o0187-23

AMENDED IN COMMITTEE FILE NO. 230769 7/24/2023 ORDINANCE NO. 187-23 [Planning, Administrative Codes - Development Impact Fee Reductions] Ordinance amending the Planning Code to: 1) reduce lnclusionary Housing Program requirements of the Planning Code, for projects exceeding a stated unit size that have been approved prior to November 1, 2023 and that receive a first construction document within a specified period; 2) adopt a process for those projects to request a modification to conditions of approval related to development impact fees, subject to delegation by the Planning Commission; 3) reduce Article 4 development impact fees, including lnclusionary Affordable Housing fees, for projects approved before November 1, 2026 that receive a first construction document within 30 months of entitlement; and, 4) modify the lnclusionary Housing Program Ordinance effective November 1, 2026 to reduce applicable fees, and on-site or off-site unit requirements, for projects that exceed a stated unit size; amending the Administrative Code to update the lnclusionary Housing Technical Advisory Committee member requirements; affirming the Planning Department's determination under the California Environmental Quality Act; making public necessity, convenience, and welfare findings under Planning Code, Section 302; and making findings of consistency with the General Plan and the eight priority policies of Planning Code, Section 101.1. NOTE: Unchanged Code text and uncodified text are in plain Arial font. Additions to Codes are in single-underline italics Times New Roman font. Deletions to Codes are in strikethrough its.lies Times New Remr:mfcmt. Board amendment additions are in double-underlined Arial font. Board amendment deletions are in strikethrough Arial font. Asterisks (* * * *) indicate the omission of unchanged Code subsections or parts of tables. Be it ordained by the People of the City and County of San Francisco: Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 1 Section 1. (a) The Planning Department has determined that the actions contemplated in this ordinance comply with the California Environmental Quality Act (California Public Resources Code Sections 21000 et seq.). Said determination is on file with the Clerk of the Board of Supervisors in File No. 230769 and is incorporated herein by reference. The Board affirms this determination. (b) On July 13, 2023, the Planning Commission, in Resolution No. 21353, adopted findings that the actions contemplated in this ordinance are consistent, on balance, with the City's General Plan and eight priority policies of Planning Code Section 101.1. The Board adopts these findings as its own. A copy of said Resolution is on file with the Clerk of the Board of Supervisors in File No. 230769, and is incorporated herein by reference. (c) Pursuant to Planning Code Section 302, this Board finds that these Planning Code amendments will serve the public necessity, convenience, and welfare for the reasons set forth in in Planning Commission Resolution No. 21353, and the Board adopts such reasons a its own. A copy of said resolution is on file with the Clerk of the Board of Supervisors in File No. 230769 and is incorporated herein by reference. Section 2. General Findings. (a) San Francisco's lnclusionary Affordable Housing Program is intended to help address the demonstrated need for affordable housing in San Francisco. As rents and sales prices for housing outpace what is affordable to the typical San Francisco family, the City faces a continuing shortage of affordable housing for all but households with the highest incomes. The California Association of Realtor's "California Housing Affordability Update," for the first quarter of 2023, reported that the median home price in San Francisco was $1,550,000, requiring a minimum qualifying income of $384,000 to purchase such a home. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page2 San Francisco's median home prices are over twice the State of California's median of $619,900, and over four times the national median home price of $371,200. The majority of market-rate homes for sale in San Francisco are priced out of the reach of low- and moderate income households. (b) San Francisco is facing a shortage of all types of housing. To meet San Francisco's share of the regional need for housing between 2023-2031, the City must accommodate over 82,000 units, including 32,881 46,598 units for extremely low, very-low aoo low- and moderate- income households, and 49,188 units for moderate and above moderate income households. The lnclusionary Housing Program is an important part of the City's overall strategy for providing affordable housing to very-low, low- moderate-, and middle-income households, and has created more than 3,300 units since its inception. But the success of the lnclusionary Housing Program is contingent on the overall feasibility of residential development. For that reason, Planning Code Section 415.10 requires periodic review of the program's requirements. (c) From October 2022 through April 2023, consistent with Planning Code Section 415.10, the Controller and the Affordable Housing Technical Advisory Committee (TAC) met to conduct and review the feasibility of the City's inclusionary affordable housing obligations. The Controller and the TAC studied five condominium prototypes and five rental apartment prototypes, and considered key economic parameters, such as: interest rates, capitalization rates, land prices, construction costs, use of the State Density Bonus law, rents and sale prices. (d) The Controller and TAC found that none of the development prototypes studied were financially feasible at the current inclusionary housing rates in the Planning Code. Most prototypes studied had significant negative land value, indicating that the prototype would not be financially feasible, even setting aside the cost of land. The prototypes, which were studied Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 3 because they represent the types of residential development that are common in San Francisco, account for a majority of the housing production in San Francisco. The finding that these two prototypes are not feasible suggests that residential development is, broadly speaking, not financially feasible under current economic conditions at current inclusionary housing rates. (e) Economic conditions that render residential development infeasible threaten several important policy priorities of the City, including the expansion of the City's housing supply, the production of inclusionary affordable housing units, as well as the creation of jobs and growth in tax revenue. 1 O (f) On June 30, 2023, the Controller will submit submitted a report to the Board of Supervisors that summarizes the residential development feasibility analysis and the recommendations developed by the Controller, with TAC agreement, between October 2022 and April 2023. +Rat The report will recommend recommended that the City's inclusionary housing rates be reduced from the current rates of 22% - 33%, to a range of 12% to 16%. (g) The City's inclusionary housing requirements are an important policy lever, that, if optimized, can facilitate robust and ongoing production of both market rate housing and inclusionary housing. The Controller and the TAC found that the current citywide rates of 22% to 33% directly contribute to the economic infeasibility of residential development. By reducing the rates in line with the Controller and TAC's recommendation, the City will stimulate residential development, increase production of inclusionary affordable housing, create jobs, and grow tax revenue. (h) In addition to reducing the inclusionary obligations for new projects seeking entitlement from the City, the TAC discussed and recommended reducing inclusionary obligations for projects that already have been approved, but have not been constructed. These "pipeline projects" represent tens of thousands of units that could quickly move into the Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page4 construction phase of development should the project's economics improve. The sponsors of these pipeline projects have likely spent considerable money securing land, pursuing entitlements, and advancing design, but have also been subject to significant construction cost escalation and rising interest rates during the time between project conception and today. By reducing their inclusionary obligation below that of new projects seeking entitlement over the next three years, the City will incentivize these projects to advance into the construction phase, and swiftly provide much needed market rate and inclusionary units. (i) This ordinance amends the lnclusionary Housing Ordinance to create a temporary program to reduce the inclusionary obligations for projects approved before November 1, 2023; and (2) a temporary program to reducing inclusionary housing obligations for projects that are approved between November 1, 2023 and November 1, 2026, so long as they obtain a first construction document within 30 months. The ordinance requires the TAC to convene again, no later than January 1, 2026, to review the economic feasibility of the City's inclusionary housing obligations and sets the requirements for projects approved after November 1, 2026, unless the City amends the requirements before that date. The ordinance creates a temporary program to reduce other development impact fees for projects that get a first construction document within 30 months of project approval, thereby providing an incentive for projects to advance to the construction stage. Section 3. Article 4 of the Planning Code is hereby amended by adding new Section 415A, to read as follows: SECTION 415A. TEMPORARY REDUCTION OF INCLUSIONARY REQUIREMENTS FOR RESIDENTIAL AND LIVE/WORK DEVELOPMENT PROJECTS APPROVED PRIOR TO NOVEMBER 1, 2023. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Pages SEC. 41 SA.1. PURPOSE. In order to encourage the construction o{residential and live/work development proiects that have been Finally Approved prior to November 1. 2023, but have not procured a First Construction Document, the Citv hereby establishes a tempora,y program to: (1) reduce certain inclusionarv affordable housing fees and obligations: (2) extend the time such developments have to obtain a site permit a(ter proiect approval; and (3) allow the modification of certain findings required bv Planning Code Section 206. 6 ("State Density Bonus Program: Individually Requested. ") SEC. 41 SA.2. DEFINITIONS. The following terms shall have the follo wing definitions: "Pipeline Proiect" means a residential or live/work proiect that (]) is subiect to the Inclusionarv Affordable Housing Ordinance. Planning Code Section 415.1 et seq., and (2) was Finallv Approved prior to November 1. 2023. and (3) has not been issued a First Construction Document prior to November 1. 2023. "Finallv Approved' or "Final Approval" shall mean (I) approval of a proiect 's first Development Application., unless such approval is appealed: or (2) i{a proiect onlv requires a building permit. issuance o(the first site or building petmit, unless such permit is appealed,· or (3) i{the first Development Application or first site or building permit is appealed, then the final decision upholding the Development Application. or first site or buildingpermit. on the appeal by the relevant Citv Board or Commission. "Finallv Approved" or "Final Approval" shall not include anv modification o{the approval under Section 415A.5. SEC 415A.3. APPLICATION. This Section 415A shall applv to Pipeline Proiects. This Section 415A shall not apply to (1) any mixed-use proiect that has entered into a development agreement e,y;ecuted pursuant to Chapter 56 of the Administrative Code or other sirnilar binding agreement with the Citv on or before November 1. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page6 2023, or (2) proiects that have chosen to complv with affordable housing requirements bv dedicating land, including but not limited to projects meeting the requirements set forth in Sections 419.5(a)(2) or 249.33(b)(l6). or (3) proiects that have paid development impact fees, including inclttsionarv impact fees. on or before November 1. 2023. SEC. 415A.4. MODIFICATION OF PIPELINE PROJECTS. On or before November 1. 2026. proiect sponsors of Pipeline Proiects shall be entitled to request a modification under Section 415A.5 to that proiect's conditions o(approval. conditions on a project permit. notice of special restrictions. or other requirements related to: (1) specified requirements of the Inclusionarv Affordable Housing Progra,n. Planning Code Section 415. I et seq .. or other applicable inclusiona,y housing requirement; (2) conditions that require a project sponsor to obtain a ite permit within a certain timeframe after project approval; and (3) findings required by Planning Code Section 206.6. Except as specifically set forth herein. or as modified under the procedure set forth in subsection 415A.5, Pipeline Proiects shall compfv with all other conditions o( approval. conditions on a proiect permit, or notice of special restrictions and any applicable requirements of the Planning Code, including the requirements set forth in Sections 415. l through 415.11. Project span ors mav request the following modifications: (a) Affordable Housing Fee. If a proiect sponsor ofa Pipeline Proiect elected to pav the inclusionar housin ee ursuant to Section 415. 5. the ro ·ect shall be entitled to a modi cation o the inciusionarv housing requirements set forth in Section 4I 5.5(b)(l )(BJ or 415.5(b)(l )(CJ, or i( applicable 415.3(b)(2)(A) through (2)(C), as follows: 1 For Ownershi or Rental Housin Pi efine Pro ·ects consistin o ·25 units o more. the applicable percentage shall be 16. 4%. (2) For anv Pipeline Proiect consisting of 25 units or more located in an area with a specific affordable housing requirement set forth in a Special Use District. Area Plan. or in anv other section of the Code. including 415.3(d), 419. or 428. the applicable percentage shall be 54.5% of Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 7 the rate for Rental Housing Proiects in the specific area. rounded to the nearest tenth of one percent. This reduction shall not applv to fees subiect to the Temporarv Fee Reduction Program set forth in Section 403. (3) Notwithstanding subsections (1) and (2). in no case shall a Pipeline Project be entitled to a modi/icat.ion o(an affordable housing fee that would result in an applicable percentage lower than 16. 4%. (b) On-site Affordable Ho11si11gA/temative. !fa project sponsor ofa Pipeline Project elected to provide on-site affordable units pursuant to Section 415.5(g). the development project shall be entitled to the following modifications to the on-site percentages in Section 415.6(a)(2) or (a)(3). or if applicable. the on-site percentages set forth in 415.3(b)(J )(A) to (b)(J)(D): (I) For Pipeline Projects consisting o(25 units or more, the number of Affordable Units constructed on-site shall be 12% of all units constructed on the proiect site. Such projects shall ensure that a minimum 0{8% o(the units are affordable to low-income households. 2% are affordable to moderate-income households. and 2% are affordable to middle-income households. (2) For anv Pipeline Project consisting of25 units or more that is located in an area with a specific affordable housing on- ite requirement set forth in a Special Use District. Area Plan. or in anv other section of the Code, including Sections 415.](b)(l )(E). 415.3(d). 419. or 428. the applicable percentage shall be 54.5% o(the rate for Rental Housing Projects in that specific area. rounded to the nearest tenth of one percent. (3) Notwithstanding subsections (1) and (2), in no case shall a Pipeline Project be entitled to a modification o{an on-site affordable housing obligation that would result in an applicable percentage lower than 12%. (c) Off-Site Affordable Housing Alteniative. !fa project sponsor of a Pipeline Project elected to provide off-site units pursuant to Section 415.5(g). the development proiect shall be entitled to a modification o[the requirements in Section 415. 7(a) as follows: Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 8 . (1) For Pipeline Proiects consisting of 25 units or more, the applicable percentage shall be 16.4%. Such proiects shall ensure that a minimum of9.4% of the units are affordable to low-income households. 4% are affordable to moderate-income households, and 3% are affordable to middle-income households. (2) For anv Pipeline Proiect consisting of25 units or more located in an area or Special Use District or in anv other section o(the Code. including Sections 415.J(d). 419, and 428 with a specific affordable housing requirement. the applicable percentage shall 54.5% o(the rate for Rental Housing Proiects in the specific area. rounded to the nearest tenth o{one percent. (3) Notwithstanding subsections (l) and (2). in no case shall a Pipeline Proiect be entitled to a modification o[the o(fsite affordable housing alternative that would result in a percentage lower than I 6.4%. (d) Site Permit and First Constr11ctio11 Docume11t Timim! Rea11ireme11ts: Conditions o · Approval. (1) Notwithstanding anv contrary provision in this Code. proiect sponsors of Piveline Proiects shall be entitled to a modification under Section 415A.5 of any conditions of'am1rova1 or conditions on a proiect permit. requiring procurement of a site permit within a specified time. but in no event may such a deadline be extended past Mav I, 2029. (2) Notwithstandinf! anv contrary orovision in this Code. anv modification under Section 415A.5 shall require as a condition that the proiect sponsor procure a First Construction Document on or before May l, 2029. Failure to meet this condition shall invalidate the modification. Pipeline Proiects that fail to procure a First Construction Document on or before May 1. 2029 shall be subiect to the !nclusionarv Affordable Housing requirements in effect on Mav I. 2029 that are applicable to a proiect at the same location. size, and tenure. (e) De11sitv Bonus Proiects: Affordability Levels, Concessions, I11ce11tives and Waivers . Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 9 !fa Pipeline Proiect elected to proceed under the State Densitv Bonus law. Government Code section 65915 and/or Planning Code section 206. 6. (State Density Bonus Program: Individuallv Requested). the proiect sponsor may request the following modifications to a condition of approval or regulatorv agreement pursuant to Section 415A.5. provided that the project continues to meet the requirements o(the State Densitv Bonus law and/or Section 206.6: (I ) the number of units to be restricted as affordable units and the afl'ordabilitv levels of those units; (2) the number and tvpe of concessions. incentives. and waivers granted under 206. 6(e). SEC. 415A.5.PROCESSFORMODIF1CATIONOF INCLUSIONARYAFFORDABLE HOUSIN G PROGRAM REQUIREMENTS. The purpose of this Section 415A.5 is to provide for the efficient review and approval of reauests for modifications to conditions of avvroval conditions on a vroiect vermit. or notice of svecia1 restrictions. for projects eligible for such modifications under Section 415A. The Planning Commission shall be responsible for reviewing and approving such requests. or mav delegate those functions to the Planning Director. (a) Planning Commission Review. Notwithstanding Section 415A. 5 (b), anv modification of the conditions of approval, conditions on a project permit. or notice of special restrictions consistent with Section 415A that would result in the significant modification of approved _p!Clns shall require review and approval bv the Planning Commission under the modification process .otherwise applicable to the project, including but not limited to Planning Code Sections 303(e), 309(i) or 329(0(7)). All modifications pursuant to this subsection 415A.5{a), including anv appeal of such modifications. shall be granted prior to November I. 2026. A significant modification shall include, but is not limited to: . Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 10 (I) a change in the number of Residential or Group Housing units bv more than 20%. or a change of more than I 0% in Gross Floor Area; or. (2) a change of use from Dwelling Units to Group Housing. (b) Admillistrative Modifications. Notwithstanding Section 415A.5(a). if the Planning Commission has delegated its authority to the Planning Department to review and approve requests for modifications consi tent with Section 415A.5. the following modifications shall be reviewed and approved by the Director of the Planning Department. and the Planning Commission shall not hold a public hearing for discretionary review. Modifications under this subsection 415A.5(b) shall not be subject to review under Planning Code sections 303(e). 309(/), 3090) or 329(()(7). Any modifications pursuant to this Section 415A.5(b) must be granted prior to November 1. 2026. Jfso delegated. the Planning Director hall be authorized to modify: 415A.4(b). 415A.4(c). (I) the applicable inclusionary fee required consistent with Section 415A.4(a). (2) the applicable percentage of off.site units required consistent with Section (3) the applicable percentage of on-site units required. consistent with Section (4) for proiects that elected to develop u ing the State Density Bonus Law. Government Code section 65915 or State Densitv Bonus Program: Individuallv Requested. under Planning Code section 206.6. the number o(on-site Affordable Units. and the a!fordabilitv levels of those units if such levels require modification for the proiect to continue to qualify for the same amount o[densitv bonus previousiv approved. and findings required bv Section 206. 6(e) related to eligibility for a densitv bonus, concessions and incentives and/or waivers o{development standards. consistent that are significant as set forth in subsection (a), shall be reviewed by the Planning Commission. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 11 (5) performance standards consistent with Section 415A.4(d). including the time o(validitv, expiration and renewal. (c) Additional Conditions. Any modification to conditions of approval under this Section 415A. 5 shall include a condition that a project must secure a First Construction Document on or before Mav I. 2029 and if a proiect sponsor fails to secure a First Construction Document on or before Mav 1. 2029. the inclusion.arv requirements applicable to the project shall be those requirements in place at the time a First Con !ruction Document is secured applicable to a project o( the same size. location, and tenure. SEC. 415A.6. SUNSET PROVISION. This section 415A shall expire bv operation of!aw on May I. 2029. unless extended bv an ordinance effective on or before that date. Upon expiration ofthis Section 415A. the Citv Attorney shall cause the section to be removed from the Planning Code. Section 4. Article 4 of the Planning Code is hereby amended by adding new Section 4158, to read as follows: SEC. 41 SB. TEMPORARY REDUCTION IN REQUIREMENTS FOR NEW RESIDENTIAL AND LIVE/WORK DEVELOPMENT PROJECTS. In order to encourage construction of residential and live/work development projects subject to the Inclusionarv Affordable Housing Program, Planning Code Sections 415.1 et seq. this Section 415B shall applv to housing and live/work development projects that are Finallv Approved. as defined in Planning Code Section 415A.2. between November 1. 2023 and November I. 2026. provided that such projects receive a First Construction Document within 30 months from Final Approval. Such deadline shall be extended in the event of anv litigation seeking to invalidate the Citv 's approval of such proiect, for the duration ofthe litigation. Housing development proiects that (ail to obtain a First Construction Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 12 Document within 30 months of Final Approval shall be subject to the requirements of Section 415.1 et seq. in effect on the date a First Construction Document is finallv obtained. Except as specifically set forth herein. all other Inclusionary Affordable Housing requirements in Sections 415.1 et seq hall continue to applv. SEC. 41 SB.J. AFFORDABLE HOUSING FEE. !(a proiect sponsor elects to pay the affordable housing fee under Section 415.5. the project shall complv the requirements set forth in Section 415.a§,(b)(l ). except as follows: (a) For anv housing development consisting o(25 units or more. the applicable percentage shall be 20.5%. (b) For anv housing development located in an area with a specific affordable housing requirement set forth in a Special Use District. Area Plan. or in anv other section of the Code, including 415.3(d), 419. or 428. the percentage shall be 68% of the rate applicable to Rental Housing Proiects. rounded to the nearest tenth o{one percent. This section shall not applv to fees subject to the Temporarv Fee Reduction Program set forth in Section 403. SEC. 415B.2. ON-SITE AFFORDABLE HOUSING ALTERNA TIVE. !fa project sponsor elects to provide on-site Affordable Units pursuant to Section 415.5(g). the housing development shall be subiect to the following required percentages rather than the percentage of units set forth in Section 415.6(a): (a) For anv housing development consisting o{25 or more unit . the number of Affordable Units constructed on-site shall be 15% o(all units construc.ted on. the proiect site. Proiect sponsors shall ensure that a minimum o{J 0% of the A/fordable Units shall be affordable to low-income households, 2.5% o{the Affordable Units shall be affordable to moderate-income households. and 2.5% o{the Affordable Units shall be af!prdable to middle-income households. (b) For any housing development located in an area with a specific affordable housing requirement set forth in a Special Use District, Area Plan, or in anv other ection o[the Code such as Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 13 Section 415. 3 (d), 419. or 428. the percentage shall be 68% ofthe rate applicable to Rental Housing Proiects in such area. rounded to the nearest tenth o{one percent. SEC. 415B.3. OFF-SITE AFFORDABLE HOUSING ALTERNATIVE. ]fa proiect sponsor elects to provide off.site units to satisfy the requirements o{Section 415.1 et se . ursuant to 41 5. 5 Section 415. 7(a). except as follows: (a) For any housing development consisting o(25 units or more, the applicable percentage shall be 20.5%. Project sponsors shall ensure that a minimum ofl 1.5% o(the Affordable Units shall be affordable to low-income households, 5% o[the Affordable Units shall be affordable to moderate-income households, and 4% of the Affordable Units shall be affordable to middle-income households. (p) For anv housing development that is located in an area with a specific off-site affordable housing requirement set forth in a Special Use District. Area Plan. or in anv other section of the Code including Section 415.3(d). 419, or 428, the percentage shall be tRe 68% o{the applicable rate for Rental Housing Proiects in the area. rounded to the nearest tenth o(one percent SEC. 415B.4. INCLUSIONARY FEE ANNUAL FEE UPDATES. Notwithstanding anv other provision o(the Code, during the period that this Section 415B applies: (a) the amount o[the inclusionarv housing fee shall be adjusted consistent with the factors set forth in Sections 415.5(p)(2) and 415.502)(3). but in no case shall the fee be increased bv more than 2% annuallv: and (p) the provisions of 415.6(a)(5) shall not applv. SEC. 41 SB.5. SUNSET PROVISION This section 41 SB shall expire bv operation of!aw on this Section 415B. the Citv Attornev shall cause the section to be removed from the Planning Code. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 14 Section 5. Article 4 of the Planning Code is hereby amended by revising Sections 403 and 415.10, to read as follows: SEC. 403. PAYMENT OF DEVELOPMENT FEE(S) OR SATISFACTION OF DEVELOPMENT IMPACT REQUIREMENT(S) AS A CONDITION OF APPROVAL PL4NNING COMAI/SS!-OlVREVIEW; TEMPORARY FEE REDUCTION PROGRAM RECOM,"4/ENDA. TlON CONCERNING EFFECTIVENESS OF FEE DEFERRAL PROGRAA1. (s) Cenditien 9/A.pprew,/. In addition to any other condition of approval that may otherwise be applicable, the Department or Commission shall require as a condition of approval of a development project subject to a development fee or development impact requirement under this Article that such development fee or fees be paid prior to the issuance of the first construction document for any building or buildings within the development project, in proportion to the amount required for each building if there are multiple buildings, with an option for the project sponsor to defer payment of 85 percent of the fees, or 80 percent of the fees if the project is subject to a neighborhood infrastructure impact development fee, to prior to issuance of the first certificate of occupancy upon agreeing to pay a Development Fee Deferral Surcharge on the amount owed, as provided by Section 107 A.13.3 of the San Francisco Building Code ("Fee Deferral Program"). The Department or Commission shall also require as a condition of approval that any development impact requirement imposed on a development project under this Article shall be satisfied prior to issuance of the first certificate of occupancy for any building or buildings within the development project, in proportion to the amount required for each building if there are multiple buildings. Temporary Fee Reduction Program. The following development fees assessed on or before November 1. 2026 shall be reduced bv 33% for (1) proiects that receive a First Construction Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 15 Document, as defined in Building Code Section 107A.13.l. within 30 months o{Final Approval. as defined in Section 415A.2; and (2) for Pipeline Proiects modified under Section 415A.5, ifsuch Pipeline Proiects receive a First Construction Document on or before May 1. 2029. Proiects approved for a fee reduction under this Section 403. Upon receipt ofa First Construction Document. the Planning Department shall determine whether the proiect is eligible for the Temporary Fee Reduction Program. and update the fees assessment as applicable. If the project is found eligible. the following fees shall be reduced: (1) The Transportation Sustainabilitv Fee (Section 41 lA); (2) The Downtown ParkFee (Section 412): (3) The Jobs Housing Linkage Program (Section 413): (4) The Childcare Requirement for Office and Hotel Development Projects (Section (5) The Childcare Requirements for Residential Projects (Section 414A): (6) Market and Octavia Area Plan and Upper Market Neighborhood Commercial District Affordable Hou ing Fee (Section 416): (7) Fund (Section 418); Eastern Neighborhoods Area Plan Affordable Housing Requirement (Section Rincon Hill Communi Im rovements Fund and SOMA Comnumitv Stabilizatio Visitation Valle Communitv Facilities and In ·astructure Fee and Amd 'Sectio (g10) The Market and Octavia Communitv Improvements Fund (Section 421): (4-011) Balboa Park Community Improvements Fund (Section 422): (4412) Eastern. Neighborhood Impact Fees and Public Benefits Fund (Section 423); Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 16 (42-13) Van Ness & Market Affordable Housing and Neighborhood Infrastructure Fee and Program (Section 424); (4-J14) Transit Center District Open Space Impact Fee and Fund (Section 424.6) and Transportation and Street Improvement Impact Fee (Section 424. 7): (4415) Van Ness and Market Community Facilities Fee and Fund (Section 425); (-%16) Open Space requirements (Sections 426 and 427): (4917) Public Art Fee (Section 429); (4+18) Bicvcle Parldng fee (Section 430): (4819) Central SOMA Communitv Services Facilities Fees and Fund (Section 432); (4-920) Central SOMA Infrastructure Fee and Fund (Section 433): (~21) Union Square Park. Recreation. and Open Space Fee (Section 435): Fees eligible for reduction under this section. including the amount with a reduction. shall be included in the Controller 's Cit:vwide Development Fee and Development Impact Requirenients Report described in Section 409(a). (b) lleR:<ill.g hJ Review EffeetiJ1eness ~/Fee Deferral Pf'egmm. Under 107A. l3. 3 of the &m Fnmcisco Building Cede, the option Ee deft'-!· thepByment of'deveJopmentfees e.."<pires on July 1, 2013 unless the Bosril (:TfSupen,•isars e..Y:te,u/,s the Fee De.ferret/ Pragrn,'1i. Prier Ee the J1:1ly 1, 2013 expirB:tian dst;e, the Plamiing Csmmissian shall hoid a public hearing tea review the effectiveness efthe Fee Defcrrel Prag,"-flH'l, the ecmwmy at lerge, e:nd whether the simulati·;e effects l'>jthe Fee De.ferral Program c1;re still necessarJ,. Fellowin:g the public hearing, the Gemmission shall forward a recemnwndetif:m te the Beard of &.tpe,·visors ss Ee whether the Fee Deferrel Pregmm should be ctmtirzued, medi:fied, er ternzinated. SEC. 415.10. REPORTING TO BOARD OF SUPERVISORS. (a) Findings. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 17 San Francisco continues to experience a housing crisis that requires a broad spectrum of land use and financing tools to address. The 2022 Housing Element Update of the City's General Plan calls for 40% -38% of all new housing production to be affordable for lower income households below 80% of area median income and M% 17% of new housing affordable to be built for moderate/middle income households up to 120% of area median income. San Francisco's inclusionary housing program, which requires housing developers to provide affordable units as part of their projects, is a critical component of the City's programs to expand affordable housing options. The lnclusionary Housing program is one of the City's tools for increasing affordable housing dedicated to lower income San Franciscans without using public subsidies, and in particular it is a useful tool for creating any affordable housing t meet the growing need of moderate/middle income households. The City adopted an lnclusionary Housing ordinance in 2002 that set requirements on market rate development to include affordable units at 12% of the total for the first time. The inclusionary program has successfully resulted in more than .J,()00 3,330 units of below-market, permanently affordable housing since its adoption. The City prepared a Nexus Study in 2007 in support of the program. which was updated in 2016. The repo~ demonstrated the necessary affordable housing in order to mitigate the impacts of market rate housing, and tlw inclusionary requirements were i)icreased to 15% of total tmits. The City's inclusionary housing requirementsL which have been set at various levels since 2002 in response to changing economic conditions. are codified in Section 415 of the Planning Code. The City is noH" i,·i the precess efupdctling that nexus analysis. In 20l l, Governor .le)•ry Breum dissol"l-ed the Sfflre Redevdepment Agency, which WtlS the City's pri,·nm7•pe)w1a.nentfwuling stream/er a.ffoniaele housin.g. !n 2012, in response ro th;s Jess, the voters amended the &m Fnmcisce Clu,rter to creau: the Afferde.hk Housing Trust Fund, which included fl pn,visien te Je wer th.e o,i site inclztsimut1y refituirernent to 12%. 111 November 2014, in Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 18 response to an esceJating 8./fer-dabk housing crisi:s, the ,..e,'£:rs passed Prepositien K, which set forth a poliC)' directi~·e to the Cit)• to ensure that sdditional ef{ordabJe .1iousirtg is a minimum &/33% (}fits overall heMSing prodctctien to low and moderate/middle income lumsehokls up to 120% r>}the Area Median Income tmd c1.t least emother 17% ajfortlable to househ.oklsfrem 120% lo 150% o.fthe Area },kditm Income. The Board e{Sztper,;iso,·s has preposed to the 1;,·oters a Chfl.rter {I;,nendment that will appear on. the June 7, 2016 ballot. The Che.rte,· crnicndme1'lt would eiutherize the Cit)· te enact by ordi,umce subsequent changes le the incl:usionary hottsing reqtdrements, including changes to the mil'limttHl or maximum ineh,<sionary or efferdebJe housing obligations applicable to nuu-ket rate housing p,·ej-eets. On 1~,tf:arch I, 2016, #w Board of&tpenii.sors unanimously tuiopled Resolution Ne. 79 16 declaring that (1) it shall be Citypo/.icy to mttximi=e the economically feasibkpercentage e>fafferdabk inclusiena1y· hG!<Si1ig in market rate housing devetepment to create .1ie-usingfor lower and mGderate/middle inceme households· (2) if the voters ad6pt the proposed Charter anwndment on June conduct a periedic eeonmnic study to rnaximi:::e ctfferdahility in the City's indusiontu7· lumsing requirCfflenls; end (3) thefuture erdi1umce would cretlte €Eli advisory· cemmiaee to Cl'ISure that #w economic study is the result o-fa tronsptu=ent and i:idusiYepuhlicprocess. The purpose of this Section 415.10 is to provide {or the ongoing study Qf...how to set inclusionary housing obligations in San Francisco at the maximum economically feasible amount in market rate housing development to create housing for low and moderate/middle income households, at the income levels set forth in Section 415.1 O(d), and with guidance from the City's Nexus Study, which sheukl shall be periodically updated. * * * * Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 19 Section 6. Article XXIX of Chapter 5 of the Administrative Code Chapter is hereby amended to revise Sections 5.29-1, 5.29-4, and 5.29-6 to read as follows: ARTICLE XXIX: INCLUSIONARY HOUSING TECHNICAL ADVISORY COMMITTEE SEC. 5.29-1. CREATION OF ADVISORY COMMITTEE. The Board of Supervisors hereby establishes the lnclusionary Housing Technical Advisory Committee (the "Advisory Committee") of the City and County of San Francisco. * * * * SEC. 5.29-4. ORGANIZATION AND TERMS OF OFFICE. (a) Each member shall serve at the pleasure of the member's appointing authority. and mav be removed bv their appointing officer at anv time [or anv reason. Each member appointed to the Advisory Committee shall serve for an unlimited term. in 20}& shell serve tmtil three numths sfter the date the CenlreUerproduces thefi.rst ecenomicfeBSibility a1u1/ysis required by P!-amzing Cede shell appeint members te the Advi.se1y CemmiUee in anticip8.ti8n Qf each s"'bsequent eemz8mic feasibil:ity 8.n8.lysis by the C8nl:r8ller, mu/ th8se members' teFms shall similarly expire three mfmlhs «fter the date the Commlierpmduces the eeen8micfeasibility enalysis required by Planning Cede Section 415.10. Members shall not Rl8.)' held ever after the expirati8n of their terms. * * * * SEC. 5.29-6. MEETINGS AND PROCEDURES. The Advisory Committee shall hold a regular meeting not less than once every four months until the sunset date set forth in Section 5.29-7. Notwithstanding anv other provision o[ this Section 5.29 or Planning Code section 415. 10. the Advisory Committee shall convene no later than January I . 2026. * * * * Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 20 Section 7. Article 4 of the Planning Code is hereby amended to revise Sections 415.3, 415.5, 415.6, 415.7, 419.3, 419.5, 428, and 428.3, to read as follows: SECTION 415.3 APPLICATION. * * * * (b) Except as provided in subsection (3) below, any development project that has submitted a complete Environmental Evaluation application prior to January 12, 2016 shall comply with the Affordable Housing Fee requirements, the on-site affordable housing requirements or the off-site affordable housing requirements, and all other provisions of Section 415.1 et seq., as applicable, in effect on January 12, 2016. For development projects that have submitted a complete Environmental Evaluation application on or after January 1, 2013, the requirements set forth in Planning Code Sections 415.5, 415.6, and 415. 7 shall apply to certain development projects consisting of 25 dwelling units or more during a limited period of time as follows. ( 1) If a development project is eligible and elects to provide on-site affordable housing, the development project shall provide the following amounts of on-site affordable housing. * * * * (F) Any development pro:fect t,het has submitted 8 compkte Environnwntal E·~Btuetion applicB.tio11. mi or before Jsnueuy 12, 201 e and seeks te t.·titize e density bonus unde,· Stste Lf:lw shall blSe its best efforts te prOi>1ide on. site refferds.bk tmits in the amount of25% of the number ef units censtructed on site and shR1l censult with the Planning Dcpartl'l'leJit abeut how to tlchieve this snunmt ofinehisio,uuy Qffords.ble housing. An applicsnt seeking a density henus under thepro11isiens Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 21 o.fSudc Law shall previde rCBSe1u1.hk (i(!)CunwntBtifm le csl:aelish eligibility fer 8 requested density bem,s, inccnti,es or concessions, and waivers or .eeductiens ofrki·el:epnient standards. (2) If a development project pays the Affordable Housing Fee or elects to provide off-site affordable housing, and such requirements have not been amended on or before November 1. 2026, the development project shall provide the following fee amount or amounts of off-site affordable housing during the limited periods of time set forth below. (A) Any development project that has submitted a complete Environmental Evaluation application prior to January 1, 2014, shall pay a fee or provide off-site housing in an amount equivalent to -2J.% 20.5% of the number of units constructed on-site. (B) Any development project that has submitted a complete Environmental Evaluation application prior to January 1, 2015, shall pay a fee or provide off-site housing in an amount equivalent to 27.5% 22.5% of the number of units constructed on-site. (C) Any development project that has submitted a complete Environmental Evaluation application on or prior to January 12, 2016 shall pay a fee or provide off-site housing in an amount equivalent to M)% 24.5% .of the number of units constructed on-site. (D) Any development project that submits an Environmental Evaluation application after January 12, 2016 shall comply with the requirements set forth in Sections 415.5, 415.6, and 415.7, as applicable. (E) Notwithstanding the provisions set forth in subsections (b)(2){A), (B) and (C) of this Section 415.3, for development projects proposing buildings over 120 feet in height, as measured under the requirements set forth in the Planning Code, except for buildings up to 130 feet in height located both within a special use district and within a height and bulk district that allows a maximum building height of 130 feet, such development projects shall pay a fee or provide off-site housing in an amount equivalent to M)% 24.5% of the number of units constructed on-site. Any buildings up to 130 feet in height located both within a special use Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 22 district and within a height and bulk district that allows a maximum building height of 130 feet shall comply with the provisions of subsections (b)(2)(A), (B) and (C) of this Section 415.3 during the limited periods of time set forth therein. (F) Notwithstanding the provisions set forth in subsections (b)(2)(A), (B) and (C) of this Section 415.3, if a development project is located in a UMU Zoning District or in the South of Market Youth and Family Zoning District, and pays the Affordable Housing Fee or elects to provide off-site affordable housing pursuant to Section 415.5(g), or elects to comply with a Land Dedication Alternative, such development project shall comply with the fee, off- site or land dedication requirements applicable within such Zoning Districts, as they existed on January 12, 2016, plus the following additional amounts for the Affordable Housing Fee or for land dedication or off-site affordable units: (i) if the development project has submitted a complete Environmental Evaluation application prior to January 1, 2014, the Project Sponsor shall pay an additional fee, or provide additional land dedication or off-site affordable units, in an amount equivalent to 5% of the number of units constructed on-site; (ii) if the development project has submitted a complete Environmental Evaluation application prior to January 1, 2015, the Project Sponsor shall pay an additional fee, or provide additional land dedication or off-site affordable units, in an amount equivalent to 7.5% of the number of units constructed on-site; or (iii) if the development project has submitted a complete Environmental Evaluation application on or prior to January 12, 2016, the Project Sponsor shall pay an additional fee, or provide additional land dedication or off-site affordable units, in an amount equivalent to 10% of the number of units constructed on-site. Notwithstanding the foregoing, a development project shall not pay a fee or provide off-site units in a total amount greater than the equivalen of J()% 24.5% of the number of units constructed on-site. * * * * Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 23 (d) Notwithstanding the provisions set forth in Section 415.3(b ), or the inclusionary affordable housing requirements contained in Sections 415.5, 415.6, and 415. 7, such requirements shall not apply to any project, consisting of 25 dwelling units or more, that has not submitted a complete Environmental Evaluation Application on or before January 12, 2016, if the project is located within the Eastern Neighborhoods Mission Planning Area, the North of Market Residential Special Use District Subarea 1 or Subarea 2, or the SOMA Neighborhood Commercial Transit District, because inclusionary affordable housing levels for those areas will be addressed in forthcoming area plan processes or an equivalent community planning process. Until such planning processes are complete and new inclusionary housing requirements for projects in those areas are adopted, projects consisting of 25 units or more shall (1) pay a fee or provide off-site housing in an amount equivalent to MJ% 24.5% if the Principal Project is a Rental Housing Project, or JJ% 27% if the Proposed Project is an Ownership Housing Project, or (2) provide Affordable Units in the amount of .JJ-% 20.5% of the number of units constructed on-site in a Rental Housing Project, or .J7..% 22.1% of the number of units constructed on-site in an Ownership Housing Project. For Rental Housing Projects, 15.5% of the on-site Affordable Units shall be affordable to low-income households, J.% 2.5% shall be affordable to moderate-income households and J.% 2.5% shall be affordable to middle-income households. For Ownership Housing Projects, .J..J.%16.1% of the on-site Affordable Units shall be affordable to low-income households, 6% 3% shall be affordable to moderate-income households and 6% 3% shall be affordable to middle-income households. * * * * SEC. 415.5. AFFORDABLE HOUSING FEE. The fees setforth in this Sectien 415. 5 will he reviewed when the City cempktes an Eeenomic FC(J;sihility Study. Except as provided in Section 415.5(g), all development projects subject to Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 24 this Program shall be required to pay an Affordable Housing Fee subject to the following requirements: (a) Timing of Fee Payments. The fee shall be paid to DBI for deposit into the Citywide Affordable Housing Fund at the time required by Section 402(d). (b) Amount of Fee. The amount of the fee that may be paid by the project sponsor subject to this Program shall be determined by MOHCD utilizing the following factors: (1) The number of units equivalent to the applicable off-site percentage of the number of units in the Principal Project. (A) For housing development projects consisting of 10 units or more, but less than 25 units, the applicable percentage shall be 20%. (B) For development projects consisting of 25 units or more, the applicable percentage shall be 27ro-JJ.% if such units are Owned Units. (C) For development projects consisting of 25 units or more, the applicable percentage shall be 24.5%J()% if the development project is a Rental Housing Project. In the event a Rental Housing Project becomes an Ownership Housing Project, the Project Sponsor shall either (A) reimburse the City the proportional amount of the lnclusionary Affordable Housing Fee, which would be equivalent to the current lnclusionary Affordable Housing Fee requirement for Ownership Housing Projects, or (8) provide additional on-site or off-site Affordable Units equivalent to the current inclusionary requirements for Ownership Housing Units, apportioned among the required number of units at various income levels in compliance with the requirements in effect at the time of conversion. Any additional Affordable Units provided on-site or off-site shall comply with Section 415 and the Procedures Manual. (2) The affordability gap, using data on MOHCD's cost of construction of affordable residential housing. l\Te later then .ktnua1y 3}. 20l8, t:he Centre!:kr, with the suppert f>j consultants as ,wcessary, ~md in consullatien with the lnelmiemu·y Heusing Technical Advisery Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 25 Committee (TAC) esffl.blished in Pkmning Cede Sectfrm 415. JO, shall condHct a stt1dy te develop tm epprepriate methodolegyfer cakukl#ng, indexing, and applying tJze appropriate amount ef the hiclusio1u1.ry1 Afjerd6.bl:e Hmtsing Fee. Th Sblflf)Ort the Con.freUer 's study cfl'ld annually thm·eefier, },{()HCD s!ze1./provide the fol!:owing docwnentatien: {l) schedttles efsources end blSCS effimils end independent auditor 's reports (" Gest Ce1·tifications ') .for ell A{()HCD funded devek}pnwnts completed within three years ef the date e>frcportirtg to the Controller; and, (2) for any }AOH:CD funded del>'elep,Rent that commenced construction wi#ti.~ threeJectrs efthe reporting date to the Controller but for 1.~~11ich n8 Gest Certificati8,'Z is yet ee,nplete, the sourees fmd t/Ses ef fimds appreved by MOHCD and the construction lender as efthe date of the development's censtn:1ction lof!ln dosing. C8st Certifications conipleted in years prior to the year of reporting to the Controller nuiy be i1zcre6sed er decreBSed by the applicable mmuc1,1 Gmstruct:ien Ce:st l-nde.x percentsge(s) .for residel'ltial const,-;;.•ction for San Francise8 reported in the E."lgineerin.g AT.ews Record. MOHCD. together with the Controller and TAC shall evaluate the cest .to construct de:t8, inc!udh1g fl:Clilt8l B:nd appraised kind costs, slllte and/.er fed.ere} public subsidies &vaihtble to 1"40HCD fiauiedprejects, ctnd determine MOHCD 's awnzge costs. Fe/.lewing completion ~Cthis study·, the Boaril efSttper·,ri!J'ors, i,•1 its sek and absoh,te discretion, and wilhin the legal aU8wtmces &jthe Residential Nm.us Analysis, will review the a;u1iyses, methodelogy fee applicatiel'l., and thepropesedfee schedule; and may consider adopting legislation te revise the I11.clusione1)1 Affe,=dable Ho't,1sing fees. The me.thod ~{calculating, indexing, and appiyil1g the fee slu11l be published in the Procedures },famt8.l. The Depsrtment a,id M-OHCD shall irpdflte thefee methedology and technieB:l report eYe,•y three years, ·with 8.nalysisfrom the Tech:zical Ad'llise,7• Cemmitle:e, in erder to ensure that the affordability gt1p reHiai,"IS current C8fisistent with the requirements set forth below in Section 4 l 5. 5(b) (3) and Sectie1l 415. l 0. * * * * (5) The applicable amount of the inclusionary housing fee shall be determined based upon the date that the project sponsor has submitted a complete Project Application Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 26 Envirmunental E,wluatie:1 appliceliion. In the event the project sponsor does not procure a building permit or site permit for construction of the principal project within 30 months of the project's approval, the development project shall comply with the inclusionary affordable housing requirements applicable thereafter at the time when the project sponsor does proceed with pursuing a building permit. Such time period shall be extended in the event of any litigation seeking to invalidate the City's approval of such project, for the duration of the litigation. * * * * SEC. 415.6. ON-SITE AFFORDABLE HOUSING ALTERNATIVE. If a project sponsor elects to provide on-site units pursuant to Section 415.S(g), the development project shall meet the following requirements: (a) Number of Units. The number of units constructed on-site shall be as follows: (1) Fer housing deYe/,epment projeclS consisting of I r:J dwelling wiits or mere, hut less then 25 dwelling wiUs, the nwnbe-r ofafferdabk tm#s constnwted en site shall generally be 12% efall units censtnwted en the project site. The ejfordabk tmilS shall e.ll be affordable te Jew inceme heuseho'lds. Owned Units shall be effordabk Jo hm,,:sef.1etds earning l:lft te }r:Jr:J% efArea Metlian Income, witJz an affordable sales price set at 80% ~{Area l·Aedic1:n Income or less. Re:itel Units sha,U be ofAroo Jkdien Income er less. (2) .Rer f:my Ownership He using Project censisting e.f 25 er more w1:Us, the number ey-r Affordable Units ce,·1st:ruet:ed on site slu,l! generally be 2r:J% o.f e:ll units censtrttc!ed Oli the pro/eel site. 4 . . C 1 r:J0{J ./' l 0l l il b ff d bf / . l l 1d 5°'6 t'/l "I I ti b ., 11llJlllnwn 8j •7 Gj [,1,e W1l S SliRe al -Or~ ~ te ~)t,' meeme r1.ei1SevW, S,, GjrlC UliVS Sr1cle aff-0rdahle to ffUJtiCffl.te inceme ho1:1Sehoids, and 5% efthe units shell be {'J;ffordabl:e w m.iddle iHC<Jme Supervisors Peskin; Safai, Mandelrnan, Dorsey, Stefani BOARD OF SUPERVISORS Page 27 househokis. In ne ease shRll the kJial number efAfferdsble Units required e;weed: the m,1;mber reqt.tired RS determined by the ap-plica.tiet'l o.f #w Elpplieable en site requirement ntte te the totslpro:Jeet wiits. Owned: U:iitsfor low income heuseholds shall ha;1e an <efferdablepl:lrCh(il:seprice set et 80% ofArecl /vf.edif:ln Jnceme or less, with households eBming up to 100% t7fAroo l',1edicm Income eligible to 8:pply Je1· low income f;{1lits. Q.,.med U,"l.itsfor moderttte i.·ieome heuseholds shell .1urve an ajfordttble p.urchase price set at 105% o}Area ,".1edian Income or less, wi#1 households eaniingfrem 95% to 120% ~{Arce 1".1edian Income eligible to apply/or moderate incenze tmits. OwJzeri Units for middle income households shall fl6J;;1e an &fforooblepurchBSe price set at 130% c,fArea A1edicui Inconw or less, with households earningfroni l20% le 150% e-JAree .. ~1edian lneome el-igible to applyfer middle income units. Far any Affeniable Units ulithpurchBSepriees set at 130% ofAres A1edicm J,.,,,eenw, the units shall have B minimum ecectpal'zcy 9ftv.:e pers8ns. This imit req1,tirement shall be oittlined within the },layor 's Office of Housing Preferences fl,'lri LoUery Proced1,1TCS .Manu(l;l n8 later than P'ebrnary 26, 20l8. MOHCD may red:uce Ar-ee ,\1ed:ian btcemepricing and t:.11.e minimum inoome requiredfar eligibility in each ownership categmy (3) Fer any Remal Heusing Prefect censisling ef25 er more units, the number of Affordable Uni.'s constructed OH site shall genern,lly be l 8% e_fRII un.its const.••ucted en the p>'"<:>:iect site, with a minimum of l 0% f>}the l;{nits e.fferdable to 'f.ow income heuseholris, 4% <Jf the units efferdable to mederate income hm,seh8lris, cuid 4% of the units 6:fferdable to mic!dle inceme heusehotds. Jn ne case shaJl the tetal n.wnba ofA.lferdable Units required e.,'(;ceed the number required ClS determined by the applicaticm f>f t!ze 8fJf:Jliceble on site requirement rete le the toUI.l pre-ject uniis. Rental Units fer low ineeme hou-seholds shall have an cif.ferdable rent set at 55% of"Area },1edian Income er less, with househoids canting up to 65% <>}Arce. l'.kdicm !nC8me eligible to applyfer Jew ilrzcome MRits. Rental er less, with househekls earningfrem 65% te 90% efArea .~1edicui Income eligible te apply.fer R1.Bderete ineome units. RenUll Units/or middle ineome households shall have en affordable rent set at Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 28 ]1()% of'Ar-ee Median J:weme or less, with h.ousehekls earningfrem 90% to 130% ofArea },{edie.,~ lncenw eligi.bte le apply/or midtil:e income units. Far cmy A.fferda.hk Units wi!.h. rental re.Les set at 110% efArea },ledian Income, the units she.fl hcnie a m,inimum OCCiiptmcy e>ftwo pe, .. soris. This unit requirement she.IL be m,tlined within the }h:l,) 10r 's Office t:>f lf.eusin.g Preferences and LotteYJ' Proeedttres Aefamutl no /.8.ter #um .F'ebrttEU)' 26, 20.18. },{OHCD may• reduce Area Aledfrm income pricing end the minimum income req1;tiredfor d-i.gibility in each ,"Cntal catege,y. (1) For housing development proiects consisting of 10 dwelling units or more, but less than 25 dwelling units. the number of affordable units constructed on-site shall generally be 15% of all units constructed on the proiect site. The affordable units shall all be affordable to low-income households. Owned Units shall be affordable to households earning up to 100% of Area Median Income, with an affordable sales price set at 80% o{Area Median Income or less. Rental Units shall be affordable to households earninf! uv to 65% of Area Median Income with an affordable rent set at 55'31. of Area Median Income or less. (2) For any Ownership Housing Proiect consisting o{25 or more units. the number o( Affordable Units constructed on-site shall generallv be 20% of all units constructed on the proiect site. A minimum 0(10% o[the units shall be affordable to low-income households. 5% o(the units shall be affordable to moderate-income households. and 5% of the units shall be affordable to middle-income households. In no case shall the total number of Affordable Units required exceed the number- required as determined bv the application of the applicable on-site requirement rate to the total proiect units. Owned Units for low-income households shall have an affordable purchase price set at 80% o{Area Median Income or less. with households earning up to I 00% of Area Median Income eligible to applv for low-income units. Owned Units for moderate-income households shall have an affordable purchase price set at 105% ofArea Median Income or less. with households earning from 95% to 120% of Area Median Income eligible to applv for moderate-income units. Owned Units for middle-income households shall have an affprdable purchase price set at 130% of Area Median Income or less, with Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 29 households earning from 120% to 150% of Area Median Income eligible to applv for middle-income units. For anv Affordable Units with purchase prices set at 130% of Area Median Income. the units shall have a minimum occupancv of two persons. This unit requirement shall be outlined within the Mayor 's Offlce of Housing Preferences and Lotterv Procedures Manual no later than February 26. 2018. MOHCD mav reduce Area Median Income pricing and the minimum income required for eligibility in each ownership categorv. (3) For anv Rental Housing Proiect consisting of25 or more units. the number of Affordable Units constructed on-site shall generally be 18% of all units constructed on the proiect site, with a minimum of l 0% o{the units affordable to low-income household . 4% of the units affordable to moderate-income households. and 4% o(the units affordable to middle-income households. In no case shall the total number o{A/fordable Units required exceed the number required as determined bv the application of the applicable on-site requirement rate to the total proiect units. Rental Units for low- income household shall have an affordable rent set at 55% of Area Median Income or less. with households earning up to 65% of Area Median Income eligible to applv for low-income units. Rental Units or moderate-income households shall have an a ·ordable rent set at 80% o Area Median Inconi or less. with households earning from 65% to 90% of Area Median Income eligible to applv for moderate-income units. Rental Units for middle-income households shall have an affordable rent set at 110% of Area Median Income or less. with households earning from 90% to 130% of Area Median Income eligible to applv for middle-income units. For any Affordable Units with rental rates set at 110% of Area Median Income, the units shall have a minimum occupancv o{two per. ons. MOH CD mav reduce Area Median Income pricing and the minimum income required for eligibilitv in each rental category. (4) Notwithstanding the foregoing Area Median Income limits for Rental Units and Owned Units, the maximum affordable rents or sales price shall be no higher than 20% below market rents or sales prices for the neighborhood within which the project is located, Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 30 which shall be defined in accordance with the American Community Survey Neighborhood Profile Boundaries Map. MOHCD shall adjust the allowable rents and sales prices, and the eligible households for such units, accordingly, and such potential readjustment shall be a condition of approval upon project entitlement. The City shall review the updated data on neighborhood rents and sales prices on an annual basis. (5) Starting on January 1, .J().J..82028, and no later than January 1 of each year thereafter, MOHCD shall increase the percentage of units required on-site for projects eensisting eflO 24 units, r:1s selferth in Seetieii 415.6(a)(J), by increments of0.5% e€tehyear, tmtil !J°'l:leh requirement is 15%. Fer all develepment projects with 25 or more units, the required en site 9,fferdable e1,wzership housing le satisfy this Sectien 415. 6 shall increase by .5%1% annually for two consecutive years starting January 1, .J().J..82028. The increase shall be apportioned to units affordable to low-income households, as defined above in subsection 415.6(a)(3). Starting January 1, .J().2.{)2030, the increase to on-site housing developments with 25 or more units shall increase by 0.5% annually, with such increases allocated equally to moderate= and middle= income households, as defined above in subsection 415.6(a)(3). The total on-site inclusionary affordable housing requirement shall not exceed 26% for Ownership Housing Projects or 24% for Rental Housing Projects, and the increases shall cease at such time as these limits are reached. MOHCD shall provide the Planning Department, DBI, and the Controller with information on the adjustment to the on-site percentage so that it can be included in the Planning Department's and DB l's website notice of the fee adjustments and the Controller's Citywide Development Fee and Development Impact Requirements Report described in Section 409(a). (6) The Department shall require as a condition of Department approval of a project's building permit, or as a condition of approval of a Conditional Use Authorization or Planned Unit Development or as a condition of Department approval of a live/work project, Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 31 that .J..J%15%, 18%, or 20%, as applicable, or such percentage that has been adjusted annually by MOHCD, of all units constructed on the project site shall be Affordable to Qualifying Households so that a project sponsor must construct -:-1-2-.15, .18, or .20 times, or such current number as adjusted annually by MOHCD, as applicable, the total number of units produced in the Principal Project. If the total number of units is not a whole number, the project sponsor shall round up to the nearest whole number for any portion of .5 or above. In no case shall the total number of Affordable Units required exceed the number required as determined by the application of the applicable on-site requirement rate to the total project units. * * * * (11) Specific Geographic Areas. For any housing development that is located in an area with a specific affordable housing requirement set forth in a Special Use District or in any other section of the Code such as Section 419, the higher housing requirement shall apply. The PkmningDcpflrtment, in ce.·:zsl;(/lation wUh the ContreUer, shall tmd-erto.ke a sttuly efarC6S greater t!um,jit:e acres in size, ·where en Area Plan, Specie} Use District er ether re ;;ening is being co;1side;·edfor c1deption er hfils been adepted efter Js.rwa,,· }, 20.15, to determine whether tl higher on silc inchtSienary «fferdsbk he/;{sing req1:1;irement is fes.sibk en sites thdt !uwe recei.l>·ed a. 20% or g,-eater increase in develepa.bk residential gress .fleer aretL er a 35% er greater inc.-'ease iri residential Supendsers. (12) If the Principal Project has resulted in demolition, conversion, or removal of affordable housing units that are subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate-, low- or very-low- income, or housing that is subject to any form of rent or price control through a public entity's valid exercise of its police power and determined to be affordable housing, the Commission o Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 32 the Department shall require that the project sponsor replace the number of Affordable Units removed with units of a comparable number of bedrooms and sales prices or rents, in addition to compliance with the requirements set forth in this Section. (13) The applicable amount of the percentage required for the on-site housing units shall be determined based upon the date that the project sponsor has submitted a complete Proiect Application EnvironmenEel Evti.ht.atien application. Any development project that constructs on-site affordable housing units as set forth in this Section 415.6 shall diligently pursue completion of such units. In the event the project sponsor does not procure a building permit or site permit for construction of the Principal Project within 30 months of the project's approval, the development project shall comply with the inclusionary affordable housing requirements applicable thereafter at the time when the project sponsor procures a building permit. Such deadline shall be extended in the event of any litigation seeking to invalidate the City's approval of such project, for the duration of the litigation. * * * * SEC. 415.7. OFF-SITE AFFORDABLE HOUSING ALTERNATIVE. If the project sponsor elects pursuant to Section 415.5(g) to provide off-site units to satisfy the requirements of Sections 415.1 et seq., the project sponsor shall notify the Planning Department and MOHCD of its intent prior to approval of the project by the Planning Commission or Department. The Planning Department and MOHCD shall provide an evaluation of the project's compliance with this Section 415. 7 prior to approval by the Plannin Commission or Planning Department. The development project shall meet the following requirements: (a) Number of Units: The number of units constructed off-site shall be as follows: Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 33 (1) For any housing development that is located in an area or Special Use District with a specific affordable housing requirement, or in any other Planning Code provision, such as Section 419, the higher off-site housing requirement shall apply. (2) For housing development projects consisting of 10 units or more but less than 25 units, the number of Affordable Units constructed off-site shall be 20%, so that a project applicant shall construct .20 times the total number of units produced in the Principal Project. If the total number of units is not a whole number, the project applicant shall round up to the nearest whole number for any portion of .5 or above. In no case shall the total number of Affordable Units required exceed the number required as determined by the application of the applicable off-site requirement rate to the total project units. Owned Units shall be affordable to households earning up to 100% of Area Median Income, with an affordable sales price set at 80% of Area Median Income or less. Rental Units shall be affordable to households earning up to 65% of Area Median Income, with an affordable rent set at 55% of Area Median Income or less. (3) For any Ownership Housing Project consisting of 25 or more units, the number of Affordable Units constructed off-site shall be JJ.%27% of all units constructed on th project site, with a minimum of .J-8%12% of the units affordable to low-income households, -8%7.5% of the units affordable to moderate-income households, and -7--%7.5% of the units affordable to middle income households. In no case shall the total number of Affordable Units required exceed the number required as determined by the application of the applicable off- site requirement rate to the total project units. Owned Units for low-income households shall have an affordable purchase price set at 80% of Area Median Income or less, with households earning up to 100% of Area Median Income eligible to apply for low-income units. Owned Units for moderate-income households shall have an affordable purchase price set at 105% of Area Median Income or less, with households earning from 95% to 120% of Area Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 34 Median Income eligible to apply for moderate-income units. Owned Units for middle-income households shall have an affordable purchase price set at 130% of Area Median Income or less, with households earning from 120% to 150% of Area Median Income eligible to apply for middle-income units. For any Affordable Units with purchase prices set at 100% of Area Median Income or above, the units shall have a minimum occupancy of two persons. This unit requirement shall be outlined within the Mayor's Office of Housing Preferences and Lottery Procedures Manual no later than February 26, 2018. MOHCD may reduce Area Median Income pricing and the minimum income required for eligibility in each rental category. (4) For any Rental Housing Project consisting of 25 or more Rental Units, the number of affordable units constructed off-site shall generally be J0%24.5% of all units constructed on the project site, with a minimum of ..J.8%12.5% of the units affordable to low- income households, 6% of the units affordable to moderate-income households, and 6% of the units affordable to middle-income households. In no case shall the total number of affordable units required exceed the number required as determined by the application of the applicable off-site requirement rate to the total project units. Rental Units for low-income households shall have an affordable rent set at 55% of Area Median Income or less, with households earning up to 65% of Area Median Income eligible to apply for low-income units. Rental Units for moderate-income households shall have an affordable rent set at 80% of Area Median Income or less, with households earning from 65% to 90% of Area Median Income eligible to apply for moderate-income units. Rental Units for middle-income households shall have an affordable rent set at 110% of Area Median Income or less, with households earning from 90% to 130% of Area Median Income eligible to apply for middle- income units. For any affordable units with rental rates set at 100% of Area Median Income or above, the units shall have a minimum occupancy of two persons. This tmit reqMirenum.t slulll be <:mt/ined within the A,!Ryor s Office efH8l:lsing Preferences and Lette,y PFecedures l',/anual ne le.ter Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 35 ihan 6 nzonlhs .fellewing the cffecti.,•e date o.fthe Ordimmce cenmined bi Beanl efSuper>iJisers Fik No. 161351. MOHCD may reduce Area Median Income pricing and the minimum income required for eligibility in each rental category. MOHCD shall set forth in the Procedures Manual the administration of rental units within this range. (5) In the event that a Rental Housing project converts to an Ownership Housing project, the Project Sponsor shall either (A) reimburse the City the proportional amount of the lnclusionary Affordable Housing Fee, which would be equivalent to the then- current lnclusionary Affordable Housing Fee requirement for Ownership Housing Projects, or (8) provide additional on-site or off-site Affordable Units equivalent to the then-current inclusionary requirements for Ownership Housing Projects, apportioned among the required number of units at various income levels in compliance with the requirements in effect at the time of conversion. (6) The applicable amount of the percentage required for the off-site housing units shall be determined based upon the date that the project sponsor has submitted a complete Project Application &wire~rn~entlll Evahtatien &.ppliuaien. Any development project that constructs off-site affordable housing units as set forth in this Section 415.6 shall diligently pursue completion of such units. In the event the project sponsor does not procure a building permit or site permit for construction of the principal project or the off-site affordable housing project within 30 months of the project's approval, the development project shall comply with the inclusionary affordable housing requirements applicable thereafter at the time when the project sponsor procures a building permit. Such deadline shall be extended in the event of any litigation seeking to invalidate the City's approval of the principal project or off-site affordable housing project for the duration of the litigation. * * * * Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 36 SEC. 419.3. APPLICATION OF UMU AFFORDABLE HOUSING REQUIREMENTS. (a) Section 419.1 et seq. shall apply to any housing project located in the UMU Zoning District of the Eastern Neighborhoods, that is subject to the requirements of Sections 415 et seq. (b) Additional UMU Affordable Housing Requirements to the Section 415 lnclusionary Affordable Housing Program Requirements. The requirements of Section 415 through 415.9 shall apply subject to the following exceptions: (1) For all projects sites designated as Tier A, a minimum of 14. 4peY'Cent 12.3% of the total units constructed shall be affordable to and occupied by qualifying persons and families as defined elsewhere in this Code, so that a project sponsor must construct -:-1-44 .123 times the total number of units produced in the principal project beginning with the construction of the tenth unit. If the total number of units is not a whole number, the sponsor shall round up to the nearest whole number for any portion of .5 or above. (A) If the project sponsor is eligible for and elects pursuant to Section 415.5(g) to build off-site units to satisfy the requirements of this program, the sponsor shall construct 23 percent 18.8% so that a sponsor must construct d-3- .188 times the total number of units produced in the principal project beginning with the construction of the tenth unit. If the total number of units is not a whole number, the sponsor shall round up to the nearest whole number for any portion of .5 or above. (B) If the project sponsor elects pursuant to Section 415.5 to pay the fee to satisfy the requirements of this program, the sponsor shall meet the requirements of Section 415 according to the number of units required above if the project applicant were to elect to meet the requirements of this Section by off-site housing development. For the purposes of this Section, the City shall calculate the fee using the direct fractional result of the Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 37 total number of units multiplied by the percentage of off-site housing required, rather than rounding up the resulting figure. (2) For all project sites designated Tier B, a minimum of 16percent 13.1% of the total units constructed shall be affordable to and occupied by qualifying persons and families as defined elsewhere in this Code, so that a project sponsor must construct -:-1-6 .131 times the total number of units produced in the principal project beginning with the construction of the tenth unit. If the total number of units is not a whole number, the sponsor shall round up to the nearest whole number for any portion of .5 or above. (A) If the project sponsor is eligible for and elects pursuant to Section 415.5(g) to build off-site units to satisfy the requirements of this program, the sponsor shall construct 25percent 20.5% so that a sponsor must construct d-5 .205 times the total number of units produced in the principal project beginning with the construction of the tenth unit. If the total number of units is not a whole number, the sponsor shall round up to the nearest whole number for any portion of .5 or above. (B) If the project sponsor elects pursuant to Section 415.5(g) to pay the fee to satisfy the requirements of this program, the sponsor shall meet the requirements of Section 415 according to the number of units required above if the sponsor were to elect to meet the requirements of this Section by off-site housing development. For the purposes of this Section, the City shall calculate the fee using the direct fractional result of the total number of units multiplied by the percentage of off-site housing required, rather than rounding up the resulting figure. (3) For all project sites designated Tier C, a minimum of 17.6percent 14.4% of the total units constructed shall be affordable to and occupied by qualifying persons and families as defined elsewhere in this Code, so that a project sponsor must construct-:-J..U .144 times the total number of units produced in the principal project beginning with the Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 38 construction of the tenth unit. If the total number of units is not a whole number, the sponsor shall round up to the nearest whole number for any portion of .5 or above. (A) If the project sponsor is eligible for and elects pursuant to Section 415.5(g) to build off-site units to satisfy the requirements of this program, the sponsor shall construct -2+ percent 22.1% so that a sponsor must construct d-7- .221 times the total number of units produced in the principal project beginning with the construction of the tenth unit. If the total number of units is not a whole number, the sponsor shall round up to the nearest whole number for any portion of .5 or above. (8) If the project sponsor elects pursuant to Section 415.5 to pay the fee to satisfy the requirements of this program, the sponsor shall meet the requirements of Section 415 according to the number of units required above if the sponsor were to elect to meet the requirements of this Section by off-site housing development. For the purposes of this Section, the City shall calculate the fee using the direct fractional result of the total number of units multiplied by the percentage of off-site housing required, rather than rounding up the resulting figure. (c) Timing of Fee Payments. Any fee required by Section 419.1 et seq. shall be paid to DBI for deposit into the Citywide Affordable Housing Fund at the time required by Section 402(d). SEC. 419.5. ALTERNATIVES TO THE INCLUSIONARY HOUSING COMPONENT. * * * * TABLE 419.5 HOUSING REQUIREMENTS FOR THE UMU DISTRICT Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 39 Tier A B C On-Site Housing Off-Site/In- Middle Requirement Lieu Income Requirement Alternative* 14.4% 12.3% .JJ!N,18.8% J()%24.5% -14%13.1% ~20.5% JJ.%28.6% 17.6%14.4% 2-7--%22.1% 4()%32.7% Land Land Dedication Dedication Alternative for Alternative for sites that have sites that have less than at least 30,000 30,000 square square feet of feet of developable developable area area 35% 30% 40% 35% 45% 40% SEC. 428. DIVISADERO STREET NCT AFFORDABLE HOUSING FEE AND REQUIREMENTS. Sections 428.1 through 428.5, hereafter referred to as Sections 428.1 et seq., set forth the requirements and procedures for the Divisadero Street Neighborhood Commercial Transit District Affordable Housing Fee. SEC. 428.3. APPLICATION OF AFFORDABLE HOUSING FEE REQUIREMENT. (a) For any project for which a complete development application has been submitted before October 1, 2018, the lnclusionary Affordable Housing Program set forth in Planning Code Sections 415.1 et seq. shall apply in the Divisadero Street NCT, except the temporary provisions of Planning Code Section 415.3(b) shall not apply and except as set forth in Section 428.3(a). For any development site for which the Planning Department determines that the residential development potential within the Divisadero Street NCT has been Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page40 increased through the adoption of the NCT rezoning set forth in Ordinance No. 127-15, as detailed in Section 428.1 ( e) herein, the requirements of Sections 415.1 et seq of the Planning Code shall apply, except as set forth in subsections (a)(1 ), (a)(2), and (a)(3), below, and the temporary provisions of Planning Code Section 415.3(b) shall not apply. (1) Fee. For a development project of 10 or more dwelling units that is subject to the lnclusionary Affordable Housing Program, the development project shall pay an affordable housing fee equivalent to a requirement to provide JJ% 27% of the units in the Principal Project as affordable units if those units are Owned Units, or -Y)% 24.5% of the units i the project is a Rental Housing Project, using the method of fee calculation set forth in Section 415.5(b). (2) On-site. For a development project of 10 or more units that is subject to the lnclusionary Affordable Housing Program that elects to construct units Affordable to Qualifying Households on-site of the Principal Project as set forth in Planning Code Section 415.5(g), the development project shall comply with all otherwise applicable requirements of Section 415.6, except that for all housing development projects consisting of 10 or more units, the following requirements shall apply. (A) For an Ownership Housing Project, the number of affordable units constructed on site shall be 2-J.% 18. 8% of all units constructed on the site. A minimum of ./-2-% J 0% of the units shall be affordable to low-income households, B% 5% of the units shall be affordable to moderate-income households, and B% 4.8% of the units shall be affordable to middle-income households. In no case shall the total number of affordable units required exceed the number required as determined by the application of the applicable on-site requirement rate to the total project units. Owned Units for low-income households shall have an affordable purchase price set at 80% of Area Median Income or less, with households earning up to 100% of Area Median Income eligible to apply for low-income units. Owned Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 41 Units for moderate-income households shall have an affordable purchase price set at 105% of Area Median Income or less, with households earning from 95% to 120% of Area Median Income eligible to apply for moderate-income units. Owned Units for middle-income households shall have an affordable purchase price set at 130% of Area Median Income or less, with households earning from 120% to 150% of Area Median Income eligible to apply for middle-income units. (B) For a Rental Housing Project, the number of affordable units constructed on site shall be 2-{)% 16.4% of all units constructed on the site. A minimum of n% 10% of the units shall be affordable to low-income households, 4% 3% of the units shall be affordable to moderate-income households, and 4% 3.4% of the units shall be affordable to middle-income households. In no case shall the total number of affordable units required exceed the number required as determined by the application of the applicable on-site requirement rate to the total project units. Rental Units for low-income households shall have an affordable rent set at 55% of Area Median Income or less, with households earning up to 65% of Area Median Income eligible to apply for low-income units. Rental Units for moderate- income households shall have an affordable rent set at 80% of Area Median Income or less, with households earning from 65% to 90% of Area Median Income eligible to apply for moderate-income units. Rental Units for middle-income households shall have an affordable rent set at 110% of Area Median Income or less, with households earning from 90% to 130% of Area Median Income eligible to apply for middle-income units. (3) Off-site. If the project sponsor of a housing development project of 10 or more units that is subject to the lnclusionary Affordable Housing Program elects to provide units Affordable to Qualifying Households off-site of the Principal Project as set forth in Section 415.5(g), the project sponsor shall construct or cause to be constructed affordable housing equal to~ 27% of all units constructed on the Principal Project site as affordable Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page42 housing if the units in the Principal Project are owned units, and .J{}% 24.5% if the project is a Rental Housing Project. (b) For any project for which a complete development application has been submitted on or after October 1, 2018, the lnclusionary Affordable Housing Program set forth in Planning Code Sections 415.1 et seq. shall apply in the Divisadero Street NCT except as set forth in this subsection (b ). For any development site for which the Planning Department has determined that the residential development potential has been increased through the adoption of the NCT rezoning set forth in Ordinance No. 127-15, as detailed in Section 428.1 (e) herein, the requirements of Planning Code Sections 415.1 et seq. shall apply, except that the following affordable housing requirements shall be applied to residential development on such sites: (1) Fee. For a development project of 10 or more dwelling units that is subject to the lnclusionary Affordable Housing Program, the development project shall pay an affordable housing fee equivalent to a requirement to provide JJ% 27% of the units in the Principal Project as Affordable Units if those units are Owned Units, or -U)% 24.5% of the units if the project is a Rental Housing Project, using the method of fee calculation set forth in Section 415.5(b). (2) On-site. If the housing development project of 10 or more dwelling units tha is subject to the lnclusionary Affordable Housing Program elects to construct units Affordable to Qualifying Households on-site of the Principal Project as set forth in Planning Code Section 415.5(g), the project sponsor shall comply with all otherwise applicable requirements of Section 415.6, except that for all housing development projects consisting of 10 or more units, the number of Affordable Units constructed on-site shall be provided as follows. (A) A project that consists of Owned Units shall provide .JJ-% 18.8% of units as Affordable Units at the following levels: 10% shall have an average affordable Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 43 purchase price set at 80% of Area Median Income; 8% 5% shall have an average affordable purchase price set at 105% of Area Median Income; and m 4.8% shall have an average affordable purchase price set at 130% of Area Median Income. (B) A project that consists of Rental Units shall provide .JJ% 18.8% of units as Affordable Units at the following levels: 10% shall have an average affordable rent set at 55% of Area Median Income; 8% 5% shall have an average affordable rent set at 80% of Area Median Income; and J.%-4.8% shall have an average affordable rent set at 110% of Area Median Income. (C) Notwithstanding subsections (b)(2)(A) and (b)(2)(B), thepercenffl:gC €md ajfm·dability le~els 9./Affordabk Units constructed 0~1 site c1s set.forth in subsections (h)(2)(A) and (h)(2)(B) shell be the S6mzepereenlage end «ffeniability levels es setferth in Section 206.3(!)(2)(A), fIS it may be fimemJedfi·om ti.nw te ti.·ne, and in no case shall the percentage of Affordable Units constructed on-site pursuant to this subsection (b)(2) be less than the percentage required by Section 415.6 for projects consisting of 25 or more units. If the percentage of Affordable Units constructed on-site pursuant to this subsection (b )(2) would be less than the percentage set forth in Section 415.6 for projects consisting of 25 or more units, the percentage of Affordable Units set forth in Section 415.6 for projects consisting of 25 or more units shall apply. (3) Off-site. If the project sponsor of a housing development project of 10 or more units is eligible and elects to provide units Affordable to Qualifying Households off-site o the Principal Project as set forth in Section 415.5(g), the project sponsor shall construct or cause to be constructed affordable housing equal to .J..3..% 27% of all units constructed on the Principal Project site as affordable housing if the units in the Principal Project are owned units, and JO% 24.5% if the project is a Rental Housing Project. Section 8. Effective Date; Operative Dates. Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 44 (a) This ordinance shall become effective 30 days after enactment. Enactment occurs when the Mayor signs the ordinance, the Mayor returns the ordinance unsigned or does not sign the ordinance within ten days of receiving it, or the Board of Supervisors overrides the Mayor's veto of the ordinance. (b) Sections 1 through 6 of this ordinance, adding Planning Code Sections 415A and 4158, amending Planning Code Sections 403 and 415.10, and amending Administrative Code Sections 5.29-1, 5.29-4 and 5.29-6, shall become operative on November 1, 2023. (c) Section 7 of this ordinance, amending Planning Code Section 415.3, 415.5, 415.6, 415.7, 419.3, 428 and 428.3, shall become operative on November 21, 2026, unless the City enacts legislation to change such operative date, or to otherwise revise or rescind the amendments set forth in Section 7. Section 9. Scope of Ordinance. In enacting this ordinance, the Board of Supervisors intends to amend only those words, phrases, paragraphs, subsections, sections, articles, numbers, punctuation marks, charts, diagrams, or any other constituent parts of the Municipal Code that are explicitly shown in this ordinance as additions, deletions, Board amendment additions, and Board amendment deletions in accordance with the "Note" that appears under the official title of the ordinance. APPROVED AS TO FORM: DAVID CHIU, City Attorney By: Isl Audrey Pearson AUDREY PEARSON Deputy City Attorney n:\legana\as2023\2300225\01690430 .docx Supervisors Peskin; Safai, Mandelman, Dorsey, Stefani BOARD OF SUPERVISORS Page 45 City and County of San Francisco Tails Ordinance City Hall I Dr. Carlton B. Goodlett Place San Francisco, CA 94102-4689 File Number: 230769 Date Passed: September 05, 2023 Ordinance amending the Planning Code to: 1) reduce lnclusionary Housing Program requirements of the Planning Code, for projects exceeding a stated unit size that have been approved prior to November 1, 2023 and that receive a first construction document within a specified period; 2) adopt a process for those projects to request a modification to conditions of approval related to development impact fees, subject to delegation by the Planning Commission; 3) reduce Article 4 development impact fees, including lnclusionary Affordable Housing fees, for projects approved before November 1, 2026 that receive a first construction document within 30 months of entitlement; and, 4) modify the lnclusionary Housing Program Ordinance effective November 1, 2026 to reduce applicable fees, and on-site or off-site unit requirements, for projects that exceed a stated unit size; amending the Administrative Code to update the lnclusionary Housing Technical Advisory Committee member requirements; affirming the Planning Department's determination under the California Environmental Quality Act; making public necessity, convenience, and welfare findings under Planning Code, Section 302; and making findings of consistency with the General Plan and the eight priority policies of Planning Code, Section 101.1. July 24, 2023 Land Use and Transportation Committee -AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE July 24, 2023 Land Use and Transportation Committee - DUPLICATED AS AMENDED July 24, 2023 Land Use and Transportation Committee - RECOMMENDED AS AMENDED AS A COMMITTEE REPORT July 25, 2023 Board of Supervisors - PASSED ON FIRST READING Ayes: 10 - Chan, Dorsey, Engardio, Mandelman, Melgar, Peskin, Ronen, Safai, Stefani and Walton Noes: 1 - Preston September 05, 2023 Board of Supervisors - FINALLY PASSED City and County of San Francisco Ayes: 10 - Chan, Dorsey, Engardio, Mandelman, Melgar, Peskin, Ronen, Safai, Stefani and Walton Noes: 1 - Preston Page I Printed at 12:00 pm on 9/6123 File No. 230769 London N. Breed Mayor City and County of San Francisco Pagel I hereby certify that the foregoing Ordinance was FINALLY PASSED on 9/5/2023 by the Board of Supervisors of the City and County of San Francisco . .,P Angela Calvillo Clerk of the Board Date Approved Printed at 12:00 pm on 9/6/23