Deal reached on inclusionary housing separates levels for income, neighborhoods

Source: San Francisco Examiner

Housing projects under construction in San Francisco’s Mission Bay neighborhood. (Emma Chiang/2016 Special to S.F. Examiner)

By Michael Barba

City supervisors reached a consensus late Wednesday on inclusionary housing requirements that they say strikes a balance between developers and affordability advocates.

The agreement would decrease the percentage of affordable housing that developers must build on site under Proposition C, which passed last June, except for in the two neighborhoods most impacted by the housing crisis until further study.

“We stood up to the developers and it was really enjoyable working with my colleagues,” said Supervisor Aaron Peskin, who joined Supervisor Jane Kim in proposing new inclusionary housing rules in competition with legislation from Supervisor Ahsha Safai and Board of Supervisors President London Breed.

“Everybody agreed that we need to do more studies to stem the tides of gentrification,” Peskin said.

At a news conference Thursday announcing the deal, Kim and other affordable housing activists sliced fruit pies into pieces to demonstrate the various levels of affordable housing that will be included.

Safai, who was focused on expanding affordable housing options to the middle class, said the agreement would cover janitors, hotel workers and teachers.

“This is groundbreaking legislation. For the first time in our city’s history, we have three categories, we will be serving working- and middle-class families,” Safai said.

“This was a hard-fought negotiation over the last four or five months, but the Board of Supervisors came together for a compromise that was in line with providing opportunities for all San Franciscans,” he added.

Under the agreement, developers of large rental projects with at least 25 units who choose to build affordable housing on-site would be required to designate 18 percent of units as affordable.

But that percentage would gradually grow to 24 percent by 2027.

Prop. C required developers to designate 25 percent of rental units as affordable, with 15 percent of the units reserved for low-income residents. The Tenderloin and Mission districts would remain at those levels until further study.

The 18 percent proposed for rentals would be broken down into three tiers.

The cost for 10 percent of those rentals would be affordable to those who earn 55 percent of the AMI, but those who earn between 40 and 65 percent would be eligible to rent those units.

Another 4 percent would be priced as affordable for those earning at 80 percent of AMI, but residents making between 65 percent and 90 percent of AMI would be eligible.

The remaining 4 percent would be rented at 110 percent of AMI for residents making between 90 percent and 130 percent of AMI.

The overall percentages would increase in the coming years and the tiers depend on whether the local density bonus program remains intact.

Within 18 months, the requirement for developers to build on site would grow from 18 percent to 20 percent with the lowest tiers growing first.

The number would then increase to 19 percent in 2018 and continue to increase gradually until reaching the 24 percent cap in 2027.

As for in-lieu fees, the proposal retains the 33 percent fee under Prop. C for developers who choose not build on- or off-site.

“We really, really want to disincentivize people [who fee] out,” Peskin said. “The fee out numbers are really high.”

The proposal is expected to reach the Land Use and Transportation Committee on Monday and the full Board of Supervisors for a vote Tuesday.