o0201-23

AMENDED IN COMMITTEE FILE NO. 230855 9/11/2023 ORDINANCE NO. 201-23 [Planning, Administrative Codes - Development Impact Fee Reductions] Ordinance amending the Planning Code to: 1) reduce lnclusionary Housing Program requirements of the Planning CoEle, for projects, including requirements for projects approved under the Housing Opportunities Means Equity- San Francisco (HOME-SF) program, exceeEling a stateEI unit size for projects 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 exceeding a stated unit size, 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 strikcthroHgh iffllics Times 1¥ew Romtm/ont. Board amendment additions are in double-underlined Arial font. Board amendment deletions are in strikethrough Arial f.ont. Asterisks(* * * *) indicate the omission of unchanged Code subsections or parts of tables. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 1 Be it ordained by the People of the City and County of San Francisco: 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 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. 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 2 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. 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 f:or 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 3 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 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. (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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page4 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 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: Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 5 SECTION 415A. TEMPORARY REDUCTION OF INCLUSIONARY REQUIREMENTS FOR RESIDENTIAL AND LWEIWORK DEVELOPMENT PROJECTS APPROVED PRIOR TO NOVEMBER 1, 2023. SEC. 415A.J. 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 City hereby establishes a temporary program to: (]) reduce certain inclusionary affordable housing fees and obligations,· (2) extend the time such developments have to obtain a site permit after proiect approval,· and (3) allow the modification o(certain findings required by Planning Code Section 206. 6 ("State Density Bonus Program: Individually Requested. ") SEC. 415A.2. DEFINITIONS. The following terms shall have the following definitions: "Pipeline Proiect" means a residential or live/work proiect that (]) is subiect to the Inclusionary Affordable Housing Ordinance, Planning Code Section 415.1 et seq., and (2) was Finally Approved prior to November 1, 2023, and (3) has not been issued a First Construction Document prior to November 1, 2023. "Finally Approved" or "Final Approval" shall mean(]) approval of a proiect's first Development Application, unless such approval is appealed; or (2) i[a proiect only requires a building permit, issuance of the first site or building permit, 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 building permit, on the appeal by the relevant City Board or Commission. "Finally Approved" or "Final Approval" shall not include any modification of the approval under Section 415A. 5. SEC 415A.3. APPLICATION. Supeivisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 6 This Section 415A shall apply to Pipeline Pro;ects. This Section 415A shall not apply to (]) any mixed-use pro;ect that has entered into a development agreement executed pursuant to Chapter 56 of the Administrative Code or other similar binding agreement with the City on or before November 1, 2023, or (2) pro;ects that have chosen to comply with affordable housing requirements by dedicating land, including but not limited to pro;ects meeting the requirements set forth in Sections 419.5(a)(2) or 249. 33(b)(l 6), or (3) pro;ects that have paid development impact fees, including inclusionary impact fees, on or before November 1, 2023. SEC. 415A.4. MODIFICATION OF PIPELINE PROJECTS. On or before November 1, 2026, pro;ect sponsors of Pipeline Pro;ects shall be entitled to request a modification under Section 415A.5 to that pro;ect 's conditions of approval, conditions on a pro;ect permit, notice of special restrictions, or other requirements related to: (1) specified requirements o(the Inclusionary Affordable Housing Program, Planning Code Section 415.1 et seq., or other applicable inclusionary housing requirement; (2) conditions that require a pro;ect sponsor to obtain a site permit within a certain time{rame after pro;ect 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 Pro;ects shall comply with all other conditions of 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 415.1 through 415.11. Pro;ect sponsors may request the following modifications: (a) Affordable Housing Fee. If a pro;ect sponsor of a Pipeline Pro;ect elected to pay the inclusionary housing fee pursuant to Section 415. 5, the pro;ect shall be entitled to a modification of the inclusionary housing requirements set forth in Section 415.5(b)(1 )(A). 415. 5(b)(l )(B) or 415.5(b)(l)(C), or ifapplicable 415.3(b)(2)(A) through (2)(C), as follows: (1) For Ownership or Rental Housing Pipeline Pro;ects consisting of:J:a 10 units or more. the applicable percentage shall be 16. 4%. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 7 (2) For any Pipeline Proiect consisting of:J.!a 10 units or more located in an area with a specific affordable housing requirement set forth in a Special Use District, Area Plan. or in any other section ofthe Code, including 415.3(d), 419, or 428, the applicable percentage shall be 54.5% ofthe rate for Rental Housing Proiects in the specific area, rounded to the nearest tenth of one percent. This reduction shall not apply to fees subiect to the Temporary Fee Reduction Program set forth in Section 403. (3) Notwithstanding subsections (1) and (2), in no case shall a Pipeline Proiect be entitled to a modification of an affordable housing fee that would result in an applicable percentage lower than 16. 4%. (b) On-site Affordable Housing Alternative. If a proiect sponsor of a Pipeline Proiect elected to provide on-site affordable units pursuant to Section 415. 5 (g), the development proiect shall be entitled to the following modifications to the on-site percentages in Sections 415.6(a)(1 ). 415. 6(a)(2).. or 415.6(a)(3), or if applicable, the on-site percentages set forth in Sections 415.3(b)(l)(A) to (b)(l)(D), or Section 206.3: (1) For Pipeline Projects consisting of 10 units or more, but less than 25 units, the applicable percentage shall be 12%. f,B.<2l For Pipeline Proiects consisting of 25 units or more. the number of Affordable Units constructed on-site shall be 12% of all units constructed on the proiect site. Such proiects shall ensure that a minimum of8% of the units are affordable to low-income households, 2% are affordable to moderate-income households, and 2% are affordable to middle-income households. ~ill For any Pipeline Proiect consisting of:J.!a 10 units or more that is located in an area with a specific affordable housing on-site requirement set forth in a Special Use District, Area Plan, or in any other section of the Code, including Sections 415.3(b)(l )(E), 415. 3(d), 419, or 428, the applicable percentage shall be 54. 5% of the rate for Rental Housing Proiects in that specific area, rounded to the nearest tenth of one percent. For any Pipeline Project consisting of 10 units Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 8 or more that was approved pursuant to Section 206.3, the applicable percentage shall be 54.5% of the rate in Section 206.3(f}. ,(Jf.(4} Notwithstanding subsections (1) and (2)(3). in no case shall a Pipeline Proiect be entitled to a modification of an on-site affordable housing obligation that would result in an applicable percentage lower than 12%. (c) Off-Site Affordable Housing Alternative. !fa proiect sponsor ofa Pipeline Proiect elected to provide off-site units pursuant to Section 415. 5 (g). the development proiect shall be entitled to a modification ofthe requirements in Section 415. 7 (a) as follows: (1) For Pipeline Projects consisting of 10 units or more, but less than 25 units, the applicable percentage shall be 16.4%. f-1-t.(21 For Pipeline Proiects consisting of 25 units or more. the applicable percentage shall be 16. 4%. Such proiects shall ensure that a minimum of 9. 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. ~.Q} For any Pipeline Proiect consisting of~ 10 units or more located in an area or Special Use District or in any other section of the Code, including Sections 415. 3 (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 of one percent. ~{4} Notwithstanding subsections (1) and (2).Q}. in no case shall a Pipeline Proiect be entitled to a modification of the off.site affordable housing alternative that would result in a percentage lower than 16. 4%. (d) Site Permit and First Construction Document Timing Requirements; Conditions of Approval. (I) Notwithstanding any contrary provision in this Code, proiect sponsors of Pipeline Proiects shall be entitled to a modification under Section 415A. 5 of any conditions of approval Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 9 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 May 1, 2029. (2) Notwithstanding any contrary provision in this Code, any modification under Section 415A. 5 shall require as a condition that the proiect sponsor procure a First Construction Document on or before May 1, 2029. Failure to meet this condition shall invalidate the modification. Pipeline Proiects that fail to procure a First Construction Document on or before May l, 2029 shall be subiect to the Inclusionary Affordable Housing requirements in effect on May 1, 2029 that are applicable to a proiect at the same location, size, and tenure. (e) Densitv Bonus Projects: Affordabilitv Levels, Concessions, Incentives and Waivers. !fa Pipeline Proiect elected to proceed under the State Density Bonus law, Government Code section 65915 and/or Planning Code section 206. 6. (State Density Bonus Program: Individually Requested), the proiect sponsor may request the following modifications to a condition of approval or regulatory agreement pursuant to Section 415A.5, provided that the proiect continues to meet the requirements of the State Density Bonus law and/or Section 206. 6: (]) the number of units to be restricted as affordable units and the affordability levels of those units,· (2) the number and type of concessions, incentives, and waivers granted under 206. 6(e). SEC. 415A.5,. PROCESS FOR MODIFICATION OF INCLUSIONARY AFFORDABLE HOUSING PROGRAM REQUIREMENTS. The purpose of this Section 415A. 5 is to provide for the efficient review and approval of requests for modifications to conditions of approval, conditions on a proiect permit, or notice of special restrictions, for proiects eligible for such modifications under Section 415A. The Planning Commission Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 10 shall be responsible for reviewing and approving such requests, or may delegate those functions to the Planning Director. (a) Planning Commission Review. Notwithstanding Section 415A.5(b), any modification o(the conditions of approval, conditions on a proiect permit, or notice of special restrictions consistent with Section 415A that would result in the significant modification o(approved plans shall require review and approval by the Planning Commission under the modification process otherwise applicable to the proiect, including but not limited to Planning Code Sections 303(e), 309(i) or 3 29(0(7)). All modifications pursuant to this subsection 415A. 5 (a), including any appeal of such modifications, shall be granted prior to November 1, 2026. A significant modification shall include, but is not limited to: (]) a change in the number of Residential or Group Housing units by more than 20%, or a change of more than 10% in Gross Floor Area: or, (2) a change of use from Dwelling Units to Group Housing. (b) Administrative Modifications. Notwithstanding Section 415A.5(a), i(the Planning Commission has delegated its authority to the Planning Department to review and approve requests for modifications consistent with Section 415A. 5, the following modifications shall be reviewed and approved by the Director o(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 subiect to review under Planning Code sections 303(e), 309(/), 309(i) or 329(0(7). Any modifications pursuant to this Section 415A. 5(b) must be granted prior to November 1, 2026. !(so delegated, the Planning Director shall be authorized to modify: (]) the applicable inclusionary fee required consistent with Section 415A. 4(a). (2) the applicable percentage of off-site units required consistent with Section 415A.4(b). Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 11 (3) the applicable percentage of on-site units required, consistent with Section 415A.4(c). (4) for proiects that elected to develop using the State Density Bonus Law, Government Code section 65915 or State Density Bonus Program: Individually Requested, under Planning Code section 206. 6, the number o(on-site Affordable Units, and the affordability levels of those units if such levels require modification for the proiect to continue to qualify for the same amount of density bonus previously approved, and findings required by Section 206. 6(e) related to eligibility for a density bonus, concessions and incentives and/or waivers of development standards, consistent with Section 415A. 4(e). Notwithstanding the previous sentence, modifications to a density bonus proiect that are significant as set forth in subsection (a), shall be reviewed by the Planning Commission. (5) performance standards consistent with Section 415A. 4(d), including the time of validity, expiration and renewal. (c) Additional Conditions. Any modification to conditions of approval under this Section 415A. 5 shall include a condition that a proiect must secure a First Construction Document on or before May I, 2029 and if a proiect sponsor fails to secure a First Construction Document on or before May I, 2029, the inclusionary requirements applicable to the proiect shall be those requirements in place at the time a First Construction Document is secured applicable to a proiect of the same size, location, and tenure. SEC. 415A.6~ SUNSET PROVISION This sSection 415A shall expire by operation oflaw on May I, 2029, unless extended by an ordinance effective on or before that date. Upon expiration of this Section 415A, the City 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 415B, to read as follows: Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 12 SEC. 415B. TEMPORARY REDUCTION IN REQUIREMENTS FOR NEW RESIDENTIAL AND LIVE/WORK DEVELOPMENT PROJECTS. In order to encourage construction of residential and live/work development proiects subiect to the Inclusionary Affordable Housing Program, Planning Code Sections 415.1 et seq, this Section 415B shall apply to housing and live/work development proiects that are Finally Approved, as defined in Planning Code Section 415A.2, between November 1, 2023 and November 1. 2026, provided that such proiects receive a First Construction Document within 30 months from Final Approval. Such deadline shall be extended in the event of any litigation seeking to invalidate the City's approval of such proiect, for the duration of the litigation. Housing development proiects that fail to obtain a First Construction Document within 30 months of Final Approval shall be subiect to the requirements of Section 415.1 et seq. in effect on the date a First Construction Document is finally obtained. Except as specifically set .forth herein, all other Inclusionary Affordable Housing requirements in Sections 415.1 et seq shall continue to apply. SEC. 41 SB.1. AFFORDABLE HOUSING FEE. If a proiect sponsor elects to pay the a/fordable housing fee under Section 415. 5, the proiect shall comply the requirements set forth in Section 415. e5(b)(I ), except as follows: (a) For any housing development consisting of25 units or more, the applicable percentage shall be 20. 5%. (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 any other section of the Code, including 415.3(d), 419, or 428, the percentage shall be 68% o[the rate applicable to Rental Housing Proiects, rounded to the nearest tenth of one percent. This section shall not apply to fees subiect to the Temporary Fee Reduction Program set forth in Section 403. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 13 SEC. 415B.2. ON-SITE AFFORDABLE HOUSING ALTERNATIVE. !fa proiect 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 any housing development consisting of25 or more units, the number of Affordable Units constructed on-site shall be 15% of all units constructed on the proiect site. Proiect sponsors shall ensure that a minimum of] 0% of the Affordable Units shall be affordable to low-income households, 2. 5% of the Affordable Units shall be affordable to moderate-income households, and 2. 5% of the Affordable Units shall be affordable 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 any other section of the Code such as 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 of one percent. SEC. 415B.3. OFF-SITE AFFORDABLE HOUSING ALTERNATIVE. If a proiect sponsor elects to provide off-site units to satis-/j; the requirements of Section 415.1 et seq. pursuant to 415.5(g)(l)(B), the housing development proiect shall be subiect to the requirements of Section 415. 7(a), except as follows: (a) For any housing development consisting of25 units or more, the applicable percentage shall be 20.5%. Proiect sponsors shall ensure that a minimum off 1.5% ofthe Affordable Units shall be affordable to low-income households, 5% of the Affordable Units shall be affordable to moderate-income households, and 4% of the Affordable Units shall be affordable to middle-income households. (b) For any 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 any other section of Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 14 the Code including Section 415.J(d), 419, or 428, the percentage shall be tl=le 68% ofthe applicable rate for Rental Housing Projects in the area, rounded to the nearest tenth of one percent. SEC. 415B.4. INCLUSIONARY FEE ANNUAL FEE UPDATES. Notwithstanding any other provision of the Code, during the period that this Section 415B applies: (a) the amount o[the inclusionary housing fee shall be adjusted consistent with the factors set forth in Sections 415.5(b)(2) and 415.5(b)(3), but in no case shall the fee be increased by more than 2% annually; and (b) the provisions of 415. 6(a)(5) shall not apply. SEC. 415B.5. SUNSET PROVISION. This section 415B shall expire by operation o[law on November 1, 2026, unless extended by an ordinance on or effective before that date. Upon expiration of this Section 415B, the City Attorney shall cause the section to be removed from the Planning Code. 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 PLA1VNING C0111Af!SS!ONREVIEW; TEMPORARY FEE REDUCTION PROGRAM RECOAl11IENDATION C01VCERNLVG EFFECTIVENESS OF FEE DEFERRAL PROGRAAI. (a) Centlititm efAppf'fJvHl. 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, Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 15 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 by 33% for (I) proiects that receive a First Construction Document, as defined in Building Code Section 107 A.13.1. within 30 months of Final Approval, as defined in Section 415A.2; and (2) for Pipeline Proiects, as defined in Section 415A.2, modified under Section 415.A..5, i{such Pipeline Proiects receive a First Construction Document on or before May 1, 2029. Proiects approved pursuant to a development agreement under Chapter 56 of the Administrative Code shall not be eligible 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. !{the proiect is found eligible, the following fees shall be reduced: (]) (2) (3) The Transportation Sustainability Fee (Section 411A),· The Downtown Park Fee (Section 412),· The Jobs Housing Linkage Program (Section 413),· (4) The Childcare Requirement for Office and Hotel Development Proiects (Section Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 16 (5) The Childcare Requirements for Residential Proiects (Section 414A),· (6) Market and Octavia Area Plan and Upper Market Neighborhood Commercial District Affordable Housing Fee (Section 416),· (7) Eastern Neighborhoods Area Plan Affordable Housing Requirement (Section (8) Rincon Hill Community Improvements Fund and SOMA Community Stabilization Fund (Section 418),· (9) Visitation Valley Community Facilities and Infrastructure Fee and Fund (Section (g.10) The Market and Octavia Community Improvements Fund (Section 421 ),· (4-011) Balboa Park Community Improvements Fund (Section 422),· (44-12) Eastern Neighborhood Impact Fees and Public Benefits Fund (Section 423),· (~13) Van Ness & Market Affordable Housing and Neighborhood Infrastructure Fee and Program (Section 424),· (~14) 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),· (4616) Open Space requirements (Sections 426 and 427); (4817) Public Art Fee (Section 429); (4+18) Bicycle Parking fee (Section 430),· (48-19) Central SOMA Community Services Facilities Fees and Fund (Section 432),· (4-Q.20) Central SOMA Infrastructure Fee and Fund (Section 433): (~21) Union Square Park, Recreation, and Open Space Fee (Section 435); Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 17 Fees eligible for reduction under this section, including the amount with a reduction, shall be included in the Controller's Citywide Development Fee and Development Impact Requirements Report described in Section 409(a). (b) HeRring 18 Re•ikw Effectir'e.'less &/Fee Deferr-(l[ Pr-egrt1»1. Under 107A. l3. 3 r>Jthe San FfflRcisco BHikiing Cede, the option to defer the ptlymel"lt ofdc,;dopmeRtfees expires on JMly 1, 2013 bll9less the Boerd o:f&,pervisors exteRds the Fee Defcrrel Progrem. Prior to the JMly 1, 2013 expiretio,q date, the PlanniRg Commission shell hokl: fl pHhlic heeriRg to re1,;iew the cffecti1,;e1wss of the Fee DcfcrrRl Progrem, the ecoRonqy Rt large, find whether the sin9HH:ltive effects afthe Fee Dcfcrrnl PregrRm fire stil/ 1qecessE1ry. FollowiRg the pHhlic heRring, the Comnqissiol"l shRll forwRrd fl recommendRtion to the BoRrd &/Supervisors €IS to whether the F'ee Defcrml ProgrRm shoHld be coRtinbled, nwdified, or terminRted. SEC. 415.10. REPORTING TO BOARD OF SUPERVISORS. (a) Findings. 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% ~ of all new housing production to be affordable for lower income households below 80% of area median income and .J...{).% 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 to meet the growing need of moderate/middle income households. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 18 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, end the inclusionery reqMirenw1qts were increesed to 15% oftotf:ll units. The City's inclusionary housing requirements,_ 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 now in the process ofbtf)deting thet nexus enelysis. In 2011, Governor Jerry Brown dissolved the Slete Redc;elopmentAgency, which ~f€lS the City's pri;nery perme1qent funding streem /er efferdeble housing. In 2012, in response to this loss, the -voters emended the SeH Frencisco Cherter to creete the Ajferdeble Housing Trust Fw1d, which included e provision to lower the on site il'lclusionttry requirement to 12%. In ]Vmember 201 4, in respo,qse to en esceleting afferdeble housing crisis, tlw ·;oters pessed Proposition K, which set forth e policy directive to the City to ensure thet edditionel t1:fferdeble housing is e minin1um of33% of its owrell housing productiol'l to low end moderete/middk incoN'le households up to 120% of the Arce A1edien Inco>"lw e1'ld et leest enother 17% afferdeble to households from 120% to 150% of the Arce },1edien Income. The Boerd ofSbtJ3ervisors hes proposed to the voters e Cherter €lfnendmel'lt thet will aptJeer on the June 7, 2016 bellot. The Cherter emendment woul:d euthorize the City to el'lect by ordinence subsequeNt changes to the iNchtsion€H'y' hobtSiNg requi,"'C>"IWnts, including changes to the ,'11i,1'lin1um or meximum il'lclusionary or t1:fferdeble housing obligetions €tf3pliceble to merket rate housing projects. OH Afarch 1, 2016, the Boerd a/Supervisors unm'limeusly edopted Resolution ]'lo. 79 16 declering thet (1) it shell be Citypelicy to meximi:z;e the ecenomicelly/eesible percentege o}E1fferdeble Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 19 inclusionery hmtsing in m€1:rket r€1:te housing developnient to cre€1:te housing for lower €1:mi moder€1:te-/n1iddle income hoitseholds; (2) if the 11oters €1:dopt the proposed Ch€1:rter €1:mendment on J1;me 7, the Bo€1:rd inte1'lds to €1:dopt tJ future ordi11tJnce requiring the Controller tJnd other City dep€1:rtments to conduct €1:periodic economic study to n1€1:xin1ize efferdahility in the City's inclusion€1:ry housing requireN1e11ts; €1:nd (3) the futbtre ordintJrwe would cre€1:te €1:n €1:dvisory committee to ensure th€1:t the economic study is the resull oftJ tr€1:nsptJrent tJnd inclusiw public process. The purpose of this Section 415.10 is to provide for the ongoing study Q[_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 should shall be periodically updated. * * * * 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 may be removed by their appointing officer at any time for any reason. Each member appointed to the Advisory Committee shall serve for an unlimited term. in 2016 sh€1:ll sen,e until three nwr1ths Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 20 aficr the dete the ControlJcr produces the first economic feesibility enelysis required by P kmning Code Section 415.10, et which point the member's term shell expire. The Boerd ofSttper;isors end the Afayor shell trppoint monbers to #w Ad·;isory· Committee in enticipetion ofeech subsequent econornic fcesibility' enelysis by the Controller, end those members' terms shell simiktrly expire three nwnths after the dete the ControUerprodbtces the eco1qomic.fcesibility enelysis required by Pl-tuming Code Section 415.10. },/embers shelJ not may hoM o·;er aficr the expiretion &/their tern9s. * * * * 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 any other provision of this Section 5. 29 or Planning Code section 415.10, the Advisory Committee shall convene no later than January 1, 2026. * * * * 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 21 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-) ,foy devel,opl'IW19tproject thet hes subl'l9itted e compkte Ew.rironnw1qtel Eveluetion €lpplicetion on or before Januery 12, 2016 end seeks to utiliw e density bonus u1qdcr Sff:lte Lew shell use its best efforts to provide on site efferdable units in the enqount &}25% of the number of units crmstructed on site end shell consult with the Pfenning Dcpertment ebout how to echiew this enwunt o.finclusionery efferdeble housing. A1q €lpp!icent seeking e density bonus under the prmisions ofStete Lew shellprm·ide reesonebk Glocumentetion to esteblish eligibility/ore requested density bo;qus, incentir1es or concessions, end weivers or reductions &j dcvel,opment stenderti8. (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 I, 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 ~ 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. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 22 (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~ 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~ 24.5% of the number of units constructed on-site. Any 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 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(9), 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 23 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 equivalent of .JO.% 24.5% of the number of units constructed on-site. * * * * (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 .JO.% 24.5% if the Principal Project is a Rental Housing Project, or .J.J% 27% if the Proposed Project is an Ownership Housing Project, or (2) provide Affordable Units in the amount of 8% 20.5% of the Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 24 number of units constructed on-site in a Rental Housing Project, or .J.l..!#, 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 set forth in this Section 415. 5 wiU he rc,1ie,Fed when the City col'npletes Em Economic Feasibility StHcly. Except as provided in Section 415.5(g), all development projects subject to 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 27%J.:J-% if such units are Owned Units. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 25 (C) For development projects consisting of 25 units or more, the applicable percentage shall be 24.5o/oJ.f)!#, 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 (B) 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. ,Vo klter #um .!al'rble1y 31, 2018, the Controller, with, the support of consblltents es J'lecessery·, end in consblltetion with #w !rtelblsionery· Hobtsing Technicel Advisory Committee (TAC) estflblished in Pklnnin,g Code Section 415.10, shell conduct e stbldy to develop en BpprOf)riete Hwthodology .for celeuklting, indexing, e1qd BfJplying the Bppropriete emount of the !nclblsionery Afferd&ble Housi19g Fee. To SUJ3!30rt the Controlkr 's stHdy, end ennuelly thereajier, },{()}{CD shell provide the .fellowi19g documentetion: (1) schedules 0:fsources e1qd uses of.fimds end independc1qt euditor 's reports ("Cost Certificetions ") .for ell A«JHCD :fomded developnwnts completed ·within three yeers o_fthe dete ofrCfJorting to tlw Controlkr; e19d, (2) .for eny· },«JHCD funded develO[Jment thflt coHunenced construction within three yeers of the reporting dB:te to tlw Controller but .for ,,vhich no Cost Certificetion is yet coHiplete, the sources end uses offunds BpprMed ey ,\«JHCD end the construction lender €lS <:rfthe da:te of the dc,,eletHnent 's construction ken elosi,'-9:g. Gest Certificetions compkted in yeers prior to the yeer of reporting to the C011trol-ler mBy be increesed or decreesed By' the BfJplicebk ennuel Construction Cost Index percentflge(s) .for resideRtiel co1qstruction .for Sen Frencisco reJ3orted in the E19gineeri19g l'k-ws Record },«JHCD, together with the Controlkr Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 26 €Ind TAC, sh€lll ev€ll1,1€lk! the cost to crmstr1,1ct d€lf€l, incl1,1ding €lct1,1€ll €Ind €lf3JJr€lised ltmd costs, st€lk! €lnd/.er feder€ll ptthlic s1,1bsidies €l','€liltJble to ,~fOHCD fz,mded pr&jects, €Ind dek!rmine },fOHCD 's €l'lCr€lge costs. Following co,npletion efthis st1,1dy, the Bo€lrd efS1;1J3en;isors, in its sole €Ind €lbsolttk! discretion, €Ind within the leg€ll €lll-ow€lnces ofthe Residenti€ll Nex1,1s An€llysis, will re,;iew the €ln€llyses, methodology, f-ee flfJf)lic€ltion, €Ind the prOJ3osedfee sched1,1le; €Ind l'11ey consider €ldopting legisltJti011 to revise #w I11cl1,1sion€lry1 Afferdttble Housing fees. The method of c€lk1,1/t:,ting, indexing, €Ind €lfJf)lying the fee sh€lll be p1,1blished in the Proce8:l;{;res A!an1,1€ll. The Dep€lrtment €Ind },fOHCD sh€lll upd€lte the fee methodology €Ind technic€ll report every' three ye€lrs, ·with €ln€llysisfrom the Technic€ll Advisory Committee, i11 order to ens1,1re th,€lt the efferdttbility gep rem€lins c1,1rrent, consistent with the req1,1irnnents set forth below in Section 415. 5(b) (3) €Ind Section 415.10. * * * * (5) The applicable amount of the inclusionary housing fee shall be determined based upon the date that the project sponsor has submitted a complete Proiect Application Environmenf€ll E1r€ll1,1€ltion €lf3plic€ltion. 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. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 27 If a project sponsor elects to provide on-site units pursuant to Section 415.5(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) For housing de 1;elopment prejects consisting of 1 (} dwelling units or more, but less than 25 dwelling units, the number ofefferdable units constructed on site shall generatly be 12% &fall units constructed on the project site. The efferdt1ble u11its shall all be ttfferdt1ble to lo,F incorne households. Owned Units shall be efferdtlble to households eaming up to 1 (}(}% e>}Area },kdian Income, with an efjordt1ble sales price set at 8(}% ofArea l,kdian Income or less. RentEll Units shall be efferdt1ble to households earning Hp to 65% 0:fArea Akdia,1 Inconw, with an efferdt1ble rent set at 55% ofArea l,kdian Income or less. (2) For ar,y Ownership Housing Project co11sisting of25 or more u11its, the number e>f Afferdtlble Units constructed on site shall generally be 2(}% &fall units constructed on the project site. A 1ni11imurn of 1 (}% of the units shall be efferdtlble to low income households, 5% e>ftlw units shall be efferdt1bk to moderate inconw households, and 5% of#w units shall be efferdtlble to middle income households. In no case shal-l the total number e>}Afferdable Units required exceed the nwnber required as determined by· tlw €tpplication o.fthe €tpplicable on site requirement rnte to tlw totEll pr&ject Hnits. Owned Units for low incorne households shall have an efferdt1bk pHrchase price set at 8(}% &}Area l,fedian IncoHw or less, with households earning blJ3 to 1 (}(}% 0:fArea l,kdian Income eligible to apply for low income units. Owned Units fer Hwderate bwome households shall have an tifferdt1ble pHrchase price set at 1 (}5% &}Area l,kdian Income or less, with households earnb1gfrom 95% to 12(}% e>fArrn l,fedian Income eligible to apply fer H1oderate i,wome Hnits. Ovmed Units fer middle incoHw hobtSeholds shall hm·e El,"l €t}ferdt1ble pl+reh€1Se price set at 13(}% ofArea J,{edia,"l I:wome or less, with households earning from 12(}% to 15(}% &}Area l,kdian Income eligible to applJ,· for middle income Hnits. F'or any Afferdtlble Units v,iith purchase prices set at 13(}% e>}Area },{edian IHcome, the l,1;}1its shall ha,;e a :<11iniHutm occbtpancy of two persons. This unit requirement shall be outlined within the Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 28 },{syor 's Office &/Housing Preferences trl'ld Lottery Procedures },{anual no leter than February 26, 2018. M:OHCD n1ey reduce Area ,Hedian Income prici11g and the n1inimhln1 income required fer eligibility in each ownership category. (3) F'or any Ren.tel Housing Project consisting &}25 or more units, the number of Afferdable Units constructed on site shall generally be 18% &jall units constructed on the project site, with a n1ininHm1 (}/10% &}the M11its efferd:€1:ble to low income hoMseholds, 4% &jthe units efferdable to moderate income lwMseholds, and 4% of the Mn its afferd:€1:ble to n1iddle income hoMseholds. In no case shall the total nun1ber &JA:fferdable Units reqMired exceed the nMmber reqMired as determined by the epplication of the tifJplicable on site reqMirement rate to the total project M11its. Rental Units for low income hoMseholds shall ha1,1e an €?!fordable rent set at 55% (}/Area }.fedian Inconw or less, with hoMseholds earning up to 65% ofArea Afedia,1 b1col'lw eligible to epplJ,1.fer low iJwome Mnits. Re11tal Units for moderate inconw hoMseholds shall have a,1 ejferdable re,1t set flt 80% &}Area },fedian b1conw or less, 1,vith hoMseholds ean'lingfrom 65% to 90% ofArea },{edian Income eligible to fifJPO' for moderate inconw Mnits. Rental Units fer n1iddle income households shall have an t1:f}ordable rent set at 110% ofArea },fedian Inconw or less, with hoMseholds eaming from 90% to 130% o,{Area Afedian Income eligible to epply1for middle income Mnits. For any Affordable Units with remal rates set at 110% a/Area },fedian lnconw, the units shal-l have a minimwn occttpancy &}two persons. This Ml'lit reqMiren'le11t shall be OMtlined within the },{syor 's Office ofHousing Preferences and Lottery ProcedMres MGtJ'lMal no leter than F'ebrMary 26, 2018. MDHCD n1ey redMce Area },fedian Income pricing a11d the minim Mm income reqMired for eligibility in each rrntal category. (I) For housing development pro;ects consisting of IO 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 I 00% of Area Median Income, with an affordable sales price set at 80% of Area Median Income or less. Rental Units shall be Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 29 affordable to households earning up to 65% of Area Median Income, with an affordable rent set at 55% o(Area Median Income or less. (2) For any Ownership Housing Proiect consisting of25 or more units, the number of Affordable Units constructed on-site shall generally be 20% of all units constructed on the proiect site. A minimum of I 0% of the units shall be affordable to low-income households, 5% of 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 by 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% of Area Median Income or less, with households earning up to I 00% 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 I 05% o(Area Median Income or less, with households earning from 95% to I 20% o{Area Median Income eligible to apply for moderate-income units. Owned Units for middle-income households shall have an affordable purchase price set at I 30% of Area Median Income or less, with households earning from I 20% to I 50% of Area Median Income eligible to apply for middle-income units. For any Affordable Units with purchase prices set at I 30% of Area Median Income, 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 ownership category. (3) For any Rental Housing Proiect consisting of25 or more units, the number of Affordable Units constructed on-site shall generally be I 8% of all units constructed on the proiect site, with a minimum of I 0% o(the units affordable to low-income households, 4% of the units affordable to moderate-income households, and 4% 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 30 application of the applicable on-site requirement rate to the total proiect 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 fi:om 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 110% of Area Median Income, the units shall have a minimum occupancy of two persons. MOH CD may reduce Area Median Income pricing and the minimum income required for eligibility 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, 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, ~2028, and no later than January 1 of each year thereafter, MOHCD shall increase the percentage of units required on-site for projects cel'lsisti,uzg e-/10 24 Mnits, as setferth il'l Sectien 415.6(a)(l), by· i,u,crements e-/0.5% each year, Mntil such re€pbtirement is 15%. For all dcvdopmentpre-jccts with 25 or more units, the re€Jblired on site @fferdeelc ownership hoHsing to satisfy this Section 415. 6 shall increase by. 5%1% annually for two consecutive years starting January 1, ~2028. The increase shall be apportioned to units Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 31 affordable to low-income households, as defined above in subsection 415.6(a)(3). Starting January 1, ~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, that .J.-2!.#,J 5%, 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 -c-J-J.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. * * * * Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 32 (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 Pl+mning DeperfJ99en.t, in consuhetion wilh the ControUer, shell, umierfeke e sfbtdy aferees greefer fhenfive ecres in size, where en Arce Pkm, Specie! Use Disfrict, or ofher re zoning is beiJqg considered/or edOJ3fion or hes bee,q edepfed efeer Janble11y· I, 2015, to defennine whefher e higl'ler on site inclbtsionery &jjordable hob/sing requirement is feesible on sites 1:.",,ef heve received e 20% or greefer increese in developeble residentiel gross floor eree ore 35% or greefer increese in residenfiel density over prior zaning, end shell su!Jnqif sbtch infermetion to 1:.",,e P/en,qfng Commission end Boerd of· Sbtpen;fsors. (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 or 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 Environmentel Evelbtefion €IfJJ3licetion. 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 33 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 Planning 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: (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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 34 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 the 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 .::J.%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 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 ~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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 35 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 btHit reqMirement shEtll be ObttliHed withiH the },/ayor 's Office ofHobtsing Preferences Etnd Lottery Procedbtres ,\fanbtEtl HO !Etter thEtH 6 moHths followiHg the effective tfflte afthe OrdinEJ1qce coHte:iHed iH BoEtrd ofSufJer;isors File i'lo. 161351. MOHCD may reduce Area Median Income pricing and the minimum income required for eligibility in each rental category. MOH CD 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 (B) 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. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 36 (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 Proiect Application El'lvirol'lnwl'ltfll Ev€fIHetio1'1 €lppliceti01q. 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. * * * * 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. 4 percent 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 :-144 .123 times the total number of units produced in the principal project beginning with the Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 37 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 :-2.J. .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 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 25 perce1qt 20. 5% so that a sponsor must construct c-2-5. 205 times the total number of units produced in the principal project beginning with the construction of the tenth unit. If the Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 38 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~ .144 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 :P. percent 22.1% so that a sponsor must construct :-J-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. (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 sponsor were to elect to meet the requirements of this Section by off-site housing development. For the purposes of Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 39 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 Tier On-Site Housing Off-Site/In- Requirement Lieu Requirement A N. 4% 12.3% ~18.8% B -1-6%13.1% 2-J-%20.5% C 17.~%14.4% Jl..%22.1% Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Middle Income Alternative* J.().:}{;2 4. 5 % :H-%28.6% 44%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% Page 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 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 J...J.SM, 27% of the units in the Principal Project as affordable units if those units are Owned Units, or JfJ% 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. 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 41 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 .JJ% 18.8% of all units constructed on the site. A minimum of -1-2,% 10% of the units shall be affordable to low-income households, ~ 5% of the units shall be affordable to moderate-income households, and ~ 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 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~ 16. 4% of all units constructed on the site. A minimum of -1-2,% 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 42 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(9), 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 housing if the units in the Principal Project are owned units, and -M}% 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 43 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~ 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 that 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(9), 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~ 18.8% of units as Affordable Units at the following levels: 10% shall have an average affordable 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 J% 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~ 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 ~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), the percentage and (ijfe,ce/ebility l-e,1els efAfferae!Jl-e Unils censtr'btcted en site as setferth in subsectiens ('3)(2)(.4) and (b)(2)(B) shell be the 8&Hiepercentage andafferaebility l-ewls es set forth in Sectien 206.3(!)(2)(A), es it nu1y be emendedfrem time te time, end 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 Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 44 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 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 .J.JJM, 27% of all units constructed on the Principal Project site as affordable housing if the units in the Principal Project are owned units, and ::UJ% 24. 5% if the project is a Rental Housing Project. Section 8. Effective Date; Operative Dates. (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 415B, 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. Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 45 ifil 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. (b) On July 24. 2023. the Land Use and Transportation Committee of the Board of Supervisors amended the ordinance in Board File No. 230769 to amend section (b) and (f) of the General Findings in Section 2 of the ordinance; correct a reference in new Section 415B.1 of the Planning Code; and correct the numbering in amended Section 403. The Committee then duplicated the file. creating Board File No. 230855. The original ordinance, in Board File No. 230769. was then approved by the Board of Supervisors on first reading on July 25, 2023, and approved by the Board on second reading on September 5, 2023. This ordinance, in the duplicate file (Board File No. 230855), includes additional amendments to the ordinance. which were adopted by the Land Use and Transportation Committee on September 11. 2023. The additional amendments reduce the inclusionary requirements for projects, including HOME-SF projects, with 10-24 units that are approved prior to November 1, 2023; and reduce impact fees for Pipeline Projects, as defined. Because the ordinance in Board File No. 230769 is not yet effective, both sets of Committee amendments (those adopted by the {L {L {L {L {L {L Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 46 Committee on July 24, 2023 in the ordinance in Board File No. 230769, and those adopted by the Committee on September 11, 2023 in the ordinance in Board File No. 230855} are shown in this ordinance in Board amendment font. APPROVED AS TO FORM: DAVID CHIU, City Attorney By: /s/ Audrey Pearson AUDREY PEARSON Deputy City Attorney n :\legana\as2023\2300225\01704140 .docx Supervisors Peskin; Safai, Mandelman, Dorsey BOARD OF SUPERVISORS Page 47 City and County of San Francisco Tails Ordinance City Hall I Dr. Carlton B. Goodlett Place San Francisco, CA 94102-4689 File Number: 230855 Date Passed: October 03, 2023 Ordinance amending the Planning Code to: 1) reduce lnclusionary Housing Program requirements, including requirements for projects approved under the Housing Opportunities Means Equity - San Francisco (HOME-SF) program, for projects 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 exceeding a stated unit size, 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 - NOT AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE July 24, 2023 Land Use and Transportation Committee - CONTINUED TO CALL OF THE CHAIR September 11, 2023 Land Use and Transportation Committee - AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE September 11, 2023 Land Use and Transportation Committee - AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE September 11, 2023 Land Use and Transportation Committee - CONTINUED AS AMENDED September 18, 2023 Land Use and Transportation Committee - REFERRED WITHOUT RECOMMENDATION September 26, 2023 Board of Supervisors - PASSED ON FIRST READING Ayes: 10 - Chan, Dorsey, Engardio, Mandel man, Melgar, Peskin, Ronen, Safai, Stefani and Walton Noes: 1 - Preston October 03, 2023 Board of Supervisors - Fl NALLY PASSED City and Coullty of San Francisco Ayes: 10 - Chan, Dorsey, Engardio, Mandelman, Melgar, Peskin, Ronen, Safai, Stefani and Walton Noes: 1 - Preston Page I Printed at 9:00 am 011 10/4/23 File No. 230855 London N. Breed Mayor City and County of San Francisco Page2 I hereby certify that the foregoing Ordinance was FINALLY PASSED on 10/3/2023 by the Board of Supervisors of the City and County of San Francisco. Angela Calvillo Clerk of the Board Date Approved Printed at 9:00 am 011 I 0/4/23