This is a big policy shift in a city that’s often seen as the poster-child for well-intentioned, poorly-thought-out affordable housing policy.
San Francisco requires market-rate housing to include some units that are set aside for low-income residents. This was, effectively, a tax on new development that was intended to produce new subsidized / low-income housing.
The policy remains in place, but the percentage of required units was dropped from 15% of all units to 5% of all units. Additionally, projects with 24 of fewer units are now exempt altogether (previously it was 10 units.)
This represents a recognition by the SF Board of Supervisors that there is such a thing as too onerous a requirement, and that the city needs private housing development to literally pencil out economically if it wants new housing to actually be built.
The deal that was brokered won the support of some erstwhile opponents by accompanying the legislation with a new fund from the government to directly fund affordable housing.
This is a significant improvement – the revenue is now unlinked from a tax that effectively penalizes new development. Biting the hand that feeds, so to speak.
San Francisco (and California) have been passing policy changes aimed at cutting red tape for development and spurring housing growth in the private market, but broader economic trends and the red tape that remains in place have resulted in little actual progress building housing.
It remains to be seen the immediate impact this will actually have, but with rents skyrocketing, it seems plausible at some point the slate of new legislation will start to help projects pencil out and cranes start to pop up in larger numbers.
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Submission statement:
This is a big policy shift in a city that’s often seen as the poster-child for well-intentioned, poorly-thought-out affordable housing policy.
San Francisco requires market-rate housing to include some units that are set aside for low-income residents. This was, effectively, a tax on new development that was intended to produce new subsidized / low-income housing.
The policy remains in place, but the percentage of required units was dropped from 15% of all units to 5% of all units. Additionally, projects with 24 of fewer units are now exempt altogether (previously it was 10 units.)
This represents a recognition by the SF Board of Supervisors that there is such a thing as too onerous a requirement, and that the city needs private housing development to literally pencil out economically if it wants new housing to actually be built.
The deal that was brokered won the support of some erstwhile opponents by accompanying the legislation with a new fund from the government to directly fund affordable housing.
This is a significant improvement – the revenue is now unlinked from a tax that effectively penalizes new development. Biting the hand that feeds, so to speak.
San Francisco (and California) have been passing policy changes aimed at cutting red tape for development and spurring housing growth in the private market, but broader economic trends and the red tape that remains in place have resulted in little actual progress building housing.
It remains to be seen the immediate impact this will actually have, but with rents skyrocketing, it seems plausible at some point the slate of new legislation will start to help projects pencil out and cranes start to pop up in larger numbers.