In 2002, members of SFHAC got together with then-Supervisor Mark Leno to help draft and pass the City’s first inclusionary housing ordinance. It has since undergone a couple of major revisions, but it is still one of our chief sources of funding to subsidize affordable housing.
Today, San Francisco’s Inclusionary Housing Ordinance requires that all market-rate projects of 10 units or more contribute to the City’s affordable housing stock. There are three ways for a project to do this – build 12 percent of the Below-Market-Rate (BMR) units on-site, build 20 percent of the units off-site on a separate parcel of land or pay a fee equivalent to 20 percent to the Mayor’s Office of Housing (MOH). These percentages are slightly higher in certain parts of the Eastern Neighborhoods Plan (ENP). Additionally, project sponsors have the option of dedicating land for affordable housing if they are building within ENP zoning. Because of their complexity, the off-site and land dedication options are rarely chosen.
Currently, a BMR unit for a rental project is priced at approximately 55 percent of the Area-Median-Income (AMI) and 90 percent of AMI for a for-sale project.
It is important that we recognize that, while Inclusionary Housing is a necessary tool to improve housing affordability, it is not sufficient by itself to solve the enormous housing challenges San Francisco faces. We need more tools to solve the riddle of providing our most badly needed product, middle-income housing.