Good Changes Ahead for Inclusionary Housing

1 02 2016
The ballot measure proposed by Kim and Peskin puts forth much needed changes to the City's inclusionary policy.  Photo: Lea Suzuki, SF Chronicle.

The ballot measure proposed by Kim and Peskin puts forth much needed changes to the City’s inclusionary policy. Photo: Lea Suzuki, SF Chronicle.

A big change is coming down the pike for inclusionary housing (the requirement on market-rate development to build mixed-income housing with below-market-rate units, or contribute funds to the City’s affordable housing development).  Since 2012, San Francisco’s inclusionary housing requirement has been locked up in the City’s charter –meaning that any change to inclusionary has to be done through a charter amendment voted on by SF residents and can’t be made by the Board of Supervisors legislatively.  Really meaning that it is impossible to increase the inclusionary housing requirement to align with the current housing market in San Francisco, which has dramatically changed since 2012.  This June, a measure will be on the ballot to take inclusionary housing policy back out from the charter and at least initially increase the affordability requirement from 12% of units in a development project being affordable for low-income residents, to 15% affordable for low-income AND 10% affordable for middle-income households.

If you aren’t feeling excited about this yet, you should be.  This is a big opportunity to increase affordability in San Francisco.  Our current inclusionary housing requirements were set back in 2012 as part of the compromises around the Prop C Housing Trust Fund, which helped restore affordable housing funds put into limbo when the State government dissolved the City’s redevelopment agency (and which some have tried to portray as a romantic grand bargain – though many of the outcomes of Prop C were good, the reality of some deal points today is less pretty).  Now in 2016, the housing market and affordability in the City look very different and market-rate developments should be expected to contribute significantly more affordable housing to San Francisco.  And recent measures (like 2014’s Proposition K, calling for a minimum of 33% of new development to be affordable) show voters are on board with this.  It’s beyond time to set a higher bar for private development and ensure that projects are contributing their fair share to housing our City’s resident workforce.

Beyond setting that higher bar, this measure does something else important – it acknowledges that a wider and wider range of the City’s everyday people are being shut out of the housing market.  Though low-income and working-class residents still have the greatest need for affordable housing and are the most vulnerable to displacement and exclusion from this great city, increasingly middle-income San Franciscans are finding that they are scrambling to afford to stay in the City, too.  Inclusionary housing is one of the best tools we have to build housing for moderate and middle-income San Franciscans, as local, state, and federal subsidies don’t apply to housing for those income levels.  Instead of pitting low-income and middle-income housing needs against each other, this measure addresses BOTH needs, adding a second tier to the City’s inclusionary housing requirement in the form of 10% of on-site units for middle-income households.  This means rental housing for households making up to 100% Area Median Income (for example, a teacher making $70,000/year, or a postal worker and a restaurant worker with a child making $90,000/year) or first-time homeownership opportunities for households making up to 120% AMI (for example, an electrician making $85,000/year, or a family of four with two teachers making $120,000/year).

So get excited.  We will finally have the change to inclusionary housing that we’ve needed – a measure that recognizes the real obligation private development has to contribute to affordable housing and works to address the ever-widening housing affordability crisis.