On S.F. Development Breed’s practical plan to reduce housing fees

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nlike many mayors in the Bay Area, San Francisco’s London Breed has made it clear she’s determined to fight the housing crisis with every tool at her disposal.

Her latest effort is a new ordinance to eliminate city fees for the development and renovation of 100 percent affordable housing projects and accessory dwelling units.

The legislation, which Breed plans to introduce to the Board of Supervisors this month, won’t shift the dynamics of San Francisco’s unacceptably unaffordable housing market overnight.

High costs for land, construction and regulation mean it still costs far too much to build new housing here.

Plus, thanks to NIMBYism and restrictive zoning rules, too much of the city is off-limits to the dense new development it would take to really make a dent in the city’s sky-high housing costs.

But the mayor’s proposal would lower costs for affordable housing developers and homeowners seeking to build accessory dwelling units.

Developers building 100 percent affordable housing projects are exactly the kind of builders who need less red tape at City Hall. As for ADUs, Breed, who’s already instructed city departments to speed up their backlogged approval process, is wise to add them to this proposal, too.

Accessory dwelling units add to the city’s housing stock in areas that would otherwise be difficult to build in. For renters, they tend to be more affordable than new building units.

They’re also usually built by individual homeowners — another group that could use a lift when it comes to the bureaucracy of housing creation.

The legislation also works as a statement of purpose for San Francisco. Cutting red tape and lowering costs for the Bay Area’s most-needed housing developments should be a priority for all local officials.

One of the things Breed’s proposal makes clear is the sobering cost of the current administrative barriers.

For example, the city’s current source for affordable housing funds is the Office of Housing and Community Development.

Yet when affordable housing developers receive funds from that office, they wind up turning around a

portion of it directly to a different city agency — the Department of Building Inspection — for various permit reviews, inspections and other administrative services.

These are unnecessary layers of administration, and there’s little reason for the city not to eliminate them for these projects in the name of speed and efficiency. One potential hurdle may be the proposal’s cost. The Department of Building Inspection collected about $1.4 million in permitting and inspection fees from 100 percent affordable housing projects in the last fiscal year, and more than half a million dollars in fees from accessory dwelling units. The amount of fees will vary from year to year depending on the number of projects.

Breed’s office believes the amount of money generated by the fees isn’t significant enough to be concerned about the impact on the department’s bottom line, but that money will need to be made up somewhere.

The danger, as always with the Board of Supervisors, is that it might be tempted to make up the money through extra fees on market-rate development of residential or commercial buildings. Breed will need to persuade the board to show restraint.

Affordable housing developers have already responded to the proposal with enthusiasm. They’re eager to refocus on their mission and to reinvest the money they’ll save into planning for new projects. Good.

While it remains to be seen how homeowners will respond, building fees for an accessory dwelling unit currently range from $7,000 to $10,000. That’s the kind of margin that can really make an impact for an individual project.

We’ll need a lot of those to dig out of this punishing housing crisis. This proposal is a good step for Breed as she continues chipping away at the challenges to building housing in San Francisco.