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Forcing Below-market Housing Units -Lower-cost housing plan OKd in S.F. Below-market units will be part of every deal if mayor makes it law

San Francisco — In pricey San Francisco, where only
one in 13 families can afford to buy a modest home,
the Board of Supervisors voted yesterday to force
residential developers to include affordable units in
their projects.

Ilene Lelchuk, Chronicle Staff Writer

The proposal by Supervisor Mark Leno requires
builders who construct 10 or more units to offer at
least 10 percent of those units at cheaper prices, or
pay a fee that would go to an affordable-housing fund.

The plan is Leno’s attempt to ease a problem that has
topped residents’ list of concerns in recent years, the
shortage of cheap housing. With about 4, 500 new
units in the pipeline, Leno’s proposal could create at
least 450 below- market-price units.

Under Leno’s plan, rental units would have to be set
aside for people who earn, at most, 60 percent of the
San Francisco median income, or $36,150 a year. A
single home buyer who makes as much as the
median income — about $60, 000 a year — would be
eligible to buy units designated as affordable.

A family of two renters who both work could expect to
pay about $1,000 a month under Leno’s plan. The
same family would spend about $1,500 on monthly
mortgage payments if they bought.

According to a city-commissioned housing study
released last week, only 7.3 percent of San Francisco
households can afford the median price of a house in
the city, which is about $497,000. The national figure
is 56.9 percent.

Leno’s legislation is among a handful of
affordable-housing plans introduced by supervisors in
the past year, and the first to pass. The latest
proposal came yesterday from Supervisor Aaron
Peskin, who suggested letting homeowners build and
rent in-law units in certain neighborhoods.

Some San Francisco developers have said Leno’s
legislation unfairly forced them to bear the burden of
building for San Francisco’s working-class families.

But other builders said they supported Leno’s
proposal because it set out clear city requirements.

Under current policy, the City Planning Commission
can force developers to include affordable units in
certain projects. Critics have complained that the
commission applies the rule randomly.

Martin Dalton, who plans to build and sell 860
high-rise condominiums on Rincon Hill that could start
at $500,000, said yesterday that he would have to
offer at least 103 units at affordable prices under
Leno’s plan.

Dalton, who supported the legislation, said he would
probably build affordable units at a different location
from the fast-emerging Rincon Hill neighborhood.

Leno’s plan allows developers to build the cheaper
housing somewhere else, but they have to construct
half again as many affordable units as they would if
they added them to the main project. Builders can
also choose not to create any affordable housing, but
it will cost them a fee determined by the number of
units in the project.

Supervisor Tony Hall, who represents San Francisco’s
relatively conservative west side and was the only
board member who voted against Leno’s legislation,
called the plan punitive and said residential developers
— a "natural resource" — were being driven from the
city.

"We are penalizing the very people who can (build)
better and cheaper than the nonprofits (low-income
housing developers)," Hall said.

Leno’s plan must still be signed by Mayor Willie
Brown to become law.

E-mail Ilene Lelchuk at [email protected].

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/03/19/MN81094.DTL

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