SPUR’s Analysis of Proposed Housing Balance Legislation

After the draft release in April of Supervisor Jane Kim’s proposed Housing Balance legislation, SFHAC staff and several of our members joined with SPUR staff and members to analyze this radical, damaging housing legislation. Out of this meeting, SPUR wrote a thorough analysis that requests alternatives or amendments to the legislation.

We are sharing excerpts from SPUR’s memo to sound the alarm about how harmful this legislation could be to the production of housing in District 6 and how the measure would actually reduce the amount of affordable housing. Read and act below. 

Under this proposed legislation, more commonly known as “housing metering,” any market-rate housing project in the district seeking approvals would need a separate conditional use approval by the Planning Commission if the overall ratio of affordable housing to market-rate housing in District 6 was below 30 percent at the time of application to the planning or building department. This separate conditional use approval would require special findings, and would be in addition to all the other entitlements and approvals the project would otherwise need to obtain.

While the proposal intends to address the problem of housing un-affordability, SPUR’s analysis demonstrates that this ordinance is likely to backfire—resulting in less – not more – affordable housing.  The ordinance will make it extremely difficult to construct new residential market-rate development in the district, which puts more pressure on the existing housing stock (the same number of renters and buyers competing for a smaller number of homes) and further aggravates our housing affordability crisis.

Some of the specific impacts of this legislation include:

– Less overall housing, because new supply would be suppressed to stay within the “balance”

– Reduced housing affordability, because fewer inclusionary units would be produced

– Lower funding of citywide affordable housing needs such as HOPE SF, because funding generated in D6 would be kept within the district

The proposed metering legislation is likely to increase the cost and reduce the supply of housing and is likely to result in fewer people – at all income levels – being able to live in San Francisco.

Here are a list of revisions that could improve the feasibility of the legislation and reduce its damage.

Recommended Amendments

1. Reform the Off-Site Inclusionary option which delivers 20 percent affordability

2. Enact the Inclusionary “Dial” concept

3. Reduce required overall housing balance ratio from 30 to 20 percent.

4. Amend the Commission findings language to favor new housing

5. Allow a fair grandfathering date for projects underway

6. Remove Redevelopment projects from counting toward the required ratio

7. Make a one-time allocation from the General Fund to the Housing Trust Fund

8. Require Jobs-Housing linkage funds paid by commercial development and/or in-lieu Inclusionary housing fees generated in D6 to stay within the district

9. Subject to future State legislation, establish infrastructure financing districts (IFDs) in D6 to capture tax increment to support affordable housing development

10. Exempt existing adopted Area Plans from the proposed legislation

11. Exempt Student Housing projects

Conclusion

Though certainly well intended, this legislation is unlikely to address the housing affordability crisis in D6, since it does not direct more resources to affordable housing. Its most likely impact will be to reduce the overall housing supply. We believe that a better approach would be to work towards increasing funding for affordable housing production in District 6 and citywide.

The complete analysis with case studies is found here.