Supervisors expand childcare impact fees, allow developers to dedicate units for family childcare

The San Francisco Board of Supervisors on Dec. 15 passed on first reading an ordinance that increases the city’s childcare impact fee for office and hotel projects, applies a tiered childcare fee to residential projects and creates an option for residential developers to dedicate units for licensed family childcare in lieu of the fee.

Supervisor Norman Yee, the ordinance sponsor, said San Francisco currently has licensed capacity for roughly 42 percent of children with working parents and faces a projected population increase that will raise demand for childcare. “We currently have 3,500 children in the eligibility list waiting for childcare services,” Yee said, arguing the proposal would generate additional funding for childcare facilities and create new on‑site family childcare space.

Key provisions: The ordinance extends the childcare impact fee to commercial and residential development citywide, raises fees according to the city’s 2014 nexus study, and offers developers of rental housing an option to dedicate up to three units (depending on project size) as licensed family childcare homes. The proposal is intended to create modest additional capacity and generate an incremental revenue stream for the Childcare Facilities Fund.

Why it matters: Supporters said the measure is a creative, first‑in‑the‑nation approach to increasing childcare capacity, especially by encouraging small, home‑based family childcare that can serve up to eight children per unit and tends to be more affordable than center‑based care. Supervisor Jane Kim and others joined Yee as co‑sponsors.

Vote and next steps: The ordinance passed its first reading unanimously on a voice vote without objection and will return for final consideration in a subsequent meeting.

Context: The sponsor noted that a small childcare center build‑out in San Francisco can cost $400,000–$500,000, so the expanded fee revenue—estimated to yield several million dollars over several years—would supplement development and city investments. The measure also asks the planning department and other agencies to craft implementing details as the ordinance moves forward.

Ending: The ordinance aims to increase financing and on‑site options for childcare amid growing demand; the measure will return for a final vote after clerical processing and any required administrative steps.