Planning commission backs limited support for waiving Market Octavia impact fees after heated public debate

The San Francisco Planning Commission on July 24 recommended approval of legislation introduced by Mayor Lurie and Supervisors Dorsey and Mahmood to waive several Market Octavia–area development impact fees, but asked that the Board of Supervisors and city agencies continue neighborhood engagement and consider revisiting or partially reinstating the waived fees in the future. The motion passed 4–3.

The vote came after more than two hours of public comment and presentations from the Mayor’s Office of Economic and Workforce Development, Planning Department staff and neighborhood groups. Commissioners who supported the recommendation said removing the extra, area‑specific fees could help stalled projects get to construction; opponents warned the change would forfeit tens of millions of dollars earmarked for community projects and affordable housing.

The issue dates to the adoption of the Market Octavia Plan in February 2007 and the plan’s implementation in 2008. The plan created area fees that, until now, have funded neighborhood projects and helped finance affordable housing. OEWD staff told the commission the area has produced about 4,800 housing units since adoption, including about 1,700 affordable units (roughly 35%), and about $53 million in impact‑fee revenue that has been collected and spent on parks, streets and other public improvements. But OEWD and other city staff said development in Market Octavia has largely stalled since 2020: 26 approved residential projects accounting for about 2,700 units remain unbuilt, and fee collection has been minimal in recent years.

OEWD analyst Jacob Bintliff said the stacked area fees can add $20,000–$60,000 per unit in additional costs in parts of the plan area and that some stalled projects could be moved toward construction if the extra area fees were removed while keeping citywide fees in place. "By reducing some of these city costs on the projects, we're hoping we can help stimulate the housing development," he told the commission.

Supporters from housing advocacy and development groups repeatedly echoed that point. Mark Babson, president of Emerald Fund, a local developer, said construction costs and layered fees are keeping projects from penciling out: "If these fees went away, it will become much closer to financial…