students that may have an interest in city government. the idea is to expose the more -- expose them to more departments and hope that the best and brightest will choose to work within cities. this is modeled after a program in new york city. the founder had gone to that program. commissioner wu would know something about it, but it is here in san francisco, and it is interesting because these fellows get paid, and most of the departments are enterprise departments because they have the flexibility. several had degrees in urban planning or urban studies or architecture, and it would be great to figure out a way to get one of these people on staff at some point in the future. these fellowships run based on the san francisco fiscal cycle.

we did a study looking at eastern neighborhoods, and they went for generally the planning department code and talk a little bit about eastern neighborhoods and took a project study and had a developer talk a little bit about the give and take. it was interesting. i felt like i learned a lot as well looking at how developers look at projects and how they feel that they get to interact with the city. it was quite in lightninged in that way as well. >> if there are no other commissioner commons, we can move on to directors report, directors announcements, and a review of past week's events of the board of supervisors, board of appeals, and historic preservation commission. >> thank you, commissioners.

i wanted to point out a couple of things. a number of staff, including myself, will be at the national planning conference this year, which is in los angeles. i am very pleased it is in our times and this year, given the of the times of some of the meetings -- very pleased it is in our time zone this year. the environment planning staff does not often get awards for eir's, which are very technical documents, so we are very pleased about that. i wanted to spend, if i may, a couple of minutes updating you on the activities of the

oversight board and the success of the redevelopment agency. since we have sat -- since we have had several new agencies -- and i will put this in writing for your next report as well, but to give you a quick background on what we have been doing. just as a reminder, assembly bill 26, which eliminated the agency, required or allowed cities to create successor agencies to take on what are called the enforceable obligations of the redevelopment agency. just as a side note, in the case of los angeles, as you may have heard, the city chose not to take on that responsibility, and the governor has set up a panel to take over the los angeles redevelopment agency's responsibilities. the mayor proposed legislation to transfer two clusters of assets.

one is the housing assets that the agency has in the mayor's office of housing, and the non- housing assets were transferred to essentially the city administrator's office, and there is now a redevelopment division within the city administrator's office. that legislation that the board passed also identified three large projects as the three projects that will continue under the auspices of the successor agency and identify the agency as also the agency that will review projects and entitled projects in those three areas. outside of those three areas, the redevelopment areas that had existed, all of those areas with the exception of two, were already being reviewed by the planning department. the two exceptions were rincon

point, south beach, and the bay view industrial triangle. the redevelopment agency zoning was and is in place, and there are some differences we have to work out between that and zoning and planning code, and we have not quite worked out the details of how that transition is going to happen, but there are some discrepancies, if you will, between that zoning and planning code if you have to work out. most of the redevelopment area is billed out. we are primarily dealing with changes to existing buildings and tenant improvements and uses and that sort of thing. beyond that, what we still have not dealt with is the kind of, for lack of a better term, soft issues, if i could. the planning, project area committees, the other planning work that the agency was working on, which nobody is currently doing in the bayview and other

parts of the city, and that is where i think the planning department will be in discussions with other agencies to decide what agency should take on that work. specifically, there were two areas where a lot of work had been done, which, unfortunately, cannot continue because there are no enforceable obligations. that is the mid market area and visitation valley. we have looked at the in quite a lot of detail to see if there are any obligations we can hang our hat on to use tax increments, and the conclusion of everyone is that we cannot. we will be meeting with the visitation valley community on tuesday to discuss what the next steps might be. also the same with mid-market. there had been a lot of work over the last few years between the planning department and agency on both those areas, and unfortunately, the funding does not exist as of this moment to

continue that work. we will try to figure out if there is alternative funding to continue the planning work over the next couple of months. with regard to the board, we have had to take several actions. first meeting was largely housekeeping, but the primary action we have had to take was related to what is called our recognized obligation payment schedule, and that is literally a listing of every single payment that the redevelopment agency would have had to have made over the next six months, and it is hundreds of payment obligations, and the state requires us to approve that payment schedule. that would cover the time between february 1 when the agency dissolves and july 1. we again have to do this next month for the second half of the year, and it is a very detailed schedule that the state requires

us as the oversight board to review and approve, and the state actually has to look at every one of those payments and has the ability under the law to question any of them, so that process is going on right now. finally, i want to say that reviewing that list of obligations was really enlightening to me because it really was an indication of the bread of activity that the redevelopment agency was involved with, and we are talking projects all over the city, properties that they maintain, contracts they had. it was, frankly, a much broader range of activity than i ever imagined and made me much more sad that the agency was dissolved and many of those activities cannot continue. but it was really an impressive list of projects. some of them will be able to continue, but unfortunately, many will not. as you may have heard, they also

resolved the staffing question. about 100 positions at the agency -- about 56 of them have been retained as city employees through a combination of the redevelopment division of the city administrative office, the port, because some of the redevelopment agency responsibilities were on for property and the mayor's office of housing, so a combination of this agency is allowed about 56 or 57 people to be retained as city employees. that is it for now. i will put some of this in writing for our next directors' report. i know many of you asked about this, i wanted to give you a brief update. that concludes my report unless there are questions. commissioner antonini: thank you for an excellent report. chian regards to the reason why increment cannot be used for visitation valley and mid- market, they are too far into

the redevelopment process, as opposed to a situation like treasure island, where i believe we are able to do some other type of financial -- >> the issue on visitation valley was that there was no actual contract. the actual binding contract that exists on the other project areas was with the agency typically referred to as an owner participation agreement, essentially development agreement, and they had never gotten to that point. there was no binding contract with which to spend dollars. that is the problem. even the with the designated redevelopment area, they never got to the point of actually doing a be a -- a d a -- a d.a. >> are there some pieces of state legislation in the works to address cleanup or aspects of this whole mess, so to speak? >> there are several things being looked at.

there are some cleanup amendments which i do not think have a major substantive change, but what is being looked at -- there isn't some discussion but with no resolution yet -- it changes to infrastructure financing districts to see if those could be used in some capacity in these areas. >> is there something in the works addressing affordable housing? >> the primary discussion is within the city, not in sacramento. the mayor's housing trust fund is looking at alternatives. that was the discussion happening yesterday at the housing coalition forum, new ideas being discussed to replace the tax increment being used for affordable housing. the mayor is hoping to conclude that within the next month or six weeks to get something on the ballot in november. commissioner moore: the leland avenue portion of visitation valley was not part of that

because it became part of main street, and what was happening there was not enough to create -- as the beginning point of the obligation. >> that is correct. we were able to do the street improvements, but there is not -- that street does not generate enough tax increment to actually do any other major work in the district to really need the development on the side or for something to happen. commissioner moore: ok, thank you. >> good afternoon, commissioners. planning department's staff here to give you your weekly report on activities of the board of supervisors, and as commissioner miguel described earlier, this monday, the land use hearing consider the ordinance to revise the eating and drinking controls. at your hearing last fall, you

did unanimously recommend downsizing the current maze of definitions down to two types of restaurants and one bar use. you had some additional recommendations about controls for certain neighborhoods that generally permit the limited restaurants. since your recommendation, the ordinance was originally sponsored by supervisor weiner and co-sponsored by supervisors chu and avalos. this week, there are no new amendments, so i can review the changes that happened ely, or i could tell you that it was re- heard with those amendments. the full board recommended approval unanimously. supervisor kim and cohen signed

on as co-sponsors. also on monday, the committee heard a hearing on the budget and legislative analyst audit on affordable housing policies in san francisco. the audit had provided recommendations to our department and the commission including providing more information about the regional housing needs allocation in san francisco's housing obligations. the recommendations also requested additional information about so-called-for data that would illustrate -- so-called dashboard data that would illustrate. at the hearing, staff responded with their intent to implement these recommendations, and our director was part of the presentation this week. there were also broader issues

that were discussed in the public comment and during supervisors questions. topics included the need for affordable housing at very low incomes, the need for middle income and family housing. issues were brought up related to foreclosures in single- residency/occupancy hotels. you discussed recently the funding stream for affordable housing. the mayor's office of housing presented a grim story for future funding due to the dissolution of the redevelopment agency. the hearing did provide the data and a discussion that will help inform important policy construction's about affordable housing in san francisco -- important policy construction about affordable housing in san francisco. also on tuesday, two previous ordinances were passed on final reading here in the first is the neighborhood organization introduced by supervisor cohen,

that would extend the time for property owners of these non- conforming uses to submit applications to legalize their uses. your modifications were incorporated into the ordinance, and the time line was extended slightly longer to november 12 of this coming year, so this week, it did pass. as did the public art of the ordinance. the ordinance was sponsored by mayor lee and board president chiu, amending the public art requirement to allow certain projects to pay into the fund instead of providing on-site art. the ordinance would also expand districts that are subject to the art requirement. that item also passed on final reading. there were three new pieces of legislation that i wanted to share with you that were introduced this week. first was a hearing request submitted by board president david chiu, a request to review

the city's housing laws, including an evaluation of redevelopment impact fees at different sizes. secondly, there was an ordinance introduced by supervisors olague, chu, and elsbernd. the ordinance would amend the planning code to add a section that would permit existing gas stations and service stations along 19th avenue to provide a mechanical car wash. lastly, there was a new ordinance that would amend the planning code by adding article 5 to implement san francisco's housing preservation, policies, and goals. it would legislate that some of these reporting activities were conducted. this item was sponsored by a number of supervisors, and i did not get that list down here, but i believe at least five

sponsors -- five supervisors sponsored it. the two ordinance's will be brought before you within the next three months or so -- the two ordinances will be brought before you with the next three months or so. that is my report. >> the board of appeals did meet last night. there was an appeal for a permit to replace windows, which the commission heard as a discretionary review just a few weeks ago. the appeals were withdrawn, so there was no hearing on the item. the second item is the beach motel. it relates to a letter of determination issued in 1997 that said that it was a residential hotel and not a tourist hotel the was appealed to the board of appeals. there was a hearing in 1998 that found they actually up held the letter of determination that was 3-2 to overturn the determination, but they failed to get the votes to overturn, so it was upheld by a matter of

law. there was a re-hearing request filed on it, and there was active litigation at the time against the property owner. most of that litigation -- of course, all of it has now been resolved. the request was continued several times and ultimately indefinitely. it was on the call of the chair agenda. last year, the previous board of appeals president sought to clean house with all these cases that were contingent to the call of the chair, so they had a hearing on the re-hearing request last night and did vote to grant it. in the last 14 years, there's new information, which is one of the standards for granting the request related to the losses and also the status of the residential hotel. the building is no longer considered a residential hotel subject to the housing conversion ordinance. i think the hearing scheduled for late june may get moved back a little more to july.

there are quite a few speakers there who had concerns about whether or not this may become an sro. the board pointed out correctly that there were some inflammatory letters given out to the community. that will be back. it is potential this could be before you in one form or another in the future as well, but just wanted to make you aware of that. that is all. >> commissioners, the historic preservation commission did not meet this week. there is no report. commissioners, we are now ready to go to item 9 on your calendar, and informational presentation on regional housing needs allocation targets -- an

informational presentation on the regional housing needs allocation targets. >> good afternoon, commissioners. i am the manager of the information and analysis group of city-wide policy planning. i am here to talk about the ehna annual report recently submitted to the department of community redevelopment -- the rhna annual

report. it is a key component in the pre-audit process of updating the housing element as mandated by the housing element law. the process quantifies each jurisdiction share of the regional housing need, especially affordable housing needs, for specific planning periods, thereby laying the basis for the housing element objectives and policies and implementing programs. jurisdictions are expected to plan for a meeting their share of the regional housing needs, largely via zoning and ensuring sufficient land access to meet those needs. although the housing element was not adopted until last year, the yearperiod --current period starting january 1, 2007, and will cover through june 2014. the housing element law also

mandates an annual report on the statutes and progress and implemented accounting elements, especially the rhna targets we submitted to the state. this monday specifies the group use forms and definitions adopted by andhcv, hence -- by the hcv. i would like to remind commissioners that this format does not include the program supported by the mayor's office of housing as well as the successor agency to the redevelopment agency such as rental assistance, first-time home buyers program, etc. the annual report is due the first of april and covers the previous calendar year. by chance the planning department prepares an annual housing inventory, which we typically complete by march 31, and provides the numbers needed to complete the rhna annual

report. due to staffing shortage, we have not completed the housing inventory. we expect it to be done next month, but we have completed enough of it to submit the rhna report on time. the slide shows san francisco's fair share of the regional housing needs. as noted earlier, affordability is the first of the process. for the 7-5 -- the 7.5-year reporting period, about 18,880 units, or 60%, are to be affordable to moderate or extremely-low income households. from 2007 through december 2011, or five years, this is pro rated to almost 20,800 units, of

which 60% is to be affordable. so how are we doing? 12,326 units have been built since 2007. about 4500 or 30% of the units were affordable. this is below the 60% mandated by the rhna process. the 11,000 units represent an achievement of just under 60% of production targets to date. this slide shows the breakdown of targets by affordability. 36% of the affordable housing targets were achieved. this can be a bit confusing. when i mentioned that 37% of the production was affordable, but actually, only 36% of the targets have been achieved.

clearly, the city has trailed dramatically in terms of meeting targets for low and moderate income housing. we are doing slightly better with the units affordable to very low-income households, and we are also just keeping pace with the market rate units, 90% of the target. this is new to the overall, very low production count in 2011. so how are we going to meet the 64% shortfall? there are about 49,000 units in the pipeline. about 3500 are under construction. over 3/4 of the pipeline have just been in title. this includes the very large development projects in treasure island, hunters point and park merced with about 20,000 units total. the projects are not expected to be built within the next few years.

we estimate about 6300 units in the pipeline will be completed by 2014 or the end of the reporting period. approximately 27% of the units in the subset of this pipeline will be affordable. this is just an estimate, and until we have all the information for affordable units, we are assuming that the larger projects will opt for on- site or off site inclusion their units. this is what it would look like for the rest of the rhna reporting period. approximately 18,600 units would have been achieved, but with only 6300 units affordable, this is just 13% of the affordable housing production targets. how are we doing in comparison to the previous cycle? between 1999 and 2006, the city

produced 17,400 units towards the rhna production targets. this is about 86% of the production targets. we expect, given the current pipeline, that the city would have counted 18,630 units, but while this is more than the previous cycle, we have a higher target. this would only account for 60%. similar with affordable housing production, while we produce 6800 units, or 48% of the production targets, we expect to come up with 6300 new affordable units by 2014, but this is only 33% of the rhna targets. the next slides will show how

san francisco compares with jurisdictions in the current cycle of the process. we looked at the 10 largest cities in california for comparison. while they may differ for these jurisdictions, i evaluated as to where they were in 2010, which is the latest information that we got. as you can see, san francisco is about third in terms of total production to date. ditto for market rate production. as to affordable rate production, we are also in third place. this seemingly large gap between the top two in terms of affordable housing production is largely a function of housing prices in anaheim and sacramento. the majority of the new affordable housing produced is affordable to