SUBSTITUTED i6

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1 FLE NO. SUBSTTUTED. 0i... (FRST DRAFT) [Charter Amendment - Authorizing Board of Supervisors to Update ncusionary or Affordabe Housing Requirements and Providing ncreased nterim Requirements] Describing and setting forth a proposa to the voters to amend the Charter of the City and r County of San Francisco at an eection to be hed on _June, 0, to authorize the Board!. of Supervisors to update the id.ciusionary or affordabe housing obigations.for housing deveopment projects and.setting forth increased interim requirements; and affirming the Panning Department's determination under the Caifornia Environmenta Quaify Act. O Section. The Panning Department has determined that the actions contempated in this proposed Charter Amendment compy with the Caifornia Environmenta Quaity Act (Caifornia Pubic Resources Code Sections 000 et seq.). Said determination is on fie with the Cerk of the Board of Supervisors in Fie No._ and is incorporated herein by reference. The Board affirms this determination. Section. The Board of Supervisors hereby submits to the quaified voters of the City and CofUty, at an eection to be hed on June, 0, a proposa to amend the Charter of'j:he City and County as foows: ~O. NOTE: (a). Unchanged Charter text and uncodified text are in pain font. Additions are singe-underine itaics Times New Roman font. Deetions are strike through itaics Tirnes }ow Roman font. Asterisks(* * * *)indicate the omission of unchanged Charter subsections. The Peope of the City and County ~f San Francisco hereby find as foows:. San Francisco voters overwhemingy passed the Affordabe Housing Goas Poicy Decaration (Proposition.K) in 0 and an Affordabe Housing Jond (Proposition A) in 0 in a proactive response to a worseri.ing housing crisis that requires a broad spectrum ofand Supervisors Kim; Peskin, Mar, Avaos, Campos BOARD OF SUPERVSORS Page

2 use and financing toos to both preserve existing and create new affordabe housing.. San Francisco currenty has the argest income gap in the country, rents are three times higher than the nationa average and evictions have increased by i"0% in a ucrative deveopment market that has incentivized widespread specuation.. Whie San Francisco has buit,00 units of affordabe housing over the past ten 0 years, it has simutane~usy ost,00.unit.s of existing affordabe housing stock as a direct.res~t! of Eis Act evictions and short term renta specuation during the same ten year window.. With San Francisco's median rent for a bedroom unit continuing to cimb past i $,00 a month, most San Franciscans are finding that they cannot afford to pay renta prices.!... Over the ast decade,,000 chidren and youth have eft the City due to evictions and economic dispacement, whie famiies are the fastest-growing demographic of homeess j reidents.. A new residentia deveopment shoud incude a mix of market rate housing and i affordabe housing. n addition, deveopment of new market rate housing creates additiona. J, 0? i housing, the incusionary requirements shoud be updated to refect more appropriatey the ink j be~een creation of new.market rate housing and demand for affordabe housing. demand for affordabe housing. As one of the many ways to address the need for affordabe j (b). The Charter.is he~eby amended by revising Section.0, to read as foows: SEC..0. HOUSNG TRUST FUND. * * * * (b) Definitions. For purposes of this Section: () "Affordabe Housing Fee" sha mean afce cacuated by the Mayor's Office of \Housing as the difference betiveen the affordabe saes.price a.fa housing unit ofa certain bedroom si:::e snd the cost o.fde:ek;ping s compsrabk housing ~it. The J.ayor's Office of kmsing shai index the fee.,,,,uay hesed on th<; fhffuapercrmt change in the Gonstruetian i' _,.!..! \ Supervisor Kim, Peskin, Mar,. Av~J 0S {wtv'\.p () S,, BOARD OF SUPERVSORS Page

3 ~.".) 0 0 Cost ndex for San Francisco aspubished by Engineering }'ews Record ~r a simiar index seected by the },{ayor's Offiee ofhousing. () "Area }.edian ncome" or '~} " sha mean the unadjusted area median income e"".jes as cacuated by the }.ayor's Office o.fhousing using datafrom the Department o.f Housing and Urban Dereopment on cm annua basisfor the San Francisco area, adjusted soey for Househod size, but not high housing cost area. () "Basic On Site ncusionary Requirement" sha mean % o.fthe units in the principaproject, afferdabe to a Househod whose initia househod income does not exceed 0% of.area };fedian ncomefor o wnership units and % for renta units or.an on site requirement with, an equivaent!ncusienary Housing Cost Obigation. ft "First Responder" sha mean a City empoyee who responds first in cases of natura J disaster or emergencies, incuding, bu~ not imited to, a active uniformed, sworn members of the SanJEraqcisco Poice and Fire Departments. W "Genera Fund Di~cretionary Revenues" sha mean revenues that the City receives and deposits in its treasury, that are unrestricted, and that th:e City may appropriate for any awfu City purpose. ( () "Grossj!:oor area" sha have the meaning in Pmming Code Section 0., or any j successor section, as amended.from time to time. fj "Househod" sha mean any person or persons who reside or intend to reside in the same housing unit. tj "Mayor's Office of Housing" sha mean the Mayor's Office of Housing and Community Deveopment or t=:ny successor City agency. () "Other Affordabe Housing Fees" sha mean any fee imposed on residentia de-;, efopment by the City as a condition ofa deveopment approva reated to affordabe housing,. which.fee sha be adjusted annuay by the City using.an index seected by the City, or any Supervisor Kim, Peskin, Mar / kvw'\js J tt'\'0= BOARD OF SUPERVSORS Page

4 ,,-., O.. 0 exactions Qn residentiri de-.,, eoprnent reated to affordabe housing rm.posed by the City, cxcudingfees imposed under Panning Code Section. ( 0) "Panning Code Section,; Yha mean San Francisco Panning Code Section. as e_fjuy, 0, to gather with the defined terms in Section 0 as o_fthat same date, and any successor egisation adopted consistent -'ith this Section.0. 'otwithstanding the foregoing, the cacuation ofthe appicabe affordabe housingfeefor "biddings o_fm:er 0 feet. in height" sha be as setferth in Panning Code Sections (a)()(b) &.(C) and.(b)() in Ordinance... Vo. 0 0, Board ofsupervisors Fie No. 0. ().,;ncw;iomjy &using Coot Obig<Hion" she mean an obigation eqmd te the appicabe percentage o.fbeow market rate housing units required imder Panning Code... Sections.,. or. mutipied by the then current Ajferdabe Housino= i?ee required. b per unit.,f'orpieposes of cacuating the cost burden ofany egisati-c change, the },Jayor's Office o_fhousing sha use the tn:erage citywide unit mix for projects subject to Panning Code Section within the pastfive years as appied to a hypothetica project of 00 units. For!. purposes of cacuating the east burden irn.posed by a cqndition ofappro-va for a particuar. project, the }Jayor's Office ofhousing "s-.tza use the 'actua unit mi."'c and ;,:nit count proposed in the de'eopmentproject s-pbfect to the condition o.fapprova. * * -* * (g) On Site nchtsionary Affordabk HoitSing Requirements. () Appication. This subsection (g) shei not appy to: any residentiriprojects subject to a deveopment agreement appro ed by the City under Caifornia Government COde Section et seq.; an.yproject exernptfrom theproyisions of-section et seq. under Section a'. ' as it existed on Juy, 0; the requirements ofa receveopmentpanfor a rede;:eopment project area; or anyproject in which the Cit)'. has aproprietary interest.. Supervisor Kim, Peskin, Mar / AJt;;io.S {o.,tttf0.. '!, BOARD OF SUPERVSORS, J. Page

5 () Reducti' <>f Cun-/'t On Sie ncusfonary Ajfiwdahk He using Requireme~;... 0 j Beginning on January, 0, the City sha reduce by 0% the on site incusionary housing obigationfor a projects subject to the on site Jncusionary ajfordabk housing requirements of' Panning Code Section et seq., incuding any onsite requirements found in other sections of the.p.anning Code incuding, but not imited to, Panning Code Sections.,,,., (b)() and any other },unicipa Code sections that refer to P Janning Code Section et seq. or its predecessor, from the requirements ofsection and ot~er reated sections as they exist as ofjuy, 0. Notwithstanding the foregoing, fri no evc!yit sha the on sitc incusionary housing obigation for any project be reduced beow the Basic ncusionary Housing Requirement. () Appication to Pre-viousy Appro,ied Projects. incusion.e) housing requirements through subsection (g)() cibop'e. 0 recei've a reduction in any on site beow market rate requirement appicabe to the subject property under this subsection (g). (C) Sponsors o.f projects that have not received their first construction document as defined in Section 0A.. J o.fthe San Francisco Buiding Code by January!, 0 may appy once to the Panning Commission.for a modification o.ftheir existing conditions o.fappi'o',;a to reduce any on site befo-w market rate. incusionary requir.ements by 0% consistent with subsection (g)(), or change their eection so that they wiproyide on site rather than off site beo""rv market rate units or Affordabe Housing... L'ee payments. Project sponsors seeking to amend their conditions o.fappro va to benef*fi om ~he 0% reduction must demostrate to the Panning Commission that the proposed reduction wi enabe thepr&ject to obtainfinancing and Supervisor Kim, Peskin, Mar / A-vcdo) J [ \., V\i ('<& BOARD OF SUPERVSORS Page

6 ...,.J commence construction within a one year time period.foowing Panning Commission's approva ofthe proposed reduction. The Parm.ing Commission sh.a inchde a condition of, appror'a to require that the project sponsor obtain itsfirst construction document within one year of the approva. fthe pr(}ject sponsor does not obtain itsfirst construction document within j one year, then the conditions o.fapprova existing before the modification sha appy uness the. Zoning Administrator, a-fter a duy noticed hearing, deten~ines that th~ project sponsor has i made good}aith efforts to obtain itsfirst construction document but for reasons beyond the. project sponsor's controz incuding, but not imited to, the fiing ofa awsuit or deay on the part 0. :::ea:~:::;:::::;~:: ::~:~:::::~::;:en; n obtaining thefirst construction document. Anyfurther eictensions o.ftime may ony be granted by the Panning Commission using the smne inquiry as to whether the project sponsor has made. good faith efforts to obtain itsfirst construction document. The Panning Commission may not niake modifications under this subsection (g)()(c) after January, 0. (h) Stabiizing the Cost Obigation of Future!nchtsionary or Affordabe Housing Requirements. () Appication. This subsection (h) shau appy as foo'ws: G.) This subsection sha appy ony to private residentia projects or theprfvate residentiaportion ofa mixed use project, and not commerciaprojects; and 0 (B) This subsection sha not appy to any o.fthe fooping: (i) A project ocated in an area subject to a deveopment agreement under Caifornia Go ;ernment Code Sections et seq., as amended, or any successor egisation; (ii) A project ocated in a rede; eopmentproject area, an infi astructure finencing disti-ict, or eny other erea that the City designates under State kw in which property tax increment is aocated tefand affordabe housii'g; Supervisor Kim, Peskin, Mar t f G.; ~ r LQvrY\f (.) BOARD OF SUPERVSORS. Page

7 (iii) A project that, throitgh a Specia [Jse District or other oca egisiztion adopted after Z'ovember, 0, receives () a 0% or greater increase in deyeopabe residentia grossjoor area, as measured by a change in height imits, Foor Area Ratio imits, or use, orer prior zoning, o:; () a 0% or greater increase in residentia densities o er.prior zoning. }onvith.standing the jbregoing, shoud a project sponsor seek to deveop a project in accordance with :=oning in pace immediatey before the estabishment.of the Specia Use District, this subsection (h) sh.a appy; (iv) An area subject to a change in zoning enacted after 'o'ember, 0 that ajfects 0 or more acres or greater and resuts in a significant increase in residentia doveopmentpeknii,,[, where the eree is net ese enaempessed by,; Specie/ Uu DistricJ adopted after.. Vovembcr, 0. The City sha adopt a standard.for determining what j constitutes "a. significant increase in residentia de>jeopmentpotentici"for these purposes ru... foows: There sha be a Housing Review Committee comprised o.fthe Directors ofthe },{ayor's Office ofhousing, the P'm-ning Department, and the Office ofeconomic and W-0rkforce Dq-veopment, oi their successor agencies. No ater than },/arch., 0, the Housing ReYieit: Committee, after at east one pubic hearing, sha recommend a standard to the Board of Supervisors in the form ofaproposedordinance Thereafter, the HousingRe-;ie-w Com.mittee, at necessary updates or modifications to the Board. The Board ofsitper;isors may :;~ef ect a proposed ordinance submitted by the Housing Review Committee by a majority vote. fthe reguar inten as determined by the Committee, sha reviev; the standard and reconm~end any! Boardfais to reject the proposed ordinance within 0 days o.freceiying itfrom the Housing. Revie-,r Committee, the proposed ordinance sha be deemed adopted n subsequenty appying the standard estabished in the ordinance and determining. whether to increase affordab.e housingfees or exactions in the area subject to.the change in ;:;oning, the Boerd ofsupervisors Supervisor Kim, Peskin, Mar, /ti!ci)o.( &~itprj. BOARD OF SUPERVSORS Page

8 0 sha consider any anaysis approved by the Controer's Offu:e regarding the financia feasibiity ofdep'eoprnent subject to theproposedfee or exaction. j (v) A project that recci.., espubicfinancing orfinancia ij'centip'es +or ajfordabe. J housingfrom the Caifornia DebtLimitA/ocation Committee tax, exen:pt boruifinancing or other simiar pubic source; or (vi) A proje_ct that receives a density bonus for the deveopment of affordabe housing through the State Density Berms Law or other simiar State egisation; (vii) A project in which the City has aproprietary interest. () nehsionary Housi~ Cpst Obigation. As ofjanumj', 0_, the City may not i amendmerd, or irnpose any new condition o,fappro> a on the ~uance ofa discretionarypermit, j adopt any new kmd 'b{se egisation or administratfve reguation, inc~ding a Panning COde that..,i;oud require an increase in the project sponsor s nchsionary Housing Cost Obigation beyond that required as ofjanuaj, 0, incuding and incorporating the reductions effected... fym~~@~.. () Other Rees Reated to Affordabe Housing Fee. As ofjanuary, 0, the City may not adopt any new and use egisation or administrative reguation, incuding a Panning Code mnendment, or in:pose any ne-w condition ofappro ;a. on the issuance o.fa discretionary permit, 0 or decision on the grounds that such egisation, order or decisio~' i'icreases the project spo!'sor s nchsionary Housing Cost Obigation or imposes Other Affordabe Housing Fees wi be subject to the requirements ofcaifernia Code o.fcii:i Procedure Sections 0 and J0i, respeeti.,,ey. Any such chaenge may b~ brought ony after a project sponsor has exiausted a a;. aiabe administrati'>'e remedies, and sha be subjeet to a appicabe stg:futes of/imitations,,\.. ' Supervisor Kim, Peskin, Mar A BOARD OF SUPERVSORS it\i\~.sj {a.,,~ Page

9 incuding without imitation those set forth in Gmifomia Code of Civi.Procedure &ction 0. and Caifornia Government Code Sections. 0() and.. ) (i-g) Legisation. The City sha?i enact S:J't)' egisation necessary to impement subsections (g) S:Jd (h) as soon as practicabe after the effective date o.fth-is &ction, but no ater than January, 0. Before the adoption ofsuch egisation, the }.fa:y or's Office ofhousing, with consutation as necessary with the ParmingDepartrnent, sha irnpkment the provisions of Supervisor Kim, Peskin, Mar }nr.;/tf;fj (et-mfos BOARD OF SUPERVSORS! 0 Page

10 0., J..) 0 board. or has not entered into a deveopment agreement or other binding agreement with the J City as ofjanuary, 0: (A) For housing deveopment prd;ects consisting of ten dweing units or more, but ess than twenty-five dweing units, the requirements ofthe Panning Code, incuding but not imited to Section et seq.. in effect on the date this <;:harter Amendment is adopted by the voters sha appv.. (B) For hous~ng deveopmentpro;ects consisting of twenty-five dweing j units or more, the requirements o(the Panning Code, incuding but not imited to Section et seq_. in efjj;ct on the date this Charter Amendment is adopted by the voters sha a(jpv, except that the amounts of the incusionary housing requirement sha be modified as fooyvs: (i) Fee. The deveopment project sha pay an affordabe housing fee equivaent to a requirement to provide % of the units in the principa project as afferdabe units. using the method offee cacuation set forth in Panning Code Section.{b). n the event the City's Nexus Anaysis in supj?ort of the ncusionary Affordabe Housing Program demonstrates that a ower affordabe housing fee is awfuy appicabe based on an anaysis of a reevant impacts. the City may utiize the method offee cacuation supported by the Nexus! Anaysis in ieu ofthe %"requiremen~ set forth herein. '!..! (ii) On-Site Housing.![the project sponsor eects and is eigibe to construct units affordabe to quaifj;ing househods on-site of the principa project as set forth in Panning Code Section.{g), the projec~ sp~nsor sha construct % of a units constructed on the project site as affordabe housing units. with % ofthe units affordabe to ow- and very ow-income househods and 0% affordabe to midde income househods. and sha compy with a otherwise appicabe requirements.of Section.. i (iii) Off-Site Housing. ](the project sponsor of a housing deveopment project eects and is eigibe to provide units affordabe to quaifj;ing househods ' Supervisor Kirn, Peskin, Mari A-W{,t {,o..j{joj BOARD OF SUPERVSORS. Page 0

11 -.. j off-site ofthe principa pro;ect as set forth in Panning Code Section.(g), the project sponsor.sha construct or cause to be constructed affordabe housing units equa to'% of a "'..) units con~tructed on the principa project site as affordabe housing. with 0% ofthe units affordabe to ow- and verv ow-income househods and % of...the units affordabe to middeincome househods. and sha compy_ with a otherwise ar.zicabe requirements o[_section '... househo~s.. (C) nterim definitions of "Lower ncome" and "Midde ncome" For _ur.oses o[_the interim eriod bef"gre the City, enacts an ordinance amending the Panning Code. incuding but not imited to Section et seq., "ower income" househod s 0 sha be defined as househods whose tota househod income does not exceed % o[area Median ncome [Or purposes ofrenting an affordabe unit. or 0% o[_area Median ncome {gr purposes ofpurchasing an affordabe unit. and "midde income" househods sha mean househods whose tota househod income does not exceed 00% o(_area Median ncome '(gr 0. purposes ofrentzng an affordabe unit. or 0% o(areamedzanncome for purposes of... purchasing an affordabe unit. * * * * APPROVED AS TO FORM: DENNS J. HERRERA, City 0 By: n:\egana\as0\00\00.docx Supervisor Kim, Peskin, Mar A-!tVi'i..S rovwtpo BOARD OF SUPERVSORS. Page