424.3

SEC. 424.3. APPLICATION OF VAN NESS & MARKET AFFORDABLE HOUSING AND NEIGHBORHOOD INFRASTRUCTURE FEE AND PROGRAM. (a) Application and Timing of Fee Payments. Section 424.1 et seq. shall apply to any development project located in the Van Ness & Market Residential Special Use District, as established in Section 249.33 of this Code, except as provided under Section 406(k) of this Code. The Fee shall be paid to DBI for deposit into either the Van Ness and Market Downtown Residential Special Use District Affordable Housing Fund or the Van Ness and Market Downtown Residential Special Use District Infrastructure Fund, as applicable, at the time required by Section 402(d) of this Code. (b) Amount of Fee. (1) All uses in any development project within the Van Ness & Market Residential Special Use District shall pay $30.00 per net additional gross square foot of floor area in any portion of building area exceeding the base development site FAR of 6:1 up to a base development site FAR of 9:1. (2) All uses in any development project within the Van Ness & Market Residential Special Use District shall pay $15.00 per net additional gross square foot of floor area in any portion of building area exceeding the base development site FAR of 9:1. (c) Option for In-Kind Provision of Infrastructure Improvements and Fee Credits. Project sponsors may propose to directly provide community improvements to the City. In such a case, the City may enter into an In-Kind Improvements Agreement with the sponsor and issue a fee waiver from the neighborhood infrastructure portion ($15.00 per net additional gross square foot of floor area) of the Van Ness & Market Residential Special Use District Affordable Housing and Neighborhood Infrastructure Fee from the Planning Commission, subject to the following rules and requirements: (1) Approval Criteria. The City shall not enter into an In-Kind Agreement unless the proposed in-kind improvements meet an identified community need as analyzed in the Van Ness & Market Affordable Housing and Neighborhood Infrastructure Program and where they substitute for improvements that could be provided by the Van Ness & Market Residential Special Use District Infrastructure Fee Fund (as described in Section 424.5). The City may reject in-kind improvements if they are not consistent with the priorities identified in the Van Ness & Market Affordable Housing and Neighborhood Infrastructure Program. No physical improvement or provision of space otherwise required by the Planning Code or any other City Code shall be eligible for consideration as part of this In-Kind Improvements Agreement. (2) Valuation. The Director of Planning shall determine the appropriate value of the proposed in-kind improvements. For the purposes of calculating the total value, the project sponsor shall provide the Planning Department with a cost estimate for the proposed in-kind improvement(s) from two independent sources or, if relevant, real estate appraisers. If the City has completed a detailed site-specific cost estimate for a planned improvement this may serve as one of the cost estimates provided it is indexed to current cost of construction. (3) Content of the In-Kind Improvements Agreement. The In-Kind Improvements Agreement shall include at least the following items: (i) A description of the type and timeline of the proposed in-kind improvements. (ii) The appropriate value of the proposed in-kind improvement, as determined in subsection (2) above. (iii) The legal remedies in the case of failure by the project sponsor to provide the in-kind improvements according to the specified timeline and terms in the agreement. Such remedies shall include the method by which the City will calculate accrued interest. (4) Approval Process. The Planning Commission must approve the material terms of an In-Kind Agreement. Prior to the parties executing the Agreement, the City Attorney must approve the agreement as to form and to substance. The Director of Planning is authorized to execute the Agreement on behalf of the City. If the Planning Commission approves the In- Kind Agreement, it shall waive the amount of the neighborhood infrastructure portion of the Van Ness & Market Residential Special Use District Affordable Housing and Neighborhood Infrastructure Fee by the value of the proposed In-Kind Improvements Agreement as determined by the Director of Planning. No credit shall be made for land value unless ownership of the land is transferred to the City or a permanent public easement is granted, the acceptance of which is at the sole discretion of the City. The maximum value of the In-Kind Improvements Agreement shall not exceed the required neighborhood infrastructure portion of the Van Ness & Market Affordable Housing and Neighborhood Infrastructure Fee. (5) Administrative Costs. Project sponsors that pursue an In-Kind Improvements Agreement will be billed time and materials for any administrative costs that the Planning Department or any other City entity incurs in negotiating, drafting, and monitoring compliance with the In-Kind Improvement Agreement. (Added by Ord. 108-10, File No. 091275, App. 5/25/2010; amended by Ord. 55-11, File No. 101523, App. 3/23/2011; Ord. 50-15 , File No. 150149, App. 4/24/2015, Eff. 5/24/2015; Ord. 63-20, File No. 200077, App. 4/24/2020, Eff. 5/25/2020; Ord. 126-20, File No. 200559, App. 7/31/2020, Eff. 8/31/2020; Ord. 188-25, File No. 250680, App. 10/6/2025, Eff. 11/6/2025) AMENDMENT HISTORY Division (a) amended; Ord. 50-15 , Eff. 5/24/2015. Division (a) amended; Ord. 63-20, Eff. 5/25/2020. Section header and division (a) amended; divisions (b)(i)-(ii) redesignated as (b)(1)-(2) and amended; divisions (c), (c)(1), and (c)(4) amended; Ord. 126-20, Eff. 8/31/2020. Division (a) amended; Ord. 188-25, Eff. 11/6/2025. SEC. 424.4. VAN NESS & MARKET RESIDENTIAL SPECIAL USE DISTRICT AFFORDABLE HOUSING FUND. (a) That portion of gross floor area subject to the $30 per gross square foot fee referenced in Section 424.3(b)(1) above shall be deposited into the special fund maintained by the Controller called the Citywide Affordable Housing Fund established by Section 413.9. Except as specifically provided in this Section, collection, management, enforcement, and expenditure of funds shall conform to the requirements related to in-lieu fees in Planning Code Section 415.1 et seq., specifically including, but not limited to, the provisions of Section 415.7. (b) Priorities for SUD Affordable Housing Fees Implementation. In order to increase the supply of housing Affordable to Qualifying Households in the Market and Octavia Plan Area, the Upper Market NCT District, and to the City, the following is the prioritization of the use of these fees; (1) First, to increase the supply of housing Affordable to Qualifying Households in the Van Ness & Market Residential Special Use District; (2) Second, to increase the supply of housing Affordable to Qualifying Households within one mile of the boundaries of the Market and Octavia Area Plan; (3) Third, to increase the supply of housing Affordable to Qualifying Households in the City and County of San Francisco.