extra money. we can pay for the fees and they are more affordable. it helped get our project and helped it happen. supervisor mar: thank you. >> good day. i am with the residential builders. these three or four years were the worst i have seen in construction. i have been building for over 35 years, any help would be appreciated. we have been in the doldrums.

you are not getting the fees. anything to give us incentive to build again would be greatly appreciated. thank you. supervisor mar: it does work if you put it in the screen. >> i am from the residential builders. i would like to take you back to march. there was a rally on the stops of city hall. this exceeded our expectations.

we counted 75 on the day. people heard about it and felt it was their opportunity. many small businesses came out. it was something they could do in their comfort zone. it demonstrated how many were hurting. i will show you a video of that day.

>> the mayor appeared and got down to the point. giving incentives to developers. [applause]

>> [cheers and applause] many will remember the noise. >> good afternoon. i am an electrical contractor and small builder.

i remember when this was introduced. we all remember what the last few years have been like. basically, this be different program is the difference when you are dealing with the bank. the project makes sense or does not make sense. i have no experience in dealing with these types of fees because the couple of projects i have done that have been smaller. i do have experience dealing with the banks. this is what it's like now. they want your firstborn to make the project work. this the deferral program really does make the difference. fees are still going to be paid. it was introduced at a time, it was the collaboration between city, small developers, small- business to make this city work and grow again. and eventually it seems it is slow. it does seem to be getting

there. we would just ask that the program stays in place for the benefit of the city and for people who are working in the city. marco going from my memory, it looked like was -- costs were reduced. that is the [inaudible] from a small delmon. >> the bank looks for you to put up so much cash, you have been carrying products -- products that were not billable. pala does is give you cash management -- all it does is give you cash management. you do not make that -- have the cash to make that work. it can do for the fees, it makes it workable. >> good afternoon, supervisors. i am a general contractor in the

city. i really feel that the city plan has worked so far. we have no need to rush the process. that see of this upturn in the city economy continues into june, 2013 before make any changes -- we make any changes. i am lucky enough to have left work to be here. there are still lots of small businesses and contractors struggling to keep their homes and businesses. the good news is that the figure for a program is helping and can continue to help us. the construction industry's recovery is favorable to out help the city recovery and to affordable housing. i would encourage you to stay the course with the feed deferral program. it is a win-win proposition. thank you. supervisor mar: thank you. >> afternoon.

i am an architect. i am here from [unintelligible] not only the building is affected. also designers, architects, plumbers, electricians, painters. and i hope you will be able to review what was going on with the builders. thank you. supervisor mar: thank you. >> i am a small builder with the residential builders association. we got there, we basically put up our own funds and i try not to reiterate or repeat what everyone is saying. everything helps when we're going to the bank, if we can

defer the funds, it helps finance projects. there is an upturn out there right now. i think if we could keep that going, we saw the graphs that were there and hopefully it will pick of gradually and we would appreciate holding on to this feature for all. thank you for your time. supervisor mar: thank you. next speaker. >> good afternoon. i am a general contractor in san francisco, fifth generation. i have told employees that lived and worked in the city and county of san francisco. as you can see from the builders that came up behind me, a hardscrabble budget i do not mind saying so. it is critical to us that the smaller in the of the building spectrum to have this financing. the city is becoming a financing partner. what you're doing is creating

jobs so that guys who work for me that live in the city, a kid go to the city schools can stay employed. i cannot tell you how many guys i have put on 40 weeks. if you look at what is going on here, the city economists said we're not coming out of this until 2016. it seems to me and timely to think about and a program that is just now starting to kick in. we have paid the price of not having some of this money in the short term. let's not do this accordion that again. let's keep it going. we have to keep the consistency here. it is fair to the people who are planning on this. it is fair to -- what it does is it shows all little bit more of a long-term thinking and plan that we're not going to try to stop and react. it is tough for everyone. i completely understand the affordable housing and redevelopment agency's shutdown is affecting everyone. no one likes to see anybody out of a job.

i think we would be taking a huge step backward. right now you can see that if you read the wall street journal or anything like that, is not just greece, it is italy. italy is the eighth largest economy. we do not want to take our stimulus out pre we do not want to do that. if these banks crashed again and we cannot get that little bit, $50,000 in the projects, was built, it makes a huge difference. thank you for your time. supervisor mar: thank you. neck speaker. -- next speaker. >> i am an architect in san francisco. i work with a lot of these guys and we're the first ones as the -- first one out as the economy goes down. i'm just now seeing my business start to pick up for the first time. i am looking at hiring for the first time since 2007. i have laid off four people of a

five-person staff. what i know from the kind of projects i work on with these hardscrabble developers and builders is that these projects , they're not the big developers who are doing mission bay housing, some of these big ones. they get institutional funding. they have to go to the bank and get a loan. if they cannot because they have to put up so much of front where they do not have the money because the banks are not lending. they cannot go ahead with the project which means i am also not born to be working. along with engineers, there is a cadre of people down the list but how many people it takes to get buildings built. developers are not hiring locally. locally in terms of architects and engineers. they are coming out of -- from out of town. i am much part of this whole spectrum of people who are trying to get back to work after

a long time of struggling along. thank you. >> supervisor mar: thank you. next speaker. >> good afternoon. we have been very active in san francisco. recently completed projects have been 555 mission street. today we are actively pursuing three new development projects, to on the commercial side and 222 second street and on the residential side at 675 units. we believe the deferral program has been successful in spurring new economic development. we support renewal of the program. thank you. >> good afternoon. we are a local housing developer. at like to speak in favor of extending that legislation. there is a high demand to live in san francisco and that is

part of the reason why the housing is so expensive. there is relatively lower supply. it is pure economics. we have always been supportive of building affordable housing. we built 200 units as part of the inclusion in the market rate projects over the last 15 or 20 years or so. making a product pay the impact and movies abroad hurts the production of affordable housing. by making a market rate prior to pay the fees of frack my makes the financial feasibility of the project much harder. once the visibility is impacted, it makes the project not built it all. if the project is not built, it means it is not contributing to in the fees or affordable housing creation. by continuing to defer the fees, it reduces the caring -- carrying costs. when more market rate housing is created, it contributes to the creation of affordable housing

through fees or through on-site inclusion. i would like to mention a project we are looking at. it is in the market oktibbeha plan. our total impact and in lieu fees on that is $20 million. that is $61,000 of added costs. that makes housing more affordable. if -- that is $5 million of added costs. over an 18-month duration. the costs equates to $13,000 of additional cost per unit. if you look at read, that is $780 additional rent every year that their methods -- rent would have to create. >> what other projects are there? >> there are others that are in the free development stages.

some in the civic center area. >> supervisor mar: thank you. next speaker. >> good afternoon. we are a developer and owner and operator of rental housing. we have seven projects in san francisco. we also have several products -- projects in the pipeline. we decide -- we elected to affordable housing on site. we do believe the figure for a program makes financing for projects very, very attractive for investors as they're able to pay the fee is closer to the time at which the projects begin to pay revenue. as the previous speaker said, that makes a significant impact on financial feasibility. when you talk about the kerry

costs, it sounds a little extreme. you talk about 100-unit project. the kerrey cost becomes significant. thank you. supervisor mar: you choose to build the on-site bmr's. >> just for the [unintelligible] triangle. supervisor mar: thank you. kraska afternoon. -- good afternoon. most of our work is for multi in a housing project eric -- anywhere from two units to 106 units. thething that is -- the thing that is so poor and to me is my experience in san francisco, most projects of any size, anything more than six or eight units that has to go through environmental review can take up

to four years to six years from inception to actual sales. and so proud six that are in an section now probably will not see the light of day and tell twice 16. the economic times right now are not very good. there is a little more activity. i did also attend a couple of presentations by ted egan, who predicts things will not come back to the level they were at the truck -- top of the mark in 2007 until 2016. and so in my opinion, i believe this deferral should go on for another three years until june or july of 26 teen. because again, there will be projects that will be anchoring themselves all the way up to 2016 in a lesser economy than

we're used to. the other part of this is the eastern neighborhood and the other fees are new. and on top of the fact that the economy is not so great to be able to defer these fees is a great boon to be able to see some of these projects during this still not so great time. thank you for your time. supervisor mar: thank you. how is it going? >> thank you for having this hearing today. i was all a bit, what are we back here so soon? it had been two years and it has been an extremely interesting to years in our trade. emigration use were allowed to come and take testimony. and the impact has been devastating. we do not have to go there. we have the forecast, how things look. is there a light at the end of

the tunnel? two years ago we did not have the tunnel. we might have some light again. i think it is appropriate we have this conversation. with a lot of the housing applicants, what was unique about this stimulus package is we discussed it and everybody's issues were brought, what of this or that happens, how is the money protected? it gave everyone under -- an understanding of how this works. there was no way any new projects were going to go forward. no money was going to come in to these projects. there was pain cravat and you had to wait longer so we could get the finance and construction and that money would come. most of our members in the past have done on site. we have done on site. it depends on the project. i want to talk more to the figures. nobody wants to make a final

decision if that affected the one where the other. the stimulus package is working. you are getting first hand on the street information as supervisors. we have a long way to go. i am case in point. i started a project and there is 15 to 20 people working or not on that site. -- weeks ago. i was able to convince the bank to get this project because i was getting relief from the city. i did not have the money. in 24 months we will have a building. i will be giving my money to this city. everybody wins in the deal. supervisor mar: neck speaker. if there is anyone else, please come forward because we are going to close public comment. >> i have used -- a few small structural -- companies.

in 2008, late 2008-2009, we laid off 50% of our employees. 200 we laid off -- of 200 we laid off 96. the deputy director said the building department laid off 25%. we notice it was -- it all bus. we spent 19 years -- >supervisor mar: what year was this? >> 2009. it affected us tremendously. we spent 19 years training and working and working with their family and having their sons and daughters were crass. you lose everything you have worked 19 years because you cannot -- get people employed -- keep people employed. we have to start looking for work in other areas. we looked down south. there is money in los altos and tiburon. we started expanding your workspace. we want to work in san francisco. that is where we live here.

will of the bay area, willow san francisco, with of the politics. as goofy as it is, it is where we all want to live. we care about the people and the way we are providing benefits to the people is employed people here. that is what everyone in this room is comfortably -- objectively try to do. our suppliers give as a 2% income discount if repair bill within the first of the month. since 2009, we have never done that again. they say we do not have the -- cannot take that this, because we do not have cash reserves. we have one line of credit until -- for $20,000. we have one line of credit. every time we make a payment it would go down.

anything the city can do to work together with the community, everyone in this room, they are small builders, architects, there are no large firms that are having 10-unit project. it makes a difference. 5000, 10,000, $20,000 makes a difference to keep this community employed and putting money back. $30,000 makes a difference of whether you can start of procter down market street, start a project in bayview and visitation valley. it does not matter where it is. that is a lot of money to everyone and it is important to keep this deferred program. supervisor mar: thank you. >> over the years there has been a lot of conversation about building communities with the verse incomes. i would like to -- while i agree, i would like to take it a step further and we need to build communities of blue and white-collar workers. that includes those who like to

walk with -- work with their hands or might not have college degrees or not speak english as a native language. i certainly support the goals and objectives of providing more bmr units in the neighborhood. but if we really want to produce these units, we have to take a good, hard look at the current program. many of its peña to policies. affordable housing is only affordable to the end user. it is very expensive to build. some of those policies include a $20,000 fine or fee, the lower the price down to $20,000 if we do not provide parking. it is painful enough that we have to provide the unit and then they had as of for another test dollars and $20,000. it is not good enough that you are providing us to better minutes, we want to bedroom, 2 bath.

the size of the units are different from the size the nonprofits get to build. the location of the units of the building. it is not good enough that you are providing two units are three but that to be on each floor. if your building a 40-foot building, you have a top, bottom, and middle floor. the top is always the best read the lower is? and things. it becomes punitive. the finishes are sometimes confusing. somebody mentioned there is for programs. the on site, the in lieu, the offside, and the land dedication. the land dedication is good if you have 25,000 square feet or larger. no good for the small developer. the offsite does not stick. where are you going to find at 2-43 annett site? there is no offsite option for small builder. the offside is punitive and the in the system provides a tremendous cash management barrier. and at the end of the day, i think we need to step back, work together, and refined some of

these programs so we can contribute and we can participate and we can act in the city's inventory on -- of on-site bmr units. thank you. supervisor mar: thank you. >> dan murphy, a local developer. member of the eastern neighborhoods cac. i want to look at this from a different perspective. we're hearing more about the need for us as an industry in working in partnership with the city that approves -- produced more housing. across all branches there is need. if you would have asked us before this fee deferral program was put on the books to identify impediments' at that time for housing production, across all regions of income, the city structure for paying and the fees would have been toppled the list, frankly. also i want to look at it from

the point of view of the state's impact the law. the enabling state legislation which gives rise to these impact fees. technically speaking, the impact is not created until the principal project is built. and if you are building units on site, you are delivering those units are the time to get certificate of occupancy. with this be program, it is much more similar to what we ought to have on the books in any event. i'm a big proponent of seeing that feed deferral program -- become permanent. -- fee due for a program become permanent. >> i have been dealing with these like this locker than anyone. i have dealing -- been dealing with it since 1979. it has been a long haul and a serious discussion about when and how to propose fees and what they're -- they are needed for.

in the eastern neighborhoods, they're acutely needed to create residential context for we have had industrial uses. we learned from the explosion of live-work in the 1990's that by building housing does not make an neighborhood. we struggled with that in eastern neighborhoods and need to build out that transit and the open space and the pedestrian improvements ala. those kinds of deferrals are hurting the housing that is being constructed. second thing is, do we have a rationale for doing anything to extend the fee for the large developers and commercial developers? i do not think so. i think there needs to be a serious discussion and it should be a discussion seriously of the board. what are the segments that need this? i would be absolutely against any commercial project getting that the deferral. if they're going,