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Planning Commission defers decision on inclusionary fee for state density bonus projects
Summary
Staff recommended disapproval of an ordinance that would retroactively apply an inclusionary housing fee to additional floor area generated by the State Density Bonus, saying it would mainly affect one project and create fairness and implementation problems. The commission continued the item to Feb. 14 for staff to publish clarity in procedural guidance; vote 5–0.
Jacob Bentley, planning department staff, presented an ordinance that would change grandfathering for one element of San Francisco’s inclusionary housing program: charging an additional inclusionary fee on floor area gained through the State Density Bonus that had previously been exempt for projects with environmental applications filed before Jan. 12, 2016. Bentley said staff’s review found roughly three dozen projects that had filed for the state density bonus; six pre‑dated the January 2016 cutoff and of those only one remains in a position where a site permit could be subject to a retroactive fee. Bentley cautioned that retroactive application would create uncertainty, require disproportionate staff resources, and could slow housing production. He estimated the newly applied fee could be about $1,000,000 on the single potentially affected project and recommended disapproval of the ordinance.
Commissioners and staff discussed the interplay between site permits, vesting and the proposed fee. Kate Stacy of the City Attorney’s office clarified that, in general, once a site permit is issued the department assesses impact fees and cannot change the methodology for that project except in limited circumstances; staff said they would update procedural guidance and application materials (bulletin language) so projects in the pipeline would know whether the fee would apply if they later selected the state density bonus.
Public commenters representing developers and housing organizations urged clearer written guidance (a zoning administrator bulletin or code amendment) so applicants understand whether projects that switch to the state density bonus will be charged the fee. Speakers included Fernando Marti of the Council of Community Housing Organizations, who said developers are seeking clarity, and Corey Smith of the Housing Action Coalition, who warned that changing a rule years after a deal was made adds uncertainty and could disincentivize housing production.
After deliberation Commissioner Richards moved — and the commission seconded — to continue the item to allow staff time to amend or issue the procedural bulletin and provide written clarification. The commission set the new hearing date for February 14 and voted to continue the matter unanimously, recorded as Johnson Aye; Fong Aye; Moore Aye; Richards Aye; Chair Hillis Aye (5–0).
What happens next: The item will return to a future hearing after staff issues the clarified procedural guidance referenced by planning staff. The commission did not adopt the ordinance nor make a final policy determination at this meeting.
