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Mayor Breed wants to ax fees for affordable housing

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In-law units would also receive a discount under mayor’s plan

Photo by Viktoria Shuvalova/Shutterstock

In another effort to prod housing in San Francisco, Mayor London Breed says she wants to eliminate Department of Building Inspection fees for 100 percent affordable housing projects and for new in-law apartments (or ADUs—“accessory dwelling units”—in City Hall parlance.)

On Monday, Breed announced that she’ll introduce new legislation to cut fees at this week’s regular Board of Supervisors meeting on Tuesday .

“Cutting fees for affordable housing projects also makes sense as we try to make every dollar count in the construction of new housing, especially when city funds are being used to help finance these projects,” said Breed via email.

“We can absorb the loss of these fees, but we cannot absorb the loss of new housing,” the mayor added.

According to the mayor’s office, fees make up about 7.8 percent of the cost of the average SF in-law and can push up the price of affordable housing projects by up to $150,000.

That’s a relatively small number compared to the overall price of building—just over a third of the price of creating a single new unit in a multi-family SF project in 2016, according to UC Berkeley researchers.

On the other hand, it’s also much more than what developers pay in other California cities, which are themselves already pricier than most cities in other states.

According to UC Berkeley’s Terner Center for Housing:

In 2015, average impact fees in the state were [...] $19,558 for a multifamily unit—almost three times the national average. Because of how significantly they affect the overall cost of a project, these fees are often passed along to buyers in the form of higher home prices, especially in high demand markets, or can increase the amount of subsidy needed to build affordable housing units.

Photo by Doops

San Francisco legalized in-law homes in 2016 as a quick and easy way to create more housing, a move that one planning commissioner referred to as “doubling the density of the entire West side.”

However, as of 2018, the city had issued only 109 permits for new ADUs. Of those, only 23 were actually built, and there was a “backlog of nearly 900 ADU applications.”

The main obstacle to new in-laws seems to be the approval process rather than fees. In August, Breed ordered that all languishing applications be finalized within a six months—a deadline that’s just on the horizon.