New buildings going up on Rhode Island Street in San Francisco.
By Thomas K. Pendergast
(Originally published in the August, 2016, issue of the Sunset Beacon newspaper, a community newspaper serving the Sunset District of San Francisco.)
Just when the feud between "moderate" and "progressive" factions of the SF Board of Supervisors seemed like it was escalating to Hatfield-and-McCoy-level animosity, they managed to reach a compromise on some controversial housing legislation.
It seems the board has literally split the difference with the Affordable Housing Density Bonus Program -- which is aimed at offering incentives for developers to build more "affordable" housing in the City -- when it cleaved the program into two parts, with the least controversial part passed unanimously by the board in July.
This part of the plan would allow non-profit developers to add three stories above zoning height limits for projects in which dwelling units are all classified as "affordable."
"I am committed to making an impact on our city's affordable housing supply for our most vulnerable residents, and I look forward to continuing my work in advocating for more affordable housing opportunities for low-and-middle-income households," said SF Supervisor Katy Tang. "We need to do more to ensure that residents can stay in San Francisco."
Even this compromise, however, only came about after the legislative equivalent of a shot-gun wedding between dueling proposals.
The original affordable housing proposal was first introduced to the board back in September, 2015, when the mayor's office and Tang began promoting it as a way to create below-market-rate (BMR) housing toward SF Mayor Ed Lee's goal of building 10,000 new "affordable" units by 2020. The original proposal would have allowed developers of projects with a minimum of 30 percent of on-site BMR housing, guaranteed for at least 55 years, to build up to two more floors than allowed by zoning laws; and three more if they project was entirely "affordable" on-site housing.
The legislation was intended to fulfill a state requirement that all cities implement a law granting a density bonus in return for a commitment to build 20 percent affordable housing on site.
The definition of "affordable" depends on who is asked. According to the U.S. Department of Housing and Urban Development (HUD), it means housing that costs no more than 30 percent of an individual's income. In San Francisco, however, it gets a bit more complicated. Here, affordable is attached to something call the Area Median Income (AMI).
According to the San Francisco Association of realtors, the median household income in the City is $77,734 annually. But the AMI being used by Tang and the mayor is based on the overall average income of three counties: San Mateo, San Francisco and Marin.
Meanwhile, the progressive camp is pushing for and AMI based on individual neighborhoods in San Francisco.
In the end, the one thing they could agree on was that if a non-profit developer makes all apartments affordable, they get to add three more floors to the project above what zoning laws allow, which hopefully will increase the number of dwelling units created for middle-and-working-class people.
"I'm glad that my colleagues realize the full consequences of not supporting the production of affordable housing units during this housing crisis, and I hope they will continue to support our efforts in the fall," said Tang. "The housing challenges we face cannot be politicized -- let's take real action to build more housing now, and not less later."
In response to Tang and Lee's original proposal, supervisors Eric Mar and Aaron Peskin, from the progressive camp, offered their own proposal to the board, which uses the HUD definition of affordable "adjusted on an annual basis for neighborhood areas within San Francisco, adjusted for household size, but not high housing costs. The Mayor's Office of Housing and Community Development (MOHCD) shall determine a methodology for and publish a table of neighborhood median income by neighborhood area. ... Until MOHCD establishes a methodology for neighborhood median income by neighborhood area, neighborhood median income shall be determined by zip code."
After both sides worked out a compromise, the 100-percent affordable component of the legislation was passed unanimously by the Board of Supervisors on July 12.
SF Planning Department officials say the primary focus of the program is commercial corridors and commercial properties. It will not apply to lots zoned for single-family homes, two-unit houses or apartments subject to rent control.
According to the department, 240 "soft sites" -- those most likely to be developed using the program -- have already been identified. They also noted that many of the soft sites are parking lots or gas stations, and none of them currently have residential housing on them.
Supervisor John Avalos, who frequently sides with the progressive camp, expressed support for the legislation passed by the board.
"This has been an ordinance that I've been watching very, very carefully. I live in a part of San Francisco ... that has not had a lot of development," Avalos said. "I know that in order to rebuild real stalled commercial corridors it's going to take greater density to make that happen. It's going to take greater density to build our transportation infrastructure, to be one that's much more efficient and effective for people who live in the southern part of San Francisco. And it's going to require greater density to have enough units to really meet the huge demand that we have in the City."
Planning Department officials said the original proposal, which included both components, would create 5,000 new units, of which 2,000 would be BMR units. Within the 30 percent of production dedicated to affordable units in that part of the original proposal, 12 percent would be reserved for households that earn up to 90 percent of the AMI and 18 percent for those who earn up to 120 percent of the AMI, using the three-county standard to determine AMI favored by Tang and the mayor's office.
But the debate about that part is far from over.
"The mixed-income program is still in committee," said Dyanna Quizon, a legislative aide for Tang. "We are waiting for a feasibility study to be done in the fall. We don't have an exact time but we're hoping sometime later this year. We don't want to move forward until the feasibility study is done."
"We put off the more complicated conversation around how to deal with density and bonuses as they apply to market-rate projects for a future conversation," said Nickolas Pagoulatos, a legislative aide to Supervisor Mar. "That is going to require additional community input. Supervisor Mar felt that the proposal that had been crafted by the mayor's office and Supervisor Tang, that did include market-rate housing, didn't really incorporate enough of the community concerns that were expressed. It did too much to promote market-rate development without enough thought being given as to how to promote both affordable housing as well as how to avoid displacement."
Avalos welcomes the discussion about density.
"I also will be supportive of something that is on the private sector side as well, although I need to see details about what that's going to look like," said Avalos. "I live in a part of the city where our commercial corridor is often filled with single-story buildings. ... That does no allow for the commercial corridor to expand, to actually meet the neighborhood's needs. ... I want to change all that. And this is a step in that direction."
Tang also agreed the City needs the help of private developers to meet its goals of producing affordable housing.
"We need to do more to support our low-and-middle-income households," said Tang. "Focusing only on public subsidies to create more affordable housing in our City will not work -- we also need to have market-rate developers as part of the equation."