AGI Capital

My spell check doesn't recognize "Inclusionary"

Posted by AGI on August 14, 2006 12:19 PM | Permalink

Welllll, so we all read the press release . . .

MAYOR NEWSOM SIGNS LANDMARK INCLUSIONARY HOUSING LEGISLATION - Strengthened Ordinance is model for nation's cities

San Francisco, CA- Mayor Gavin Newsom today signed landmark legislation that strengthens the City's affordable housing policy. The legislation, sponsored by Supervisors Daly, Maxwell and McGoldrick, makes San Francisco's inclusionary housing ordinance a model for large cities nationally.

"Not only are we improving the City's housing policy to create affordable housing in economically integrated communities" Newsom said, "We are also celebrating our ability to prioritize good policy over politics."

WOW! In essence the City has bumped the affordable housing requirement from 10% to 15% and made the requirement apply for any development with 5 or more units, versus the prior 10 units or more threshold. On paper the implications are massive, basically a 50% increase on the number of required affordable units...ouch! What's more, for every 10 units built, that means double the number of affordable units because the planning department law requires the builder to round-up (i.e., you can't build 1.5 units, so build 2 affordable units for every 10; so I guess we'll see a lot of projects with 9's at the end: 19 units, 29 units, etc.).

So, here at Keeping It Real...Estate, are we shuttering the windows, burning our fundraiser RSVPs, jumping in our ozone depleting luxury SUV's and heading for the unregulated badlands east of the Caldecott Tunnel?

Well damn the torpedoes...there is a silver lining. Don't get us wrong, this new policy hurts like a sharp Gracie ju-jitsu blow to the solar plexus and is leaving us gasping; however, there is an unintended truth to Mayor N's statement about "prioritizing good policy over politics." In the politically charged city of SF, almost every major housing development is accompanied by a cacophony of complaints, suggestions, demands; among the strongest and most vocal are those with an interest in affordable housing and NIMBYs who are opposed to gentrification (a topic which will be, ahem, afforded, its own bevy of blogs). Without going into the technical details of the quirky system here in San Francisco where nearly all major projects are reviewed the Board of Supervisors in addition to the Planning Commission, developers here are at the mercy of the various interest groups and generally never know what they will be required to do.

Recently the pound of flesh exacted has been to require affordable housing well in excess of the planning code's 10-12%. We say again, emphatically OUCH to the 15%, but an exodus is not in order. This new legislation sets the bar at 15% for onsite affordable housing, an expensive cost indeed; however, if the result will be that lawmakers stand by this as the high-water mark and give developers certainty, meaning not caving into interest groups asking for more, (as of course is their right, prerogative and necessary component to the delicate balance of a diverse community), it would at least provide that housing projects can be properly planned, financed and actually built. By hopefully removing the uncertainty with the codified high standard, it allows progress without (or at least less of) the politics and brings some order into the chaotic process of San Francisco housing development.