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Greenbelt Alliance In the News

July 5, 2002

City, housing factions find maybe they can get along

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With very little debate, the Board of Supervisors in March adopted "inclusionary zoning" rules that require developers to offer 10 to 17 percent of the units in every project at below-market prices, but also allow developers to build the affordable portion at a separate location.

Related measures allowing both greater density and housing development where it's not currently financially practical are waiting in the wings at City Hall and seem likely to win support in coming months. All these moves together may produce affordable housing as soon as 2004.

At play are two major factors: the formation of the consensus-building Housing Action Coalition and the realization that even an economic downturn couldn't cool San Francisco's housing market. For the first time ever, key people working on all sides of the housing crisis began meeting regularly and working together when the coalition formed in 1999. That's started to temper at least some traditional neighborhood opposition to additional housing in their midst.

"The primary thing is what's best for the city as a whole," said HAC member Ron Miguel, president of the Planning Association for the Richmond and a retired flower shop owner.

Construction, Residential Sign up to receive free daily business updates by email every weekday afternoon. Use Search Watch to watch for related topics, companies. Receive free Industry News via email. Choose from 46 different industries. "We have to think as San Franciscans and not only as people from the Richmond, Marina, Cow Hollow, and all the rest. San Francisco is just too small to afford that kind of argument," Miguel said.

The coalition's 26 diverse members include developers, the Bicycle Coalition, the Greenbelt Alliance (which aims to maximize open space near urban areas), the San Francisco Chamber of Commerce and neighborhood groups.

"It's a minimalist coalition," explained Gabriel Metcalf, the coalition's creator and deputy director at the San Francisco Planning and Urban Research Association, known as SPUR. "We agree on one thing, which is increasing housing production." The chamber's interest is simple, said Jaime Rossi, its director of economic development.

"The lack of affordable housing and the lack of home ownership opportunities are really a big deterrent to business growth and to retaining a work force," Rossi said.

At least two projects have already been affected by the new ordinance -- a proposal by AF Evans Co. Inc. to build 250 units of housing at 601 King St. and 850 condominiums proposed by Martin Dalton of Union Property Capital at 300 Spear St.

The AF Evans project would have included 25 affordable units, but now will provide 30 (unless Evans wins state bond financing, which requires 20 percent of a project be affordable). It was headed for city hearings this month, said project manager Steve Kuklin.

Clarity is important

Taking advantage of the new legislation's provision allowing developers to build affordable units at a separate location, Dalton could start construction this summer on 22 units near Candlestick Point.

"From the perspective of the development community, having the inclusionary requirement in an ordinance -- so there's clarity as to what the requirement is -- is going to be very important," said Steven Vettel, a lawyer of counsel with Morrison and Foerster who has represented developers seeking entitlements in San Francisco for 16 years. Morrison and Foerster is a member of the HAC.

Planning officials have long applied a 10 percent rule, but inconsistently, which made it hard to negotiate land prices and keep a project viable during a typical two-year approval process, Vettel said. In fact, less than 2 percent of the housing built in San Francisco between 1992 and 2000 sold at affordable rates.

Also proposed by HAC and being introduced by Supervisor Mark Leno, who sponsored the inclusionary zoning, is an ordinance allowing taller buildings in transit corridors, as long as the extra space goes for housing and the housing is not eligible for a parking permit.

"People have talked about transit-oriented development for a long time, but we haven't done anything to put it into the codes," Miguel said.

Top priority for business representatives among HAC's proposals, said developer Oz Erickson, is one named C-3-O after the "C3" office zoning designation downtown. C-3-0 would allow projects to exceed the current maximum floor-area ratios if they include housing. Buildings would be allowed to exceed current density restrictions but not height and bulk limits.

"To me, this is a win-win situation for everybody," Erickson said. "You're providing jobs for people to build these things, you're providing housing for everybody, and you're providing affordable housing."

Additional HAC proposals wending their way into legislation include:

· Rezoning the city's vacant and under-used industrial land for housing;

· Reducing parking requirements and easing restrictions on in-law apartments;

· Reducing the minimum size of "planned unit developments," a category that enables developers to build to the next higher allowable level of density.

"I expect that over the next year, you'll see multiple pieces of housing legislation that each may be small but will add up to something big," Metcalf said.

In another move to increase home ownership in San Francisco, the chamber is creating a $129 million loan fund that will enable San Franciscans of moderate income -- up to $103,000 for a family of four -- to make housing down payments as small as 1 percent of the purchase price.

Tom Radulovich, a BART director, an environmental and housing activist, and by trade a gardener, planted the seeds that grew into HAC when he suggested that Metcalf and SPUR form the coalition. He calls HAC's goal "restorative urbanism;" he's hoping for more mixed-use projects like the Paramount at Third and Mission streets, which is 20 percent affordable, and fewer housing styles like live-work lofts.

"The HAC is really trying to say these urban models of housing are a really great form of development, and we need more all over the region," Radulovich said. "What we need is a lot of tweaks to make it legal, to decriminalize good urbanism."

Laura Impellizzeri is a contributing writer for the San Francisco Business Times. © 2002 American City Business Journals Inc.

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