Planning Commission backs supervisors'compromise on inclusionary housing but flags fee study

The San Francisco Planning Commission on June 15 recommended approval of a revised inclusionary-housing ordinance that reconciles recommendations from the commission, a technical advisory committee and a compromise ordinance introduced at the Board of Supervisors.

Planning Department staff and Supervisor Ahsha Safaie told the commission the compromise keeps on-site requirements at 18% for rentals (20% for condominiums), phases in annual increases and retains a three-tier AMI structure to target low-, middle- and moderate-income households. Staff emphasized the ordinance needs technical clarifications on grandfathering, rounding rules for the three tiers and references to statewide minimum unit sizes.

The board-level compromise calls for an on-site emphasis and an in-lieu fee structure (identified in the ordinance as 30—3%) that staff and advocates warned may exceed the maximum economically feasible fee the Technical Advisory Committee (TAC) had recommended. Planning staff proposed two options: set the fee at the TAC-feasible rate or adopt the higher rate while directing a controller-led study to update the methodology before the fee becomes binding.

Supporters including labor and affordable-housing advocates praised the measure'for restoring a dynamic inclusionary policy and adding unit-mix and family-size targets. Critics, including some affordability groups and YIMBY representatives, urged caution about raising in-lieu fees above TAC recommendations, saying higher fees could reduce funds available to the Mayor's Office of Housing and put some pipeline projects at risk.

Planning recommended several implementation changes: reference state TCAC minimum unit sizes rather than locking outdated square-foot numbers into code; clarify that replacement of demolished rent-protected units should be counted within, not on top of, the inclusionary requirement where doing otherwise would exceed feasibility; and add a clear trigger point for when an entitlement'rate is re-set (the staff suggested first construction document after 30 months). The planning director also recommended revising neighborhood-mapping references to use the American Community Survey neighborhood profile boundaries for demographic analyses.

Commissioner Richards moved a package of staff recommendations with a targeted exception: commissioners declined to support adding replacement rent-controlled units above the inclusionary requirement (i.e., the commission removed staff recommendation #4). The motion passed 5—to— with Commissioner Moore voting no.

Next steps: the commission's recommendations will go to the Board of Supervisors, which must adopt the ordinance and resolve pending technical questions including the affordable-housing fee methodology and any area-specific rates for neighborhoods such as the Mission or Tenderloin.

Quotes: "We wanted to drive as much affordable housing on-site," Supervisor Safaie said, calling the compromise the result of months of negotiation. "We also have to be mindful of feasibility," Planning staff said, urging a follow-up TAC study on fee methodology.

The commission's action includes technical directions to staff and asks the board to adopt clarifying language on grandfathering and fee-study timing.