Supervisors Aaron Peskin and Eric Mar announced forthcoming legislation on Tuesday that would allow developers to build denser, taller buildings on certain lots around the city if the buildings are fully affordable.
The forthcoming legislation – announced at a press conference on Tuesday – is an alternative proposal to the widely discussed Affordable Housing Density Bonus Program, which would allow private developers similar height and density benefits for increasing the percentage of affordable units in a project.
The alternative plan would only grant a two-story height and density increase to projects that are fully affordable, which are often built by nonprofit developers with public financing. The added height and density would make building affordable units more economical for the developer, Peskin said.
That’s a full story less than the original density bonus proposal gave to fully affordable housing projects, which would be able to rise to three stories above height limits.
Under the original law, developers get an additional two stories above height limits and other density bonuses if they build an additional 18 percent of affordable units — above the 12 percent required by city law — on-site at middle-income levels. Most of the units in those projects would remain market-rate, however, and even some of the below-market-rate units were deemed too expensive by opponents of the law.
Those 18 percent of units would be open to households making between 120 and 140 percent of area median income, or $129,250 to $150,800 a year for a family of four.
That income requirement prompted a cry of “ethnic cleansing” earlier this year when opponents said that the law would create unaffordable units in minority neighborhoods like the Western Addition and Bayview-Hunter’s Point and further displacement.
Fully affordable housing projects — which would get a three-story bonus under the original proposal and a two-story bonus under the alternative — are reserved for those making 60 percent of area median income or less, which comes to $64,600 a year for a family of four.
Peskin and Mar’s alternative proposal would include a stipulation that affordability requirements be based on a neighborhood’s median income, rather than the generally higher regional income. That would ensure that units built in a neighborhood be affordable to local residents, proponents said.
Their proposal promotes “equity and equitable development without displacement,” Mar said.
“We are not against development. I support development that is…not for the 1 percent or the 11 percent, it’s for all of us,” Mar added, referencing a statistic that only 11 percent of San Francisco residents could afford to buy a median-priced home in the city.
It also restricts developers from destroying any existing housing or displacing any neighborhood-serving businesses, a point of contention with the original bonus law. The original law was amended to prohibit the destruction of any housing units and allows businesses to seek relocation assistance from the city.
Fred Sherburn Zimmer, with the Housing Rights Committee, emphasized the importance of building exclusively affordable, rather than market-rate, housing. She said displacement is exacerbated by the construction of market-rate housing, negating the effect of including affordable units in market-rate developments. She cited a flood of eviction notices and rent increases she observed after the proposal of a large market rate development at 16th and Mission streets.
“If you build 10 affordable units and displace 100 low income tenants, we don’t get shit, let’s be honest,” Sherburn Zimmer said.
She also characterized market rate homes as investment options or pied-a-terres for the wealthy. An investigation by 48 Hills found that some 39 percent of condos in 23 new buildings were owned by absentee owners, and a SPUR report found that more than 9,000 units citywide were only occupied occasionally as vacation homes.
The city has identified some 214 locations city-wide — ranging from gas stations to parking lots to single-story buildings — on which construction could proceed without the destruction of any existing housing.
But critics of the alternative say the new proposal is counterproductive if the goal is to incentivize housing production and mitigate the city’s affordability crisis.
Sonja Trauss, the founder of the pro-development San Francisco Bay Area Renter’s Federation — SF BARF — backed the original law because it would nudge private developers to boost the percentage of middle-income housing in their projects and create more housing overall, she said.
The alternative “defeats the purpose of most of the Affordable Housing Bonus Program,” she said. She called for the city to study the housing that would be built under both proposals and guessed that the alternative would result in far less new construction.
“It’ll just be way fewer houses,” she said. “It removes all the incentive for private developers to offer middle-class housing.”
Trauss also took issue with the protection of businesses. She understood why upending commercial tenants would be undesirable and said she sympathized with those that lose their leases. In the midst of the city’s current housing crisis, however, decisions must be made on whether to prioritize housing production or the existence of low-lying businesses, she said.
“If you choose not to tear down a one-story commercial and don’t build 100-200 units, that’s a choice you’ve made,” she said. “That’s displacement.”
Tim Colen, the director of the San Francisco Housing Action Coalition, said he had not yet studied the alternative proposal but was cautious. Conferring added density on fully affordable projects is a desirable policy, he said, but the alternative proposal would do little to push private developers to build more middle-income housing.
“Is it going to incentivize anyone to say, ‘Oh wow, this is a huge opportunity, I’m going to start building?’” he said. “We’re skeptical.”
Peter Cohen, co-director of the Council of Community Housing Organizations, admitted that the new law is narrow but said the original proposal gave too much to private developers in return for too little. The new proposal would be targeted, he said, and could be expanded if successful.
“You can’t just throw an idea at the wall and hope that the market will give you its best shot,” he said. “[This is] an alternative to the overall package, and it’s a much narrower program that’s been fine-tuned.”
The original bonus program will be heard by the Land Use Committee of the Board of Supervisors on June 6, while the alternative will be introduced to the board sometime before then.