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Proposed market-rate density bonus program revived in SF

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As The City is placing a greater emphasis on subsidized workforce housing, Supervisor Katy Tang is leading a revived effort for market-rate development in San Francisco. (Jessica Christian/S.F. Examiner)
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San Francisco legislators have revived a proposal to grant a density bonus to developers who provide more than the required affordable housing as The City is also discussing how to adjust below-market-rate development requirements overall.

The debate comes as The City is placing a greater emphasis on encouraging subsidized middle-
income, or workforce housing.

Last year, the Board of Supervisors approved a density bonus program for 100 percent affordable housing projects, but postponed a decision on providing such a bonus for market-rate development amid concerns over impacts to neighborhoods.

But Monday, the board’s Land Use and Transportation Committee held the first hearing on a revived effort for market-rate development, which Supervisor Katy Tang is leading.

The proposal’s revival, however, didn’t mean it sailed through. Tang made several amendments to the legislation and said it would “sit in committee for some time for public discussion.”

One amendment officially named the proposal Home SF, potentially making it more politically appealing.

The program would grant developers an additional 20 feet in height if they provide 30 percent of the units as below-market-rate. The City’s current voter-approved requirement is 25 percent, of which 15 percent is for low-income and 10 percent for middle-income.

Proposed changes to the inclusionary affordable housing requirements are set to go before the Planning Commission on Thursday, where there are dueling proposals to amend them, one from Supervisor Ahsha Safai and board President London Breed and the other from supervisors Jane Kim and Aaron Peskin.

Safai’s proposal, for example, calls for 18 percent of affordable housing and then divides that up equally in low, moderate and middle incomes for large rental developments. Kim’s proposal sets the rate at 24 percent, and keeps 15 percent low-income and the remaining 9 percent for middle-income.

Tang amended the proposal to match the income levels in Safai’s proposal so that 30 percent of the below market-rate units are distributed evenly among those earning 55 percent area median income, 80 percent area median income and 110 percent area median income.

“Our city really does not invest any dollars into housing that support our middle-income and our workforce households and families here,” Tang said. “That is how we came up with a local program to incentivize development of 30 percent affordable housing in market-rate projects.”

Tang also made amendments to encourage units with three or more bedrooms, placing larger units on all floors and near open spaces or play yards, and family-friendly amenities like bathtubs, stroller storage and open space.

Moe Jamil, head of the Middle Polk Neighborhood Association, recommended further limiting sites that could qualify for a density bonus. “Limiting the program to large lots [over 18,000 square feet], parking lots/garages and gas/service stations would allow The City to add more housing to the [Neighborhood Commercial District] where appropriate without causing massive disruption to The City’s neighborhoods and small businesses,” Jamil wrote in a March 12 letter to board members.

Jamil also sought more commercial business protections such as a ban on lots with a “legacy business” and a boost in affordable housing to 40 percent.

Kristy Wang, of public policy think tank SPUR, praised the proposal for encouraging “housing in the right places, by transit, but also … getting into some of the neighborhoods where there have been sites that have been underutilized or unused and we think that we can use them better.”

“This is a fairly targeted program,” Wang said. “It is not going to transform The City overnight.”

But Supervisor Aaron Peskin said he had concerns about applying the program to the district he represents, which includes North Beach, Chinatown and Polk Street, given the existing density there.

“I want to reiterate some of the concerns that I expressed the last time we had this relative to ensuring that density is equitably distributed geographically. I do have concerns relative to District 3,” Peskin said to Tang. “I hope to work through those issues with you over the months ahead.”

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