Planning Commission backs staff-recommended modifications, urges value-capture analysis for Divisidero and Fillmore NCTs

The Planning Commission on June 30 recommended the Board of Supervisors move forward with legislation from Supervisor London Breed that would require projects in the Divisidero and Fillmore Neighborhood Commercial Transit districts to meet the city’s new inclusionary housing standards when they use NCT density decontrol.

Connor Johnston, legislative aide to Supervisor Breed, told commissioners the substitute legislation would “set the Divisidero and Fillmore affordable housing requirements to the recently adopted 25/33 percent standard” and require pipeline projects that use the NCT density option to meet the higher citywide rates rather than be grandfathered at lower levels. Johnston said President Breed’s goal is “unequivocal — more affordable housing, more affordability now.”

Supporters from neighborhood groups urged the commission to maximize on-site inclusionary housing and to reject grandfathering that would allow pipeline projects to proceed at 13–14 percent BMR. Julie Roberts Fung, a Devisidero resident, told the commission: “We’re deeply affected by the affordability crisis … I urge the commissioners to respect the Divisidero‑Fillmore ordinance to maximize the amount of affordable housing in our neighborhood and not allow developers to build without building affordable units.”

Developers and project attorneys urged restraint. CJ Higley, representing project sponsors, said the city’s trailing feasibility study required by Proposition C could show whether the higher rates are viable and warned that “if the BMR requirements make residential development infeasible, then we’ll get fewer market‑rate units and fewer BMR units.” David Krizier, the developer of a major Devisidero project, said the NCT rezone had already increased unit potential and argued changes should respect projects already under way.

After more than two hours of debate, commissioners voted to forward the ordinance to the Board with staff’s recommended modifications and an explicit directive that the city and the Board pursue a focused financial analysis of “soft sites” within the districts to quantify the value conferred by NCT density. The motion instructs staff to: (1) strike obsolete fee‑deferral language, (2) keep existing planning‑code controls and adopt the 25/33 percent on‑site/in‑lieu baseline for projects that are not grandfathered, and (3) require a before‑and‑after fiscal analysis to determine whether additional inclusionary percentage increases or fees are justified by the value created. The motion passed 4–1, with Commissioner Wu voting against.

What happens next: The Commission’s recommendation is advisory; the Board of Supervisors must still act. The commission’s vote adds a clear demand for a city financial analysis — and makes grandfathering the primary point for further negotiation as the ordinance moves through the supervisors’ hearings.