Planning Commission pauses Divisadero and Fillmore inclusionary-housing ordinance to await feasibility work and public meetings

The San Francisco Planning Commission on May 19 voted unanimously to continue consideration of an ordinance that would set new inclusionary housing rates for the Divisadero and Fillmore Neighborhood Commercial Transit (NCT) districts, directing staff to produce a short analysis of the value change from NCD to NCT zoning and to convene community meetings before the item returns on June 30.

Commission staff presented the measure as written: if a project sponsor chooses to pay a fee, the fee would be equivalent to 25 percent of the project’s units; on-site affordable housing would be required at a 23 percent rate; and off-site housing would be set at 25 percent. Staff recommended depositing fees into the Citywide Affordable Housing Fund and aligning the NCT rules with the citywide program to avoid creating a precedent that siphons off citywide resources. The staff presentation also linked the ordinance to the charter amendment (Prop C) on the June 7 ballot and noted that the final rates could be affected by the outcome and by a forthcoming feasibility study.

Why the Commission paused the measure: Commissioners and many members of the public said the city lacks the feasibility analysis and neighborhood engagement needed to fix rates now. Multiple community speakers, representing Affordable Divisadero and neighborhood councils, urged either delay until results of the citywide feasibility (Nexus) study are finalized or adoption of interim/adjustable rates tied to that analysis. Dean Preston of Affordable Divisadero said the community had not been consulted and argued the ordinance as drafted would allow developers to gain large density increases “without requiring any additional percentage” of affordable housing in practice.

Developers and other stakeholders urged caution against sudden midstream changes. The project sponsor and representatives including Steve Battle and David Krizier asked for predictable grandfathering provisions and warned that abrupt changes could imperil projects already in the pipeline. Several speakers and commissioners also flagged a fee-deferral clause in the draft code language; staff explained the referenced building-code deferral had sunset and that there is no active deferral option now.

What the Commission directed: After extended questioning about grandfathering tiers, timing relative to the June 7 ballot, and the need for greater community outreach, the Commission voted to continue the matter to June 30 “to allow time for community meetings and feasibility study between NCDs and NCTs,” with staff to prepare clarifying language and to tie the commission’s recommendations to the forthcoming feasibility work. Commissioner comments emphasized producing a narrowly scoped analysis of the increase in residential potential from the NCD-to-NCT change and using that analysis to calibrate any tiering or grandfathering rather than setting final citywide rates in advance.

Next steps: Staff will prepare the NCD-to-NCT feasibility analysis requested by the Commission, clarify code language related to fee deferral and grandfathering, and convene community meetings ahead of the June 30 hearing. The Commission’s action was procedural — no permanent rates were adopted — and the matter remains subject to Board of Supervisors action and to the results of the Prop C ballot measure and any trailing legislation.

Quotes from the hearing: Planning staff said the proposal would “deposit fees into the Citywide Affordable Housing Fund” to maximize citywide use of affordable-housing dollars. Several public commenters urged the Commission to treat pipeline projects fairly and to avoid midstream changes without a feasibility study.

The Commission’s June 30 hearing will revisit the ordinance with the requested analysis and any revised staff recommendations.