Board approves waiver of Market & Octavia impact fees for 26 pipeline projects; 8-2 vote

The San Francisco Board of Supervisors voted 8-2 on Sept. 16 to pass on first reading an ordinance amending the city Planning Code to waive certain development impact fees in the Market & Octavia area, limited to 26 projects already in the pipeline and anticipated to obtain construction permits by January 2026.

The ordinance, as amended at committee, narrows an initially broader fee waiver. Supervisor Gordon Chan, who spoke during the item, said the original proposal would have applied to the entire area and to both approved developments and some projects still awaiting approval; the amendment removes projects not yet approved and narrows eligibility. Chan said she had proposed a five-year sunset during internal discussions.

Supporters argue the limited waiver will help housing projects move forward in a difficult financing environment. Chan said information from the Office of Economic and Workforce Development indicates the waiver will help boost housing production in the area, including some affordable units.

Opponents warned the waiver forfeits money the city planned for community infrastructure and affordable-housing fees. Supervisor Matt Fielder, who voted no, said the item "forfeits $81,000,000 in lost revenue for communities," including what he described as more than $47 million for community infrastructure and more than $33 million for affordable-housing fees. Fielder said the Planning Department itself had told the board that higher interest rates and construction costs—not impact fees—are the primary causes of housing delays.

The roll call on the ordinance produced eight ayes and two no votes. Supervisors who recorded aye votes were Mandelmann, Melgar, Sauter, Cheryl, Chan, Chen, Engadio, and Mammut. Supervisors Walton and Fielder recorded no votes. The ordinance passed on first reading.

What the ordinance does and does not do: it (1) waives specified development impact fees in the Market & Octavia area for a defined list of pipeline projects that have approvals or expect permits by January 2026, (2) removes from eligibility projects that have not yet received approval, and (3) as discussed in committee was adjusted to reduce the aggregate estimated waiver from about $135 million to roughly $81 million. A five-year sunset was proposed by Supervisor Chan in discussion; the final ordinance as passed on first reading reflects the committee amendment limiting eligibility.

The discussion included explicit budget and program trade-offs: supervisors and speakers emphasized the effect on funds dedicated to affordable housing, community facilities, and infrastructure in the Market & Octavia area. The Planning Department’s characterization that current economic conditions are a major driver of delays, rather than impact fees alone, was cited in debate but did not prevent the first-reading approval.

The ordinance will return for further readings and final passage consistent with the city's legislative process. Additional details—such as the final sunset language, the formal list of the 26 covered projects, and any mitigation measures for lost community funds—were not in the on-the-record explanation during first reading and are not specified in the transcript.