the planning department for all of their assistance during this audit. supervisor campos: i want to thank the budget and legislative analyst for the work that they have done on this product. i am wondering if i can ask a couple of questions to provide a little bit more information. i know that we are going to hear from the planning department very shortly, but in terms of the kind of tracking that the planning commission and does, i will elaborate on what is the you keep track of and what it is that they don't. >> we found that the planning commission had asked for a quarterly report to give them a sense of how the city was doing.

the planning department has produced that. they will resume shortly. they have information on the type of housing, the income level of housing. our recommendation is that it be expanded on the types of housing and that kind of thing. they included a valuation of how it was in the proceeding here, contributing to the housing goals for each income level and the policies and objectives.

in describing the expected impact on the housing goals at each income level. whether it advances various area plantss, the current project status compared to the city's housing goals. between the housing inventory, the quarterly report, it should be made more robust. i think that those are the main elements that pertain to our recommendation. >> i know that when an individual project is being reviewed or considered by planting, there are certain things that have to happen. in the context of the project,

is their consideration where it falls? >> the planning department staff presents each project with limited context. we want it to expand the description of how each large- scale development meets or doesn't meet the housing goals. our finding was that currently the department uses the template to describe the housing element. but that it doesn't specify how howell each project will advance to the city's housing goals at each level of

affordability. the recommendation is that it be included in the regular report that comes with the presentation of each. >> just a quick question, how many go through the planning commission or planning department. maybe that is something the planning department can get to. maybe supervisor olague has a question. ok, we have the planning director here. we'll wait. supervisor olague: no, i think

that that is accurate, actually. if i remember ait, i remember seeing analysis around a project that was how it was affordable or how it can be attributable to the affordable housing of the city based on the ordinance. there would be a couple of paragraphs after the principles that include the affordable housing goals. there was never a numerical sort of -- >> that was one of the recommendations, that the department include the level of detail with the description of the project. supervisor olague: i'm just

being vague here, all 100 units are 100% market rate project. because there is a contribution that is being given to the in lieu fee or off-site affordable housing -- is it 15%? is it 20 now? >> i want to point out in response to that, that one of the recommendations is to include in the housing inventory report, how the affordable housing fees see the impact of that.

>> i know that it is not clear where that money is going or how it is being invested, unnecessarily. -- necessarily. is the percentage going into the construction of new and affordable housing. it is not clear how the money is being used. >> if i can bring up the next presentation from the planning department, i see we have the director of planning here as well. >> most of the presentation will be by the staff at the department, but i want to make a few opening comments. the number of you here today reflects the importance of this issue. i will say that this program, obviously, we're certainly only

one player in many cities, and the inclusion very program involving -- it is a joint program between us and the mayor's office of housing. i want to thank the hon budget analyst officer for taking the time to understand how we do our work and getting into details on this. we generally agree with all the recommendations. the recommendations they are making is not necessarily in that type of report, but in the detail of the report. we are working on the template to develop -- how that particular project is meeting the goals. in terms of the numbers, they are something less than 100 units a month. what is important is that less than half of those are approved

by the planning commission. more than half of that number is on projects that are generally smaller projects. the planning commission only sees about how for a little less than half of the project. certainly, the reports will encompass a full range of projects. the one exception of about that number, the approval of the very large project at the shipyard at treasure island. the historical averages something on the range of 2500 units a year that are approved. not all of those are actually built. that is the kind of nuance we have to get into. the purpose was to look that the whole program. there are the mechanics of how

we approve the project as well as the regional housing needs allocation. she has been our primary contact on that. and we will report on how we are doing with some of the numbers. i will close by saying that there is a lot of the implication of the reporting requirement that is being discussed, that the department or the commission should consider different criteria for how and when we approved projects. while that is part of the mechanics, it is clearly a much broader policy question that deserves a broader discussion. if we change the criteria by which we approved projects, it is a big deal. the we have to discuss what it means for the city as a whole. thank you for the hearing, for the work, and i want to thank

others for all of their work on this. >> we do have a question. supervisor campos: thank you for working with the budget and legislative analyst and being open in terms of giving them information. i see this not so much as a criticism of what hasn't been done, but thinking about what can be done to even provide more information beyond what is already there. i think the more detail the 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