SF introduces new incentives for building below market-rate homes

City planners this week unveiled a much-awaited program to provide incentives for building homes for low- and middle-income households, potentially paving the way for an additional 4,000 below-market rate housing units in the next two decades.

The Affordable Housing Bonus Program would apply to some 30,850 parcels in San Francisco, primarily in areas zoned as neighborhood commercial districts where commercial use is either required or permitted on the ground floor, with residential units above, said Kearstin Dischinger, a long-range planner with the Planning Department.

Incentives for developers would include taller height limits and increased density based on how many below market rate homes are included in more northern and western pockets of The City.

That means developments along corridors like Geary Boulevard in the Richmond, Taraval Street in the Sunset, Lombard Street in the Marina, and much of North Beach and Nob Hill that have seen fewer new housing units added to The City’s stock than, for example, the eastern neighborhoods, would be subject to the various incentives.

“The whole goal really is to get more affordable housing throughout The City to help meet our affordable housing needs,” Dischinger said.

According to a first-of-its-kind housing balance report released by the Planning Department last month, more than half of the housing built in The City between 2005 and 2014 was built in District 6, which includes the Tenderloin, South of Market, Civic Center, South Beach, Mission Bay, Rincon Hill and Treasure Island/Yerba Buena Island neighborhoods.

The effort would include incentives for developers from both from local and state programs, which is San Francisco’s local implementation of the state density bonus law that was adopted in 1979 to require all cities and counties to offer a density bonus and other incentives for housing developments with a certain amount of below market-rate units.

As part of the local program, project sponsors that provide 30 percent or more below market-rate units would not be subject to residential density limits and could add up to two additional stories. Buildings would be required to provide at least 40 percent two-bedroom units.

The state program would include specific incentives for project sponsors that offer at least 5 percent of units at below market-rate in the building, with more incentives for more below market-rate homes.

“[The program] is trying to incentivize people to meet their inclusionary housing on site, and increase the amount of affordable housing units they provide,” Dischinger said.

Jodie Medeiros, deputy director of the nonprofit Housing Action Coalition that advocates for residential development projects, emphasized the program would create The City’s first incentive to build housing for middle-income residents who earn between 120 and 140 percent of the area median income, which in San Francisco is $71,350.

“We applaud The City for their work in coming up with creative solutions like the density bonus,” Medeiros said.

The legislation is expected to be introduced to the Board of Supervisors this fall as an amendment to The City’s planning code.

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