Market rate developers would have to make 18% of rental units affordable to low- and moderate-income households under an ordinance the San Francisco Planning Commission approved Thursday night.
The housing law the commission backed, which the Board of Supervisors must approve, was the more developer-friendly of the two versions of the law under consideration. That version was introduced by Supervisors Katy Tang, Ahsha Safai and London Breed, who are aligned with the more moderate faction of the board. A more aggressive version of the law, which would have required that 24% of rental units be affordable, had been backed by Supervisors Aaron Peskin and Jane Kim. The Kim/Peskin version also skewed the units to lower income levels, while the ordinance that was approved sets aside more units for moderate-income families that don't qualify for most of the city's subsidized housing projects.
Both sides in the debate said that they wanted to milk the maximum number of affordable units from market-rate developers. The disagreement, however, centered on how many affordable units could be squeezed out of a project before it became economically infeasible.
Critics of the more moderate version of the law characterized it as a real estate industry giveaway that favored moderate-income households over the poor and put developer profits over generating below-market-rate units.
But planning staff countered that the housing program covered by the ordinance represents only about 10% of the affordable units the city produces. The vast majority of affordable housing units constructed in the city — about 75% — are funded with federal tax credits and are available only to households that earn less than 55% of area median income, $63,400 for a family of four. The city has 6,900 affordable units under construction or in the pipeline.
"We are talking about a small subset of affordable housing and the only housing that can get to that middle-income level," said Planning Commission President Rich Hillis, who voted for the Safai/Tang/Breed version.
Dozens of speakers testified on the ordinance, mostly in favor of the Peskin/Kim version. Many of them said that the housing law should reflect the voter-approved Proposition C, which passed in June and set the limit at 25%, but required that the levels be adjusted after a feasibility study.
"The impacts are different for the low-income family of four facing displacement than for a middle-class family facing displacement," said Peter Papadopoulos of the Mission's Cultural Action Network.
But some pro-development advocates said they had problems with both versions. The version that passed includes a 5% fee for projects that take advantage of the state's density bonus law, which allows developers to increase height of buildings near mass transit lines. The fee brings the affordable housing costs for developers to 23% — almost the same as the Peskin/Kim version, which assumes that all developers will seek the density bonus.
"If you raise the fee too high, we will lose affordable units," Laura Clark, of the pro-housing group YIMBY Action. "Twenty-three or 24% of zero is still zero."
