406

SEC. 406. WAIVER, REDUCTION, OR ADJUSTMENT OF DEVELOPMENT PROJECT REQUIREMENTS. (a) Waiver or Reduction Based on Absence of Reasonable Relationship. (1) The sponsor of any development project subject to a development fee or development impact requirement imposed by this Article may appeal to the Board of Supervisors for a reduction, adjustment, or waiver of the requirement based upon the absence of any reasonable relationship or nexus between the impact of development and either the amount of the fee charged or the on-site requirement. (2) Any appeal authorized by this Section shall be made in writing and filed with the Clerk of the Board no later than 15 days after the date the Department or Commission takes final action on the project approval that assesses the requirement. The appeal shall set forth in detail the factual and legal basis for the claim of waiver, reduction, or adjustment. (3) The Board of Supervisors shall consider the appeal at a public hearing within 60 days after the filing of the appeal. The appellant shall bear the burden of presenting substantial evidence to support the appeal, including comparable technical information to support appellant's position. The decision of the Board shall be by a simple majority vote and shall be final. (4) If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment, or reduction of the fee or inclusionary requirement. If the Board grants a reduction, adjustment or waiver, the Clerk of the Board shall promptly transmit the nature and extent of the reduction, adjustment or waiver to the Development Fee Collection Unit at DBI and the Unit shall modify the Project Development Fee Report to reflect the change. (b) Waiver or Reduction, Based on Housing Affordability. (1) An affordable housing unit shall receive a waiver from the Rincon Hill Community Infrastructure Impact Fee, the Market and Octavia Community Improvements Impact Fee, the Eastern Neighborhoods Infrastructure Impact Fee, the Balboa Park Impact Fee, the Visitacion Valley Community Facilities and Infrastructure Impact Fee, the Transportation Sustainability Fee, the Residential Child Care Impact Fee, the Central South of Market Infrastructure Impact Fee, and the Central South of Market Community Facilities Fee if: (A) the affordable housing unit is affordable to a household earning up to 120% of the Area Median Income (as published by HUD), including units that qualify as replacement Section 8 units under the HOPE SF program; (B) the affordable housing unit will maintain its affordability for a term of no less than 55 years, as evidenced by a restrictive covenant recorded on the property’s title; (C) the Project Sponsor demonstrates to the Planning Department staff that a governmental agency will be enforcing the term of affordability and reviewing performance and service plans as necessary, and (D) all construction workers employed in the construction of the development that includes the affordable housing unit are paid at least the general prevailing rate of per diem wages for the type of work and geographic location of the development, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate under the terms and conditions of Labor Code Section 1777.5. (2) Projects that meet the requirements of this subsection are eligible for a 100 percent fee reduction until an alternative fee schedule is published by the Department. (3) Projects that are located within a HOPE SF Project Area are eligible for a 100 percent fee reduction from the TSF, applicable both to the affordable housing units and the market- rate units within such projects, and to any Non-Residential or PDR uses. Projects within a HOPE SF Project Area are otherwise subject to all other applicable fees per Article 4 of the Planning Code. (4) Residential uses within projects where all residential units are affordable to households at or below 150% of the Area Median Income (as published by HUD) shall not be subject to the TSF. Non-residential and PDR uses within those projects shall be subject to the TSF. All uses shall be subject to all other applicable fees per Article 4 of the Planning Code. (5) This waiver clause shall not be applied to units built as part of a developer’s efforts to meet the requirements of the Inclusionary Affordable Housing Program, Sections 415 or 419 of this Code. (c) Waiver for Homeless Shelters. A Homeless Shelter, as defined in Section 102 of this Code, is not required to pay the Rincon Hill Community Infrastructure Impact Fee, the Transit Center District Impact Fees, the Market and Octavia Community Improvements Impact Fee, the Eastern Neighborhoods Infrastructure Impact Fee, the Balboa Park Impact Fee, the Visitacion Valley Community Facilities and Infrastructure Impact Fee and the Transportation Sustainability Fee. (d) Waiver Based on Duplication of Fees. The City shall make every effort not to assess duplicative fees on new development. In general, project sponsors are only eligible for fee waivers under this Subsection if a contribution to another fee program would result in a duplication of charges for a particular type of community infrastructure. The Department shall publish a schedule annually of all known opportunities for waivers and reductions under this clause, including the specific rate. Requirements under Section 135 and 138 of this Code do not qualify for a waiver or reduction. Should future fees pose a duplicative charge, such as a Citywide open space or childcare fee, the same methodology shall apply and the Department shall update the schedule of waivers or reductions accordingly. (e) Waiver or Reduction of Fees for a Public Park in the Central SoMa Plan Area. A development project may elect to provide land and other resources in order to construct a public park on an approximately 40,000 square-foot portion of Block 3777 as called for in the Central SoMa Plan, and in doing so may be eligible for a waiver against all or a portion of fees otherwise applicable to such development as set forth in this subsection 406(e). As part of the approval process for such a project, the Planning Commission may waive all or a portion of the Eastern Neighborhoods Infrastructure Impact Fee, the Central SoMa Infrastructure Impact Fee, the Transit Impact Development Fee, and the Transit Sustainability Fee, and may specify how such waiver would be distributed among the aforementioned fees, provided such total amount does not exceed the value of the park, which shall be calculated based on actual costs to acquire the land. (f) Waiver Based on Calamity. The replacement of existing Residential, Non-Residential, or PDR uses on a lot subject to, and meeting all the provisions of, Planning Code Section 188(b) for the replacement of buildings damaged or destroyed by fire or other calamity, or by Act of God or the public enemy, shall not be considered in the determination of applicability of any impact fee in Article 4 of this Code and new Gross Floor Area within a building subject to and meeting all the provisions of Section 188(b) shall not be subject to any impact fee in Article 4. However, any additional land uses or addition of Gross Floor Area beyond what is needed to replace the damaged or destroyed building(s) shall be subject to any applicable Article 4 impact fees. (g) Waiver for Projects in PDR Districts. In a PDR District, a development project that meets the eligibility criteria in subsection (g)(1) of this Section 406 shall receive a waiver from any development impact fee or development impact requirement imposed by this Article. (1) Eligibility. To be eligible for the waiver in this subsection (g), the project shall: (A) be located in a PDR District; (B) contain a Retail Use or PDR Use and no residential uses; (C) propose the new construction of at least 20,000 square feet of Gross Floor Area and no more than 200,000 square feet of Gross Floor Area; (D) be located on a vacant site or site improved with buildings with less than a 0.25 to 1 Floor Area Ratio as of the date a complete Development Application is submitted; (E) submit a complete Development Application on or before December 31, 2026, including any projects that have obtained Final Approval prior to the effective date of the

ordinance in Board File No. 230764 that have not already paid development impact fees. (2) Extent of Waiver. The waiver in this subsection (g) shall be limited to development impact fees or development impact requirements for the establishment of any new Gross Floor Area of PDR or Retail Use. (3) Sunset. This subsection (g) shall expire by operation of law on December 31, 2026, unless the duration of the subsection has been extended by ordinance effective on or before that date. Upon expiration, the City Attorney shall cause subsection (g) to be removed from the Planning Code. (h) Waiver for Projects in the C-2 and C-3 Districts. In the C-2 and C-3 Districts, a development project that meets the eligibility criteria in subsection (h)(1) of this Section 406 shall receive a waiver from any development impact fee or development impact requirement imposed by this Article. (1) Eligibility. To be eligible for the waiver in this subsection (h), the project shall: (A) be located in a C-2 or C-3 District; (B) contain any of the following uses: Hotel, Restaurant, Bar, Outdoor Activity, or Entertainment; (C) submit a complete Development Application on or before December 31, 2026, including any projects that have obtained Final Approval prior to the effective date of the ordinance in Board File No. 230764 that have not already paid development impact fees. (2) Extent of Waiver. The waiver in this subsection (h) shall be limited to development impact fees or development impact requirements for the establishment of any new Gross Floor Area of the Hotel, Restaurant, Bar, Outdoor Activity, or Entertainment Use. (3) Sunset. This subsection (h) shall expire by operation of law on December 31, 2026, unless the duration of the subsection has been extended by ordinance effective on or before that date. Upon expiration, the City Attorney shall cause subsection (h) to be removed from the Planning Code. (i) Conditional Waiver or Reduction of Fees for Central SoMa Plan Area Projects Impacted by the Downtown Rail Extension. A development project that enters into an agreement with the Transbay Joint Powers Authority to construct foundation and shoring systems that will reduce the lateral force from the project onto the tunnel and not encroach on the tunnel alignment required for the Downtown Rail Extension, which agreement is to the satisfaction of the Department of Building Inspection, and submits a building or site permit application that includes the agreed-upon foundation and shoring systems, may be eligible for a conditional waiver of the Transportation Sustainability Fee (Sections 411A et seq.) and the Eastern Neighborhoods Infrastructure Impact Fee (Sections 423 et seq.), as set forth in this subsection (i). As part of the approval process for such a project, the Planning Commission may conditionally approve waiver of all or a portion of the Transportation Sustainability Fee and of the Eastern Neighborhoods Infrastructure Impact Fee, provided that such waiver is conditioned on the satisfaction of the actions in the preceding sentence. If the final approved building permit or site permit foundation addendum includes the agreed-upon foundation and shoring systems, the project shall receive a waiver of those fees in an amount commensurate with the net increase in cost of the agreed-upon foundation and shoring system as compared to a baseline foundation system, as calculated by the Planning Department. If the final approved building permit or site permit foundation addendum does not include the agreed upon foundation and shoring systems, the City shall withhold issuance of the first certificate of occupancy until the conditionally waived fees are paid. (j) Waiver for Certain Non-Residential to Residential Conversion and Replacement Projects. This subsection 406(j) provides eligible Non-Residential or Production, Distribution, and Repair (PDR) to Residential conversion and replacement projects with a waiver of any Development fee or Development impact requirement imposed by this Article 4, as specified in this subsection. (1) Eligible Projects. To be eligible for the waiver, a project must replace Gross Floor Area of existing PDR uses or Non-Residential uses, other than a Hotel use, with Gross Floor Area established as Residential use, whether as part of a change of use of existing Gross Floor Area, or through the demolition of Non-Residential Gross Floor Area and construction of new Gross Floor Area for Residential use. For purposes of this subsection 406(j), any Gross Floor Area established as Live/Work use shall be considered as Residential use. Projects must be located in a C-3 district, or a C-2 district east of or fronting Franklin Street/13th Street and north of Townsend Street. (2) Waiver Amount. Eligible projects shall be entitled to a waiver from any applicable Development fee or Development impact requirement imposed by this Article 4 on any net new Gross Floor Area of Residential use in an amount up to 110% of the Gross Floor Area of Non-Residential use or PDR use converted to Residential use. Converted Non-Residential or PDR Gross Floor Area shall be calculated as the net reduction of Non-Residential Gross Floor Area resulting from the project. (3) Calculation of Space. In a mixed-use project with Residential and Non-Residential or PDR uses, the Gross Floor Area of Residential use shall be calculated based on the definition of Gross Floor Area in Planning Code Section 102, in the proportion that such areas serve the Residential use to the total square feet of Gross Floor Area served by such areas. (4) Limitation of Waiver. Any portion of a project’s Gross Floor Area that is not entitled to this waiver shall be subject to the otherwise applicable Development fees and Development impact requirements of this Article 4, including the Inclusionary Housing Program. Applicable Development fees and Development impact requirements shall be calculated based solely on the proportion of the project that is not entitled to this waiver, and not on the project as a whole. In the event the project provides On-site or Off-site Affordable Units to satisfy the requirements of Section 415.1 et seq., the equivalency, minimum size, and distribution of any such Affordable Units shall be based on consideration of the project as a whole, and the requirements of the Inclusionary Housing Program shall apply. (5) Modification of Previously Approved Projects. Projects that received a Final Approval prior to January 1, 2025, and have not been issued a First Construction Document shall be entitled to request a modification to the project’s Development fees and Development impact requirements under this subsection 406(j). (6) Relationship to Other Planning Code Sections. The waiver in this subsection 406(j) may be combined with any other reduction or waiver of fees or development impact requirements applicable to the project, as provided in this Article 4. (7) Reporting. The Department shall provide a written report of projects that receive a waiver of Development fees and Development impact requirements under this subsection 406(j) to the Inclusionary Housing Technical Advisory Committee established by Administrative Code Chapter 5 Article XXIX in conjunction with the triennial economic feasibility analysis of the City’s inclusionary affordable housing obligations pursuant to Planning Code Section 415.10. (8) Cap on the Total Square Footage Subject to a Development Fee Waiver. The waiver in this subsection 406(j) shall apply only to the first 7,000,000 square feet of Gross Floor Area that replaces Gross Floor Area of existing PDR uses or Non-Residential uses, other than a Hotel use, with Gross Floor Area established as Residential use associated with Eligible Projects in the order that the projects receive a Final Approval. If an Eligible Project does not receive a building or site permit within five years of the Final Approval, the project shall forfeit any rights to the approved waiver, and any Gross Floor Area associated with such project shall no longer be counted against the 7,000,000 square foot limit set forth in this subsection 406(j)(8). (k) Waiver of Fees for Projects in the Market and Octavia Area Plan. (1) Development projects located within the Market and Octavia Area Plan that have received Final Approval prior to January 1, 2026, and have not been issued a First Construction Document as of that date shall be entitled to a waiver of all development impact fee requirements under Sections 416, 421, 424, and 425 of this Code. (2) Development projects located within the Market and Octavia Area Plan that have received Final Approval prior to January 1, 2026, and that have been issued a First Construction Document as of that date shall be entitled to a waiver of any portion of the development impact fee requirements under Sections 416, 421, 424, and 425 of this Code that has been deferred and not yet paid pursuant to Building Code Section 107A.13.3. (Added by Ord. 108-10, File No. 091275, App. 5/25/2010; amended by Ord. 3-11, File No. 101247, App. 1/7/2011; Ord. 47-11, File No. 110009, App. 3/16/2011; Ord. 14-15 , File No. 141210, App. 2/13/2015, Eff. 3/15/2015; Ord. 200-15 , File No. 150790, App. 11/25/2015, Eff. 12/25/2015; Ord. 222-15 , File No. 155521, App. 12/18/2015, Eff. 1/17/2016; Ord. 2-16 , File No. 150793, App. 1/19/2016, Eff. 2/18/2016; Ord. 26-18, File No. 171193, App. 2/23/2018, Eff. 3/26/2018; Ord. 296-18, File No. 180184, App. 12/12/2019, Eff. 1/12/2019; Ord. 63-20, File No. 200077, App. 4/24/2020, Eff. 5/25/2020; Ord. 47-21, File No. 201175, App. 4/16/2021, Eff. 5/17/2021; Ord. 193-23, File No. 230764, App. 9/15/2023, Eff. 10/16/2023; Ord. 248-23, File No. 230446, App. 12/14/2023, Eff. 1/14/2024; Ord. 39-24, File No. 231164, App. 3/7/2024, Eff. 4/7/2024; Ord. 20-25, File No. 240927, App. 3/7/2025, Eff. 4/7/2025; Ord. 124-25, File No. 250542, App. 8/1/2025, Eff. 9/1/2025; Ord. 188-25, File No. 250680, App. 10/6/2025, Eff. 11/6/2025) AMENDMENT HISTORY New division (c) added and former division (c) redesignated as (d); Ord. 14-15 , Eff. 3/15/2015. Division (b)(1) amended; new divisions (b)(3) and (4) added and former division (b)(3) redesignated as (b)(5); division (c) amended; Ord. 200-15 , Eff. 12/25/2015 and Ord. 222-15 , Eff. 1/17/2016. Divisions (b)(1) and (b)(1)(B) amended; Ord. 2-16 , Eff. 2/18/2016. Division (b)(1)(B) amended; Ord. 26-18, Eff. 3/26/2018. Division (e) added; Ord. 296-18, Eff. 1/12/2019. Division (b)(1)(B) amended; division (f) added; Ord. 63-20, Eff. 5/25/2020. Division (b)(1) amended; Ord. 47-21, Eff. 5/17/2021. Divisions (g)-(h)(3) added; Ord. 193-23, Eff. 10/15/2023. Divisions (b)(1), (b)(1)(A), and (b)(5) amended; divisions (b)(1)(B)-(C) deleted; new divisions (b)(1)(B)-(D) added; Ord. 248-23, Eff. 1/14/2024. New division (i) added; Ord. 39-24, Eff. 4/7/2024. Divisions (j)-(j)(8) added; Ord. 20-25, Eff. 4/7/2025. Divisions (j)-(j)(3) and (j)(8) amended; Ord. 124-25, Eff. 9/1/2025. Divisions (k)- (k)(2) added; Ord. 188-25, Eff. 11/6/2025. SEC. 407. NOTICE; FAILURE TO GIVE NOTICE. Any notice required by this Article to be given to a project sponsor or owner shall be sufficiently given or served upon the sponsor or owner for all purposes hereunder if: (a) personally served upon the sponsor or owner, or (b) deposited, postage prepaid, in a post office letterbox addressed in the name of the sponsor or owner at the official address of the sponsor or owner