Good afternoon. It is october, 28. Please place a cards in the basket to the right of the lectern. Additionally, there is a sign in sheet on the front table. Sfgovtv please show the office of Small Business slide. Thank you out, everyone. It is our custom to begin in end every meeting with a reminder that the office of Small Business is the only place to start your business in San Francisco and the best place to get answers to your questions about doing business in San Francisco. The office of Small Business should be your first stop when you have a question about what to do next. You can find us online or in person here at city hall. Best of all, all of our services are free of charge. Small Business Commission is the official public forum to voice your opinions and concerns about the policies that affected the Economic Vitality of Small Business in San Francisco. If you need assistant with Small Business matters, start here. First item. Called to order at roll call. [roll call] mr. President , you have a quorum. For the record i need to leave at 315 today if the meeting is not over buy them for a doctors appointment. Item two, general Public Comment. Do we have any members of the public who would like to comment on any item that is not on todays agenda . Seeing none. Public comment is closed. Next item, please. Board of supervisors 190458 planning code. Ordinance amending the planning code to modify the job housing linkage fee by inducting the fee, adding options for complying with the fee, requiring payment of the fee no later than the time of the first certificate of occupancy, dedicating funds for permanent Supportive Housing and the preservation and acquisition of Affordable Housing, and to remove the monetary limit for the small sites funds under the inclusionary housing program, affirming the Planning Department a determination under the. Making findings of consistency with the general plan and the eight priority policies of the planning code. Discussion and action item. Presenters are courtney mcdonald, the legislative aide supervisor matt haney rate also aaron starr , manager of legislative affairs, and ken rich. Come on up. Thank you. Good afternoon, commissioners. Courtney mcdonald with a supervisor haneys office. You so much for having me today. I want to thank you all for the great work. We have many constituents to the office of Small Business. Thank you for being a wonderful role model for our city. Im here today to talk about the housing for San Francisco workers legislation, also known as the job housing linkage fee program. As you know, San Francisco is struggling to meet our growing demand for housing that is affordable to the vast majority of our growing city. We are falling drastically short for low and during the last decade the city aimed to produce over 2,000 new affordable units and only produced 657 net new affordable units. What that means is that low and moderate income households are leaving the city. We are failing our residents and our workers and that is why we are part of this legislation. What we hear on a daily basis from our constituents is the demand for more Affordable Housing. Teachers and workers are moving further and further out of the city, because they cannot afford to live here. Maybe they are leaving their jobs altogether. We have people dying on our streets because of the lack of housing. Families crammed into small bedrooms. People waiting years to get into stable housing. Seniors who are at risk of becoming homeless. San franciscans are demanding more Affordable Housing and this issue we know is not just unique to district six. Our policies need to support this massive demand for Affordable Housing. When we talked to the Mayors Office of housing, but we hear are barriers to building our funding, and land. In this legislation aims to address both of those. Since 1980, our citys population has grown 27 . Our job base has grown 32 . Both great things. These are faster than the rate of our Housing Production which is only 17 . For every new large Office Development, over 25,000 square feet which is the type of new development that this legislation deals with. A third of the new employees are making under 100,000 per year. For every job created, five additional low and middle income jobs are created and yet we are squeezing out these workers and these residents. San francisco has the highest jobs to housing ratio in the bay area. We are only building one unit of housing for every 8. 5 jobs that we are creating. Only 25 of those units that we are building are affordable. Think of the imbalance. This is a dangerous and unacceptable trend that we cannot afford to continue. The situation on our street and the migration of low and moderate income residents is unsustainable. We have been ignoring this problem for years. If we are not proactive now, the inequality gap will only continue to grow in the city. We must actively work towards the higher citywide housing to jobs ratio and update the decades jobs housing linkage fee to spur Affordable Housing development is one important step. This legislation will generate over 400 million for Affordable Housing in the next seven years. It will create funding for 1,000 new units for low to middle income workers. 715 units for people experiencing homelessness. And Fund Acquisition of 150 units are risk all by updating an impact fee that has not been updated since the 90s to grow Affordable Housing to match this growth. This housing for San Francisco legislation is cosponsored by supervisor yi, if you are, ronan, walton, peskin and mar. The Planning Commission unanimously supported it. It is also supported by Affordable Housing advocates like the community dont coun count housing organization. The housing right community, jobs for justice and countless others. You may have seen this as a Planning Commission there were dozens and dozens of people who came out in support of this. We would appreciate your support here today as well. A little bit of history on the fee. For decades San Francisco has recognized the undeniable relationship between the construction of new largescale office buildings. New employees on Affordable Housing demand. During our citys first phase of highrise Office Expansion the city recognized really early on the need to link this Large Scale Development to fees to mitigate the impact. We enacted a Transportation Impact fee, a childcare impact fee and a job housing linkage fee. The purpose of the fee is to offset the impacts of large scale commercial development on the community. Unlike other impact fees, the job housing linkage fee already accepts small commercial development and over 25,000 square feet. This is really simple. Every large commercial developer has employees a third of them are low to moderate income. Focusing housing. Housing is really expensive in the city. Commercial developers have to plan not only for their investment on office space but also for the housing employees and office space. The city doesnt have the most equitable way to do this impact by having developers either one dedicate land towards Affordable Housing or to give money to help the city builder. Over the past five years the linkage he has generated 70 million for a housing. A really critical source of funds that stabilizes our communities and houses our workers. To put one of the Planning Commissioners last month when we were there, commissioner koppel said the missing middle is literally disappearing. I have not seen one thing done as far as addressing the middleclass issue and this is the first time. The people that live here should be working in those office buildings, not having to cross the bridge or not having to go through the tunnel to go to work. This fee first established in the 80s and then updated in the 90s is meant to be updated periodically. It has hardly matched inflation since the 1990s despite the changing dynamics of the city and the fact that our offices are more dense and there is a growing population of lowwage workers in the city. Right now, new Office Developments are paying just 28. 57 per square foot. Arete said a decade ago based on very outdated data about how many workers there are two Office Development, and data around old housing and construction costs. For years legislative and Community Members have been asking for this fee to be updated and an update has been anticipated for a long time. After almost 25 years, this past summer the office of economic and workforce of element released updated job housing study which is really setting the legal maximum for which we can charge on a new developments. It looks like a real need the new Office Develop minutes creating. The study looks at the total total affordable unit demand per square foot of new office by analyzing the density of employees and a new office space, worker incomes what it cost for the city to build Affordable Housing which we all know continues to increase. The study focused exclusively on quantifying the needs, Housing Needs just for a low and income workers. Not even all new employees coming into the city. For a new Office Development to meet the demand creates on Affordable Housing, if we were to truly mitigate the impacts of these developments for new, low and moderate income workers we would be setting this fee adds 193 that is not what we ar are 193 per square foot. That is not what we are proposing today. These findings are a real wakeup call. We need to dramatically increase our investment in formal housing and spur construction of new affordable units that will serve our growing low and middle income workforce. What this legislation does is a changes the fee amounts for a new office, again over 5,000 square feet up to 69. 60 for future projects. For projects that are currently in the pipeline, and then submitted their applications, paying 57. 14. We are also changing the fee amounts for laboratory, and i am happy to share with you today that there are a couple of updates to the legislation you have in front of you. We will be amending the Laboratory Fee to 38. 37. The legislation also aligns the indexing of the job housing fee with all other impact fees in the city. So we can make sure it is being updated on every single year and then also changing how the fees are allocated. Right now, all of the fees just to go into our citywide Affordable Housing fund. We are specifying that 10 go to acquisition and preservation of Affordable Housing to maintain buildings that are at risk of losing affordability. Second it specifies that 30 of those funds go to Construction Permit if Supportive Housing. This would be the first dedicated stream of funding for that. Lastly the remaining 60 continues to be contributed to the citywide Affordable Housing fund by the Mayors Office of housing. This fee increase that is in this legislation is consistent with other impact fees that are typically set at about 36 of what the nexus says that we can charge. That is how we arrived at the number of 6960. It also takes into consideration a recommendation from the nexus study as well as the Feasibility Study that i know ken will speak about shortly. Again the nexus study justifies charging much higher fee rates than those in our proposal. With this new fee we would generate at least 400 million over the next seven years. Just to close and then im happy to answer questions. We can expect nearly 50,000 new workers who will need housing in the next decade. Many of whom will not be able to afford market rate rents. How many times have each of us heard of a friend, or colleague, not taking a job here, leaving do to a lack of Affordable Housing . Someone who is commuting, maybe an hour or two because they cannot find a place to live. Commercial use in the city benefit from the availability of housing close by for their employees. We have to increase Public Investment and Affordable Housing at a rate that keeps paying for job growth. We have to ensure sufficient housing to meet the full range of worker income and demand to have a healthy city. This jobs housing fee the update will continue to provide revenue significantly below the cost that Affordable Housing developers will incur to mitigate the massive housing need. Resulting from over 7 million square feet of planned office in the next two years. If we dont raise this fee, who also pays . This fee update has been discussed for many months. We first introduced it in may. I welcome your support as we go to the full board of supervisors tomorrow for a vote. Thank you so much for your time. Im happy to answer questions before or after ken. Have a question. I hate increasing fees i think it is ridiculous. The city is definitely in a housing crisis, especially for low and middle class. But you fail to realize how we got there, and that is because of all of the red tape and all of the bs it takes to build low and moderate income in this town. I know projects that cant be built because neighborhoods dont want it built in their neighborhoods. I have to scratch my head and wonder, why doesnt the board of supervisors look at why this stuff is not going to be built . There is a lot of stuff, small and other, formal housing pause on the pipeline that wants to be built. It is being held up because of archaic laws. Call supervisor haney a look at that stuff, too. You can raise all the money you want, and is still not going to make a difference until you change the way this city looks at building Affordable Housing. Right now it goes on the back burner. And the red tape with planning everything, no problem with planning. You just follow the laws. The bureaucratic way of doing business in this town has got to stop, okay . We have Small Businesses closing left and right, okay . This impact fee. You are going to see more Small Businesses close, okay . They will not be able to afford it anymore. There is my 2 cents. Thank you for your comments, commissioner. I cant fully discuss some of the things we are working on because they are on the ballot this year. In terms of making it easier to build housing in the city. Like i said, when we sat down with the Mayors Office of housing early on we said what can we do to help you . They said we need funding and we need land. That is what we are aiming to address here. We dont pretend to say that this is the solution to our housing crisis. Its a very complicated issue. There are a lot of solutions we need to look at. They want to make sure that we are recognizing the impact that we need to medicate from the large Office Development and putting up funds is not going to hurt that problem, it would only help it. I will pass on your comments. Thank you for the presentation, courtney. Would you be available to sit around, i would like to ask more questions but after we hear richs presentation. I just want to make sure i understand anything correctly before i ask any. Of course. I can be here until the item is over. Thank you. Contrary good afternoon commissioners. I am ken rich from the office of workforce development. I have a short presentation. I will go for you there it quickly. It is fairly dense. Please let me and ask questions afterwards. Apologies for the technical difficulties. Im going to do the overhead projector. I probably need some help getting that figured out. There we go. Hopefully that will work. I just want to do a brief description of how we look at whether fees are changing are going to be feasible, which means that they will actually leave enough return for the developer so the developer will still build the project and talk about some policy considerations around that. The city. Okay i got a change that. The city assesses the impact fees on native element as you well know. These fees are intended mitigating specific impacts on this availment. One of these fees is the jobs housing linkage fee that was introduced to you by courtney which is money from which goes to pay to build Affordable Housing in the city. Any fee, by state law must be supported by a nexus study which demonstrates there is