Dive Brief:
- The San Francisco Board of Supervisors voted 9-2 Tuesday on initial approval to reduce inclusionary housing mandates for developers from 15% to a minimum of 5%, the San Francisco Examiner reported.
- The amendment, which will now move to a second vote, also eliminates inclusionary mandates for developments under 25 units. At the same time, the Board moved to expand San Francisco’s Affordable Housing Trust Fund from $52 million to $125 million, a decision that will go before voters in November, according to Mayor Daniel Lurie.
- “Inclusionary requirements are intended to support affordable housing, and they can help us do that,” Lurie said in a social media post following the Board’s vote. “But in a moment when our city is barely building any housing, they can stop projects altogether. And when nothing gets built, costs go up, and families are forced to leave.”
Dive Insight:
As cities and counties across the country seek ways to boost housing development amid an affordability crisis, longstanding local ordinances are going under the microscope, including, ironically, affordability mandates.
San Francisco first adopted inclusionary housing mandates in 2002. In lieu of including a percentage of below-market-rate units in a project, residential developers may pay an affordable housing fee to the municipality. The measure has been responsible for the creation of more than 3,600 affordable housing units since its inception, according to a report from the supervisors’ budget and legislative analyst.
In the past three years, however, due to stalled housing production, San Francisco has not collected any inclusionary housing fees from developers, according to Supervisor Myrna Melgar.
Melgar, a co-sponsor of the latest reforms, said during the July 14 meeting she hopes the changes will incentivize more market-rate housing and be a temporary fix.
“I don’t love lowering the inclusionary percentage … but this is the moment that we’re in right now, and it is a temporary moment,” Melgar said.
The measure could reduce impact fees for commercial and residential developers by 67%, according to the budget and legislative analyst.
Supervisor Chyanne Chen, who voted against the measure, said that San Francisco must recognize that affordable housing is part of the cost of doing business.
“Inclusionary requirements are the single most important tool to foster mixed income communities,” said Chen. “Without it, we facilitate a San Francisco that only becomes further segregated.”
