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(a) Need for New Housing and Other Land Uses. San Francisco is experiencing a severe shortage of housing available to people at all income levels. In addition, San Francisco has an ongoing affordable housing crisis. Many future San Francisco workers will be earning below 80% of the area's median income, and even those earning moderate or middle incomes, above the City's median, are likely to need assistance to continue to live in San Francisco. In 2007, the median income for a family of four in the City was about $86,000. Yet median home prices suggest that nearly twice that income is needed to be able to afford a dwelling suitable for a family that size. Only an estimated 10% of households in the City can afford a median-priced home.
The Association of Bay Area Governments' (ABAG) Regional Housing Needs Determination (RHND) forecasts that San Francisco must produce over 31,000 new units in the next five years, or over 6,000 new units of housing annually, to meet projected needs. At least 60%, or over 18,000, of these new units should be available to households of very low, low, and moderate incomes. With land in short supply in the City, it is increasingly clear that the City's formerly industrial areas offer a critical source of land where this great need for housing, particularly affordable housing, can be partially addressed.
(b) Target Area For New Housing. San Francisco's Housing Element establishes the Eastern Neighborhoods as a target area for development of new housing to meet San Francisco's identified housing targets. The release of some of the area's formerly industrial lands, no longer needed to meet current industrial or PDR needs, offers an opportunity to achieve higher affordability, and meet a greater range of need. The Mission, Showplace Square - Potrero Hill, East SoMa and Central Waterfront Area Plans of the General Plan (Eastern Neighborhoods Plans) thereby call for creation of new zoning intended specifically to meet San Francisco's housing needs, through higher affordability requirements and through greater flexibility in the way those requirements can be met.
New affordable units are currently funded through a variety of sources, including inclusionary housing and in lieu fees leveraged by new market rate residential development pursuant to Sections 413 and 415; as well as City, State, and federal funding. Using these existing sources, the Planning Department projects that approximately 1,000 to 1,500 new units of affordable housing will be developed in the Eastern Neighborhoods.
Recognizing that this number of affordable units is not sufficient, the Plans call for further measures beyond the existing inclusionary requirements and Citywide funding, including new funding sources for affordable housing programs such as an impact fee; and new zoning districts in formerly industrial areas which require deeper affordability.
(c) Requirements for New Development To Contribute Towards Housing Objectives. A key policy goal of the Eastern Neighborhoods Plans is to provide a significant amount of new housing affordable to low, moderate and middle income families and individuals, along with "complete neighborhoods" that provide appropriate amenities for these new residents. The Plans obligate all new development within the Eastern Neighborhoods to contribute towards these goals, by providing a contribution towards affordable housing needs and by paying for a reasonable share of their impact on the neighborhood's infrastructure. They further require new development in transitioning formerly industrial areas to contribute a higher share towards the City's exponentially high affordability needs.
To address the full range of housing needs of all income categories, including low, moderate and middle income families and individuals, the Plans provide programs which address all of these income levels, as follows:
(1) Low: Current housing programs funded by federal and State funds, private equity raised through Low-Income Housing Tax Credits, and local funds such as inclusionary in-lieu and Jobs-Housing Linkage fees and run by MOH and the San Francisco Redevelopment Agency fund affordable housing primarily at very low and low income levels, to households making below 80% of the area median income; but due to the low supply and high costs of land in the City, are at a disadvantage for sites upon which to provide such housing. An alternative to the city's Inclusionary Housing Program will allow developers to dedicate sites for very low and low income level units.
(2) Moderate: The City's Inclusionary Housing Program funds affordable housing primarily at the moderate income levels through on-site provision of below-market rate units, to households making between 80% and 120% of the San Francisco median income. Continuation and expansion of the Inclusionary Housing Program will allow provision of these moderate income units to increase.
(3) Middle: The City has no current programs to fund affordable housing to those at "middle" income levels, below the 200% area median income level estimated to be required to purchase market rate housing yet above the 120% threshold required for the City's Inclusionary Housing Program. An alternative to the city's Inclusionary Housing Program will allow developers to provide "middle" income level units.
The Eastern Neighborhoods Plans structure requirements and fees by tiers to ensure feasibility. This feasibility amount remains below the nexus established in the Residential Nexus Analysis, April 2007, on file with the Planning Department. Within these districts, new development of market-rate housing will be required to meet affordable housing requirements above the City's ordinary affordable housing requirements for Residential and Live/Work Development Projects (Section 415), as described in Sections 419.2-419.4. These housing requirements may be met through increased inclusionary requirements under the City's traditional Inclusionary Program, or through alternative methods contained herein.