Affordable Housing - Plan B for Prop C

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By Richard Ivanhoe, HANC Board

 On April 27, the Planning Commission considered competing proposals regarding affordable housing, one from Supervisors Kim and Peskin (Proposal A) and another from Supervisors Safai, Breed and Tang (Proposal B). Either proposal would make significant changes to the affordable housing requirements passed overwhelmingly (67.9% of the vote) in June, 2016 as Proposition C.

Proposition C did not change the requirement that developers of projects of 10 or more units must either a) pay an affordable housing fee, b) build affordable housing on the project site, or c) build affordable units offsite, but it did change the number of affordable units or amount of the fee.

For smaller projects (10-24 units), the onsite requirement is for 12% of the units affordable to low income households; the offsite requirement is for 20% of the units affordable to low income households; and the fee was set as equivalent to 20% of the units. For larger projects (25 or more units), the onsite requirement is 25% affordable, split 15% for low income and very low income households and 10% of the units for middle income households; the off-site requirement is 33% affordable, split 20% affordable to low income and very low income households and 13% of the units affordable to middle income households; and the fee was set equivalent to 33% of the units.

Low and very low income was defined as up to 55% of Area Median Income (AMI) for rental projects or up to 80% AMI for ownership projects; middle income was defined as up to 100% AMI for rental projects and up to 120% AMI for ownership projects. The Mayor’s Office of Housing and Community Development publishes an annual AMI chart. The 2017 chart can be found at http://sfmohcd.org/sites/default/files/Documents/MOH/Asset_Management/2017_AMI-IncomeLimits-HMFA_04-21-17.pdf.    AMI varies with household size. For a one-person household, 100% of AMI is $80,700; for a four-person household, 100% of AMI is $115.300.

The competing proposals are both complex and make changes to the Prop C percentages and income levels. Planning Department staff put together a chart which compares the two proposals to the current law. The chart is on pages 26 through 28 of the Planning Department’s report, which can be found at http://commissions.sfplanning.org/cpcpackets/415_amendments_Final_Packet_for_adoption_4.27.17_2017-001061PCA-03.pdf.

The Planning Commission consideration of these proposals lasted more than six hours. At the hearing, the overwhelming majority of public comment favored Proposal A, the Kim/Peskin proposal. The Planning Commission, made recommendations that were closer to Proposal B. For small projects, the percentages and income levels would remain unchanged.   For larger projects, the on-site requirement would be reduced for rentals to 18% affordable units with two-thirds at 55% AMI and one-third at combined 80% and 110% of AMI; while the affordable percentage of ownership projects would be 20%, with two-thirds at 90% AMI and one-third at combined 110% and 140% AMI. Equivalent reductions were recommended for the off-site and fee alternatives. Additional recommendations included increasing the requirement for two and three bedroom units and increasing the percentages every two years by one percent.

The next step is for the Board of Supervisors to consider the recommendations and pass legislation. Until the Board passes new legislation, Proposition C remains in effect.

 

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