Committee forwards North of Market fee overhaul after debate over indexing and project feasibility

The committee advanced an ordinance Jan. 27 to abolish the North of Market affordable housing fund and redirect fees into the citywide affordable housing fund, with the Mayor’s Office of Housing and Community Development proposing a $5 per-square-foot base to be indexed back to 2011.

Amy Chan, of the Mayor’s Office of Housing and Community Development, told the committee that planning staff confirmed they have authority to apply indexing beginning in 2011 and that no project has paid the fee yet. She said the proposal returns the fee to $5 per square foot and planning staff will apply indexing.

Project representative Steve Vettel said the Planning Commission’s recommendation would effectively increase the fee by 250% and that the practical change under the proposed indexing would raise the fee to about $7.82 per square foot. Vettel said for a specific project at “550 Of Ferrell Street” (111 units) the combined fees would make the project’s fee burden roughly $1,800,000 and that further increases could endanger feasibility.

After discussion and confirmation of the red-line packet language, the committee accepted the changes and agreed to forward the item to the full Board with a recommendation. Later in the meeting the chair moved to rescind the committee’s earlier vote on the item and apply the red-line amendments; the committee agreed to rescind and send item 3 as amended to the full Board with recommendation without objection.

The full Board will review the ordinance; committee staff noted indexing and the exact fee amount will be applied by planning staff.