FILE NO. 171193
AMENDED IN COMMITTEE
1/29/18
ORDINANCE NO. 26-18
[Planning Code - lnclusionary Affordable Housing Program]
Ordinance amending the Planning Code to amend the lnclusionary Housing Ordinance
to remove the requirement that on-site and off-site inclusionary units within a new
development be ownership units rather than rental units, or alternatively, that the
project sponsor submit a contract demonstrating the proposed on-site or off-site units
are exempt from the Costa-Hawkins Rental Housing Act; making conforming
amendments to Planning Code Section 124: updating references in Planning Code
section 406; and affirming the Planning Department's determination under the
California Environmental Quality Act; and making findings of consistency with the
General Plan and the eight priority policies of Planning Code Section 101.1.
NOTE:
Unchanged Code text and uncodified text are in plain Arial font.
Additions to Codes are in single-underline italics Times New Roman font.
Deletions to Codes are in strikethrough italics Times }lev,i Roman font.
Board amendment additions are in double-underlined Arial font.
Board amendment deletions are in strikethrough Arial font.
Asterisks (* * * *) indicate the omission of unchanged Code
subsections or parts of tables.
Be it ordained by the People of the City and County of San Francisco:
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. 171193 and is incorporated herein by reference. The Board affirms
this determination.
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(b) On January 11 2018, the Planning Commission, in Resolution No. 20087, Planning
Department found 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. 171193, and is incorporated herein by reference.
Section 2. The Planning Code is hereby amended by revising Sections 415.3, 415.4,
415.5, 415.6, and 415.7, to read as follows:
SEC. 415.3. APPLICATION.
* * * *
(b) Any development project that has submitted a complete Environmental Evaluation
application prior to January 12, 2016 shall comply with the Affordable Housing Fee
requirements, the on-site affordable housing requirements or the off-site affordable housing
requirements, and all other provisions of Section 415.1 et seq., as applicable, in effect on
January 12, 2016. For development projects that have submitted a complete Environmental
Evaluation application on or after January 1, 2013, the requirements set forth in Planning
Code Sections 415.5, 415.6, and 415.7 shall apply to certain development projects consisting
of 25 dwelling units or more during a limited period of time as follows:
* * * *
(2) If a development project pays the Affordable Housing Fee or is eligible and
elects to provide off-site affordable housing, 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.
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(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 25% 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% of the number of units constructed on-site.
(C) Any development project that has submitted a complete
Environmental Evaluation application on or prior to January 12, 2016 shall pay a fee or
provide off-site housing in an amount equivalent to 30% 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 30% 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
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in the South of Market Youth and Family Zoning District, and pays the Affordable Housing Fee
or is eligible and elects to provide off-site affordable housing pursuant to Section 415.5(g), or
elects to comply with a land dedication alternative, such development project shall comply
with the fee, off-site or land dedication requirements applicable within such Zoning Districts,
as they existed on January 12, 2016, plus the following additional amounts for the Affordable
Housing Fee or for land dedication or off-site affordable units: (i) if the development project
has submitted a complete Environmental Evaluation application prior to January 1, 2014, the
Project Sponsor shall pay an additional fee, or provide additional land dedication or off-site
affordable units, in an amount equivalent to 5% of the number of units constructed on-site; (ii)
if the development project has submitted a complete Environmental Evaluation application
prior to January 1, 2015, the Project Sponsor shall pay an additional fee, or provide additional
land dedication or off-site affordable units, in an amount equivalent to 7.5% of the number of
units constructed on-site; or (iii) if the development project has submitted a complete
Environmental Evaluation application on or prior to January 12, 2016, the Project Sponsor
shall pay an additional fee, or provide additional land dedication or off-site affordable units, in
an amount equivalent to 10% of the number of units constructed on-site. Notwithstanding the
foregoing, a development project shall not pay a fee or provide off-site units in a total amount
greater than the equivalent of 30% of the number of units constructed on-site.
(G) Any development project consisting of 25 dwelling units or more that
has submitted a complete Environmental Evaluation application on or prior to January 12,
2016, and is eligible and elects to provide off-site affordable housing, may provide off-site
affordable housing by acquiring an existing building to fulfill all or part of the requirements set
forth in this Section 415.3 and in Section 415.7 with an equivalent amount of units as specified
in this Section 415.3(b)(2), as reviewed and approved by the Mayor's Office of Housing and
Community Development and consistent with the parameters of its Small Sites Acquisition
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and Rehabilitation Program, in conformance with the income limits for the Small Sites
Program.
* * * *
SEC. 415.4. IMPOSITION OF REQUIREMENTS.
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(c) Payment of Affordable Housing Fee or Project Sponsor's Eligibilityfor and
Selection of Alternative. Prior to issuance of first construction document for a development
project subject to the requirements of Section 415.1 et seq., the sponsor of the development
project shall pay the Affordable Housing Fee set forth in Section 415.5 or, ifeligible to meet the
requirements #wough an Alternative, shall select one of the options listed in Section 415.5(f).
* * * *
SEC. 415.5. AFFORDABLE HOUSING FEE.
* * * *
(g) Alternatives to Payment of Affordable Housing Fee.
(1) Eligibility: A project sponsor must pay the Affordable Housing Fee unless it
qualifies for and chooses to meet the requirements of the Program though an Alternative
provided in this subsection (g). The project sponsor may choose one of the following
Alternatives:
(A) Alternative #1: On-Site Units. Project sponsors may elect to
construct units affordable to qualifying households on-site of the principal project pursuant to
the requirements of Section 415.6.
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(B) Alternative #2: Off-Site Units. Project sponsors may elect to
construct units affordable to qualifying households at an alternative site within the City and
County of San Francisco pursuant to the requirements of Section 415. 7.
(C) Alternative #3: Small Sites. Qualifying project sponsors may elect to
fund buildings as set forth in Section 415.7-1.
(D) Alternative #4: Combination. Project sponsors may elect any
combination of payment of the Affordable Housing Fee as provided in Section 415.5,
construction of on-site units as provided in Section 415.6, or construction of off-site units as
provided in Section 415.7, provided that the project applicant constructs or pays the fee at the
appropriate percentage or fee level required for that option. Development Projects that have
submitted a complete Environmental Evaluation application after January 12, 2016 that are
providing on-site units under Section 415.6 and that qualify for and receive additional density
under California Government Code Section 65915 et seq. shall use Alternative #4 to pay the
Affordable Housing Fee on any additional units or square footage authorized under Section
65915.
(2) Qualifirntions: !fa project sponsor v,·ishes to cornply rFith the Progrem t,71,rough one
ofthe Alternatives described in subsection(g)(l) rether than pay the Affordable Housing Fee, they must
demonstrate that t,71,ey qualify for t,71,e Alternati1Je to the satisfaction oft,71,e Department and A10HCD. A
project sponsor may qualifj,· for an Alternative by the follm~·ing methods:
(i) },1ethod #1
Ownership Units. All affordable units provided under
this Program shall be sold as ownership units and will remain mmership units for the life of the
project. Project sponsors must submit the 'Affidavit of Compliance with the Inclusionary Affordable
Housing Program' to the Planning Department prior to project approval by the Department or the
Commission; or
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(ii) J.1ethod #2 Government F'inancial Contribution. Submit to the
Department a contract demonstrating that the project's on or off site units are not subject to the Costa
HmFkins Rental Housing Act, California Civil Code Section 195 4. 50 because, under Section
1954.52(b), it has entered into an agreement with a public entity in consideration for a directfinancial
contribution or any other form ofassistance specified in California Government Code Sections 65915
et seq. and it submits an Affidavit ofsuch to the Department. All such contracts entered into ·with the
City and County ofSan Francisco must be reviewed and approved by A10HCD and the City Attorney's
Office. All contracts that invol>,JC 100% affordable housi1qgprojects in the residential portion may be
executed by the },1ayor or the Director of},10HCD. Any contract that invol>,JCs less than 100%
affordable housing in the residential portion, may be executed by either the },1ayor, the Director o.f
},10HCD or, after revie'ev and comment by },10HCD, the Planning Director. A Development Agreement
under California Government Code Sections 65864 et seq. and Chapter 56 of the Administrative Code
entered into between a project sponsor and the City and County of San Francisco may, but does not
necessarily, qualify as such a contract.
(J}f]l The Planning Commission or the Department may not require a project
sponsor to select a specific Alternative. If a project sponsor elects to meet the Program
requirements through one of the Alternatives described in subsection(g)(1 ), they must choose
it and demonstrate that they qualify 30 days prior to any project approvals from the Planning
Commission or Department. The Alternative will be a condition of project approval and
recorded against the property in an NSR. Any subsequent change by a project sponsor that
results in the reduction in the number of on-site units shall require public notice for a hearing
and approval from the Planning Commission. l'f.otwithstanding the foregoing, if a project sponsor
qualifies for an Alternative described in subsection (g)(l) and elects to construct the affordable units
on or off site, the project sponsor must submit the Affidavit of Compliance ,Fith the Inclusionary
Housing Program based on the fact tlwt the units v.Jill be sold as ownership units. A project sponsor
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Vv'ho has elected to co1qstruct affordable mvnership units on or aff site may only elect to pay the
Affordable Housing Fee 'btJ3 to the issuance of the first construction document if the project sponsor
submits a ne·w Affidavit establishing that the units ',Vilt not be sold as ownership units. !fa project
sponsor fails to choose an Alternative before project awroval by the Planning Commission or
Planning Department or ifa project becomes ineligible for an Alternative, the provisions a/Section
415. 5 shall apply.
(4){}.l If at any time, the project sponsor eliminates the on-site or off-site
affordable ownership only units, then the project sponsor must immediately inform the
Department and MOHCD and pay the applicable Affordable Housing Fee plus interest and
any applicable penalties provided for under this Code. If a project sponsor requests a
modification to its conditions of approval for the sole purpose of complying with this Section,
the Planning Commission shall be limited to considering issues related to Section 415 et seq.
in considering the request for modification.
SEC. 415.6. ON-SITE AFFORDABLE HOUSING ALTERNATIVE.
If a project sponsor is eligible and elects to provide on-site units pursuant to Section
415.5(g), the development project shall meet the following requirements:
* * * *
(b) Any On-site units provided through this Section 415.6 may be used to qualify for a
density bonus under California Government Code Section 65915, any ordinance
implementing Government Code Section 65915, or one of the Affordable Housing Bonus
Programs contained in Planning Code Section 206 et seqin tlw ordinance in Board ofS'btj3er'<lisors
F'ile l'lo. 150969. An applicant seeking a density bonus under State Law shall provide
reasonable documentation to establish eligibility for a requested density bonus, incentive or
concession, and waiver or reduction of development standards, as provided for under State
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Law and as consistent with the process and procedures detailed in a locally adopted
ordinance implementing the State Law.
* * * *
(f) Type of Housing.
(1) Equivalency of Units. All on site units constructed under this Section 415. 6 shall
be provided as mtmership units unless the project sponsor meets the eligibility requirement ofSection
415.5(g). In general, affordable units constructed under this Section 415.6 shall be comparable
in number of bedrooms, exterior appearance and overall quality of construction to market rate
units in the principal project. A Notice of Special Restrictions shall be recorded prior to
issuance of the first construction document and shall specify the number, location and sizes
for all affordable units required under this subsection (f). The affordable units shall be evenly
distributed throughout the building. For buildings over 120 feet in height, as measured under
the requirements set forth in the Planning Code, the affordable units may be distributed
throughout the lower 2/3 of the building, as measured by the number of floors. The interior
features in affordable units should be generally the same as those of the market rate units in
the principal project, but need not be the same make, model or type of such item as long as
they are of good and new quality and are consistent with then-current standards for new
housing. Where applicable, parking shall be offered to the affordable units subject to the term
and conditions of the Department's policy on unbundled parking for affordable housing units
as specified in the Procedures Manual and amended from time to time.
(2) Minimum Size of Affordable Units. The affordable units are not required to
be the same size as the market rate units. For buildings over 120 feet in height, as measured
under the requirements set forth in the Planning Code, the average size of the unit type may
be calculated for the lower 2/3 of the building, as measured by the number of floors. All units
shall be no smaller than the minimum unit sizes set forth by the California Tax Credit
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Allocation Committee as of May 16, 2017, and no smaller than 300 square feet for studios.
The total residential floor area devoted to the affordable units shall not be less than the
applicable percentage applied to the total residential floor area of the principal project,
provided that a 10% variation in floor area is permitted.
* * * *
U)
Benefits. If the project sponsor is eligible for and elects to satisfy the affordable
housing requirements through the production of on-site affordable housing in this Section
415.6 , the project sponsor shall be eligible to receive a refund for only that portion of the
housing project which is affordable for the following fees: a Conditional Use authorization or
other fee required by Section 352 of this Code, if applicable; an environmental review fee
required by Administrative Code Section 31.22, if applicable; a building permit fee required by
Section 355 of this Code for the portion of the housing project that is affordable. The project
sponsor shall pay the building fee for the portion of the project that is market-rate. An
application for a refund must be made within six months from the issuance of the first
certificate of occupancy.
The Controller shall refund fees from any appropriated funds to the project sponsor on
application by the project sponsor. The application must include a copy of the Certificate of
Occupancy for all units affordable to a qualifying household required by the lnclusionary
Housing Program. It is the policy of the Board of Supervisors to appropriate money for this
purpose from the General Fund.
SEC. 415.7. OFF-SITE AFFORDABLE HOUSING
If the project sponsor is eligible and elects pursuant to Section 415.5(g) to provide off-
site units to satisfy the requirements of Section 415.1 et seq., the project sponsor shall notify
the Planning Department and the Mayor's Office of Housing and Community Development
("MOHCD") of its intent as early as possible. The Planning Department and MOHCD shall
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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:
* * * *
(d) Type of Housing: All off site units constructed under this Section 415. 7 shall be provided
as ownership housing for the life of the project unless the project appliamt meets the eligibility
requirement ofSectio,q 415.5(g). Nothing in this Section shall limit a project sponsor from
meeting the requirements of this Section through the construction of units in a limited equity or
land trust form of ownership if such units otherwise meet all of the requirements for off-site
housing. In general, affordable units constructed or otherwise provided under this Section
shall be comparable in number of bedrooms, exterior appearance and overall quality of
construction to market rate units in the principal project. The total square footage of the off-
site affordable units constructed or otherwise provided under this Section shall be no less than
the calculation of the total square footage of the on-site market-rate units in the principal
project multiplied by the relevant on-site percentage requirement for the project specified in
this Section. The Notice of Special Restrictions or conditions of approval shall include a
specific number of units at specified unit sizes - including number of bedrooms and minimum
square footage - for affordable units. The interior features in affordable units should generally
be the same as those of the market rate units in the principal project but need not be the
same make, model, or type of such item as long as they are of new and good quality and are
consistent with then-current standards for new housing and so long as they are consistent
with the "Quality Standards for Off-Site Affordable Housing Units" found in the Procedures
Manual. Where applicable, parking shall be offered to the affordable units subject to the terms
and conditions of the Department's policy on unbundled parking for affordable housing units
as specified in the Procedures Manual and amended from time to time. If the residential units
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in the principal project are live/work units which do not contain bedrooms or are other types of
units which do not contain bedrooms separated from the living space, the off-site units shall
be comparable in size according to the following equivalency calculation between live/work
and units with bedrooms:
* * * *
Section 3. The Planning Code is hereby amended by revising Section 124. to read as
follows:
Section 124. Basic Floor Area Ratio
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(f) For buildings in C-3-G and C-3-S Districts, other than those designated as
Significant or Contributory pursuant to Article 11 of this Code, additional square footage above
that permitted by the base floor area ratio limits set forth above may be approved for
construction of dwellings on the site of the building affordable for the Life of the Project, as
defined in Section 401, to households whose incomes are within 150 percent of AMI, as
defined in Section 401, for ownership units and up to 120% of AMI for rental units, in
accordance with the conditional use procedures and criteria as provided in Section 303 of this
Code. For buildings in the C-3-G District designated as Significant or Contributory pursuant to
Article 11 of this Code, additional square footage above that permitted by the base floor area
ratio limits set forth above up to the Gross Floor Area of the existing building may be
approved, in accordance with the conditional use procedures and criteria as provided in
Section 303 of this Code, where: (1) TD Rs (as defined by Section 128(a)(5)) were transferred
from the lot containing the Significant or Contributory building prior to the effective date of the
amendment to Section 124(f) adding this paragraph when the floor area transferred was
occupied by a non profit corporation or institution meeting the requirements for exclusion from
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Gross Floor Area calculation; (2) the additional square footage includes only the amount
necessary to accommodate dwelling units and/or group housing units that are affordable for
the Life of the Project to households whose incomes are within 60 percent of AMI as defined
herein together with any social, educational, and health service space accessory to such
units; and (3) the proposed change in use to dwelling units and accessory space and any
construction associated therewith, if it requires any alternation to the exterior or other
character defining features of the Significant or Contributory Building, is undertaken pursuant
to the duly approved Permit to Alter, pursuant to Section 1110, provided , however, that the
procedures otherwise required for a Major Alteration as set forth in Sections 1111.4 and
1111.5 and shall be deemed applicable to any such Permit to Alter.
(1) Any dwelling approved for construction under this provision shall be
deemed a "Designated Unit" as defined below. Prior to the issuance by the Director of the
Department of Building Inspection ("Director of Building Inspection") of a First Construction
Document to construct any Designated Unit subject to this Section, the permit applicant shall
notify the Director of Planning and the Director of MOHCD in writing whether the Designated
Unit will be an owned or rental unit as defined in Section 401 of this Code. If any Designated
Units 111ill be rental units, the project sponsor must follow the procedures in Section
415.5(g)(2). As provided in that subsection, the Planning Director or the Director of MOHCD,
may execute such an agreement under the terms specified in Section 415.5(g)(2).
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Section 4. The Planning Code is hereby amended by revising Section 406, to read as
follows:
Section 406. Waiver, Reduction, or Adjustment of Development Project
Requirements
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(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, and the Residential Child Care Impact Fee if the affordable
housing unit:
(A)
is affordable to a household at or below 80% of the Area
Median Income (as published by HUD), including units that qualify as replacement Section 8
units under the HOPE SF program;
(B)
is subsidized by MOHCD, the San Francisco Housing
Authority, the Department of Homelessness and Supportive Housing, and/or the Office of
Community Investment and Infrastructure San Francisco Redevelopment /\gency or any
future successor agency to those listed herein; and
(C)
is subsidized in a manner which maintains its affordability
for a term no less than 55 years, whether it is a rental or ownership opportunity. Project
sponsors must demonstrate to the Planning Department staff that a governmental agency will
be enforcing the term of affordability and reviewing performance and service plans as
necessary.
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Section 4~. Effective Date. 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.
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Section.§§,. Scope of Ordinance. In enacting this ordinance, the Board of Supervisors
intends to amend only those words, phrases, paragraphs, subsections, sections, articles,
numbers, punctuation marks, charts, diagrams, or any other constituent parts of the Municipal
Code that are explicitly shown in this ordinance as additions, deletions, Board amendment
additions, and Board amendment deletions in accordance with the "Note" that appears under
the official title of the ordinance.
APPROVED AS TO FORM:
DENNIS J. HERRERA, City Attorney
By:
n:\legana\as2017\1800215\01233385.docx
Supervisor Peskin
BOARD OF SUPERVISORS
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City and County of San Francisco
Tails
Ordinance
City Hall
I Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4689
File Number:
171193
Date Passed: February 13, 2018
Ordinance amending the Planning Code to amend the lnclusionary Housing Ordinance to remove
the requirement that on-site and off-site inclusionary units within a new development be ownership
units rather than rental units, or alternatively, that the project sponsor submit a contract
demonstrating the proposed on-site or off-site units are exempt from the Costa-Hawkins Rental
Housing Act; making conforming amendments to Planning Code, Section 124; updating references
in Planning Code, Section 406; affirming the Planning Department's determination under the
California Environmental Quality Act; and making findings of consistency with the General Plan, and
the eight priority policies of Planning Code, Section 101 .1.
January 29, 2018 Land Use and Transportation Committee - AMENDED, AN
AMENDMENT OF THE WHOLE BEARING NEW TITLE
.
January 29, 2018 Land Use and Transportation Committee - RECOMMENDED AS
AMENDED
February 06, 2018 Board of Supervisors - PASSED ON FIRST READING
Ayes: 11 - Breed, Cohen, Fewer, Kim, Peskin, Ronen, Safai, Sheehy, Stefani,
Tang and Yee
February 13, 2018 Board of Supervisors - FINALLY PASSED
Ayes: 11 - Breed, Cohen, Fewer, Kim, Peskin, Ronen, Safai, Sheehy, Stefani,
Tang and Yee
File No. 171193
Mark E. Farrell
Mayor
City and County of San Francisco
Page l
I hereby certify that the foregoing
Ordinance was FINALLY PASSED on
2/13/2018 by the Board of Supervisors of
the City and County of San Francisco.
/+- Angela Calvillo
Clerk of the Board
Date App?oved
Printed at 2:37 pm 0 11 2/14/18