public good. on that note i want to urge the city to increase the affordability for those sites. as was mentioned, they are looking at sort of a baseline of 50% affordability for a lot of these sites. while that is higher than the 33% required by probprop k, they with my it's an opportunity to increase our affordability numbers overall. if you look at pipeline for the affordable housing over next six years we're way below the 33% threshold. so we have an opportunity to bump up the numbers to meet our affordable housing requirements laid out by the general plan and to really fulfill this mandate that the voters approved to have more affordable housing in san francisco. in pharyn, if you look at the pipeline, there are a lot of neighborhoods in the central city that really aren't going to see a lot of growth and affordable housing at all. we know that the four that were assessed and discussed during the presentation, there is a possibility that these sites

could provide us the opportunity to build much-needed affordable housing in areas of the city, like soma, and the central city and in chinatown. additionally, we think that we should increase affordability of some of the sites. we think that sites that large enough to accommodate 200 units should be affordable, should be 100% affordable and that the sites that are larger than 200 units we can look at a more mixed income housing. we think that will help balance our housing in san francisco and meet the affordability mandate set out bit general plan as well acid prop k and really create a service for the public in san francisco. thank you very much for your time. >> thank you. next speaker. >> good afternoon, commissioners. whitney jones the director of the housing development form chinatown ucu. first i want to thank the city

staff who are moving this process forward. thank you, guys. many city sites have been held by agencies for years without a process for moving them forward to meet overall city needs. so this process of starting to move these sites are consider uses for these sites is a great one. we support the chao choo-choo paper presented to you earlier earlier and highlight a couple of points that i think you have heard a couple of times already. a couple of simple points with my heard at the public meetings, the emphasis was on affordable and middle-income housing. we think with that emphasis to set a great emphasis on

affordable and that sites that offer the opportunity to develop 100-200 units should also be prioritized for affordable housing and should be 0-200 should be prioritized for affordable housing. with those simple tweaks to what has been presented to you, we think it's a great program and we look forward to working with it. thank you. >> thank you. next speaker. >> commissioners, joseph schmitt board president of the south of market community network. it should be a simple exercise to look at how to use the public sites. in terms of the fact these are depreciated assets and host have been in the land portfolio for decades and the reason why they have been in the city's land portfolio is there were projections around the city's growth and the infrastructure needs have more around that growth. the way that we manage our infrastructure is different now

that what was projected decades ago and that the biggest infrastructure need of the city right now is around affordable housing, which is what choo-choo has presented to you. using a depreciated asset in order to support affordable housing makes economic sense and also makes economic sense to use those depreciated seats to support small business and to support locally-held business because they can't afford to move into market rate developments that are being developed in county right now. so to use these public assets to create any amount of market rate housing, 50% or even less, makes absolutely no sense, basically what you are do is subsidizing market rate development and to look at windfalls from selling these sites only propagates a bunch of problems. you don't like alt one-time windfalls of selling public sites as you way to be a stop good measure for supplementing the general fund, it's

basically subsidizing market development. i want to emphasize the crossover of the potential for when affordable housing sites are developed, they are developed using prevailing wages and so the labor force is sometimes union, but always prevailing wage and that closing the gap between wages and affordability of housing, which is major costs for people people in the city is a huge item to consider. thank you very much. >> thank you. next speaker. >> hello, just to summarize a couple of things that we have had heard -- heard this from the project earlier the one on potrero hill and that was a mixed-use is really nice -- mixed income is really nice, and was walking around new york city last week and see a lot of mixed-use and there is retail on the first floor and people living upstairs. then we get to some of the government projects where they put all low-income housing in one spot and all of a sudden

there is no mixed-use. so mixed-use is nice unit's something that is nice for the neighbors who live nearby. if they just have a single -- or a residential project coming in, it's not as appealing if they have a residential project that has the grocery store, the hair solon, organic food store, it's appealing. the other thing we heard was bring transit to the route -- to the development. we could bring transit and there is probably already transit going on in the spaces, but we could bring [tpr-pbts/] in before they develop them on or the path to development. >> thank you. is there additional public comment? okay, seeing none, public comment is closed. commissioner antonini. >> very interesting discussion. we had a lot of speakers asking for higher levels of affordability, but i don't know if they saw jerry mcguire, show me the money, you know? basically the problem is it has to pence you ill out for

somebody to housing at a lower price and still the cost of construction are very high and we have heard prevailing wages and such and given the process in san francisco, we have to harken back to the days of old and use private development in a way to make it happen. in the '20s we had the russos and others who bottle a variety of housing in san francisco. we had more landed in those days, but it wasn't all high income housing. you had places like forest hill and st. francis woods, which was expensive and then you had merced manor and the middle00 and probably lower income -- lower-middle-income and rowhouses and sunset and you had housing for all income groups in those days.

it could be done again if we do this the right way. i think that the idea of cross subsidization with market rate makes sense because then you can build lower income housing that takes a huge subsidy to be able to provide it for people at a very low-cost. because when you are getting very little out of buyer or the renter. so it only makes sense that you are going to have to make it work. a concept that i have introduced in the past and i think it would fit a site that wasn't even mentioned yet, but it may be one for the future. it's on your map. the puc land on 7thth avenue and health department around laguna honda, a huge site that would be perfect for the situation that you built family housing with another bedrooms, you know? the kind of housing that people about children would want to have. and what you would do is that you would have the developer would have to sell these at a

prescribed price, instead of the $1.4, $1.2 million, it would have to be more than $750,000 and it prioritizing it might be public safety workers first or city employees or teachers, things like had a would get top priority and there would be restrictions on this type of housing where you wouldn't be able to sell for a certain number of years and there would be cross appreciation. but you could also -- that would be a way that you could produce housing that was good housing that would appeal to people in a middle-income group and that is what i consider "middle-income." people who could afford $600,000, $700,000 and we know that the average wage is $85,400 and two people, that is $170,000, so we have to kind of look at what is out there for families, not to

minimize the need for housing for lower income groups. but i think you have to look at these things realistically and not just be locked into abag numbers, but look at what the reality is? and what you can rent and sell and it will help to you provide housing for lower income groups by doing it in a smart way? so i would suggest that we continue down this path. i think we're doing a good thing to look at these sites, because they are not generating anything right now. it's a perfect solution and there is a variety of ways it could be done. but working with private developers to work out a situation where it can make it possible for them to develop it, but the city still gets its goals as farce affordable as far as, for or family housing. those are areas that we significantly lack. we have a dearth of units with

3 bedrooms or more, only 20% of city housing. so you wonder why families flee? it isn't just costs that they can't find a place that is adequate to meet their needs. so i think we need to continue to look at this wisely and continue to pursue it. thank you for your report. >> commissioner johnson. >> thank you very much. this is say great program. mr. elderling made a comment there were certain sites considered getting on a generation ago. so it's fantastic and looks like there will be actual movement on it and will economically, politically and otherwise to make it happen. i have a couple of comments on how -- maybe some of this can happen? i will start with a question for staff and anyone can answer it. and then i have a couple of comments and i will doo them really quick. is so i'm familiar with the

housing working group's suggestion you on how to accelerate housing development and talking about density bonuses and different ways ever accelerating development, talking about potential planning code changes, where we can reduce requirements where there are typically variances. there is a laundry list of those things. my question, are any of them -- are there going to be any suggestions from the housing working group that will be specific to public sites that will make these projects more attractive to development partners? or otherwise accelerate their development? >> commissioner, mike martin again. i think that one of the recommendations that the housing working group is this program and to identify sites specifically for affordable housing through this program. so i would say that what that -- what the housing working group's recommendations have done is tee up the ways that we can get to that goal? so these

other financing arrangements, the density bonus conversation that you are describing, the process improvements, all of these, i think a lot of what the housing working group saw we need to find a way to reduce construction cost as a way to make these projects feasible? i think a lot of those recommendations while they are not going necessarily beg moving forward through the program, this program will be closely tied to the success of those recommendations. >> thank you. >> i know the working group went through a lot of suggestions large and small and a lot of when which i heard and didn't make it for the final list and some i hadn't heard. i will throw a couple out that i think would really helps we consider the public housing sites, particularly the ones that are greater than 200 units and can support multi-phase mixed income developments. the first is going to be on financing. this is going to be more of a call to action rather than a

specific suggestion. funding moderate-income housing is the toughest nut to crack. the tools really aren't there at the local, state or federal levels. but i would also mention that the low-income housing tax credit didn't exist 30 years and people came up with it to create low-income housing. so it's sort of a call to action to be more creative. i don't know that we're not going to go fly to d.c. and try to make anything happen just for san francisco, but there might be opportunities that we can take at least in the city, potentially in the regional level, to create some new financing tools or adjuncts to financing tools like ifds that would really help with the sites. particularly ones that we're thinking about higher percentage of moderate or low-income housing we're going to need to find those dollars from somewhere to subsidize it and it needs to come from somewhere else than low-income tax credits and those other tools that people are familiar with. i didn't hear too many about it and forgive me if it was

considered and tossed out, but i love the idea of doing community benefits for these projects. i definitely agree with one public commenter it's not just about residential, but also about commercial and not just non-profits, but also about small profit and women business enterprise and minority business enterprise and finding space for them. the way i think you do that is to have a development agreement. i think the best thing to do was to have a standard development agreement that has elements that everyone wants to see, and then tailor it to specific sites and they arer not only starting from scratch with different development partners. that is something to consider and get it out in one fail whoop, local hire, mix of units, any sort of benefits that you want to provide for special open space or programming, for economic development? put it all in there, do the work upfront and for each site depending on how many units and the size, you can see what of those elements you canly

actually do? this is another sort of planning code issue that again i'm not sure if maybe the housing working group saw it and determined it wasn't feasible. but we have a requirement for the affordable housing that if you are going to do it, sra there is a certain unit mix, a certain percentage of two bedrooms or certain percentage of three bedrooms and i'm going to agree with commissioner antonini. i don't think will you get long-term stability and equality in economic diversity in the city not supporting low and middle-income families because if you don't, you talk about individuals who time going on and they come and go. so you need the larger unit sizes and we need to find ways to either hopefully not acquire, but promote the development of larger unit sizes. particularly in those again --

those larger multi-phase or mixed income developments. and then i know everyone else wants to speak, the last thing i might say is i think that the process for the public housing sites in terms of the rfp that went out and sort of splitting it up by sector, for the most part worked. so i'm sure you are looking at it, but it would be great to see a similar site -- similar process to that, maybe not as involved for public sites so we see the involvement of some of our local developers and local housing community development corporations. thank you. >> thank you. commissioner hillis. >> thank you for this. i agree with commissioner johnson. it seems like there is some good momentum to take some of these sites offer the list that have been on for decades and i agree with commissioner antioni too, there are others on the list for decades that we may want to look at now that the momentum seems to be shifting

to the 7th avenue site and laguna honda. in responsibility to the comment that we have heard 50% total seemed a little low given the fact that some of these are 100% and others are mixed. for public sites overall, it seems like a low target of total affordable housing. can you explain more kind of how the math works? if you have some sites that are like 4th and folsom that are 100% affordable, what does that mean for the balboa site? 60-70% market rate? how do you get to that? >> i think how we get to that is the feasibility analysis that we're trying to describe. and i don't think we set the portfolio goal as sort of a reservation that 50% of every project, of every mixed income project would be market rate. i think what we have seen in other model as round the country is 50% market rate with

cross subsidization and other financing tools that frankly we don't have here. have made some moderate-income housing feasible. so we haven't actually gotten in the specifics of these sites and been able to say what is feasible. i don't think anybody on the interagency team expects that we'll put our pencils down once get to 50%, because if we find the tool for doing more that is what we have been looking for. to the early comment to look at the state government and federal government to say let's broaden these tools. by no means saying that market rate has a defined home in the project and we're trying to be as realistic, so we're not seen as sort of not meeting the goal that we couldn't meet, but at the same time, sort of reaching out to something that really hasn't been piloted or demonstrated feasible in this city. >> and do you anticipate -- i mean does this not account for a bond that has passed aallocates some money many more

moderate-income housing? would you anticipate if that happens the numbers get boosted here because there is that funding source not avirginia tech currently for the 100% of amami. >> certainly if that conversation advances and voters approve that kind of approach, i think that availability of a funding source, that presumably wouldn't be targeted at market rate would expand our ability not to relay on market rate for subsidization. we want to keep the program nimble and valuable to have these resources flowed and -- deployed and the public policy goal that was illustrated by the slide a lot of work will go at the low and moderate income level and to the extent those resources become available,ti think this program is a place we want to maximize them. >> is there room on the land value that enterprise

departments kind rely on fair market value? they are zoned p, you know, it's the kind of question that mr. eberling brought up about suprazoning. who gets the benefit, enterprise department or going back in this help subsidize more affordable housing units on parcels? >> that is a very legal conversation on what constitutes "fair market value?" i would argue that we make an aggressive argument that says the agency and its mission is still getting value for its asset, but this are things like sort of value of our process, and sort of bringing something forward that brings value to the site, too. and so we want to make sure that the fair market value is reached, but at the same time that we're maximizing as we have said, the real focus of this is affordable housing for low-income and moderate income. >> miss heartily and i worked in octavia, where we targeted 50% of the units being affordable. it was a combination of

inclusionary, and then 100% affordable sites and in this mix now there is kind the moderate income which seems there is difficult in finding the right financing sources for, and hopefully those get expanded. so you can beat the 50% goal. >> i think absolutely. i think i want to say that unequivocally that is the team's goal to beat that -- our objective is to beat the goal, is that is a way to say that? by no means are going to to reign thing backs in. i think as tools come forward, this becomes this great elaborate to try these tools out to say that to the developer you can do this and get a is good value and still contribute to the well-being of the city. i agree with the tenure of your comments that we are not taking anything as a hard and fast limitation, but it's a realistic look at the schedule and feasibility for this project at the stage we're at and we're hoping to expand and

improve on it. >> thank you. just one more question. there is a lot of obvious port property that is publicly owned and i think it's always kind of puc or mta that are the enterprise departments. are there more constraints on port property that make it difficult? i mean i am on the water side, there are state lands, but on the land side? >> so well there is one challenge with proposition about that requires height increases or zoning as you described to bring some benefits back to the site requires voter approval. we saw some success with pier 70 there. but you know, that presents one more hurdle, one more challenge. the port has a lot of other house -- housing isn't a trust con consistent use and they have found ways to get to [speaker not understood] so the port has definitely been involved in our discussions and had a meeting yesterday that they were at. i think as we sort of continue this rolling site review

process and as things rise to the top at port level, i think we'll engage in that discussion. >> thanks. >> thank you. commissioner moore. >> thank you, to commissioners johnson and hillis for say something of the things that resonate with me. i would like to ask mr. martin to espouse a little more on feasibility goals? i would like to start a little more concrete frame to my question to you, the sites that we have, because of their location have attractiveness quotients which are different? closer in site, including a site near the waterfront and i'm using the latest of your comments have in perception higher values? some of them might be more expensive to build on because of foundation costs and because of infrastructure, which is not set up form housing, et cetera, et cetera. are you taking these types of criteria already

into consideration aside from saying that sites up to 200 units should have 100% affordable, et cetera? all of those issues, the peripheral effects for affordability? >> absolutely, that is the feasibility analysis that we need to do. we showed you the range of 50-200 units, projects that have been feasible and have been constructed, but think all had their own characteristics as you talk about site conditions and land cost, compending on where they are you all of that needs to be taken into cannot to say this site is feasible for low-income development based on subsidy sources that we have. what we're trying to show is that athlistical priority may swing if is there a site that is actually feasible for that mixed income level as well. i think those factors sort of bear on how i site gets from

our initial analysis to the community process. >> i wasn't trying to draw the conclusion that certain sites are more suitable for affordable housing than others. but i would like to see and i hear the other commissioners at least touch on it that our public core values including our public policy goals are largely reflected in all projects irrefective of where they are. that is where i am trying to go. because i am not interested to see affordable housing be confined to the areas of where it is cheaper to build things, the site is flatter, the streets are already all there, et cetera, et cetera. i am looking at an equity, which we mostly don't address and talking about that, i do think a basic structure of public policy and core city values be the basis for a draft overriding development

agreement where all sites have to indeed meet the idea of mixed-use, of mixed income, addressing local labor and addressing local small businesses. i think in your presentation and mr. schmitt's comment had me almost jumped up, you talked about business, but you omited to call it "local business." it's important to be very careful of how we tee up drafts of basic principles which govern everything. >> thank you. commissioner richards. >> i think this is a great concept. i guess, finely after many decades the city is finally going to walk the walk on this. i think public assets absolutely have to further public policy. whether that be housing, businesses or non-profits. a couple of questions that i have: everything is interrioted here. we have labor come out and talking about housing and

talking about businesses. so you have wages and jobs drive housing and housing drives business and non-profits and community benefits and transportation issues and livability issues, everything is kind of related. so it's hard to talk about one of these things without talking about something else and how it affects it. the question on the grounded lease concept. if it costs half a million dollars to build an affordable unit, mr. martin, how much would the land acquisition of that $500,000 be per unit roughly? >> it's hard for me to say, since that is very site-specific as we just heard. >> a percentage? >> i will turn to a colleague to see if i can get a good answer. >> good afternoon, [ka-euts/] harty, kate hartly, mayor's office on housing. $65,000 a door to $165,000 a door, it really dependents on where the site is. what the nature of the site is.

we're seeing production costs exclusive of acquisition right now between $500,000 and $55,000. >> $550,000. >> wow. >> one is that the mayor's office on housing is absolutely committed to this and we're trying to build as much affordable housing as we can. and the public sites program is a fantastic part of that effort. we don't discriminate in terms of areas. so we have got a site at seawall that we're wocking on right now. the mission. we're looking at -- we're working on upper yard, balboa reservoir and 50% ferris, baker watts that we actually did achieve in central freeway is a great example of our producing in all kinds of neighborhoods. i will say that we work within coin straints. so if we build pay 200-unit deal our average subsidy is $250,000. that is $50 million of subsidy.

we have to come up, and that doesn't necessarily include acquisition costs. that is a huge amount of our annual budget. there are opportunity costs we have to consider, because if we're going to do that, that means that other very worthy projects may not. >> so i heard something about driving with -- i heard some of the folks community housing organizations come up and say they want it exactly the inverse of what you are proposing, up to 200 units want 100% affordable and you are saying it could be 50% affordable. >> let me clarify, i must have misstated. we would love to see 100%s but that would cost $50 million. so we have to acknowledge scarcity of resources. >> it's a resource issue? >> yes, absolu.