Wading Through the Flood of New Housing Legislation

Having trouble keeping up with the seemingly endless torrent of new housing laws?  You are not alone.  Here is our summary of the key pending State and San Francisco legislation aimed at increasing housing/affordable housing production:

Proposed State Legislation

SB 35 (Wiener)

State Senator Scott Wiener has introduced amendments to SB 35 that would create a streamlined, ministerial (i.e., not triggering CEQA) approval process for certain infill projects in localities that fall short on regional housing needs assessment (RHNA) production goals.  We summarize the legislation and next steps in “Wiener’s Streamlined Infill Housing Approvals Legislation Continues to Move Forward.”

AB 915 (Ting)

On March 15, Assemblymember Phil Ting introduced new amendments to the State Density Bonus law.  The amendments would require a local jurisdiction to impose local inclusionary housing requirements on density bonus units, unless it adopts an exemption by ordinance.  As discussed below, local legislation proposed by Supervisors Safai, Breed and Tang would impose inclusionary housing requirements on density bonus units in the form of  an “in-lieu” inclusionary housing fee.  We discuss this new State legislation in “Ting Legislation Seeks to Pave the Way for Fees on Density Bonus Units.”

Proposed San Francisco Legislation

Competing Inclusionary Housing Ordinances (Safai/Breed/Tang and Peskin/Kim)

Board of Supervisors members have introduced two competing inclusionary housing ordinances.  The Safai/Breed/Tang ordinance comes closer to reflecting the City Controller’s recommendations and would also substantially increase the percentage of inclusionary housing units that are targeted for middle-income earners.  By contrast, the Peskin/Kim ordinance would maintain inclusionary housing percentages and income level distributions that are closer to existing requirements.  Both ordinances would add new complexity to the existing scheme by distinguishing between requirements for ownership and rental units and changing, among other things, income level distribution requirements, the basis for fee rate calculations, and unit mix requirements, with an emphasis on larger, family-focused units.  The Safai/Breed/Tang ordinance would apply the new unit mix requirements project-wide, with certain exceptions.  It would also extend the “in-lieu” inclusionary housing fee to density bonus units.  Read our analysis, including a comparison chart of the two ordinances, in “Competing Inclusionary Housing Proposals Introduced at the Board of Supervisors.”

Affordable Housing Bonus Program (Tang)

Supervisor Tang introduced an ordinance that would consolidate existing and add new density bonus programs to local law to encourage the production of affordable housing.  The Affordable Housing Bonus Program (AHBP) renames the existing 100 Percent Affordable Housing Program and adds three new components:  1) the HOME-SF Program, 2) the Analyzed State Density Bonus Program (ASDBP), and 3) the Individually Requested Bonus Program (IRBP).

The HOME-SF Program would provide development incentives, including up to two additional floors, in certain zoning districts.  To qualify, projects would need to include at least 30% affordable units on site.  Projects would generally be required to meet the minimum affordable housing percentages under the inclusionary housing ordinance, and provide additional units affordable to middle income households to achieve the 30% total.  The ASDBP would implement the current State Density Bonus law, but only within certain zoning districts.  It would allow up to a 35% density bonus for projects that include 12% or more inclusionary housing units, as well as incentives, concessions and waivers selected from a menu prepared by the Planning Department and its consultants.  Projects with 30% or more affordable units are eligible for priority processing.  The IRBP, which would apply in more zoning districts, would provide modified incentives and density bonuses to qualifying projects that do not meet the criteria for the ASDBP.  We summarize this legislation in “Affordable Housing Bonus Program Takes Shape in San Francisco.”

The Bottom Line 

What does this mean for market-rate residential projects?  It’s all about the definitions and qualifying criteria, which vary by legislation.  The local ordinances add complexity to an already complicated scheme, and more than ever, the calculation of benefits vs. exactions is site-specific.  It remains to be seen whether what is finally adopted provides sufficient incentive and certainty to produce more density and higher levels of affordability.

If the Wiener legislation passes, certain projects would qualify for expedited processing and would not be subject to CEQA review.  Under the competing inclusionary housing ordinances, local affordable housing requirements may change, and could increase or decrease from existing requirements.  Depending on the nature of the development project (where it is located, if it is 100% affordable, and if not, how many affordable units are proposed and at what income level, etc.), the project may qualify for one of four density bonus programs in the Tang ordinance, as well as priority processing.  The Ting legislation would require local jurisdictions to impose inclusionary housing requirements on density bonus units, as proposed by the Safai/Breed/Tang ordinance (the “in-lieu” fee discussed above), unless the density bonus units are specifically exempted by local ordinance.

Stay tuned, we will continue to track the legislation as it proceeds…