June 29, 2015 Housing Action Coalition

BREAKING: Central SoMa Plan Could Generate Up to $2B in Public Benefits

The Central SoMa Plan, San Francisco’s last area plan in the pipeline, has the potential deliver thousands of new homes and immense benefits for the community and affordable housing.  Thanks to John Kevlin of Reuben, Junius & Rose, for allowing us to republish his blog outlining the community benefits just announced. 

No conversation can be had about the future of San Francisco without including the Central SoMa Plan.  The Plan is coming at a time of both unprecedented growth and wealth along with unprecedented housing instability and need.  As a result, the Plan is very quickly becoming a vehicle to harness new growth to meet the city’s increasing needs.  In this environment, the Planning Commission began a conversation with its staff this afternoon about the financial aspects of the Plan.

Before we get to the new specifics, the big ideas.  The Planning Department sees the potential of up to $2B in new public benefits being generated by the Plan, through the capture of 66%-75% of the new value created by the rezoning and height increases proposed by the Plan.  This is clearly not a zero-sum process, which means the Plan represents opportunity for both the public and private sectors.  Planning Department staff should get credit for heavily emphasizing the need for a “Goldilocks” result here:  Too much public benefits will result in no development, too little public benefits will result in lost public benefit potential, so the Plan needs to hit the sweet spot in the middle that generates development along with sufficient public benefits.  Planning sees no less than eight different policies competing for public benefits dollars, and not all of them can be maximized in the Plan while actually allowing for new development.

Planning sees the potential for up to 3,600 new units of affordable housing (potentially 31% of all new units created).  $100M in new funds for open space and $60M new funds for child care are also expected.  

Enough for the high-minded policy.  On to the new details:

New fees.  
We finally received some specific proposals for the new fee increases in the Plan. The Plan proposes to extract additional public benefits above current levels only from sites receiving a zoning change or height increase of 15 feet or more.  These sites are generally located south of Harrison Street.  Proposed fee increases include the following:

– The Jobs-Housing Linkage Fee for office development is proposed to increase by $12/sf.
– The Central SoMa Impact Fee for projects receiving zoning benefits is proposed to increase by up to $10/sf.

BMR Rates.
The BMR rate for projects receiving zoning benefits is proposed to increase up to 20% for on-site and 30% for off-site or the in-lieu fee.

While the proposed Mello-Roos district results in an increase in property taxes after a new project, Planning Department staff provided per-square-foot estimates of what the fee could be for each type of use.  The fee is estimated at $4/sf for office use, $4.50/sf of rental housing, and $5/sf for condominiums.  If based on the same methodology as the Transit Center Mello-Roos District, this fee would apply annually for 30 years.  Keep in mind that the Mello-Roos District could not be established just through legislation – a vote would be required of the owners of parcels located within the District.  There are quite a few additional details and process steps involved with the Mello-Roos District formation.

Read the full Reuben, Junius & Rose blog

Image credit: Todd Lapin

Housing Action Coalition

The Housing Action Coalition is a member-supported non-profit that advocates for the creation of well designed, well-located housing at all levels of affordability. We believe more housing means more choices and better solutions.

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