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City Hall debates how much affordable housing to demand from developers

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Two different new plans would subject development to two different new formulas

A building with turret windows in the foreground and the Marina in the background. Andrew Zaviny

San Francisco has two new plans in the works for how much affordable housing to ask from developers. However, lawmakers put off a scheduled showdown between them this week, possibly to work out a compromise.

In 2016, voters granted the Board of Supervisors the power to decide how much affordable housing the city can ask for from developers. Right now it’s 12 to 20 percent of total units for buildings with 24 homes or fewer and up to 33 percent for bigger projects.

(The actual number depends on whether the developer opts to create affordable units in their own building or pay a fee to build them elsewhere. The percentage for fee payment is higher.)

In a report issued last week, the city’s Office of Economic Analysis observed:

[Subsidies are] paid by the market-rate housing developer, which increases their cost of development. It is often argued that developers pass these costs on to land-owners in the form of lower bids, [which can] discourage them from selling to developers to produce more housing.

[...] Inclusionary housing policy therefore involves a trade-off between the creation of affordable housing subsidies, for low- and moderate-income households, and the constraining of housing supply that tends to raise market-rate housing prices.

So exactly how much we should ask for is something of a delicate balance.

Under one set of new laws, put forward by supervisors Jane Kim and Aaron Peskin, the lowest 12 percent rate (for buildings of 10-24 homes) would increase by 0.75 percent every year.

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Rates would increase marginally (two percent) for condo projects with 25 or more homes that opt to build offsite, but would also decrease one to three percent for all new apartment buildings with 25 or more units.

Supervisors Katy Tang, London Breed, and Ahsa Safai, on the other hand, put up a separate plan that would cut the rates for bigger buildings (25 or more homes) between two to seven percent, but then turn up the heat by increasing the requirement 0.5 percent every year for 10 years.

Both plans were set to come up before the Land Use Committee on Monday but the debate didn’t go forward, put off until at least next week.

Over the weekend, Board President London Breed tweeted a photo of lawmakers dining together at Fat Angel on O’Farrell Street, saying they were “Working to make housing better for all San Franciscans,” suggesting that they’re working on a middle course between the two plans.