§ 10E.4. HOUSING ELEMENT PRODUCTION REPORTS AND HEARINGS.

(a) Findings.

(1) In Section 65580 of the California Government Code, the State Legislature declared that:

(A) the availability of decent housing and a suitable living environment for every Californian is of vital statewide importance and a priority of the highest order,

(B) attainment of the State's housing goal requires the cooperative participation of government and the private sector to expand housing opportunities and accommodate housing needs at all economic levels,

(C) the provision of housing affordable to low- and moderate-income households requires the cooperation of all levels of government,

(D) local and state governments have a responsibility to use the powers vested in them to facilitate the improvement and development of housing to make adequate provision for the housing needs of all economic segments of the community,

(E) in carrying out this responsibility, each local government also has the responsibility to consider, among other things, community goals set forth in the general plan, and

(F) each local government has a responsibility to cooperate with the state in addressing regional housing needs.

(2) The State of California has enacted several laws to implement the State's housing goals. Among these is a requirement that a local jurisdiction have a Housing Element as part its General Plan that, among other things, contains an identification and analysis of existing and projected housing needs and a statement of goals, policies, quantified objectives, financial resources, and scheduled programs for the preservation, improvement, and development of housing that meets the existing and projected needs of all economic segments of the community. (Gov. Code Section 65583 et seq.)

(3) Pursuant to Government Code Section 65584, the Association of Bay Area Governments (ABAG), in coordination with the California State Department of Housing and Community Development (HCD), determines the Bay Area's regional housing need based on regional trends, projected job growth, and existing needs. ABAG has calculated San Francisco's fair share of the regional housing need for January 2007 through 2014 – the implementation period for the current Housing Element – as 31,390 units, or about 4,160 units per year.

(4) The regional housing needs assessment (RHNA) determination includes production targets addressing housing needs of a range of household income categories. ABAG has projected that at least 39% of new housing demands will be from low and very low income households (households earning under 80% of area median income), and another 22% should be affordable to households of moderate means (earning between 80% and 120% of area median income). Market-rate housing is considered housing that is generally available to households making at or above 120% of median income. Because the median income in San Francisco is lower than the regional median income, the Mayor's Office of Housing publishes a local AMI standard.

(5) In 1996, San Francisco enacted a Jobs-Housing Linkage Program in an effort to increase the amount of affordable housing being built in the City. In 2002, San Francisco enacted an inclusionary housing ordinance in a further attempt to increase the supply of affordable housing. Nonetheless, although over 4,920 new affordable housing units were added to the City's housing stock between 2000 and 2008, the City did not meet its fair share of the regional housing needs production targets, especially for low and moderate income housing.

(6) Housing affordability continues to be a major concern as San Francisco has one of the least affordable housing markets in the nation. Under the heading "Why is Housing an Issue," Part II: Objectives & Policies of the Housing Element's introduction says:

"Based on the growing population, and smart growth goals of providing housing in central areas like San Francisco, near jobs and transit, the State Department of Housing and Community Development (HCD), with the Association of Bay Area Governments (ABAG), estimates that San Francisco must plan for the capacity for roughly 31,000 new units, 60% of which should be suitable for housing for the extremely low, very low, low and moderate income households, in the 2007-2014 Housing Element period to meet its share of the region's projected housing demand."

Objective 1 of the San Francisco Housing Element states that the City should "identify and make available for development adequate sites to meet the City's housing needs, especially permanently affordable housing." Objective 7 states that San Francisco's projected affordable housing needs far outpace the capacity for the City to secure subsidies for new affordable units. Therefore, the City needs to look for creative ways to facilitate affordable housing development.

(7) In January 2012, the San Francisco Budget and Legislative Analyst published a Performance Audit of San Francisco's Affordable Housing Policies and Programs, which was prepared at the request of the Board of Supervisors. Table 1 of the Performance Audit shows that between 1999 and 2006, San Francisco met 153.4% of its production goal for market-rate housing, 82.8% of its goal for very low income housing, 52.4% of its goal for low income housing, and 12.9% of its goal for moderate income housing. In Table 2 of the Performance Audit, San Francisco's housing production goals for 2007-2014 are: 10.6% of all new housing for extremely low income households, 10.6% for very low income households, 17.7% for low income households, 21.7% for moderate income households, and 39.5% for market rate housing.

(8) Among other things, the Performance Audit concluded that the Planning Commission does not receive a sufficiently comprehensive evaluation of the City's achievement of its housing goals and that the Board of Supervisors does not receive consistent information on the overall impact of the City's housing policies on the development of affordable housing in San Francisco. Among other things, the Budget and Legislative Analyst recommended that:

(A) Planning Department staff reports to the Planning Commission include data on the expected unit type and income level of any proposed projects or area plans under review, including how such units would address the City's fair share of the regional housing need,

(B) the Planning Department resume providing the Commission with a Quarterly Housing Production Report, and

(C) the Planning Department include in the annual Housing Inventory an evaluation of

(i) how residential projects entitled in the preceding calendar year contributed to the City's housing goals for each income level and to the Housing Element's policies and objectives,

(ii) how entitled housing projects met inclusionary housing or affordable housing fee requirements, and their expected impact on achieving the City's housing goals for each income level,

(iii) whether entitled housing projects advanced various Area Plan goals and objectives, and

(iv) the current and projected status of housing development in the City compared to the City's housing goals.

(b) Planning Department Reports.

(1) Housing Production Summary Attachment. Beginning within 30 days after the effective date of this Section, Planning Department staff reports to the Planning Commission, Historic Preservation Commission or the Board of Supervisors on all proposed projects of five residential units or more shall include data on the total number of units at all stages of the housing production process, within the current Housing Element statutory period, as it contributes towards meeting San Francisco's quantified production goals for different household income levels as determined in the General Plan's Housing Element, and including data on households earning approximately 120% to 150% of area median income based on sponsors' disclosure of unit pricing for market rate housing proposals and other available data; senior housing units; the number of efficiency, studio, one bedroom, two bedroom and three bedroom and above units (when the ability to collect this data exists); and data tracking revenue generated from the Affordable Housing Fee under Planning Code Section 415et seq. Baseline data on housing production for this reporting shall be updated quarterly.

(2) Quarterly Housing Production Reports. Planning Department staff shall provide the Planning Commission with a quarterly Housing Production Report every three months that contains, at a minimum, a comparative analysis of current housing production and regional housing needs allocation for San Francisco for different household incomes as determined in the General Plan's Housing Element, and including data on households earning approximately 120% to 150% of area median income based on sponsors' disclosure of unit pricing for market rate housing proposals and other available data; senior housing units; the number of efficiency, studio, one bedroom, two bedroom and three bedroom and above units (when the ability to collect this data exists); and data tracking revenue generated from the Affordable Housing Fee under Planning Code Section 415et seq. This report should also include information regarding the approval process for newly entitled housing. Specifically, the report should show which projects were considered at a public hearing before the Planning Commission, including Conditional Use or Mandatory Discretionary Review.

(3) Annual Housing Inventory Reports. The Planning Department shall publish an annual Housing Inventory on April 1st of each year that contains at a minimum:

(A) an evaluation of how residential projects entitled or at any other stage of the housing production process during the preceding calendar year contribute to the City's quantified regional housing needs allocation for different household income levels as determined in the General Plan's Housing Element, and including data on households earning approximately 120% to 150% of area median income based on sponsors' disclosure of unit pricing for market rate housing proposals and other available data; senior housing units; and the number of efficiency, studio, one bedroom, two bedroom and three bedroom and above units (when the ability to collect this data exists).

(B) how residential projects in the housing production process met inclusionary housing requirements as on-site below-market-rate (BMR) units, off-site BMR units, or payment of an in-lieu fee, including data tracking revenue generated from the Affordable Housing Fee under Planning Code Section 415et seq.; and

(C) the number of residential projects at any stage of the housing production process during the preceding calendar year within the City's Planning Districts and Plan Areas for different housing income levels as determined in the General Plan's Housing Element, and including data on households earning approximately 120% to 150% of area median income based on sponsors' disclosure of unit pricing for market rate housing proposals and other available data; senior housing units; and the number of efficiency, studio, one bedroom, two bedroom and three bedroom and above units (when the ability to collect this data exists).

(4) Annual Jobs-Housing Fit Report. The Planning Department shall publish a Jobs-Housing Fit Report (“Report”) on April 1 of each year, as a companion report to the annual Housing Inventory. The Report shall analyze the number, types, and wage distribution by quartile of jobs created or lost in the City, and provide an estimate of the housing needs associated with those jobs. The Report shall compare those housing needs by wages to actual housing production in San Francisco by affordability levels (“Jobs-Housing Fit”). The Report shall use available and relevant data from regularly published sources on jobs, wages, commercial and housing production, project approvals, standard assumptions for jobs per square foot by industry type, occupations and wage distribution by quartile associated with those industry types, workers per household and household size, and shall use the household income classifications expressed in the Housing Element of the General Plan. The Report shall include the following components:

(A) Ten-year Retrospective Assessment. The Report shall provide an assessment of the Jobs-Housing Fit in the City for the preceding ten years through the end of the preceding calendar year.

(B) Pipeline Projection. The Report shall project the expected Jobs-Housing Fit for the current pipeline of entitled projects. The projection shall include: commercial and housing development projects that have received their first building or site permit; entitled commercial and housing developments that have been approved but have not yet received their first building or site permit; and projects subject to development agreements, but shall not include the portions of multi-phase projects with phases expected to continue beyond ten years. The projection shall use the affordability levels associated with entitled housing developments including on-site inclusionary units. The Report shall compare projected housing needs by wages directly associated, and indirectly associated, to the extent feasible, with the entitled commercial pipeline to the affordability levels of the entitled housing pipeline. The Report shall separately evaluate the Jobs-Housing Fit for the extended development pipeline including those portions of multi-phase projects extending beyond ten years.

(C) Area Plan and Major Projects. For each draft Area Plan and major commercial or mixed-use development project larger than two acres subject to a development agreement under consideration or approved in the previous two years, the Report shall identify the Jobs-Housing Fit for each such project. To the extent Planning Department staff reports already have evaluated the Jobs-Housing Fit for these projects, the Report may reference those staff reports.

(c) Annual Planning Commission Housing Hearing; Report to the Board of Supervisors.

(1) Commission Hearing. The Planning Commission shall hold an annual public hearing subsequent to publishing the Housing Inventory. This hearing shall provide, at a minimum, information on:

(A) Findings of the annual Housing Inventory regarding how housing production trends match with San Francisco's quantified regional housing needs allocation for different income levels as determined in the General Plan's Housing Element, and including data on households earning approximately 120% to 150% of area median income based on sponsors' disclosure of unit pricing for market rate housing proposals and other available data; senior housing units; and the number of efficiency, studio, one bedroom, two bedroom and three bedroom and above units (when the ability to collect this data exists); and

(B) Findings of the state mandated annual Housing Element Progress Report regarding how housing production trends advance the Housing Element's policies and goals.

(C) Findings of the Annual Jobs-Housing Fit Report regarding how the housing needs associated with job growth compare to actual housing production by income levels. The Planning Department, in consultation with the Mayor’s Office of Housing and Community Development, shall report in writing on the allocated funding, sites, and timing necessary to meet the affordable housing needs identified in the Report, and, insofar as the Report identifies unmet past and projected needs, the amount of additional funding, and sites for affordable housing, that would need to be allocated in order to meet the projected housing needs associated with job growth.

(2) Annual Report to the Board. The Planning Department shall provide an annual report to the Board of Supervisors concerning the results of the Commission's hearing and any recommendations for legislation.

(Added by Ord. , File No. 120352, App. 12/7/2012, Eff. 1/6/2013; amended by Ord. , File No. 191106, App. 12/20/2019, Eff. 1/20/2020)

(Former Sec. 10E.4 added by Ord. 500-85, App. 11/22/85; amended by Ord. 263-99, File No. 991548, App. 10/15/99; Ord. 199-06, File No. 060698, App. 7/21/2006; redesignated as Sec. 10E.1(d) by Ord. 58-09, File No. 090179, App. 4/17/2009)