“Mayor Looks at Ballot Measure to Raise Affordable Housing Ratios”

SF Chronicle, December 1, 2015

Mayor Ed Lee is convening a group of developers and affordable-housing advocates to hammer out a ballot measure that would increase the percentage of below-market units that must be included in new projects.

Lee offered no specifics on the increases in fees and requirements the proposition would seek, saying the details would be worked out over the next few months. Administration officials said it’s possible the ballot measure would be on the June ballot, although November is more likely.

3 years after Prop. C

The announcement comes three years after city voters passed Proposition C, which lowered the city’s affordable housing requirement to 12 percent, a 20 percent drop from the previous minimum of 15 percent. That vote, which also dedicated $50 million a year over 20 years to build and upgrade affordable housing, came at a time when the recession had brought new housing creation to a standstill, and private developers were just starting to invest in land again.

Three years later, with the city facing an affordability crisis and cranes hovering across the city, the picture is very different, said Lee, who successfully led an effort to pass a $310 million affordable housing bond last month.

“As we look across the city, we have to do more on housing,” said Lee. “We recognize that the crisis demands that we do even more.”

The discussions around the proposed measure promise to be prickly, with developers saying higher requirements for affordable units could kill the very projects that pump money into the city’s coffers for below-market-rate housing. The affordable housing community would argue that high levels of affordable units are needed to mitigate the displacement and gentrification that have come with the building boom.

Developer incentives

Lee said that the goal will be to offer developers benefits, such as raised height limits, higher densities, or fast-tracked approvals, to offset the increased requirements.

“We recognize that if the level goes up, something else has to ... balance the equation,” he said. “Some people will say, ‘Let’s extract the mother out of them.’ That oftentimes gets you stalemate. It doesn’t get you production.”

Peter Cohen of the Council of Community Housing Organizations, which lobbies for affordable housing developers, said the mayor’s decision to start work on a ballot measure is “certainly a step in the right direction at this point, and frankly I think San Francisco voters are expecting this.”

“The mayor is reading the writing on the wall very well,” he said. “What I hope is that the proposal that comes out of the city working group is proportionate to the magnitude of the city’s affordability crisis. This is not a time for small or simple symbolic gestures.”

The current 12 percent requirement is especially low considering that developers of two major projects recently agreed to go as high as 40 percent, though in return for significant height increases and other zoning changes.

Forest City and the Hearst Corp., owner of The Chronicle, agreed to increase affordable housing to 40 percent in their mixed-use project at Fifth and Mission, as did the San Francisco Giants at their Mission Rock project south of AT&T Park.

Not typical projects

But developers caution that those two projects are hardly typical and that increasing the requirements could halt the smaller projects that make up the bulk of the city’s housing production.

City Planning Director John Rahaim said the “ultimate goal is more affordable housing across the city.”

“Inclusionary (housing) is just one aspect of our affordable housing program,” he said. “But it’s an important one that does not require any public subsidy. That is what is really great about it.”

J.K. Dineen is a San Francisco Chronicle staff writer. E-mail: jdineen@sfchronicle.com Twitter: @sfjkdineen