Barring any last-minute surprises, the Board of Supervisors will finally adopt compromise inclusionary housing legislation on July 18th that would, as shown in our summary comparison chart, make many major changes to the City’s existing program. The key provisions of the legislation affecting large projects with 25 or more residential units can be found in our prior blog post on this topic.
Recent noteworthy changes, including an important change to existing grandfathering protections for certain pipeline projects, are summarized below.
- The legislation now provides that projects with a complete Environmental Evaluation (EE) submitted prior to January 12, 2016 will be grandfathered not only as to inclusionary housing percentage requirements, but also Area Median Income (AMI) and other inclusionary housing requirements. Recall, however, that to maintain grandfathering protections, existing law requires issuance of a building or site permit for construction of any off-site or on-site inclusionary housing units by December 7, 2018, with an extension for the duration of any litigation challenging the City’s approval of the project.
- The legislation now provides that the inclusionary housing percentage for non-grandfathered projects will be set as of the date a complete EE application is submitted. Recall, however, that the legislation will require issuance of a building or site permit for construction of the principal project within 30 months of project approval to maintain that percentage requirement, with an extension for the duration of any litigation challenging the City’s approval of the project.
- The legislation now provides that the project sponsor must demonstrate that the project is eligible to provide off-site or on-site inclusionary housing units, if proposed, at least 30 days prior to approval of the principal project; if there is any subsequent reduction in the number of proposed on-site inclusionary housing units, Planning Commission approval at a noticed public hearing will be required.
- The legislation no longer proposes to prohibit studio units priced at 100% AMI or above. Instead, it now provides that at least two people must occupy off-site inclusionary housing units priced at 100% AMI or above and on-site inclusionary housing units priced at 110% AMI or 130% AMI, for rental or ownership units, respectively.
- The legislation now requires an updated Controller’s analysis to be completed by January 31, 2018, after which time the Board of Supervisors may revise in-lieu fees. The legislation now provides that the in-lieu fees will be based on the total cost of constructing affordable housing, including both development and land acquisition costs.
