Yesterday, the Board of Supervisors’ Land Use Committee held a robust (some would say acrimonious) hearing on the Inclusionary Housing Ordinance’s trailing legislation. A few important amendments were introduced and debated. Ultimately, the legislation was continued to the committee’s next hearing on April 25th and may be voted on by the full Board the following day. We provide an overview of the hearing for you here, but recommend watching the hearing on www.sfgovtv.org for anyone who wants to see the action themselves.
For some background on where we stand, the charter amendment going to San Francisco voters in June allows the Board of Supervisors to adopt a new inclusionary housing ordinance, and sets “interim” rates until that new ordinance is adopted. Interim inclusionary percentages for projects adding 25 units or more would be set at 25% on-site/33% off-site/33% in-lieu fee. At the hearing, sending this charter amendment to the voters, the Board also committed to adopting trailing legislation that addresses proposed projects in the development pipeline. The legislation includes a number of different provisions which in broad strokes would increase affordability requirements based on when a project first filed its Environmental Evaluation Application, with some special rules and carve-outs based on factors such as a project’s proposed location and height. That legislation was introduced a few weeks ago, went to the Planning Commission for review and comment, and then to the Board of Supervisors’ Land Use Committee yesterday.
As the legislation is currently in flux, the following is subject to change prior to adoption. Highlighting the Supervisors’ descriptions of some of the more important amendments:
1. Timing: Still at Committee. The legislation did not get sent to the full Board. It was continued to next week by a 2-1 vote, with Supervisors Cohen and Wiener supporting the continuance and Supervisor Peskin voting against. It may be at the full Board by April 26.
2. No More Full Carve-Out for Mission NCT. Pipeline projects in the Mission NCT are no longer carved out of the legislation’s graduated increased affordability requirements altogether. Instead, they will be treated similar to projects in the UMU and SoMa Youth and Family zones, with an additional affordability bump above the general graduated increase.
3. Projects with Environmental Evaluation Applications Filed before 2013. Projects that filed Environmental Evaluation Applications before January 1, 2013 would be fully grandfathered from the trailing legislation and increased affordability levels proposed in the ballot initiative.
4. Special Affordable Housing Impact Fees. Some areas have special affordable housing impact fees (such as Market-Octavia). Projects paying these impact fees can also count them towards their inclusionary housing obligation, if they elect to pay the in-lieu fee. This would help offset the increased affordability for projects in these areas that decide to pay the fee.
5. On-Site BMR Rental Projects. Projects that have executed a Costa Hawkins agreement to provide on-site affordable rental units prior to the June 7, 2016 election would be completely exempt from the BMR increase.
We will continue to monitor the progress of this trailing legislation.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.