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SF staff backs mandatory feasibility study to guide changes in inclusionary housing rules
Summary
City staff told the Rules Committee that a controller- and planning-led feasibility study, repeated every 24 months, is necessary before adjusting inclusionary housing requirements; staff said preliminary modeling shows one-size-fits-all increases risk stalling many small and mid-size projects.
City staff and the mayor's office urged the Rules Committee on Feb. 16 to require a recurring feasibility study before the city raises inclusionary housing obligations for private developers.
Ken Rich of the Office of Economic and Workforce Development told supervisors the proposed ordinance would direct the controller and planning department to complete a study within six months of passage and repeat that analysis every 24 months so the city could adjust requirements up or down with market conditions. "The goal of this initiative ordinance is to establish a pathway to maximize the amount of affordable housing that the city can require of developers," Rich said during the presentation.
OEWD consultant Emily Lask outlined what such a study would evaluate: construction costs, historical and current rent and sale levels, land-value dynamics, and a numerical definition of "development feasibility" that could be used to test different inclusionary scenarios and run sensitivity analysis across market cycles. "The short answer is that we don't know yet," Lask said when asked where the "sweet spot" would be for maximizing affordable housing without making projects infeasible.
Several supervisors and members of the public said they support raising requirements but disagreed over process and timing. Supervisor Aaron Peskin emphasized removing inclusionary rates from the charter and said the board should work to adopt a dynamic, evidence-based approach. "We should have been doing it probably years ago," Peskin said, arguing that a feasibility requirement will let the city adjust rates with economic cycles.
Developers, builders and representatives of the construction trades urged caution. Several speakers said preliminary numbers show some project types could become unfinanceable under a high, uniform requirement; staff acknowledged preliminary case work had been done but said a full feasibility study was needed to set policy. The committee filed the hearing after discussion, a procedural step that leaves substantive negotiations and any ballot timing to follow-up work.
What happens next: staff said consultants are already engaged and that a thorough feasibility study could take a few months once a consultant is fully hired; supervisors expressed a desire to negotiate grandfathering rules and other protections before any ballot or ordinance action.
