Report suggests percentage of affordable units in housing
S.F. controller says updates needed if governor OKs bill on his desk
City Controller Ben Rosenfield released a long-awaited report on Tuesday that weighs in on one of the wonkiest but important policy questions before the city: What is the maximum amount of affordable housing the city should require developers to sell and rent without jeopardizing overall housing construction?
With the help of outside consultants and nonprofit and private developers, he concluded San Francisco should require between 14 and 18 percent of new apartment units be rented at below-market prices. For condominiums, he recommended a 17 to 20 percent requirement.
But it’s unclear whether the controller’s math holds up in light of state legislation now before Gov. Jerry Brown that also seeks to maximize affordable housing construction, but through a different approach.
Known as density bonus, the state legislation says marketrate developers may make their buildings 35 percent more dense — above zoning restrictions, that is — depending on how much affordable housing they provide and at what price. The factors are complicated, but theoretically a 100-unit building could grow to 135 units if it meets certain requirements.
The question is how San Francisco’s requirements would interact with the density bonus program, which Brown is expected to sign into law.
Affordable-housing advocates say developers in San Francisco can afford to rent and sell a higher percentage of below-market units than recommended by the controller because they will automatically qualify for the state density bonus program.
The controller appears to agree, or at least thinks the
issue deserves studying.
“Since the density bonus is likely to make a significant difference in the financial feasibility of future projects, we recommend completing this additional research before undertaking any legislative change to the inclusionary housing requirements,” the report states.
The controller’s office plans another analysis over the next two months that takes into account the state density bonus program. In the meantime, San Francisco’s requirement that developers rent and sell 25 percent of units in new buildings at below-market prices will stay in effect.
That requirement was put in place by the June ballot measure Proposition C. The measure said the supervisors would alter the analysis based on a feasibility analysis — the controller’s report.
While everything appears to be still in flux, the controller’s report contains some important recommendations that aren’t affected by the density bonus program. Among them:
The city should impose higher affordable housing requirements on new condominiums compared with apartment buildings.
Whatever the starting requirement ultimately becomes, the city should increase it by 0.5 percentage points every year for the next 15 years.
The city should study how much to increase the fees developers have to pay the city if they opt not to build affordable housing. The Board of Supervisors is unlikely to act on the controller’s recommendations until he comes back with his analysis that factors in the state density bonus program. But don’t expect the progressive supervisors to be happy with any recommendation of less than a 25 percent affordability requirement.
As Fernando Martí, co-director of the Council of Community Housing Organizations, said in a meeting about the report last week: “It’s going to have to go back to the Board of Supervisors and face this political laugh test.”