our anticipation is that we could in fact generate more by offering this more stark choice, a greater advantage to be on site. the on-site advantage may or may not result in that. very simple mathematics, if we imagine 1000 units of housing produced each year, now, that would be a relatively low amounts, but it is important to note that this reduction does not relate to develop areas or areas where there are separate inclusionary requirements, so this would not reply to this. if we use that and compare a 15% requirement to the 12% requirement, we could imagine a loss over the course of 30 years of 700 to 800 units of below- market housing, again comparing a 12% threshold to a 16%

threshold. we see the housing trust fund as a way to generate or build close to 10 times those units, so in terms of a cost-benefit analysis to have broad support or a housing trust fund, part of that coalition building includes incentive programs that could result in that scale of unit production. that is the cost benefit analysis. supervisor campos: and if i may, why have that in there at all? what is the benefit? >> it is to provide a clear choice and a clear preference to building units on site. although we make good use of the fees, when we receive fees, they go to support 60% below, when

developers choose to build on side, we can tend to a constituency in san francisco that is hard at the office of the mayor to support, so it has a policy basis to provide an incentive to make that choice, and then the potential stimulus of effects, and you will hear from folks today talking about the importance of this marginal reduction. we actually feel like a fairly modest one, and an individual project, that could be the difference between making the numbers work or making them not work, and that is in the hope of stimulating broad development, providing that modest stimulus the rationale. supervisor campos: thank you. if we can now talk about the grandfathering of the projects for a certain period of time, i am wondering if you can talk a

little more about that and how exactly that works. >> sure. the typical grandfathering involves the following points. they receive a building permit. it is not eligible. if it has not yet come in for entitlement, meaning it is only a glimmer in the developers' pie, and it has to come to receive the entitlements, those projects would, by definition, receive the reduction upon passage of the charter, but for those projects that have been entitled, not yet in construction, we believe that many of those projects have not commence construction because they cannot achieve financial feasibility. those projects are allowed to come in and present to the planning commission a case that they need to receive this 20% reduction in order to make their

financial feasibility happen. the planning commission can review it. it will open up it for approval. if it is not the purview of the planning commission when they come in for this request, they are not limited to that specific request, but if approved by the planning commission, the project sponsor will have one year to initiate construction. if they fail to initiate construction in that year, they're eligible to receive a one-year extension administratively from the planning department. if they fail to do the construction after that one- year, they would have to return to the planning commission. supervisor campos: which projects would be entitled to this grandfathering? >> the second and the one i have here today is the most generous. it is any project that would be required to be an inclusionary requirement, so of a certain size. when we look at that pipeline,

we see 31 projects, a potential 2300 units. that would be in this kind of category of eligibility. now, one thing that is important to note, all of the projects that have an on-site preference, if they were all to come in, there would be a loss of about 40 below market units. if they were all granted that the exemption or reduction, compared to a 15% of the below market rate units. if they also came in and charged it -- change the auction, which is part of our hope and rationale, we would actually see a net gain of the below market

rate production. we would receive more of those units. supervisor campos: can you talk about wendy's product -- projects were entitled? the earliest? >> going back to 2005 that we are looking at. i will exceed my technical knowledge very quickly answering your question, but i do know that entitlements expire after three years, and so when we first looked at it, we only look at entitlements that had been issued in the last three years, however, those earlier are allowed to come back and ask for it anew. we looked at a broad spectrum. supervisor campos: normally when we make these, we do it in a

prospective manner. what is the policy rationale for a project that was entitled in 2005 to now in 2012, seven years later, being able to be grandfathered in in this proposal? >> it really is, the component of the package seeks to spur stalled projects. the economic crisis that we have experienced, and there was a real hit to housing production. it has been dramatic and profound. there are many projects which have received entitlements but which have not started construction. we see the issuance of a building permit at the moment where a developer has assembled a financing in order to proceed, so we would not in that case grant any reduction of requirements because the developer or that project sponsor has been able to make

that project work. the policy rationale for allowing, upon planning commission approval for the reduction, is to facilitate production of housing that otherwise would not happen and otherwise would not be feasible, so that is the basis. supervisor campos: i have to say, maybe this is a question for you, have we done this before in terms of grandfathering these types of questions? >> i do not know. supervisor kim: the eastern neighborhoods plan? >> it was what was performed in 2006. there was grandfathering there. there was grandfathering in the eastern neighborhoods. it is no apples to apples. every grandfathering situation has been different, but the

issues within the inclusionary and the eastern neighborhoods, market octavia, i believe this usually comes out. supervisor campos: this is one concern, and maybe you have some thoughts on this, the entitlement process allows each project to be judged based on its own individual merits, and it is based on the merits that entitlement decisions were made or not may. is there not a concern that by doing this grandfathering that you're basically undermining this process that they went through? >> that it undermines the criteria on which that condition was granted? supervisor campos: yes.

>> that presupposes a situation that things do not change. but the market conditions that were likely true at the time of entitlement, and informed the decisions, shifted dramatically. supervisor campos: i have a lot of other questions, but let me just ask one more and then i want to hear from the public. can you talk about some of the exceptions? >> certainly. this was a lot of our conversation revolving around it doing what it intended to do, and that was to ensure that the reduction that was provided was sustained over time, that we were not -- the granting and

stimulating development with the on-site requirement only one or two years later increasing this on residential development, so providing this, stabilizing or fixing the affordable housing was the companion piece to the reduction in the inclusionary. the two go hand in hand, so that is the basis for that decision. we have a lot of time spent making sure that the language did not include increases according to an inflationary index, as other impact fees do. stabilizing or fixing those fees did not affect flexibility, the dial program that i mentioned about, and third that we pursue that when these values go through a change in zoning, that we have the opportunity to look at the value and recapture

a portion of it with the impact fees that can include affordable housing. so that is the peace, and the framing of those exceptions, there are five exceptions, and i could go through them, but we wanted to be clear that when that condition is met or when a project has an agreement that is negotiated directly with the city, like a development agreement, that the cap of fees is not pertinent. one of the exceptions, if i may, the zoning of 30 acres or more, and my understanding is that there is -- can you talk a little bit about how that works? some city officials around that, which the board of supervisors can override but only if its is two thirds of the board of supervisors, and anytime you require a supermajority to override something, i think the board has to pay attention and

understand why it is you are doing that. >> certainly. we sort of had two buckets or exemptions when there were changes to the zoning. the other was when we were doing larger areas, and how we determine and calculate significant increases in residential development, it was overly technical and to a precise and too critical to codify in charter, so we chose instead to empower the committee, a technical committee, to determine that threshold of significance. when is it when we are doing larger area plants or changes in zoning, can we exempt that area from the cap? what are the conditions, and what is the threshold? so this committee of department heads, and planning, will be empowered under the charter to

establish that threshold and mechanism and make it recognition -- recommendation to the board. the two-thirds up/down vote i understand is roughly comparable to what goes on when doing general plan amendments. we look at this and generally a technical exercise rather than a political one. we put the technocrats in charge of it to make a recommendation to the board, and that is how it came out. supervisor campos: i guess i do not know the difference in the distinction between the technical and the political. it depends. why not have a different requirement that a simple majority of the board can override whatever decision is made? what is wrong with letting the majority of the elected body decide something different? >> perhaps others in the room can speak more directly to that

issue. i think it was to have a higher threshold for approval and to sort of for the rent power the technical aspects of it, but i will leave it to others to provide more basis for that particular decision. supervisor kim: my apologies. i really want to recognize that we have people will have been waiting for four or five hours, and i does what to say that the board will be able to continue to engage in this discussion if that is ok. so, supervisor wiener, is that ok? supervisor wiener: yes. i can provide something later to supervisor campos's question. supervisor kim: if you can introduce the amendments, supervisor farrell has an amendment, and i think it is important to vote on that now, and then we will have more after public comment.

supervisor campos: and i have a couple of motions. supervisor kim: why do we not put all of the motions out there? and we are going to lose a member of our committee. have a motion, and then we will go to -- supervisor farrell: yes, i will gulfcoast -- first, and thank you, chair kim. i will keep this brief. we all acknowledge and agree that this is a huge concern in san francisco. i think we can all debate whether or not that is on our priority list, but how we solve

that issue is, i think, up for debate, but i really appreciate that this process is taking place, and it is taking place with people across the spectrum instead francisco, and i think when that happens, i think it is something we need to take a real hard look at at the board of supervisors, and i just really want to commend everyone for doing that here in san francisco and at city hall and the whole working group. i know certain members of the board of supervisors, supervisor wiener being very instrumental, and you can pick things that either side does not like, but when you do have a compromise, i think to respect the spirit of that, i'd think that is very important, and acknowledging the we are compromising for the greater good.

this provides payment assistance for our police officers in town, and it has been a program that the statistics will show, or was shown earlier today that 18 officers have taken advantage of it. it has had minimal effect of voting intentions are very good. for me, not only as a kid who grew up in the city and in the marina district, and his whole community was affected by the 1989 earthquake, to me, having first responders living in the city is very, very important. for neighborhood safety, for the safety in case when the next big one hits, not if, but when a

comet for it to be safer in our neighborhoods on a daily basis i think is important. and i really wanted to find a way to increase the downpayment assistance program for the public officials and the public safety officers here in town. and i appreciate the number of people working around the housing trust fund, especially from the mayor's office on housing, jeff, other members who have worked on this, to make sure that our first responders are included as part of the new loan program, so i am on to introduce an amendment to they to make sure that first responders are included in this program. a lot of the details are going to be worked out in the future. i think for various good

reasons, we did not want to a much specifics put into the charter amendment itself in case we needed to be more specific down the road to make sure this program is working. no matter what we all think about different pieces of this legislation, we all want it to work, and in order to make sure it works and that we are able to make some changes, as we know last november, it is difficult to make charter changes, as you have to go back to the voters, so we want to make sure that we remain flexible and nimble. this is very important. we have right now 130% of the police and fire that live outside of our community and county, and we need to bring them back, so i am want to make a motion to introduce this amendment. colleagues, i have a copy of in here for you, and i know that another will be here to answer

questions for it, but i appreciate your support, and everyone from the mayor's office on housing and the mayor's staff working together for this proposal, so i will make a motion to amend, and i will hand out copies year, and i know we will have further copies. -- i will hand out copies here. i know we will have further copies. chair kim: so we have an amendment. will you be going through those amendments? >> thank you for checking. we have circulated them to committee members. amendments made in the city attorney's opinion, inviting you to ask clarifying questions of them. these are clarifying amendments, and what we are classified as technical amendments. and the charter amendment.

even a little clarifying can make a big difference, but we feel these are truly not changing any of the policy that underlies this, so i would just reemphasize that these amendments do accurately and truly reflect the consensus that was arrived at by all members of the working group, reflected in the term sheet that has been distributed and discussed at length, so for the purpose of saving time here, i will not go through all of them. you have them before you. i invite you to ask questions of the city attorney for mr. adams if you have any questions, but i am is clear find that these are technical amendments, so we ask that you adopt this. chair kim: either copies in the public circulate >> i do not believe there are, but i am happy to go make some.

chair kim: very quickly. >> it will take a bit. there are a lot. i am happy to do it. chair kim: i really do want to get to public comment. >> that is why i can suggest that we will have paper copies available. chair kim: ok. why do we not do that. there is a letter that is replacing supervisor farrell. the technical amendment. supervisor campos, would you like to make your resolution now? supervisor campos: yes. my first is what we talked about towards the end, the capping of the future of affordable housing

fees or 30 years and specifically on one of the five requirements, the requirement regarding rezoning. my amendment would change the threshold for the proposed ordinance from a two-thirds vote at the board of supervisors to a simple majority. again, this is simply the concept that if the housing review committee makes a certain determination but a simple majority of the board of supervisors decides to make changes to that that that simple majority of the elected body would be allowed and able to make that change, so i will distribute the changes to my colleagues, and i get copies available for members of the public as well, so i make that motion.

ok. great. the second amendment that i am introducing has to do with the issue of grandfather in projects that have already been entitled. i do believe that as a matter of policy, we should create policy in a perspective -- prospective fashion. the benefits that will be inferred -- conferred by this charter amendment will happen prospectively, and i just have not seen a reason why we need to go back and grandfather projects that were entitled along time ago, projects that already went through a process of their own, so my amendment would essentially eliminate grandfathering provisions of the charter amendment, and so i make that motion, and i have copies here for my colleagues

and members of the public. chair kim: just for the sake of dialogue, i will set the net. we have a vote before us, and we will take that after public comment. we have 46 speaker cards, and many people have left. i appreciate the people were here before, and i will still call their names. there were a number of people here in support of this charter amendment. actually, what i will do, i will call the first 10 names, but i will ask if you are a senior or if you have children, we will prioritize your, so please line up if that is the case. i have been schaefer, sarah, richard, myrna, john, bob, doug schumaker, shannon dodge, wendy, and rachael.

please line up. two minutes. you can get started right now. >> richard may with the coalition for homelessness and currently with another group. i want to say that this is a good idea but is only the tip of the iceberg. i initially wrote an article, and one comment was the lack of affordable housing in the near future. and while i am in enthusiastic support of the initiative behind this amendment, i am a little skeptical but it will be sufficient. i am also concerned that the developers may not fill their obligations to make this the balloon that now appears. but i do have my fingers

crossed, and hopefully with your continued oversight of individuals like myself will still be able to live in san francisco, so i just want you guys to look at this and keep your eyes open. supervisor: thank you very much. next speaker, please. >> hi. my name is -- i am part of the task force. you have people like me, and we are all coming up with the same answer, we spent a long time on this and ended up with many compromises. i would like to talk a little bit about housing. you look at all of the construction cranes, and you think these are all market rate housing going up, and largely they are. i would like to point out that most of them had special funding. state grants. harrison would not be built if we had not gone and $11.6

million state grant. hunter's you would not be built. that is 267. another a 400 units. crescent heights renegotiated their complete loan with union labor like to get the equivalent of a reduction. you would not be having this market housing being built without specially advantages. you are now going forward into a situation where those grants are no longer available. la jolla approach of this bank was to stimulate of housing, including market rate housing. this reduction on the infield for the reduction of the percentage is huge for market rate developers. it is huge. it means the difference between a project going ahead or not going ahead, so i would strongly urge you not to proceed. this housing bouned can end.