San Francisco Supervisor Hillary Ronen on Tuesday proposed legislation that aims to close loopholes in The City’s planning code that affect desperately needed affordable housing.
Currently, market rate home developers in The City are required to choose one of several options under the Inclusionary Housing Program to mitigate impacts on the housing market, including paying an affordable housing fee, building on-site or new off-site affordable units, or dedicating land for affordable housing constriction.
For on-site below market rate units, or BMRs, developers must typically match the tenure of the rest of the building, with rental BMRs in rental buildings and ownership BMRs in condo buildings.
Ronen said, however, recent examples where developers sought to change the tenure of the main project have created confusion about developers’ inclusionary obligations.
In one instance, a project at 600 South Van Ness Ave. approved by the Planning Commission in 2015, the developer initially sought to create units for ownership but after construction was completed in 2017, tried to change the market rate units to rentals, but keep the BMRs for ownership.
“The reality is however that having a small number of affordable condo ownership units in a market rate rental building isn’t feasible because banks won’t finance their purchase,” Ronen said at Tuesday’s Board of Supervisors meeting.
The developer’s request was ultimately denied by the Mayor’s Office of Housing and Community Development.
“The upshot is that the developer received signoff from the Department of Building Inspection on his completed project in July of 2017 and has been renting out market rate units while the BMR units have been sitting empty for nearly four years. This project failed to meet its obligations. This is four years of real impact on people who are struggling to stay in San Francisco,” she said. “The City and my district lost and we cannot allow this to happen again.”
Ronen’s proposed ordinance would establish procedures and requirements in regard to inclusionary housing tenure and address changes by a developer in elected inclusionary options after a project’s approval. The ordinance would also set a clear timeline and establish enforcement to ensure that BMR units are marketed and occupied in a timely manner, Ronen’s office said.
Planning Department Director Rich Hillis said in a statement he supported Ronen’s proposed ordinance.
“It’s our responsibility to adjust San Francisco’s Inclusionary Housing Program over time so that it can continue to efficiently provide critical below market rate units. This ordinance creates additional predictability and transparency to help protect BMR households while reconciling state and local law to get affordable units on-line faster,” he said.