This summer, the San Francisco Board of Supervisors approved legislation that increased the Transportation Sustainability Fee (TSF) for large non-residential projects, amended the HOME-SF (Housing Opportunities Mean Equity-San Francisco) Program to temporarily (through 2019) reduce Program requirements, and created a new administrative approval process for 100% Affordable Housing Bonus Program projects.

TSF Increase for Large Non-Residential Projects

In June 2018, the San Francisco Board of Supervisors approved a Transportation Sustainability Fee (TSF) increase for large non-residential projects (over 99,999 gross square feet (gsf)) citywide, with certain exceptions.  This increase follows a major overhaul of transportation fee requirements in 2015, which imposed higher transportation fees citywide for most projects.  The legislation characterizes the increase as $5.00 per gsf (based on the 2015 original TSF rate); however, according to the current Development Impact Fee Register, due to interim increases based on indexing, as of January 1, 2018, the TSF was $21.14, and the actual fee increase is $2.90 per gsf.

There are certain exemptions and exceptions to the fee increase.  For example, for most large non-residential projects in the Central SoMa Plan Area, the fee will be $21.04 upon the effective date of the Central SoMa Plan Area rezoning and associated Planning Code amendments under Board of Supervisors File No. 180184.  The fee increase also does not apply to projects with a Development Agreement approved prior to June 5, 2018.

The TSF for residential, hospital, health services, PDR, and other smaller non-residential projects (under 99,999 gsf) is not affected by the legislation and there are no changes to existing grandfathering clauses and exemptions.

Amendments to HOME-SF Density Bonus Program

In July 2018, the San Francisco Board of Supervisors approved legislation to temporarily reduce HOME-SF Program requirements.

As explained in more detail in our prior blog post, the HOME-SF Program seeks to increase affordable housing production, particularly housing affordable to middle income households, by encouraging project sponsors to provide additional on-site units as affordable.  Certain Planning Code modifications and density bonuses may be granted by the Planning Commission for qualifying projects, including up to 20 feet of additional building height without the need for a Height Map amendment. Previously, in order to qualify for the Program, at least 30% of on-site units were required to be designated as affordable, as compared to the lower percentages (18 to 20% for rental and ownership projects, respectively) otherwise required under the San Francisco Inclusionary Housing Ordinance.

The recent legislation reduces HOME-SF Program requirements for projects with a complete Environmental Evaluation (EE) application on file before January 1, 2020.  For qualifying projects with 25 or more total units, the 30% requirement is reduced to 23% or 25% for a height bonus of up to five and ten feet, respectively.  For projects seeking a height bonus between eleven and 20 feet, the 30% requirement still applies.  For smaller projects only seeking a height bonus of up to five feet, the 30% requirement is reduced to 20%, which, again, is the same as the current on-site Inclusionary Housing Ordinance requirement for ownership (i.e., condo) projects.

Although the required AMI spread for affordable ownership units (80%, 105% and 130% of AMI) and affordable rental units (55%, 80% and 110% of AMI) remains the same, changes were made to the percentage of affordable units required at those AMI levels.  For example, although a qualified HOME-SF Program project seeking 20 feet of additional building height would still be required to designate at least 30% of on-site units as affordable, more of those units could be rented at 80% and 110% of AMI. See Planning Code Section 206.3(f) for more information.

The recent amendments also require the Planning Commission to approve or deny a HOME-SF Program project within 180 days of submittal of a complete application, unless an EIR is required for the project. See Planning Code Section 328 for more information about the Planning Commission review process.

New Administrative Approval Process for 100% Affordable Housing Bonus Program Projects

The July 2018 legislation referenced above also created a new administrative review and approval process under Planning Code Section 315.1 for 100% Affordable Housing Bonus projects, as defined under Planning Code Section 206.4.

These projects will now be reviewed and approved administratively by the Planning Department, notwithstanding any otherwise applicable Conditional Use (CU) authorization requirement related to a specific land use or use size limit.  The Planning Director may also grant “minor exceptions” to Planning Code requirements (in addition to  Planning Code Section 206.4 modifications), including exceptions from residential usable open space, loading, rear yard, dwelling unit exposure and parking requirements, and modifications of other Planning Code requirements that could otherwise be modified through the Planned Unit Development (PUD) process, regardless of the zoning district. These exceptions are similar to what is currently available by Planning Commission authorization for downtown projects and projects in the Eastern Neighborhoods under Planning Code Sections 309 and 329, respectively.  Even though these modifications are substantially broader than those otherwise permitted under Section 206.4, they are available  in limited circumstances (i.e., to “appropriately shift” building mass to respond to the surrounding context and only if such modifications “do not substantially reduce or increase the overall building envelope permitted under Section 206.4.”).

The Planning Department’s determination will be appealable to the Board of Appeals through the  building permit process, but any requests for Discretionary Review (DR) by the Planning Commission will be denied if and when the Commission delegates its DR authority to the Department for 100% Affordable Housing Bonus projects, as contemplated by the legislation.  The CEQA determination for a project will be separately appealable to the Board of Supervisors, unless the project qualifies for ministerial approval under Senate Bill (SB) 35, as locally implemented pursuant to Planning Director Bulletin No. 5 (which should be amended to account for new Section 315.1). See our prior blog posts for more information about SB 35 and the local implementation of SB 35.