Home-SF Passes...Now What? [PolicyDad]
June 12, 2017 | By Tim Colen
After more than two years in gestation, District 4 Supervisor Katy Tang finally succeeded last week in passing HOME-SF, her landmark housing legislation, by a unanimous 11-0 vote.
While the legislation endured a fair bit of tinkering during the sausage-making process, the fundamentals remain: San Francisco has at last adopted its own density bonus ordinance. In simple terms, if a developer agrees to certain conditions, chiefly building a certain amount of subsidized below-market-rate (BMR) units, the project is eligible for a density bonus that could include up to 20 additional feet in height and other sweeteners over what the local zoning rules would otherwise allow.
HOME-SF is remarkable for two main reasons. The first is that the City has finally agreed to the concept that raising building height and density above existing zoning is acceptable as long as it delivers an additional public benefit, such as increased production of BMR homes. The second reason it’s noteworthy is that it’s the first housing legislation in San Francisco’s history that incentivizes building affordable housing specifically for middle income folks.
Over the last 20 years or so, virtually all subsidized affordable housing in San Francisco has been for very-low or low-income residents; essentially none for middle income. In a statement, Sup. Tang said, “At its heart, the proposal provides incentives for developers to create housing containing 30 percent permanently affordable units to serve middle-income families that currently don’t qualify for the City’s BMR program.”
Sup. Tang wanted to create a more generous version of the state density bonus (SDB) law that included middle-income housing, a new feature. Two years ago, she directed the City’s Planning Department and a team of consultants to begin designing a program, called the Affordable Housing Bonus Program (AHBP), with incentives that would be attractive to housing builders to increase affordability above existing inclusionary levels.
Predictably, she was opposed by a noisy coalition of activists and neighborhood NIMBYs whose common goal was preventing production of more housing. The former oppose anything perceived as incentives for “luxury housing” while the latter opposed any changes in their neighborhoods. Sadly, the housing opponents, with a 6-5 majority on the previous Board of Supervisors, succeeded in killing Sup. Tang’s AHBP. Her response was to modify the ordinance so that it applied only to 100 percent subsidized affordable housing projects, and, fortunately, was able to pass it last year.
A key political change that took place that made HOME-SF possible was the November 2016 election that gave the “urbanist” faction a 6-5 majority on the Board of Supervisors. Whereas the previous Board of Supervisors majority would only support density bonuses for 100-percent-subsidized affordable housing, there were now the votes for allowing market-rate housing projects to use them. On legislation as consequential as HOME-SF, this explains why the composition of the board is so important to the City’s policy questions.
The HOME-SF program is targeted at the City’s middle-income and working class, who are inexorably being displaced by a lack of housing they can afford. It requires that 30 percent of the units in eligible projects to be reserved for residents earning 80-130 percent of area median income on for-sale units and 55-110 percent of area median income for rental units. This is markedly different than current affordable housing programs, which typically benefit only very-low- and low-income households.
According to Sup. Tang, “Over the next 20 years, HOME-SF will produce 5,000 permanently affordable housing units. This represents over triple the amount of affordable housing that would be created under our City’s mandatory affordable housing laws.”
What now? Will HOME-SF live up to its promise and jump-start housing production and improve affordability as intended? At this point, it’s hard to say.
Sup. Tang shrewdly saw the need for a local density bonus ordinance that was both more attractive to housing builders and more generous to the City. Doing this was tricky because her progressive opponents kept making demands to increase the financial burden on development. Ironically, this would make it less likely that builders would choose HOME-SF and would opt instead for the stingier State Density Bonus (SDB) law which is becoming well established and more legally certain to use. Significantly, the SDB law cannot be denied by local jurisdictions. Its problem is that it doesn’t require as much affordable housing as HOME-SF, nor does it include its new protections, such as the prohibition on demolishing existing housing.
Sup. Tang labored long and hard, enduring numerous setbacks, to give the City a policy tool to improve housing affordability, especially for the City’s vanishing middle-income. Did she get it right? Given a choice between the two density bonus options, which of the two will prove more attractive? They are about to be tested in the marketplace, and the outcome will not likely be known for at least a year or two. This is small comfort for a City enduring a brutal housing affordability crisis.
Tim Colen is former Executive Director of the San Francisco Housing Action Coalition and a board member of YIMBY Action. He writes for the Bay City Beacon on a regular basis as PolicyDad: a sage, rational voice in San Francisco's dysfunctional local government family.
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