S.F. tweaks affordable housing rules to boost trust fund passage

S.F. Examiner File PhotoHomebuilder: The most common type of infill residential developments in San Francisco are projects with five to nine units.

San Francisco’s most common type of infill residential developments were exempted Tuesday from The City’s affordable housing requirements as part of a deal to help ensure passage of Proposition C, the Housing Trust Fund, in November’s election.

On Tuesday, the Board of Supervisors voted 10-0 to increase the threshold for affordable-housing requirements from five or more units to 10 or more. Projects of between five and nine units are The City’s most common type of infill developments.

If Prop. C passes, it would result in spending $1.5 billion on affordable-housing development and related programs during the next three decades.

Although previous efforts asking voters to spend more on affordable housing have failed, supporters believe a broader consensus approach could be the winning formula. To create that consensus, developers requested incentives, including the one approved Tuesday.

According to the Planning Department, there are seven such projects currently in various development stages. Three would provide a total of three on-site, below-market rate units, and the other four would pay an in-lieu fee totaling $1.4 million. Another 16 projects of this type are in the development pipeline, comprising 107 units, which would have resulted in $5.5 million of in-lieu fees being collected if the affordable-housing requirement remained.

Funding for Prop. C would come from a portion of the hotel tax that has been appropriated for affordable housing, $13 million in new revenue from an increase in business license fees, and tax revenue that otherwise would have flowed into the now-dissolved Redevelopment Agency. The business fees are part of a separate ballot measure that proposes to replace The City’s business payroll tax with a gross-receipts tax.

A well-funded campaign is backing Prop C. As of Sept. 30, $102,350 was raised by the Coalition of Sustainable Housing. The largest contributors include Ron Conway, a tech investor and major supporter of Mayor Ed Lee, with $25,000; Webcor, a general contractor, with $20,000; the San Francisco Fire Fighters union political action committee, with $15,000; Related Companies of California, developers of residential and commercial properties, with $10,000; Tenderloin Neighborhood Development Corp., a nonprofit providing affordable housing and services in the Tenderloin, with $10,000; and S. Osborn Erickson, chairman of the Emerald Fund, a group of real estate developers, with $5,000.

Supervisor Mark Farrell did not participate in the board’s vote due to the recent birth of his third child, a son.

jsabatini@sfexaminer.com

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