300 De Haro Street: SF's Biggest Affordable Groundbreaking in Years

Four hundred and twenty-five apartments. Eleven stories. One hundred percent affordable. And here's the kicker — it wasn't supposed to be affordable at all.

Right, this started as a market-rate project. Then the developers looked at the math, looked at the interest rates, looked at investors literally red-lining San Francisco — and they flipped the entire playbook.

Three hundred De Haro Street in Potrero Hill. Ground broke last August. Cranes are up right now. And if everything holds, four hundred and twenty-five studios open to working San Franciscans by summer 2027.

We're talking teachers, baristas, nurses — people earning thirty to seventy percent of area median income getting brand-new housing on one of the most expensive patches of dirt in America. [PAUSE: 2s]

So today we're pulling this thing apart. The financing, the state law that made it possible, the architects, the neighborhood politics — all of it. How did they make it pencil when nobody else could?

That's the show. Let's get into it.

Good morning, I'm Holden Carter.

And I'm Naomi Zhao. Welcome to the show.

Okay, Naomi, today we are going deep on one building. One address. 300 De Haro Street, San Francisco. An eleven-story, 425-unit affordable housing tower that just broke ground last August on a tiny triangular lot at the edge of Potrero Hill.

And when we say affordable, we mean one hundred percent affordable. Every single unit. In a city where market-rate developers have basically frozen in place because the math doesn't work anymore. This project found a way to make the math work.

The team behind it — DM Development, led by Mark MacDonald, partnering with MRK Partners on the development side. BAR Architects drew it up. Thompson Builders got the hundred-and-seven-million-dollar construction contract. And the whole thing is targeting a summer 2027 delivery. That's less than two years from dirt to doors open.

Which is wild for San Francisco. A city where getting a permit can take longer than building the actual structure.

So here's what we're covering today. We're going to walk through how this project actually got built — the financing, the state law that made it possible, the design choices. We'll talk about what it means for Potrero Hill to suddenly absorb 425 new households. And we're going to ask the bigger question: is this a one-off, or is this actually a repeatable playbook for a city that desperately needs housing?

We'll get into the SB 35 streamlining angle, because that's where this story gets really interesting — and really contentious. We'll look at the capital stack, the neighborhood reaction, and the architecture. There's a lot packed in here.

MacDonald said it himself at the groundbreaking — quote — "This is more than just housing. It's about opportunity for the young workers, service professionals and middle-income earners who are vital to our city."

Big words. We're going to find out if the project lives up to them.

Let's get into it.

Okay, so to really understand why this project matters, we need to rewind. Because 300 De Haro Street did not start as an affordable housing project.

Wait, it didn't?

No. This thing originally came into the world as a market-rate concept. Some versions were mixed-income, some were pitched as group housing. The permit application goes all the way back to July 2021. And for years, it just sat there in the pipeline, like so many projects in San Francisco, waiting for the math to work.

And the math stopped working because—

Because everything broke at once. You had COVID scaring off institutional investors. Mark MacDonald, the CEO of DM Development, said it himself at the groundbreaking — quote — "First, we had COVID that scared away a lot of institutional investors, and they simply red-lined San Francisco." Then you stack rising interest rates on top of that, construction costs going haywire, and suddenly nobody's writing checks for market-rate apartments in SF. Starts just froze.

So how do you go from a stalled market-rate project to one of the biggest affordable housing groundbreakings in the city in years?

You flip the entire financial model. And that's exactly what DM Development and their partners MRK Partners did. They looked at this triangular little parcel — it's about six-tenths of an acre, corner of De Haro and 16th Street — and they said, okay, if private equity won't touch San Francisco right now, what money IS available? And the answer was federal low-income housing tax credits and California tax-exempt bonds.

So public financing essentially replaced the private capital that had dried up.

Exactly. And the numbers are wild. In December 2024, the state — through CTCAC and CDLAC — recommended nearly six point seven four million dollars in annual federal tax credits and a hundred and one point seven million dollars in tax-exempt bond cap for this project. CalHFA is the bond issuer. Citibank is the private placement purchaser. Orrick is bond counsel. R4 Capital is the investor consultant. WinnResidential is managing the thing once people move in.

That is a deep bench of institutional players for an affordable project.

It is. And that's the point — this isn't some scrappy nonprofit scrambling for grants. This is a sophisticated capital stack engineered to actually pencil when nothing else would.

Okay, but money alone doesn't get you out of the ground. San Francisco is famous for killing projects in the entitlement process.

And that's lever number two. SB 35. [SFX: DRAMATIC_STING] California's ministerial streamlining law. If your project meets certain criteria — right zoning, includes affordable housing, pays prevailing wage — the city essentially has to approve it. No discretionary review. No years of neighborhood hearings. No appeals to the Board of Supervisors.

Which is a huge deal in a city where projects have historically died by a thousand community meetings.

Massive. The permit was issued March 28th, 2025. By late July, Thompson Builders had the hundred-and-seven-million-dollar construction contract in hand. August 25th, shovels in the ground. For San Francisco? That is lightning speed.

So what's lever number three? You said there were three things that made this work.

The building program itself. BAR Architects designed this as four hundred and twenty-five compact studios. Not a mix of ones and twos and threes. Studios. With Murphy beds, shared amenities, a second-floor courtyard podium, a roof deck. The idea is you maximize unit count on a small site, and you make the common spaces do the heavy lifting for livability.

And the design isn't trying to scream "affordable housing" either, right?

No. BAR is explicitly referencing the industrial character of Showplace Square — punched window openings, durable materials. They want this to read as a permanent neighborhood building, not temporary subsidized stock.

Okay so let's talk about the neighborhood for a second, because Potrero Hill is not exactly used to eleven-story towers.

No, it's not. And this is where the tension lives. The site is right at that seam between Potrero Hill and Showplace Square. It's close to transit, close to job centers, but it's also landing in a part of the city that's already in the middle of massive change. You've got the HOPE SF Potrero Terrace and Annex redevelopment happening in phases nearby. And now you're dropping four hundred and twenty-five new households — deed-restricted at thirty to seventy percent of area median income — into that mix.

That's a lot of new neighbors all at once.

It is. And the Summer 2027 target delivery means this isn't theoretical anymore. Foundation work is already underway. Cranes are going up. This building is coming, and the neighborhood is going to have to reckon with what that means — for transit, for services, for the character of the blocks around it.

Alright, let's get into the main event. 300 De Haro Street. This is a project that, on paper, probably shouldn't exist right now. And yet, as we speak, there's a crane in the sky over Potrero Hill and foundation work is well underway. So let's break down exactly how this happened. Naomi, set the scene for us. What are we actually looking at here?

Okay. So picture this triangular corner parcel, about six-tenths of an acre, right where De Haro Street meets 16th Street. That seam between Potrero Hill and Showplace Square. And rising from that little triangle? An eleven-story, four-hundred-and-twenty-five-unit, one hundred percent affordable housing tower. All studios. Ground-floor retail. Second-floor courtyard podium. Roof deck. And a target to have people living there by summer 2027.

Four hundred and twenty-five affordable units. In San Francisco. Where market-rate developers have basically been sitting on their hands because the numbers don't work. How did this team crack the code?

So the development team is DM Development, led by Mark MacDonald, partnered with MRK Partners. BAR Architects did the design. Thompson Builders is the general contractor with a hundred-and-seven-million-dollar construction contract. And the answer to your question really comes down to three moves that all had to work together.

Walk us through them.

Move number one: SB 35. California's ministerial streamlining law. This is the state law that says if your project meets certain criteria, including affordability requirements, the city cannot subject you to the usual discretionary review gauntlet. No lengthy planning commission hearings. No conditional use permits. No years of neighborhood back-and-forth. You meet the checklist, you get your approval. Period. And that matters enormously in San Francisco, where entitlement timelines have historically killed projects through sheer holding costs.

So they took the discretionary risk off the table entirely.

Exactly. The permit application was filed back in July 2021. The building permit was issued March 28, 2025. Now, that's still almost four years, which tells you something about even the "streamlined" process. But compare that to projects that have spent a decade in review and never broken ground? This is a different universe.

Okay, move number two.

The capital stack. And this is where it gets really interesting. This project originally started life as a market-rate concept. Earlier versions had it as mixed-income group housing. But post-2022, with interest rates spiking and institutional investors literally red-lining San Francisco, the conventional financing just evaporated.

Mark MacDonald actually said that explicitly at the groundbreaking. Quote: "First, we had COVID that scared away a lot of institutional investors, and they simply red-lined San Francisco. That's changing now." End quote.

Right. So instead of waiting for the market to come back, this team restructured the entire deal into a fully affordable, tax-credit and bond-financed project. [SFX: DRAMATIC_STING]

And the numbers here are stunning, Holden. The state CTCAC-CDLAC staff report from December 2024 recommended six-point-seven million dollars in annual federal low-income housing tax credits and a hundred-and-one-point-seven million in tax-exempt bond cap. CalHFA is the bond issuer. Citibank is the private placement purchaser. R4 Capital is the tax credit investor. Orrick is bond counsel. WinnResidential will manage the property. This is not a scrappy little deal. This is a sophisticated institutional capital stack that just happens to produce affordable housing instead of luxury condos.

So they basically said, the market won't finance market-rate right now, but the subsidy infrastructure will finance affordable at scale. Let's go where the capital is.

That's the playbook. And it's why people in development circles are watching this so closely. It's a proof point. When the traditional equity and debt markets freeze, you can pivot to LIHTC and tax-exempt bonds and actually build.

And move number three?

The building program itself. Four hundred and twenty-five compact studios. Some with Murphy beds. The idea is you maximize unit count, keep construction efficient and repeatable floor to floor, and then you invest heavily in shared amenity spaces. BAR Architects designed the building to reference the industrial character of Showplace Square. Think punched window openings, durable materials, a building that reads as permanent neighborhood architecture, not what people sometimes picture when they hear "affordable housing."

Now, I want to pause on the affordability targeting because this matters for who actually lives here. What are we talking about?

Deed-restricted for households earning between thirty and seventy percent of area median income. Some sources cite up to eighty percent AMI. But the center of gravity is around sixty percent, which is what people call "workforce" affordability. Think your baristas, your teaching assistants, your home health aides. MacDonald said it at the groundbreaking: "This is more than just housing. It's about opportunity for the young workers, service professionals, and middle-income earners who are vital to our city."

Okay. Now let's talk about the neighborhood reaction because eleven stories on Potrero Hill is not nothing.

No, it is not. And this is where SB 35 cuts both ways. The same streamlining that made the project feasible also meant limited formal community input. Some Potrero Hill residents have pushed back on the height, the density, the micro-unit format. There are real questions about whether compact studios serve families or just single young professionals. And there's a philosophical tension: do neighbors get a say in what gets built, even when the city desperately needs the housing?

And this doesn't exist in a vacuum on Potrero Hill either, right?

Not at all. The HOPE SF Potrero Terrace and Annex redevelopment is happening in phases just nearby. You're looking at a whole swath of southeastern San Francisco that is fundamentally transforming this decade. Which raises legitimate infrastructure questions. Transit capacity, grocery access, school seats, all of it. Four hundred and twenty-five new households is a small neighborhood unto itself.

So where does construction stand right now?

As of the most recent field reports in January 2026, foundation work is underway and crane segments are going up. The publicly stated delivery is still summer 2027. That means 2026 is the critical year for structural work and building enclosure. The risks from here are the usual suspects: labor availability, materials pricing, inspection and utility coordination. But so far, they're on schedule. [PAUSE: 2s]

A hundred-and-seven-million-dollar bet that affordable housing can go big in San Francisco. We'll be watching that crane.

Okay, so we've walked through how this thing got built — the financing, the SB 35 pathway, the design choices. Now I want to zoom out and ask the bigger question. What does 300 De Haro actually *mean*? Not just for Potrero Hill, but for how San Francisco builds housing going forward?

Right, because this is either a one-off — a clever team threading the needle at exactly the right moment — or it's a genuine template. And I think the answer to that question depends entirely on which lens you're looking through.

So let's start with the pro-housing, state-policy lens. Because if you're sitting in Sacramento, this project is your victory lap.

One hundred percent. SB 35 was designed to do exactly this — to say to cities, "If you're not meeting your housing targets, we're going to let qualifying projects skip the discretionary review gauntlet." And for years, the criticism was that SB 35 looked great on paper but wasn't actually producing buildings. Well, 300 De Haro is a building. Four hundred twenty-five units. A crane in the air. Foundation poured. CoStar literally called it an SB 35 "test case." And here's the thing — it worked *specifically because* the conventional market failed.

That's the irony, right? Market-rate construction stalled. Institutional investors redlined San Francisco after COVID. Interest rates spiked. And into that vacuum stepped — of all things — an affordable housing project.

Which flips the normal narrative completely on its head. Usually affordable housing is the thing that can't get built because it can't compete with market-rate projects for sites, for capital, for contractor attention. Here, the affordable deal was the *only* deal that could pencil. A hundred and one million in tax-exempt bonds, six point seven million in annual tax credits — that's a capital stack that doesn't care what the Fed funds rate is doing.

So from that perspective, this is proof of concept. The playbook works.

But — and this is a big but — does it scale? Because the tax credit and bond allocation process runs through CDLAC and CTCAC in Sacramento. There is a finite pool. Every dollar that went to 300 De Haro is a dollar that didn't go to a project in Fresno or San Bernardino or LA. You can't just replicate this four hundred times across San Francisco.

That's the development economics critique. Mark MacDonald's team was brilliant at capital stack engineering, but they were also competing in what is essentially a zero-sum allocation game.

Exactly. And there's a philosophical tension baked in here. This project serves thirty to seventy percent AMI — some reports say up to eighty percent. That's real affordability. But it's four hundred twenty-five studios. Compact studios. Murphy beds. Shared amenity spaces doing the heavy lifting for livability. The question some people are asking — and I think it's a fair question — is whether this is actually great housing, or whether it's the *maximum amount* of housing you can squeeze into a financing formula.

BAR Architects would push back on that hard.

They would, and they do. Their whole design argument is that livability isn't just about private square footage. It's about the second-floor courtyard, the roof deck, the programming in common spaces, the ground-floor retail that makes the street feel alive. They deliberately referenced the industrial character of Showplace Square — punched openings, durable materials. They're saying, "This is a permanent neighborhood building, not a warehouse for people."

And I think that argument has merit. But it also hasn't been tested yet. We won't know if that thesis holds until four hundred twenty-five people are actually living there.

Which brings us to the neighborhood perspective, because this is where it gets really contentious. [PAUSE: 2s]

Potrero Hill. Eleven stories. On a triangular half-acre parcel. In a neighborhood where the existing context is — what, three, four stories mostly?

Right. And because this went through SB 35, the normal discretionary process — the community meetings, the planning commission hearings, the opportunity for neighbors to shape the project — that was dramatically compressed. Some Potrero Hill residents feel like this was done *to* them rather than *with* them.

And you can hold two things in your head at once here. The city desperately needs housing. Four hundred twenty-five affordable units is unambiguously good for people who will live there. AND neighbors have a legitimate emotional response to an eleven-story tower appearing with minimal input.

That's the SB 35 bargain in a nutshell. Speed and certainty for the developer. Less voice for the neighborhood. And whether you think that's a fair trade depends on whether you believe decades of neighborhood process produced good outcomes or just produced obstruction. [SFX: DRAMATIC_STING]

Here's what I keep coming back to, though. This project lands in the same decade as the HOPE SF Potrero Terrace and Annex redevelopment. You're talking about potentially thousands of new residents in southeastern San Francisco. What about transit? What about schools? What about the grocery situation?

Infrastructure is the sleeper issue. Four hundred twenty-five units of housing is a policy win. Four hundred twenty-five units of housing without corresponding investment in buses and sidewalks and clinics is a setup for the next round of neighborhood backlash.

And that backlash could poison the well for the *next* SB 35 project.

Which is why 300 De Haro matters so much beyond its own footprint. If this building opens in summer 2027 and it works — if the residents thrive, if the retail activates the street, if the architecture ages well — it becomes the proof point that unlocks the next generation of projects. If it stumbles, the critics get their "I told you so" and the political coalition for streamlining gets weaker.

So the stakes are not just four hundred twenty-five units. The stakes are the entire model.

That's exactly right. This is a pilot program wearing the clothes of a building. And everybody's watching.

Okay, so let's bring this home. You're listening right now, maybe you're commuting through the city, maybe you're a renter, maybe you're someone who works in development. What does 300 De Haro actually mean for you?

Let's start with the most direct impact. If you earn between thirty and seventy percent of area median income — we're talking roughly forty to eighty thousand dollars a year in San Francisco — this building is literally being built for you. Four hundred and twenty-five studios, deed-restricted, managed by WinnResidential. Leasing activity could start as early as late 2026, with move-ins targeted for summer 2027.

So if that's your income bracket, bookmark the project site — 300deharostreet.com — and start watching for application announcements.

Now, broader takeaway number two. If you're a developer, a policy wonk, anyone who's been told "it doesn't pencil" in San Francisco — study this capital stack. Tax credits, tax-exempt bonds, SB 35 streamlining. This team showed that when market-rate finance dries up, there's a viable alternative pathway. It's not easy. It took them from 2021 to 2025 just to get from permit application to groundbreaking. But it worked.

And takeaway three — this is the neighborhood one. If you live on Potrero Hill or in Showplace Square, four hundred and twenty-five new residents plus ground-floor retail is coming to De Haro and Sixteenth. That's real. That changes foot traffic, transit demand, the customer base for local businesses.

And it's not happening in isolation. The HOPE SF Potrero Terrace and Annex redevelopment is moving through its own phases nearby. Southeastern San Francisco is being fundamentally reshaped this decade. [PAUSE: 2s]

The last thing I'd say — and this is for everyone — watch whether this model gets replicated. If 300 De Haro delivers on time, on budget, and residents actually thrive in those compact studios with shared amenities, expect other developers to run this same playbook across the Bay Area. If it stumbles, the skeptics get louder.

It's a proof of concept in real time. The crane is up, the foundation is poured, and the clock is ticking toward summer 2027.

Alright, rapid fire — let's rip through the key numbers on 300 De Haro. Thompson Builders locked in a hundred-and-seven-million-dollar construction contract back in July 2025.

The state allocated over a hundred-and-one million in tax-exempt bond cap plus nearly six-point-seven-million in annual federal tax credits to make this thing pencil.

Citibank came in as the private placement bond purchaser, with CalHFA issuing and R4 Capital on the investor side.

The permit application sat in the system from July 2021 — didn't actually get issued until March 28th, 2025. Almost four years.

Foundation work and crane installation were already visible by January 2026, so they are moving.

And WinnResidential is the named management agent, meaning they're already planning operations for four-hundred-and-twenty-five studios before the walls are even up.

All of it targeting thirty to seventy percent AMI — in a city where market-rate starts basically flatlined. That's the scoreboard, folks.

Alright, that is going to do it for today's deep dive into 300 De Haro Street. Four hundred twenty-five units, eleven stories, summer 2027 — we'll be watching that crane on Potrero Hill.

And if you take one thing away from this episode, it's that the playbook is changing. SB 35, tax credits, bond financing — this is how housing actually gets built in San Francisco right now. Not theory. Steel in the ground.

We want to hear from you. Are you following this project? Do you live in Potrero Hill? Drop us a line — we read everything.

Thanks for spending your morning with us.

I'm Holden Carter.

I'm Naomi Zhao.

We'll see you tomorrow.