Breed signs law aiming to reduce fees, boost housing production in San Francisco

Mayor London Breed announces new affordable housing projects for educators

SAN FRANCISCO – San Francisco Mayor London Breed this week signed a new law aimed to expedite the planning, approval and construction of housing projects in the city.

The Housing Stimulus and Fee Reform Plan was signed by Breed in a ceremony Thursday at 395 Third St., where a parking lot is slated for over 500 units of new housing in the South of Market neighborhood.

Introduced by Board of Supervisors president Aaron Peskin, the legislation aims to temporarily reduce inclusionary housing requirements on new and already approved development projects and reforms, and defers development impact fees in order to spur development projects and economic activity.

"This collaborative effort is a significant, time-certain incentive program that sends a clear message that San Francisco is serious about building new market-rate housing in this difficult economic climate—both jumpstarting pipeline projects and enticing new ones," Peskin said in a statement.

According to the proponents, the new law can unlock almost 8,000 pre-approved unbuilt units across San Francisco, including 2,500 in the city's downtown.

There are more than 10,000 units in proposed projects that are not yet approved that city officials say will benefit from the newly signed legislation by expediting them into the construction phase after getting approval.

According to the mayor's office, San Francisco has one of the highest inclusionary housing requirements in the country, where developers are required to set aside 22 to 33 percent of their units for affordable housing, or pay an in-lieu fee. Under the new law, affordable housing obligations will be reduced by 12 to 16 percent for projects already in the pipeline, and 15 to 21 percent for new projects.

The legislation will also lessen all development impact fees by 33 percent for the next three years. Impact fees will not be accounted through complex construction cost estimates anymore, but will be raised by a flat rate of 2 percent annually. Developers also have the chance to lock in impact fee rates when they are approved by the city to avoid cost hikes before they break ground, the mayor's office said.

"We are fundamentally transforming how we approve and build housing in San Francisco," Breed said in a statement. "These new rules will spur new housing across the city and unlock projects that have been approved but are stuck because of how expensive it has become to build."

The mayor added, "We need more housing, and we need more changes to our laws so we can have more homes for kids who are growing up here, for working people who want to live here, and for our seniors who want to stay in the communities they know and love."

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