeung, the executive director of Chinatown CDC, put it simply at the groundbreaking. He said, quote, "Our seniors deserve great design, transit, green space, and walkable neighborhoods." And that's the philosophy driving this whole thing.

Which brings us to what I think is the most underappreciated part of this project, Holden, and that's the design.

Yeah, talk about that.

So there's a real problem with a lot of affordable housing in this country, right? You get these buildings that are basically blank walls at street level. Dead zones. No foot traffic, no retail, no life. The architects on Block 2 made a very deliberate choice to program the ground floor like it's a neighborhood, not an institution. You've got a mid-block pedestrian mews, basically a public walkway cutting through the block, connecting out toward the planned Block 3 Park. You've got retail corners. You've got stoops and townhome-style frontages on parts of the building. And then there's the childcare center.

The childcare center is huge. About sixty-four hundred square feet, integrated right into the family building's ground floor at the corner of the mews and Clementina Street. And the play areas are designed to face the mews, so you've got kids playing, parents coming and going. That's daily foot traffic. That's eyes on the street. [SFX: DRAMATIC_STING]

And this is where it gets real. The retail spaces aren't theoretical anymore. LoopNet listings show ground-floor commercial space at 200 Folsom with availability starting March 1, 2026. They're actively marketing these to community-serving tenants right now. This block is transitioning from construction site to living neighborhood in real time.

Let's talk money for a second because affordable housing at this scale doesn't just happen. The financing on Block 2 East alone, the family building, included a recommendation from the California Tax Credit Allocation Committee for roughly nine million dollars in annual federal Low-Income Housing Tax Credits. That was back in December 2023. On top of that, you've got state Affordable Housing and Sustainable Communities funding, local gap loans from the city, and operating subsidies for the supportive housing units.

It's a layer cake of public financing. And the entity overseeing all of this on the city side is OCII, the Office of Community Investment and Infrastructure. They're the ones managing the disposition of these old Transbay redevelopment parcels and making sure the public interest is protected throughout the process.

And then there's the infrastructure piece that most people don't even think about. In April 2025, SF Public Works started installing new sewer mains for the Clementina Street extension right in front of the Block 2 site. That's not glamorous, but it's essential. You can't have the pedestrian mews, you can't connect to Block 3 Park, you can't build the living street network without the pipes in the ground first.

Right. And that's what makes this more than just an apartment building. The city is building a new piece of urban fabric here. A park next door, new streets, pedestrian connections, ground-floor childcare and shops. It's an attempt to prove that affordable housing can be the thing that makes a neighborhood better, not just denser.

Now the big question hanging over all of this is execution. Can the family building actually hit that summer 2026 completion window? There are always risks with projects this large, procurement delays, utility coordination, permitting. The timeline has already drifted a few months.

But the trajectory is positive. Concrete is going up. Retail is being marketed. The senior building delivered on time. And the surrounding infrastructure work is happening in parallel. If Block 2 East opens by late summer, you're looking at 335 affordable homes occupied and a whole new block of the city coming alive by the end of this year.

Three hundred and thirty-five homes. Seventy of them for people coming out of homelessness. Childcare for the neighborhood. Retail that serves the community. All of it next to one of the best transit hubs on the West Coast.

That's the bet San Francisco is making with Transbay Block 2. And right now, from everything we can see, it's a bet that's paying off.

Okay, so we've laid out the facts. Now let's get into what this actually means. Because I think Transbay Block 2 is one of those projects that's either a genuine blueprint for how cities should build affordable housing—or it's a really expensive experiment that's going to be very hard to replicate. And I keep going back and forth.

I'm right there with you. So let me start with the bull case, because I think it's strong. You've got 335 affordable apartments sitting on top of one of the best transit nodes in the western United States. BART, Muni, the Salesforce Transit Center right there. That is textbook smart growth. You are putting low-income families and seniors exactly where the infrastructure already exists to support them—without needing a car, without long commutes, without being pushed out to the exurbs where services are thin.

And that's the thing housing advocates have been screaming about for decades, right? We say we want affordable housing near transit. We say we want inclusive neighborhoods. Well, here it is. This is what it looks like when you actually do it.

Exactly. And I think the design intentionality is what separates Block 2 from a lot of affordable housing projects that have come before it. Because let's be honest—there is a long, painful history of affordable housing that gets built and then just sits there like a fortress. Blank walls. Dead sidewalks. No retail. No reason for anyone who doesn't live there to ever walk by.

The superblock problem.

The superblock problem! And Block 2 is very deliberately trying to break that pattern. You've got the pedestrian mews cutting through the middle of the block. You've got stoops and townhome-style frontages. You've got that sixty-four-hundred-square-foot childcare center with play areas that open onto the paseo. You've got retail corners being actively leased right now. The whole idea is: this building has to give something back to the street.

So here's where I want to push back a little—not on the design philosophy, because I think it's great. But on the scalability question. This project required low-income housing tax credits, state AHSC funding, local gap loans, operating subsidies for the supportive units—we're talking about a financing stack that probably has seven or eight layers. Is that replicable?

That is the question. And honestly? Probably not at scale. Not without significant policy changes. Each one of those 335 units required an enormous amount of public subsidy and coordination across federal, state, and local agencies. The tax credit allocation alone was over nine million dollars annually for just the family building.

Nine million a year in federal tax credits for one building.

For one of the two buildings. And look, that money is well spent—I'm not arguing it isn't. But when San Francisco needs tens of thousands of affordable units and each project takes this level of financial engineering, you start to see the structural problem. [PAUSE: 2s]

Right. And then there's the timeline issue. Groundbreaking was May 2024. The senior building hit its winter 2025 target, which—credit where it's due—that's impressive for San Francisco. But the family building has already slipped from spring 2026 to summer 2026, and we're sitting here in March with it still under construction.

A few months of slippage on a twenty-five-month construction schedule is honestly pretty normal. I wouldn't ding them too hard on that. But it does underscore how long these projects take from conception to keys-in-hand. The tax credit application was December 2023. The groundbreaking was mid-2024. First residents won't move into the family building until late summer at the earliest. That's nearly three years from financing to occupancy.

And that's actually fast by affordable housing standards.

That is fast! Which tells you everything about the system.

Okay, let me raise another angle. Downtown San Francisco. This neighborhood—the East Cut—it's been struggling with vacancy, with foot traffic, with the whole post-pandemic office question. What does dropping 335 affordable households into that mix actually do?

I think this is the underappreciated part of the story. Downtown doesn't just need office workers to come back. It needs residents. Period. People who are there at seven AM and seven PM. People whose kids go to childcare on the ground floor. People who need a coffee shop, a grocery run, a haircut. Block 2 is adding permanent population to a district that desperately needs it. And the fact that the retail spaces are being marketed right now with community-serving requirements—that tells me someone is thinking about this as neighborhood building, not just unit production.

So your read is this is actually good for downtown recovery, not separate from it.

I think it's essential to it. You cannot have a thriving urban core that's only activated from nine to five by office workers. You need the full ecosystem. And affordable housing residents are some of the most reliable neighborhood participants because they're there. Every day. They're not commuting in from Walnut Creek three days a week.

That's a really sharp point. And it ties back to something Malcolm Yeung from Chinatown CDC said—that seniors deserve great design, transit, green space, walkable neighborhoods. That's not charity. That's just good urbanism.

It's good urbanism that happens to also be the right thing to do. And if Block 2 delivers on that promise—if the mews actually becomes a place people walk through, if the childcare center fills up, if the retail corners get good tenants—then yeah, this becomes a model. An expensive model. A complicated model. But a model that other cities are going to study very closely.

Okay, so let's get practical. If you're listening in San Francisco right now, what does Transbay Block 2 actually mean for you?

Right, let's break it down by who you are. Number one — if you're a low-income senior or a family looking for affordable housing, pay attention. The senior building is done. One hundred fifty-one units. And the family building with 184 units should be opening this summer. That means lease-up processes are either happening now or about to start.

And these are income-restricted rentals, so you'd apply through the city's affordable housing channels — not Zillow, not Craigslist.

Exactly. Check DAHLIA, San Francisco's housing portal. That's your starting point. And remember, seventy of those units across both buildings are specifically reserved for people who've experienced homelessness, so if you're connected with a case manager or a service provider, ask them about referrals.

What about if you're a small business owner?

Great question. Ground-floor retail spaces are actively being marketed right now. Listings are already up on LoopNet with availability dates as early as March 2026. The catch — and this is important — they want community-serving uses. So think café, grocery, services, not a vape shop.

And for parents — childcare. There's a sixty-four-hundred-square-foot childcare center built right into the family building.

Which in a city where waitlists for daycare can stretch over a year, that is a big deal. Keep your eye on announcements about which operator will run that space.

And honestly, even if none of that applies to you directly — if you live in SoMa, if you work downtown, if you walk through the East Cut — this changes your neighborhood. New pedestrian mews, a park coming next door on Block 3, more foot traffic, more eyes on the street.

The bottom line? Don't sleep on this. Whether you need housing, want retail space, or just care about what downtown San Francisco looks like going forward — this is the moment to plug in.

Alright, rapid fire — let's rip through the Transbay Block 2 updates. Senior building, Block 2 West — 151 units, done, completed 2025, residents moving in, Chinatown CDC delivered on time.

Block 2 East, the family building — 184 units from Mercy Housing, concrete's rising, targeting summer 2026 completion, slight slip from that original spring window.

Seventy of those 335 total apartments are set aside for people coming out of homelessness — 30 for seniors, 40 for families.

Ground-floor retail spaces are now actively on the market — LoopNet listings show availability as of March first this year, so they're looking for tenants right now.

There's a sixty-four-hundred-square-foot childcare center built into the family building's podium, opening right onto that new pedestrian mews.

And speaking of that mews — SF Public Works started sewer mains on Clementina Street last April, which is the enabling infrastructure connecting Block 2 to the future Block 3 park next door.

And the money behind all this — over nine million in annual federal low-income housing tax credits backing the family building alone. Layers on layers of financing. Okay, let's wrap this up.

Alright, that is going to do it for today's show. Three hundred and thirty-five affordable homes going up steps from the Salesforce Transit Center — seniors moving in, families on the way this summer, childcare, retail, a pedestrian mews — Transbay Block 2 is one to watch.

And honestly, one to walk through once it's all open. That ground-floor activation could be a model for the whole neighborhood.

Agreed. We're Holden Carter and Naomi Zhao. Thanks for spending your morning with us. We'll see you right back here tomorrow.

Have a good one, everybody.