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Inclusionary Affordable Housing Program

San Francisco's Inclusionary Housing Program requires new residential projects of 10 or more units to pay an Affordable Housing Fee, or meet the inclusionary requirement by providing a percentage of the units as "below market rate" (BMR) units at a price that is affordable to low or middle income households, either "on-site" within the project, or "off-site" at another location in the City.

To apply for an affordable housing unit to rent or buy, please apply with the Mayor's Office of Housing and Community Development (MOHCD).

San Francisco's Inclusionary Housing Program has been in effect since 2002 and requires new residential projects of 10 or more units to pay an Affordable Housing Fee, or meet the inclusionary requirement by providing a percentage of the units as "below market rate" (BMR) units at a price that is affordable to low or middle income households, either "on-site" within the project, or "off-site" at another location in the City.

The Program is governed by Planning Code Section 415 and the Inclusionary Housing Program Procedures Manual, and is administered by the Mayor's Office of Housing and Community Development (MOHCD) and the Planning Department.  To be eligible to rent or purchase a BMR unit, a household must meet specific requirements, including income requirements. Read more from MOHCD.

2017 Amendments to the Inclusionary Program

On July 18, 2017, the Board of Supervisors unanimously approved legislation (Board File No. 161351) to significantly revise the key requirements and provisions contained in Section 415 of the Planning Code, including as they apply to "grandfathered" projects currently in the development pipeline. The legislation was signed into law by Mayor Ed Lee on July 27, 2017 and become effective on August 26, 2017. Additional trailing legislation (Board File No. 170834) came into effect on December 3, 2017 to make a handful of technical changes to Planning Code Section 415; including but not limited to the application of the Inclusionary Program in the Transbay Redevelopment Area and in certain areas including the Mission Plan Area, and how new requirements for feasibility studies of significant re-zoning actions will apply.

In addition, this legislation also established new dwelling unit mix requirements for projects in residential districts outside of "form-based" zoning districts, generally located in Plan Areas. These new requirements are set forth in Section 207.7 of the Planning Code.

For more information please see the Supporting Info tab

Resources

Background Documents

Effective January 1, 2019, residential development projects that comply by paying the Affordable Housing Fee will be subject to the following fee based on the Gross Floor Area of residential use, rather than the number of dwelling units. The fee will be applied to the applicable percentage of the project, as set forth in Section 415.5 of the Planning Code:

Affordable Housing Fee: $199.50 per square foot of Gross Floor Area of residential use, applied to the applicable percentage of the project:

  • Small Projects (fewer than 25 dwelling units): 20% of the project’s Gross Floor Area of residential use
  • Large Projects (25 or more units), Rental:    30% of the project’s Gross Floor Area of residential use
  • Large Projects (25 or more units), Ownership: 33% of the project’s Gross Floor Area of residential use

Note: The impact fee register in place at the time of payment shall be applied. However, a project for which a Site Permit has been issued prior to January 1, 2019 shall remain subject to the fee method and amount set forth in the impact fee register in place as of December 31, 2018. Additionally, projects with an Environmental Evaluation Application that was accepted prior to January 1, 2013 pursuant to Planning Code Section 415.3(b) shall also remain subject to the fee method and amount set forth in the impact fee register in place as of December 31, 2018. The impact fee register may be found here.

This change is pursuant to amendments to Section 415.5 that were adopted by the Board of Supervisors in July, 2017 (Board File No. 161351). Specifically, the Code requires that the Fee reflect MOHCD’s actual cost to subsidize the construction of affordable housing units over the past three years, and directed the Controller to develop a new methodology for calculating, indexing, and applying the Fee, in consultation with the Inclusionary Housing Technical Advisory Committee (TAC). In May, 2018 the Controller and TAC determined that the Fee should be applied on a per gross square foot basis to ensure that MOHCD’s cost to construct the required amount of off-site affordable housing is appropriately and equitably captured from all projects, regardless of the size and number of units distributed within the project. The Controller directed MOHCD, in consultation with the Planning Department, to convert MOHCD’s per unit cost to a per-square-foot fee, based on the average residential Gross Floor Area of projects that have paid the Fee in the past three years. The Fee amount indicated above has been calculated accordingly.    

Pursuant to Section 415.5 and the specific direction of the Controller and TAC, MOHCD shall update the amount of the Affordable Housing Fee each year on January 1, using the MOHCD average cost to construct an affordable unit in projects that were financed in the previous three years and the Planning Department’s average residential Gross Floor Area of projects that have elected to pay the Fee and have been entitled in the same time period. Each year this analysis will be updated to include new projects from the most recent year, and drop older projects that no longer fall into the three year period of analysis. The updated Fee amount will be included in the Citywide Impact Fee Register that is posted December 1 and effective on January 1.