alternatives. the planning commission can approve variations within the transit oriented district. approval of additional parking, payment of fees and other actions shape transit-oriented districts. compiling and reporting of the cumulative impact of such actions or approvals the to alter the intention of the transit oriented district should be more frequent. city policies are defined by the housing elements, the consolidated plan for grants, anthe plto abolish,, s, and the affordable housing ordinance. a has set a goal of 3000 units

by 2014. but the mayor's office of housing does not report to the board on the achievement of these goals. it enters into agreements for only nine years that are not subject to board approval, although operating subsidies are not necessarily -- is currently $5 million a year. they should enter into a 15-year agreements that would require supervisors' approval. the revisions make the preferred alternative. housing funded by these fees result in different types of housing that his belt by developers. the shift may change development for low and moderate-income households the house and for an extremely low and very low- income households.

inclusionary housing does not require developers to make units available for specific populations. housing built by fees offer target specific regulations. housing units built between 2003 to 2010 with affordable housing fees. many of these units also target and the chronically homeless. the field of housing in its debt to be smaller than inclusion area that's, and more than half of the and it's hard to or more bedrooms while 2/3 of feed-built housing are single units. housing built with affordable housing fees tend to provide rental use met -- rental units. inclusion area housing can be

built on side of market rate developments or other offsides but nearby locations. they can be found in 26 different neighborhoods while housing built with these are concentrated in six neighborhoods. public financing varies by year but has decreased by 23% in fiscal year 2007-2008 through 2010-2011. the city refund affordable housing fees in 2008-2009 as well as 2009-2010. it has been the most stable source of revenue. and the redevelopment agency allocated up to 40% for affordable housing each year. still, the city will lose up to

$46 million a year in tax increment at tax increment bonds. the city's other sources of funds, how they are less predictable. the board of supervisors consider adopting a policy that 25% be used for affordable housing development, estimated to be $1.8 million a year. heck also consider adopting a policy that a portion of non- recurring revenues will be allocated. this is estimated to be $1.2 million a year. the governor has talked about general-obligation approval for affordable housing. prior general-obligation bonds that the 55% threshold, but not the 67% threshold.

>> can you go over the first two recommendations again? dodge the board of supervisors can consider adopting a policy of volatile of all revenues that is not assigned to the station reserved. this is estimated to be $1.8 million a year. the second recommendation was the board of supervisors also consider adopting a policy that a portion of non-recurring revenues will be allocated to affordable housing development. >> of the second recommendation, it was based on the estimate that would be about $6 million a year be available, and we took a percentage of that. if they wanted to allocate more of those revenues to affordable

housing. >> in conclusion, the budget and legislative analyst would like to think the san francisco redevelopment agency staff, and 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