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Controller's feasibility study proposes higher inclusionary targets, triggers heated local debate
Summary
The San Francisco Controller's Office presented an economic feasibility study recommending higher inclusionary housing requirements and fee options; community groups and commissioners pressed for stronger low-income protections, clearer fee calculations and neighborhood-sensitive rules. The commission set hearings on March 9 and March 23 for further review.
The San Francisco Planning Commission heard a full presentation from the Controller's Office on Feb. 23 about an economic feasibility study that lays out options for raising inclusionary housing requirements and changing how the city charges in-lieu fees.
Ted Egan, an analyst with the Controller's Office, told commissioners the consultants modeled higher on-site shares for ownership projects (roughly 17—20 percent) and for rental projects (roughly 14—18 percent) and supplied equivalent in-lieu fee percentages (ownership roughly 25—28 percent; rental roughly 18—23 percent). The report also recommends an annual, modest ramp-up in requirements (about 0.5 percentage point per year) and a three-year reexamination of how many projects take the state density bonus. On the density-bonus issue, the Controller proposed charging the affordable-housing impact fee across all units in a project so projects that take the state bonus still contribute resources without penalizing projects that do not take the bonus.
The study and its potential policy outcomes drew extended public comment. Community and tenant advocates said higher average AMI targets and some proposed alternatives would reduce supply for very low-income and elderly households and risk displacing long-time residents; representatives of tenant and community organizations asked commissioners and staff to protect 55-percent AMI tiers and prioritize low-income units. Developers and YIMBY-affiliated speakers pressed the commission to use the study to raise inclusionary levels and fees to capture more affordable housing from market-rate production.
Speakers also highlighted technical questions left open by the study: how the in-lieu fee would be calculated in dollars per unit and whether the fee would produce the same number of on-the-ground BMR units as an on-site requirement; how the state density bonus would affect the overall inclusionary yield; and whether neighborhood- and product-specific differences (land cost, building type, sensitive neighborhoods) should produce different targets. The Controller's office said the consultants produced citywide feasible ranges but that project-level negotiation and targeted approaches would still have a role.
Commissioners pressed for more detail on the model's assumptions about rents and incomes, how the ramp would work in downturns, and how the nexus study and fee calculations align with feasibility results. Planning staff said an informational hearing on the legislative proposals is scheduled for March 9; the commission may return the matter for potential action March 23. The Controller said a three-year TAC recheck was recommended to revisit density-bonus uptake and adjust policy if much higher bonus take-up occurs.
Next steps: the Controller's recommendations will be considered alongside competing legislative proposals at upcoming informational hearings. The planning commission and City Hall officials said they expect further draft ordinance language and additional modeling to be circulated before any final vote.
