In recent years, the Planning Department has either initiated or implemented several programs aimed at increasing the amount of affordable housing built in San Francisco and speeding the review process for 100 percent affordable projects.
What’s Happening Now to Support 100% Affordable Housing Development?
Approval Process Streamlining
Senate Bill 35 is a state law, passed in 2017, which allows for ministerial approval of housing projects that include at least 50 percent of units affordable to low-income households (80 percent AMI or below), and meet several other eligibility requirements. In San Francisco, the primary beneficiaries of this law are 100 percent affordable projects, which, if found eligible, are exempt from CEQA review (including appeals) under the law. In response to the law’s passage, the Planning Department prepared detailed information and application materials, which were ready and available to the public the day the law went into effect. As of late 2019, 9 developments are utilizing SB35 to streamline the approval process of the housing projects. These projects propose a total of 1,177 units.
100 percent affordable housing projects which do not qualify for SB35 ministerial review may still qualify for an administrative review process under Planning Code Section 315. 100 percent affordable housing projects may seek exceptions that are offered under several other entitlement types, including Downtown Project Authorizations, Large Project Authorizations, and Planned Unit Developments. The primary benefits Section 315 offers are priority processing, a streamlined review process, and exemption from Planning Commission hearings and Discretionary Review.
Incentives
The 100 percent Affordable Housing Bonus Program (AHBP) was developed along with the HOME-SF program and offers 100 percent affordable projects greater height (up to three stories), form-based density, and a set of prescribed exceptions from existing zoning. The 100 percent AHBP applies throughout the city, in any district that allows residential uses except for RH-1 and RH-2 zoning districts. The program now also offers administrative review like Section 315, with no requirement for Planning Commission review and no Discretionary Review.
Assembly Bill 1763 (Representative Chiu) would amend the State Density Bonus Law to give 100 percent affordable housing projects additional incentives, including relief from local density controls, and up to three additional stories of height above local height limits. It was approved in the State Assembly in May 2019 and will need to pass the State Senate before heading to Governor’s desk in the fall.
As of 2018, 1 project located in the Mission neighborhood is utilizing the 100 percent AHBP program and has added 32 units above the original 62-unit count.
Issues Related to Supporting 100% Affordable Housing Production
The affordable housing built with HUD subsidy in combination with other federal, state, and local subsidies represents a unique resource that provides deeper affordability to lower income households. Many of these older HUD properties have project-based rental assistance (PBRA) contracts provided by HUD directly to these properties which allows tenants to spend no more than 30 percent of income on rent. In addition, the PBRA provides rents based on fair market rents, helping to sustain the operation and maintenance of these aging buildings. HUD developments serve concentrations of low-income people and people of color and many of the existing households have aged in place and are now very- low- or extremely-low-income seniors relying on a fixed income.
All programs described in this section include several eligibility criteria designed to ensure qualifying projects serve specific income targets, do not trigger significant environmental impacts, and respect local priorities. For example, SB 35 does not apply to potential developments which are located “within a coastal zone, prime farmland, wetlands, a high fire hazard severity zone, hazardous waste site, a delineated earthquake fault zone, a flood plain, a floodway, a community conservation plan area, a habitat for protected species, or under a conservation easement”. The 100 percent AHBP, a locally developed and adopted program, does not allow a 100 percent affordable project to demolish any existing residential unit (whether occupied or not), or to seek any additional, more flexible state programs and bonuses for affordable housing.
The City and state programs for 100 percent affordable housing generally streamline entitlement or environmental review processes, offer limited exceptions from local standards or development bonuses. However, all current programs rely on base zoning that a) allows residential uses and b) allows residential densities high enough to make sense for an affordable housing developer. This generally excludes areas of the city zoned P (Public) or PDR (Production, Distribution, and Repair), where housing is not allowed, and RH (Residential House), where only one, two or three units are allowed on each parcel. Together, these zones make up 63 percent of the city’s parcels. On parcels in these zones where a 100 percent affordable project might be appropriate, a potential project sponsor would need to pursue a rezoning, adding time and cost to an already complicated and expensive development process.
For Future Consideration
The ideas for future consideration that have the potential to increase community stability in San Francisco are described below. They provide a starting point for agencies, decision-makers, and community members to explore stabilization efforts and identify critical pathways forward. Based on preliminary information, staff is qualifying these ideas according to the type of task, scale of resources and level of complexity to underscore that any of these ideas would require time and additional resources not currently identified. These are not City commitments or recommendations, rather informed ideas that will require careful vetting and analysis as to their reach, resource needs, feasibility, unintended consequences, legal implications, and racial and social equity considerations.
Streamlining and bonus program opportunities
Create additional streamlining and bonus programs for 100% affordable housing projects
As San Francisco and California’s affordable housing crisis continues to worsen, local and state elected officials are increasingly looking to streamline the approval process for all types of housing, particularly for 100% affordable projects. There is broad consensus that increased funding for affordable housing must also be paired with legislation and programs that allow for more affordable housing to be built faster.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Regulation, Policy Implementation
|
| Resource | Generally only staff time would be required
|
| Complexity | Medium (generally some legislation and/or some change of and existing program, and two to three agencies involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Planning Department, Mayor's Office of Housing and Community Development (MOHCD), and non-profit developers |
| Key Priority | Yes - Enhancements to Existing City Programs and Policies |
| Benefit | Implementing process improvements would allow 100 percent affordable housing projects to be built faster, and to more quickly address the large backlog of affordable housing lottery applicants. |
| Challenge | It requires more resources to identify which processes these types of projects can bypass, and to assign dedicated staff to processing these projects. |
Streamlining and bonus program opportunities
RH and non-residential district possibilities
The City could assess the potential for affordable housing production in RH and non-residential districts and explore legislation and programs that would allow and/or streamline 100% affordable housing projects in those districts. An appropriate first step might be to assess potential sites for affordable housing across the city, focusing on zoning districts which don’t allow housing, or which are zoned only to allow low densities.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Data
|
| Resource | Generally only staff time would be required
|
| Complexity | Complex (generally major legislation, and/or new program required, and more than three agencies involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD) and Board of Supervisors |
| Key Priority | Yes - Enhancements to Existing City Programs and Policies |
| Benefit | This analysis could help the Department and decisionmakers determine whether a large-scale program to allow and streamline affordable housing developments in these districts is necessary, or whether targeted rezoning might be enough. Either approach would likely require intensive community outreach, to determine the appropriate path forward. |
| Challenge | This would require more resources and research to determine any issues streamlining may present. |
Using public land for affordable housing
Underutilized public land, such as bus yards or transit station parking lots, may be optimal for affordable housing since land costs could be subsidized. In 2014, late Mayor Ed Lee directed City agencies to explore underutilized sites to examine their potential for housing. The working group shaped a vision of the Public Land for Housing as a method of maximizing land use and opportunities for public benefit.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Regulation, Policy Implementation
|
| Resource | Extensive funding (the kind typically required for capital investments) and staff time would be required
|
| Complexity | Complex (generally major legislation, and/or new program required, and more than three agencies involved)
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD) and Board of Supervisors |
| Key Priority | Yes - Enhancements to Existing City Programs and Policies |
| Benefit | Develops underutilized sites for housing and helps create greater public benefit on these sites than the existing use. |
| Challenge | Requires additional research into how the existing use and proposed use of housing can coexist, requires that the underutilized site be in reach of existing public facilities and services. |
New construction methods
As construction costs increase, builders of residential projects are increasingly turning to alternative methods of construction. Modular construction, where many components of a building are constructed in a factory, and then assembled on-site, can reportedly reduce construction cost and duration by up to 30%. Cross Laminated Timber (CLT) is another emerging construction technology, which could allow taller buildings to be built without requiring expensive steel and concrete construction materials.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Regulation
|
| Resource | Extensive funding (the kind typically required for capital investments) and staff time would be required
|
| Complexity | Complex – generally major legislation, and/or new program required, and more than three agencies involved
|
| Timing | Long Term (more than 5 years)
|
| Geographic Scale | Citywide |
| Partners | Mayor's Office of Housing and Community Development (MOHCD), Board of Supervisors |
| Key Priority | Yes - Enhancements to Existing City Programs and Policies |
| Benefit | Reduces the construction cost of new housing units. |
| Challenge | May impact labor laws in place, and certain size limits exist for each unit in terms of length and width thus supporting this use for smaller dwelling units and not necessarily large family-sized units. |
