206.1

SEC. 206.1. PURPOSE AND FINDINGS. (a) The purpose of the Affordable Housing Bonus Programs is to facilitate the development and construction of affordable housing in San Francisco. Affordable housing is of paramount statewide concern, and the Legislature has declared that local and state governments have a responsibility to use the powers vested in them to facilitate the improvement and development of housing to make adequate provision for the housing needs of all economic segments of the community, especially families. The Legislature has found that local governments must encourage the development of a variety of types of housing for all income levels, including multifamily rental housing and assist in the development of adequate housing to meet the needs of low- and moderate-income households. (b) Affordable housing is an especially para- mount concern in San Francisco. San Francisco has one of the highest housing costs in the nation, but San Francisco’s economy and culture rely on a diverse workforce at all income levels. It is the policy of the City to enable these workers to afford housing in San Francisco and ensure that they pay a reasonably proportionate share of their incomes to live in adequate housing and to not have to commute ever-increasing distances to their jobs. The Association of Bay Area Governments determined that San Francisco’s share of the Regional Housing Need for January 2015 to June 2022 was the provision of 28,870 new housing units, with 6,234 (or 21.6%) as very low, 4,639 (or 16.1%) as low, and 5,460 (or 18.9%) as moderate income units. (c) The Board of Supervisors, and the voters in San Francisco, have long recognized the need for the production of affordable housing. The voters, in some cases, and the Board in others, have adopted measures to address this need, such as the mandatory Inclusionary Affordable Housing Ordinance in Planning Code Section 415; the San Francisco Housing Trust Fund, adopted in 2012, which established a fund to create, support and rehabilitate affordable housing, and set aside $20 million in its first year, with increasing allocations to reach $50 million a year for affordable housing; the adoption of Proposition K in November 2014, which established as City policy that the City, by 2020, will help construct or rehabilitate at least 30,000 homes, with more than 50% of the housing affordable for middle-income households, and at least 33% as affordable for low- and moderate income households; and the multiple programs that rely on Federal, State and local funding sources as identified in the Mayor’s Office of Housing and Community Development Comprehensive Plan. These programs enable the City to work towards the voter-mandated affordable housing goals. (d) Historically, in the United States and San Francisco, affordable housing requires high levels of public subsidy, including public investment and reliance on public dollars. Costs to subsidize an affordable housing unit vary greatly depending on a number of factors, such as household income of the residents, the type of housing, and the cost of land acquisition. Currently, MOHCD estimates that the level of subsidy for an affordable housing unit is approximately $350,000 per unit. Given this high cost per unit, San Francisco can only meet its affordable housing goals through a combination of increased public dollars dedicated to affordable housing and other tools that do not rely on public money. (e) Development incentives are a long standing zoning tool that enables cities to encourage private development projects to provide public benefits including affordable housing. By offering increased development potential, a project sponsor can offset the expenses necessary to provide additional public benefits. In 1979, the State of California adopted the Density Bonus Law, Government Code section 65915 et seq., which requires that density bonuses and other concessions and incentives be offered to projects that provide a minimum amount of on- site affordable housing. (f) In recognition of the City’s affordable housing goals, including the need to produce more affordable housing without the need for public subsidies, the Planning Department contracted with David Baker Architects and Seifel Consulting to determine a menu of zoning modifications and development bonuses that could offset a private developer’s costs of providing various levels of additional on-site affordable housing. These experts analyzed various parcels in San Francisco, to determine the conditions in which a zoning accommodation would be necessary to achieve additional density. The analysis modeled various zoning districts and lot size configurations, consistent with current market conditions and the City’s stated policy goals, including to achieve a mix of unit types, including larger units that can accommodate larger households. These reports are on file in Board of Supervisors File No. 160687. (g) Based on these reports, the Planning Department developed four programs to provide options by which developers can include additional affordable units on-site through increased density and other zoning or design modifications. These programs are the HOME-SF Program, the 100 Percent Affordable Housing Bonus Program, the Analyzed State Density Bonus Program and the Individually Requested Bonus Program. The HOME-SF Program can also be used by developers who agree to subject the units to the San Francisco Rent Stabilization and Arbitration Ordinance (Chapter 37 of the Administrative Code) (“the Rent Ordinance”).

(h) The goal of the HOME-SF Program is to increase affordable housing production, especially housing affordable to middle income households. Housing for middle income households in San Francisco is necessary to stabilize San Francisco’s households and families, ensure income and household diversity in the long term population of San Francisco, and reduce transportation impacts of middle income households working in San Francisco. Middle income households do not traditionally benefit from public subsidies. The goal of the HOME-SF Program is also to increase the number of units in San Francisco that will be subject to rent control under San Francisco’s Rent Ordinance. The City adopted its Rent Ordinance in 1979, and the Rent Ordinance has been critical in safeguarding tenants from excessive rent increases and evictions without just cause. Rent control serves as an important policy tool to stabilize communities and prevent displacement. (i) The 100 Percent Affordable Housing Bonus Program provides additional incentives for developers of 100% affordable housing projects, thereby reducing the overall cost of such developments on a per unit basis. (j) The Affordable Housing Bonus Program also establishes a clear local process for all projects seeking the density bonuses guaranteed through the State Density Bonus Law. The State Analyzed Program provides an expedited process for projects that comply with a pre-determined menu of incentives, concessions and waivers of development standards that the Department has determined can appropriately respond to neigh- borhood context without causing adverse impacts on public health and safety, and provide affordable units through the City’s already- established Inclusionary Housing Program. Projects requesting density or concessions, incentives and waivers outside of the City’s preferred menu may seek a density bonus consistent with State law in the Individually Requested Density Bonus Program. (k) San Francisco’s small business community is an integral part of San Francisco’s neighborhood commercial corridors, local economy, and rich culture. San Francisco is committed to maintaining small businesses in its neighborhoods. For this reason, the HOME-SF Program acknowledges the need for general assistance and support for any business that might be impacted. Developments using the Affordable Housing Bonus Program will generally produce additional commercial spaces which may enhance existing commercial corridors. The Office of Economic and Workforce Development (OEWD), in coordination with the Office of Small Business, currently coordinate on referrals to and deployment of a range of services to small businesses including but not limited to: small business consulting, lease negotiation assistance, small business loans, ADA Certified Access Specialists (CASp) inspection services, legacy business registry, façade improvement assistance, commercial corridor management, grants and assessments, relocation and broker services for production, distribution and repair (PDR) businesses, business permit assistance, and coordination with city agencies. (Added by Ord. 143-16 , File No. 160687, App. 7/29/2016, Eff. 8/28/2016; amended by Ord. 116-17, File No. 150969, App. 6/13/2017, Eff. 7/13/2017; Ord. 91-23, File No. 221021, App. 5/26/2023, Eff. 6/26/2023) (Former Sec. 206.1 added by Ord. 443-78, App. 10/6/78; redesignated as Sec. 209.1 and amended by Ord. 22-15, File No. 141253, App. 2/20/2015, Eff. 3/22/2015) AMENDMENT HISTORY Divisions (a) and (c) amended; divisions (d), (e), and (h)-(l) added; former divisions (d) and (e) redesignated (f) and (g) and amended; Ord. 116-17, Eff. 7/13/2017. Divisions (c), (d), (e), (g), and (h) amended; division (l) deleted; Ord. 91-23, Eff. 6/26/2023. SEC. 206.2. DEFINITIONS. The definitions of Section 102 and the definitions in Section 401 for “Area Median Income” or “AMI,” “First Construction Document,” “Housing Project,” “Life of the Project,” “MOHCD,” “On-site Unit,” “Off-site Unit,” “Principal Project,” and “Procedures Manual” shall generally apply to Section 206. The following definitions shall also apply, and shall prevail if there is a conflict with other sections of the Planning Code. “100 Percent Affordable Housing Project” shall be a project where all of the dwelling units with the exception of the manager’s unit are “Affordable Units” as that term is defined in Section 406(b). “Affordable to a Household of Lower, Very Low, or Moderate Income” shall mean, at a minimum (1) a maximum purchase price that is affordable to a Household of Lower, Very Low, or Moderate Income, adjusted for the household size, assuming an annual payment for all housing costs of 33 percent of the combined household annual gross income, a down payment recommended by the Mayor’s Office of Housing and Community Development and set forth in the Procedures Manual, and available financing; and (2) an affordable rent as defined in Section 50053 of the Health and Safety Code sufficient to ensure continued affordability of all very low and low-income rental units that qualified the applicant for the award of the density bonus for 55 years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. “Base Density” is lot area divided by the maximum lot area per unit permitted under existing density regulations (e.g. 1 unit per 200, 400, 600, 800, or 1000 square feet of lot area). Calculations that result in a decimal point of 0.5 and above are rounded to the next whole number. “Density Bonus” means a density increase over the Maximum Allowable Gross Residential Density granted pursuant to Government Code Section 65915 and Section 206 et seq. “Density Bonus Units” means those market rate dwelling units granted pursuant to the provisions of Sections 206.3, 206.5 and 206.6 that exceed the otherwise Maximum Allowable Gross Residential Density for the development site. “Development Standard” shall mean a site or construction condition, including, but not limited to, a height limitation, a setback requirement, a floor area ratio, an onsite open space requirement, or an accessory parking ratio that applies to a residential development pursuant to any ordinance, general plan element, specific plan, charter, or other local condition, law, policy, resolution or regulation. “HOME-SF Unit” shall mean on-site income restricted residential units provided within a HOME-SF project that meets the requirements set forth in Planning Code Section 206.3. “Inclusionary Units” shall mean on-site income-restricted residential units provided within a development that meet the requirements of the Inclusionary Affordable Housing Program, Planning Code Section 415 et seq. “Lower, Very Low, or Moderate Income” means annual income of a household that does not exceed the maximum income limits for the income category, as adjusted for household size, applicable to San Francisco, as published and periodically updated by the State Department of Housing and Community Development pursuant to Sections 50079.5, 50105 or 50093 of the California Health and Safety Code. Very Low Income is currently defined in California Health and Safety Code Section 50105 as 50% of area median income. Lower Income is currently defined in California Health and Safety Code Section 50079.5 as 80% of area median income. Moderate Income is currently defined in California Health and Safety Code Section 50093 as 120% of area median income. If the State law definitions of these terms change, the definitions under Section 206 shall mirror the State law changes. “Maximum Allowable Gross Residential Density” means the maximum number of dwelling units per square foot of lot area in zoning districts that have such a measurement, or, in zoning districts without such a density measurement, the maximum number of dwelling units that could be developed on a property while also meeting all other applicable Planning Code requirements and design guidelines. “Qualifying Resident” means senior citizens or other persons eligible to reside in a Senior Citizen Housing Development. “Regulatory Agreement” means a recorded and legally binding agreement between an applicant and the City to ensure that the requirements of this Chapter are satisfied. The Regulatory Agreement, among other things, shall establish: the number of Restricted Affordable Units, their size, location, terms and conditions of affordability, and production schedule. “Restricted Affordable Unit” means a Dwelling Unit within a Housing Project which will be Affordable to Very Low, Lower or Moderate Income Households, as defined in this Section 206.2 for a minimum of 55 years. Restricted Affordable Units shall meet all of the requirements of Government Code 65915, except that Restricted Affordable Units that are ownership units shall not be restricted using an equity sharing agreement. “Senior Citizen Housing Development” has the meaning in California Civil Code Section 51.3. (Added by Ord. 143-16 , File No. 160687, App. 7/29/2016, Eff. 8/28/2016; amended by Ord. 116-17, File No. 150969, App. 6/13/2017, Eff. 7/13/2017; Ord. 202-18, File No. 180557, App. 8/10/2018, Eff. 9/10/2018) (Former Sec. 206.2 added by Ord. 443-78, App. 10/6/78; redesignated as Sec. 209.2 and amended by Ord. 22-15, File No. 141253, App. 2/20/2015, Eff. 3/22/2015) AMENDMENT HISTORY Non-substantive amendments; Ord. 202-18, Eff. 9/10/2018. SEC. 206.3. HOUSING OPPORTUNITIES MEAN EQUITY - SAN FRANCISCO PROGRAM. (a) Purpose. This Section 206.3 sets forth the HOME-SF Program. The HOME-SF Program or “HOME-SF” provides benefits to project sponsors of housing projects that either (1) set aside residential units onsite at below market rate rent or sales price in an amount higher than the amount required by the Inclusionary Housing Ordinance, or (2) agree to subject all units in the project, except for units required by the Inclusionary Housing Ordinance, to the San Francisco Rent Stabilization and Arbitration Ordinance (Chapter 37 of the Administrative Code). The purpose of HOME-SF is to expand the number of below market rate units produced in San Francisco and provide housing opportunities to a wider range of incomes than traditional affordable housing programs, such as the City’s Inclusionary Affordable Housing Program, Planning Code Sections 415 et seq., which typically provide housing only for very low, low or moderate income households, and to expand the number of units in San Francisco that are subject to rent control. For projects that elect to provide additional on-site below market rate units, HOME-SF also provides an alternative method of complying with the on-site inclusionary option set forth in Section 415.6. HOME-SF allows market-rate projects to match the City’s Proposition K (November 2014) housing goals that 50% of new housing constructed or rehabilitated in the City by 2020 be within the reach of working middle class San Franciscans, and