San Francisco Committee Proposes Cut to Affordable Units Rule

\San Francisco’s Technical Advisory Committee has voted to recommend a temporary reduction in the city’s inclusionary housing requirement. This would change the percentage of affordable units developers must include in new projects from 15 percent to 5 percent.

The policy shift intends to revive stalled housing construction in a sluggish market, the San Francisco Chronicle reported. Yet the decision exposes deep divisions among committee members over how to balance economic feasibility with the city’s long‑term commitment to affordability.

Several members, including Enrique Landa, a partner in the Potrero Power Plant redevelopment, and Shannon Way of Home SF, warned that cutting the requirement too far risks eroding San Francisco’s ability to produce below‑market‑rate homes.

“To the degree that we don’t require inclusionary, the market is exclusionary,” Way said, emphasizing that even a modest mandate is vital to maintaining social equity.

Others, such as Saki  Bailey of the San Francisco Community Land Trust, supported the temporary reduction but insisted it must be paired with a dedicated funding source for affordable housing.

Bailey and other progressive members appointed by the Board of Supervisors argued that the city must simultaneously expand public investment through mechanisms like a special tax district, lifting the $50 million annual cap on the Housing Trust  Fund or allocating real estate transfer‑tax revenues to housing. Rebecca Foster, CEO of the San Francisco Housing Accelerator  Fund, said these measures are “fundamentally connected” to ensuring reliable funding for affordability.

The office of Mayor Daniel Lurie has not indicated support for these proposals, prompting skepticism from Bailey: “We can’t trust in a pathway that does not have political support yet.”

While the committee’s recommendation is advisory, it carries weight: San Francisco must permit 82,000 new homes over five years under state mandates, roughly half of them income‑restricted.

Developers say the change from 15 percent to 5 percent could make projects viable again. Marc Babsin of Emerald Fund estimated the reduction equates to $100,000 per unit in savings for his planned 541‑unit tower at 1 Oak  Street. Labor leader Rudy Gonzalez called the move “smart and reasonable,” describing it as part of a potential “grand bargain” — a flexible approach that lowers costs while pursuing new funding streams to sustain affordable housing production as market conditions evolve.

– Joel Russell