On Monday June 19, the Land Use Committee of the Board of Supervisors introduced a revised version of the compromise Inclusionary Affordable Housing legislation that Supervisors Breed, Kim, Peskin, Safai, and Tang introduced in May. We expect the legislation to be heard again, likely for the final time, at the Land Use Committee on July 10th. Any additional clarifications and/or potential amendments should be addressed prior to or at the July 10th hearing, before the Committee forwards the legislation on to the full Board of Supervisors for a vote, possibly as early as July 11. After Prop. C passed in June 2016, the Board of Supervisors adopted trailing legislation (Ord. 76-16) updating the affordable housing requirements, which resulted in the current Citywide affordable housing scheme—with a 25% on-site requirement or a 33% fee/off-site requirement for projects with 25+ units, and a lower 12% on-site or 20% fee/off-site requirements for projects with 10-24 units. Prop. C also called for the City Controller’s Office to prepare an analysis to determine the maximum feasible inclusionary housing requirements. The Controller presented its preliminary findings in the fall of 2016 and final recommendations in February 2017. Over the last few months the Planning Commission and Board of Supervisors have heard two competing versions of updated affordable housing legislation—the Peskin-Kim proposal and the Safai-Breed-Tang proposal. Last month, compromise legislation was introduced by the five Supervisors, and that version of the legislation was further amended at the Land Use Committee meeting on June 19. The Compromise legislation is pending under BOS File no. 161351 (and is available here: https://sfgov.legistar.com/View.ashx?M= F&ID=5243 881&GUID=CFA3750B-25F3-4C15-9C57-20E691DE66A2). Under the current version of the legislation, projects that have submitted an Environmental Evaluation Application (“EE Application”) before January 1, 2013 are subject to the old 12% on-site/20% fee and off-site rates. For projects that submit an EE Application between January 1, 2013 and January 12, 2016, the existing grandfathered rates apply, set forth in Planning Code Section 415.3(b).[1] Notably, the amended legislation adds a requirement that a project sponsor obtain a building or site permit within 30 months of project approval. Projects that fail to procure a permit within that timeframe would be subject to the inclusionary affordable housing requirements applicable at the time such permit is obtained. Affordable Housing In Lieu Fee: As currently proposed, for 10-24 unit projects, a 20% in-lieu fee requirement applies. Projects with 25 or more units that wish to pay the fee are subject to an amount equivalent to 33% if ownership units or 30% if rental units. Each year, by January 1, the City (via the Mayor’s Office of Housing and Community Development (MOHCD)) would be required “to adjust the fee based on the cost of constructing housing.” The affordable housing fee would also be imposed on any additional units or square footage authorized pursuant to the State Density Bonus Law (excluding projects that filed a complete EE Application by January 1, 2016). Affordable On-Site Unit Option: 10-24 unit projects would continue to be subject to a 12% on-site requirement, with sales prices at 80% AMI or less. Rental units would need to be offered at a rent set at 55% AMI or less. Starting on January 1, 2018, the City (via MOHCD) would increase the on-site requirements by 0.5% each year, until the requirement maxes out at 15%. Projects with 25 units or more would be subject to the following requirements: On-Site Ownership Units: 20%, of which: 10% to be affordable to low income households (price set at 80% AMI or less); 5% to be affordable to moderate income households (price set at 105% AMI or less); 5% to be affordable to middle-income households (price set at 130% AMI or less); and Ownership units to be offered at 130% AMI or above may not be studio units. On-Site Rental Units: 18%, of which: 10% to be affordable to low income households (rent set at 55% AMI or less); 4% to be affordable to moderate income households (rent set at 80% AMI or less); 4% to be affordable to middle income households (rent set at 110% AMI or less); and Rental units to be offered at 110% AMI or above may not be studio units. Regardless of these rates, the maximum affordable rent or sales price may not be higher than 20% below the median rental or sales price for the neighborhood in which the project is located, defined in accordance with the American Community Survey Neighborhood Profile Boundaries Map. For Projects with at least 25 units, the on-site requirement will increase by 1% each year for two consecutive years, beginning on January 1, 2018. Starting January 1, 2020, the required on-site requirement will increase by 0.5% each year, until the requirement reaches 26% for ownership units and 24% for rental units. The amended legislation further requires the Planning Department and Controller to do a study of areas where an Area Plan, Special Use District, or other re-zoning is being considered or has been adopted after January 1, 2015, in order to determine whether a higher on-site requirement is feasible on sites that have received a 20% or greater increase in developable residential gross floor area or a 35% or greater increase in residential density. Affordable Off-Site Option: 10-24 unit projects would be subject to a 20% off-site requirement, with the sales prices at 80% AMI or less. Rental units would need to be offered at a rent set at 55% AMI or less. Projects with 25 units or more would be subject to the following requirements: Off-Site Ownership Units: 33%, of which: 18% to be affordable to low income households (price set at 80% AMI or less); 8% to be affordable to moderate income households (price set at 105% AMI or less); 7% to be affordable to middle-income households (price set at 130% AMI or less); and Ownership units offered at 100% AMI or above may not be studio units. Off-Site Rental Units: 30%, of which: 18% to be affordable to low income households (rent set at