Fate of development incentives on hold until February

San Francisco needs more below–market–rate homes, but enticing developers to build such units in exchange for increased height limits and density is not necessarily the black–and–white answer.

Such was the sentiment of the Planning Commission, which weighed in for the second time on the Affordable Housing Bonus Program on Thursday after hearing hours of public comment both that urged the program to move forward and demanded it be scrapped entirely.

Prior to the meeting, Supervisor David Campos rallied with supporters in front of City Hall to call for the rejection of the program, arguing it will lead to displacement. The commission ultimately voted 4–2 to continue the item to Feb. 25, more than a month earlier than the April date recommended by staff.

The program would provide incentives for developers of projects with at least five units, primarily in areas zoned as neighborhood commercial districts, to build at least 30 percent of the units as below–market–rate. In return, developers could build up to two additional stories as well as other incentives.

The program, designed as a planning code amendment, would apply to more than 30,000 parcels in San Francisco. City planners have estimated the program could bring add 5,000 below-market–rate homes to San Francisco’s housing stock in the next two decades.

“This particular program fits into … ‘How do we produce more permanently affordable housing?’” said Gil Kelley, director of citywide planning. “This is not meant to be in response to the entire affordable-housing crisis, but one in a suite of tools.”

Currently, projects with at least 10 units must either include 12 percent of the units as below market- rate, build 20 percent of below–market–rate homes off-site or pay a fee.

The program would not apply to developers that opt to pay a fee or build below-market–rate homes off-site in lieu of the on-site housing. Projects that remove any rent–controlled homes from the market would also be exempt from the program, as well as those that demolish a historic structure or cause significant shadow impacts on public parks.

The program would also establish The City’s first permanent source of middle–income housing, defined as households that earn 120 to 140 percent of the area median income (AMI), which in 2015 was $85,600 to $99,900 for one person.

That means that, in addition to the 12 percent of homes available to moderate-income households — those that earn 55 percent of the AMI for rentals and 90 percent for homeownership — developers that include 18 percent of homes for middle–income homes would receive the density bonus.

Commissioner Rich Hillis noted that while city planners have been challenged to find ways to increase below–market–rate housing, some of the 30,000 parcels that have been identified as pertinent to the program are actually more feasible than others for taller buildings and increased density, like vacant lots and unused gas stations.

“I don’t believe [the program] works on every site,” Hillis said. “There isn’t this one-size-fits-all approach.”

Commission President Rodney Fong said he “identifies” with both those who support and oppose the program, but that ultimately more below–market–rate housing is needed. He said exempting projects that demolish rent–controlled units was a start, and questioned whether planners had explored exempting projects that demolish any housing units.

“The City is changing, the population growth is growing, we’re going to be bigger. … The worst thing we can do for San Francisco is not build anymore housing,” Fong said, adding, “[There are] things I’d like to see thought about, kicked around a little more.”

Commissioner Kathrin Moore and Vice President Cindy Wu, who were the dissenting votes to continue the item, both asked for more overall clarity surrounding the program.

“The more I spend dedicating clear-headed time to this particular program, the more confused I get,” Moore said.

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