information, the more useful and helpful a can be to the policy body. whether it is deciding on larger policy issues, i think we should have a discussion about the issues that you raised in terms of what the criteria for individual projects should be. i think there are larger issues that need more attention. there's also the issue of transit-oriented development. i appreciate the way in which you are approaching it. it is about how we do it better. is not just the planning department. it is other agencies part of the equation. i want to take the opportunity to thank you. to the extent we can provide more information to the planning commission and board of supervisors, we can all be in a better place.

>> can you briefly explain the housing allocation and how significant it is for urban centers in san francisco. >> she can cover that more readily and is prepared to present that to you. thank you. >> i am just going to take a moment and open up with [inaudible] i will just start talking. i am sorry about that.

i am technically challenged this morning. there are a number of us to speak. we will try to keep our presentations relatively brief. we are available for questions. anything we do not going to in enough detail, please ask us. a significant part of the audit relates to the allocation of falls under planning jurisdiction as the agency that manages the plan and the housing element. i wanted to give you background on the regional housing needs. housing elements have been mandatory at the state since 1969. since that time, the state department of housing and community development has determined a regional housing need for each jurisdiction within the state, including the bay area. for the bay area, our regional council of governments takes the

state allocation for the region and further distributes it among the jurisdictions within the region. the reason this is happening at the state level and trickling down is that there has been raided the state has recognized the availability of housing is important. we cannot leave it up to the state to decide we will not grow. it has to happen for the state to prosper and move forward. our allocation has always been something we have striven to produce. the way the allocation is used at the state level, it is not a mandate we must construct our allocations around. that is the amount your targeted to produce by 2014. the state's interest is that east jurisdiction does not adopt

policies or zoning measures that would prevent housing from happening. we need to prove to the state we have done zoning and measurements to allow the market and other forces to allow housing to happen and that we do not burden those as a government. we do not have to go back and illustrate we have produced the numbers. we do our best, particularly on affordability. we strive hard. we have challenges. that is why we're talking about this today, as do most other cities with a high cost of living and a range of jobs that do not reflect the high cost of living. one thing i wanted to talk about was the method for how the regional housing needs allocation is developed. it is a projection. it is not based on our existing need. it is not based on any

reflection of what is actually happening. it is a guess on what we think should happen. there are a number of factors used for the allocation. there are the total units each jurisdiction receives. then there is the affordability share. on the total units side, we looked at each jurisdiction projected household growth, the projected employment growth, and how much of the growth was near transit. that is how they look at total units allocated. affordability is generally taken to make sure each jurisdiction has a regionwide distribution.

they want to mirror that within each jurisdiction. that is that we address party. that is what we address. that is how it is balanced. otherwise it is flat across the board. i think it is important to note the methodology shifts to happen. the allegations include proximity to transit. the one we're looking ahead to is even more transit and equity focused. i will digress about that. regardless of the shifts in methodology, it is interesting the overall arena has stayed consistent in terms of what

percentage of growth we're taking and how much of it should be affordable. we are averaging 60% of our housing needs at or below income levels of 120%. that is the percentage redeeming. affordable. i want to talk about how it is being developed. the strategy is the results of bills being the ultimate aims of reducing greenhouse gas levels. it is specifically about reducing greenhouse gases. it is a smart growth oriented model. there is more i could be talking about. it is important because it is

being linked to regional needs allocations. it is an interesting mix. bile is happening, it does have to meet its original housing objectives about fair share. that is a critical thing that will not go away. it shifts the methodology from how it was done previously. there are four major components they are looking at. the first is the income allocation. it does not change from how it was done in the past. the sec is the fair share issue. that is if each jurisdiction is getting its fair share of growth. we want to make sure there is equity in terms of total numbers of growth. we're setting a minimum and maximum amount of growth so

cities that could be overtaxed are not and are not broken down. the one we have the most concerns about and have been working on with other partner agencies is sustainability. that is about connecting housing with jobs. that is critical. it is a very important thing. what is happening with the regional housing needs allocation is that significant amount of growth is being focused in places where communities have volunteered for growth. through the program, cities have told us that they plan on growing here by this much. it is a positive program that promotes development near transit. there are some cases where this will result in some jurisdictions that should have more of a fair share or growth

but had not volunteered for it. it will not match up as well as if they volunteer thing was not imbedded in it. it is confusing. i am sure he will hear more as we reached final development. it does relate strongly to the regional housing needs allocation. a look at the numbers on how it relates, the first number, 81,000 units is the amount the city is expected to grow by 2040. that is wehat scs says san francisco will see in growth. the next is what we think our needs will be. it is about the same. we are looking over 14,000 affordable units. i mean under 120% of median

income. that is about 60% of the unit. despite the changes at the regional level, san francisco is pretty much the same. i think that is what we need to remember. before i move on, there is something i want to add. one thing mentioned by the audit was the first implementation measure that you helped us adopt last year. it was that we provide more information on how we're doing with the permits of projects. i am happy to share with you that we have developed a methodology with our team that will create a scorecard that will be included in case reports to the planning commission so they understand how we're doing towards meeting our regional housing needs.

this is not intended to make certain projects look more preferable than others. it is a piece of information people and ask for. we're happy to provide it. one thing important to note is we're basing it on a quarterly allocation. it is difficult to do real time data. if we do is more frequently than quarterly, we're going to have inaccurate numbers. it does not seem to be important. on the amount of housing we're seeing, we're talking about 1% give or take we will move by doing it on a quarterly basis rather than real time. that is very small considering the accuracy we will get by tagging it to the pipeline report. i will shifted over and will be available for questions. -- i will shift it over and be

available for questions. >> how are we doing? over the last five years, units were built. about 500 of these units were affordable. this is 37% of the units that are affordable compared to what the -- what we are mandated to produce, which is 60%. this is a breakdown of the targets by affordability. 59% of the total production targets have been achieved. 36% of affordable targets have been achieved. you will see the darker column is the actual production.

light blue is what the targets should be. you will see that we are doing fairly well with market traits and not so well with low and moderate income. this report is based on the most recent support the report rates submitted to the state -- this report is based on the most recent report we submitted to the state. we were on time. >> not so well is an understatement given the lack of affordable housing. that is an understatement. we need to do much better. >> hell are we to meet the shortfall? -- ;how are we to meet the shortfall? this is a breakdown of where

these units are in terms of development. just under 3500 are under construction. the units in the pipeline are entitled. this is because of the citywide projects. about 200 units are under review. as far as the immediate pipeline, these are expected to be completed by 2014. about 1700 are expected to be affordable. that represents 27% of the units that will be completed by 2014. this is how all those units

would break down. approximately 60% of the production targets would been an -- would have been achieved by 2014. in the 2006 report, san francisco achieved 86% of that, even if the units are similar. it is just that the expectation for 2014 is much higher than we were expected to build before. 6300 units or 32% of the targets would have been achieved for border ability before affordability.

approximately the same number of units were built but we were able to meet 40% of the target. this shows it simplified. the project sponsors filed applications with building inspection. they are reviewed for compliance. the planning department approves or grants entitlements that allows sponsors to file for building permits. they then issue the permits that allow for construction. when construction is completed, dbi issues these to to give a final completion. i am not even including any of the p.o's here. supervisor chiu: we have a question from supervisor

wiener. supervisor wiener: a couple of things. a question for planning. this also has to do with the report. in previous reports including the complete budget from a couple of months ago, and in previous materials i have seen, when you look at the income breakdown, 0 to 50 is low. 120-150 middle. 150 and above being general market rate. i noticed today most of it seems to stop at 120 and classified everything above that as market rate. 125% is lumped in with 300% of

ami. i wondered about the rationale on the change. >> it is more difficult to attract -- track that, although we can make assumptions. supervisor wiener: i am curious why in previous reports it was broken out. this is academic. i think 150% ami at the top of that is about 100,007 dow -- is about $107,000. it is a key part of any help the economy having people of that income range and it is worth tracking.

putting it together, i am curious as to why that change happened. >> it is not actually a change. when we worked on the most recent housing element, middle income was an issue the city has started talking about. it is a recent issue with in the last five years. it is not anything -- it is not even a term that i think exists beyond san francisco. it is something we developed because we have the extreme gap between moderate income in being able to actually purchase a median-priced home. it is something we developed in terms of the projection in the housing element. we did that by looking at the incomes of san francisco and tried to figure out how much of that should be between 120% and

150%. we just did that for illustrated purposes for our policy goals to produce lower cost yet market rate housing, which is something the city has physical. there is no way to track it. -- which is something the city has as a goal. there is no way to track it. anything that is not subsidized, we do not know. the city has no way to track that. rentals to meet people of moderate incomes. those rents are not reported and not going through the planning department. we cannot track or monitor them. it is something we will keep in the housing element and our policy papers as a goal to try to push back, but it is not something we have the ability to track. we do not have the information coming through. supervisor wiener: i understand it is more challenging to track.

when we look at global housing needs, you have to go well beyond what the government subsidizes. i wish we had all the money in the world to be able to subsidize additional housing, but we do not. we do rely on non-subsidized housing to meet our moderate housing needs. to eliminate that category from consideration in meeting our housing goals, it does reduce our ability to meaningfully no -- know whether we're meeting the needs of the middle class. there is a world of difference between 100% and 300% of ami. one would be part of the middle class and one may not be. i want to put that out there

that it is important. >> i will be talking more about the reporting that we did. supervisor wiener: i do have another question about a number. on page 3 it says units will be affordable. it is defined up to 120. i think that is a zero to 120. it is on page 3. is that 0 to 120? is that the projection to 2040 or 2022? >> 2040. sorry. it is 2022. supervisor wiener: is that in

any way broken down or could it fall anywhere in the range? >> is just an estimate. supervisor wiener: is there any for the -- further breakdown sides -- besides 0 to 120? if there is a further breakdown? >> we will provide it. back to the production process. once the . it is issued a visa to begin a final completion, it is considered complete. we count that as part of the housing inventory. the planning department tracks development projects from application filings to construction in the pipeline

report. we started publishing the report in 2006. it was not until the last couple of years we actually were producing this on a regular quarterly basis. the report covers both residential and commercial. the pipeline report only covers those in the pipeline, not those that are completed. once completed, the planning department tracks them in the annual housing inventory. this report has been in existence since 1967. the 2011 housing inventory is the 42nd in a series. the data accounts for all new housing construction, demolition, alterations. it provides an overview of housing production trends.

it is reported citywide by district and also by affordability. we also take into account conversions and changes to sro's. we have dependants -- appendix a projects completed. this includes addresses, number of units, income, number of affordable units in the projects. when we are able, we track the sales prices and rentals. this is where we could summarize in response to supervisor wiener's request that we track the gap at 120 to 300.

it is difficult. we see sales prices advertised. it takes a while before it gets reported. we will be tracking cnct and rto units as recommended by the audit. a housing inventory is the basis for the annual reporting. we have submitted the report. it was due the first of april. we submitted on time. we intend to prepare quarterly summary of progress to come back to the commission. should the supervisors want this, we could also provide it to them.

i also wanted to note the planning department tracks production. we have produced those reports in the last couple of years. this includes not just units entitle but also would have been completed. that concludes our report. supervisor chiu: i did have a quick follow-up question. do you know what percentage of san francisco population lives within the different ami's we were just speaking of? >> the 10 do that. unfortunately, the data would be based on a survey that is not exactly the most --

>> what is your general understanding? >> we can provide that. we should be able to break down the income categories. my colleagues do have a number of questions for the planning department. we do know members of the public want to speak. i want to get through the presentations quickly. we may follow up with clarifying questions. we still have one more presentation from the mayor's office of housing. >> i seem to recall 70% is 150 or below. it is possible i am below -- wrong, but that is what i recall from a previous hearing. >> we do have the mayor's office of housing.