Plan to Expand Housing Tax Rejected
Supervisor's plan sent back to SF Planning Dept., mayor's office

By Paul Kozakiewicz

San Francisco Supervisor Jake McGoldrick's effort to include buildings with 2 to 4 units into the city's Inclusionary Housing Fund was sent back to the drawing board after a raucous meeting at the supervisor's Land Use and Economic Development Committee meeting March 4.

The proposal would have required contractors who build two to four-unit buildings to offer some of the units at below market rates or to contribute money into the housing fund. The proposal would have added about $150,000 per every $1 million in construction costs to the project.

The measure would have affected homeowners who want to expand their properties as well. For example, the owner of a single-family home in a RH-2 zone (two unit) who wanted to expand the property by adding another unit would have to pay into the fund or rent to the public at below market rates.

At the meeting of the Land Use and Economic Development Committee, there was two hours of testimony about the proposal. There were so many people at the hearing, more than 100, that a second overflow room had to be opened to accommodate the crowd. No one spoke in favor of the proposal.

Because the crowd was so raucous, the chairwoman of the committee, Supervisor Sophie Maxwell, called a recess so that three armed sheriffs could be stationed throughout the room for the remainder of the hearing to forcibly remove anyone who clapped or cheered for the speakers.

Small property owners of all stripes, including Chinese and Russian, testified that the proposal would be anti-family by making it difficult to modify their homes to add another unit for aging parents or other family members.

McGoldrick, who has already sponsored legislation to include buildings with five to nine units to be a part of the Inclusionary Housing Fund, said he had authorizing legislation ready to go to make the change for two-, three- and four-unit buildings permanent.

Supervisor Geraldo Sandoval asked McGoldrick during the hearing why he was telling the Planning Department what to do, rather than asking them to research the issue to determine the facts before making a decision.

McGoldrick responded that he was expanding a program that was already on the books and that he didn't see any reason to subject it to Planning Department scrutiny. Many of the people who testified at the March meeting were upset because they saw McGoldrick's legislation as an attempt to make up revenues for the Housing Inclusionary Fund that the supervisor had given away a couple of weeks earlier when he voted to reduce the contributions to the fund for housing projects of 120 units or more. In that case, the supervisors voted to reduce the contribution of the largest project builders working in the City from 15 to 12 percent of the cost of the project.

The lowering of the rate for the biggest builders in the City would reduce the amount of money coming into the city's affordable housing fund.

McGoldrick's proposal would make up for some of that revenue by expanding the definition of who pays into the fund.

"This measure is so everyone pays their fair share," McGoldrick said.

Grace Shanahan, a member of the Residential Builders Association, told the supervisors that developers could spread out the costs for contributing to the city's Inclusionary Housing Fund in a large project, but lowering the threshold of the fund to include 2- to 4-unit buildings would not allow a property owner that ability.

"You'll be chasing families out of the city," Shanahan said.

At the end of the hearing, Sandoval and Maxwell amended the language of the proposal and sent it over to the SF Planning Department and the mayor's office for further research.