Committee narrows Market & Octavia fee-waiver, forwards waiver for 26 pipeline projects to full board

The Budget and Finance Committee on Sept. 10 advanced to the full Board of Supervisors an amended ordinance that waives certain Market & Octavia area-plan development impact fees only for projects already in the planning pipeline, following robust public comment from neighborhood groups, labor and developers.

The ordinance as introduced would have eliminated five localized impact fees in the Market & Octavia area and the Van Ness & Market Special Use District (two affordable-housing fees and three community infrastructure fees) and would have sunset the Market & Octavia Community Advisory Committee (CAC) six months after enactment. City staff reported that the Market & Octavia area plan (adopted Feb. 2007) helped produce about 4,800 housing units since 2008 and generated roughly $53 million in community infrastructure fees, most of which have been spent.

Jacob Bentliff of the Office of Economic and Workforce Development told the committee that development in the area has stalled since 2020: only two market-rate projects completed (37 units) and 26 approved projects remain in the pipeline representing about 2,700 units. Bentliff said area-plan fees have produced “effectively almost no revenue since 2020” and that the five fees can add between $20,000 and $60,000 per unit in development cost. The Budget and Legislative Analyst estimated the 26 pipeline projects account for about $81,000,000 in area-plan fee waivers (approximately $47.6M for infrastructure and $33.4M for affordable housing) and projected approximately $135,000,000 in citywide impact fees and about $13.5 million per year in new property tax revenue if those pipeline projects are constructed.

Supporters, including labor and housing developers, said waiving the fees for pipeline projects would help “get projects in the area plan unstuck.” Jesus Mendoza of Carpenters Local 22 said the union’s members “are ready to get to work and ready to build the housing San Francisco needs.” Mark Babson of Emerald Fund said “the numbers don't work. That's why we're not seeing any, new residential construction in San Francisco,” and said the waiver would move projects closer to breaking ground.

Opponents and neighborhood representatives urged caution. Robin Levitt, a long-time Hayes Valley resident and Market & Octavia CAC member, said it is “unclear if removing them will make any difference,” arguing that macroeconomic factors (interest rates, rising construction costs) are the primary constraints. Kelly Grothe of the Council of Community Housing Organizations warned waiving fees “breaks that promise” to fund childcare, transit, open space and affordable housing and said the legislation initially presented without committee input was disappointing.

To reconcile competing views, Vice Chair Matt Dorsey proposed duplicating the ordinance and amending the parent file to limit the waiver to the 26 approved pipeline projects, while continuing the unamended duplicate file to the call of the chair for further consideration of future-project rules. The committee approved the amendment and to forward the amended parent file to the full board with a positive recommendation by a 3–0 roll call (Dorsey, Chen, Chan); the duplicate unamended file was continued to the call of the chair.

Staff and some supervisors suggested the board consider additional policy steps — such as time-limited waivers for future projects, using property-tax gains to backfill affordable-housing funding shortfalls, or pairing waivers with local policy goals — but those are matters for the full board.

The committee record includes extensive public comments both supporting and opposing the waiver and multiple staff analyses (OEWD, Planning, Planning Department, MOCD, BLA) detailing fee totals and alternatives.

The committee's action advances an immediate waiver for the 26 pipeline projects while preserving an open policy discussion about future application of area-plan fee waivers.