over? so that this middle class families and people that we really want to stay here in san francisco and indigenous -- and i can say that -- (off mic). >> thank you very much. next speaker please and before that i will call up the cards where they didn't indicate whether they're speaking on item 1 or two. [calling speaker names] >> hi. my name is sonia and i want to take issues with peskin's claim earlier that life went on fine after the first inclusionary fees were instituted. life is not fine. we're in a horrible housing crisis. things are fine for housing associations and others

but generally it's not fine. high fees can i have marginal development and that's the development we want the most, stuff that happens at the beginning of the cycle aka the end of the recession when people most need jobs and in the neighborhoods and low profit margin and projects at the end of the cycle and wind up being sold when they open at the bottom for a third off. those are the most delicate projects and those are harm and when you willy-nilly set the fees too high and that's what i am really keen on you know based this on the feasibility analysis and it's true that the feasibility analysis can be cooked either way. right? they can be cook that you can afford a higher or a lower fee. it's obviously a political process.

i would suggest airing on the lower fee side for the development. thanks. >> thank you very much. next speaker please. >> supervisors. i am build inc. and i want to thank you all for the concern about housing. i certainly share it. affordable housing is critical in san francisco. and two things i'm going to say. one is we've got to get the percentage right whether with a feasibility study or some other way. we don't want to kill the goose that's laying the golden eggs here and get the grandfathering right we have a pipeline that is creating huge community benefits right now. i sit on the market octavia board and our budget in the next five years for the pipeline projects is $40 million in fees and directly impact that neighborhood. multiply that

over the entire city and you see that throttling the production of housing at all levels of affordablity would be greatly deteleious to people living in san francisco. it's important to keep that housing pipeline going. the affordable housing market rate housing are linked. if we don't either delink them or if we stifle the production of market rate housing it is going no doubt will have a chilling effect on the production of affordable housing, so please consider carefully what you're doing here, and find the right path for us. thank you. >> thank you very much. next speaker please. >> hi. my name is oz ericson

and president of emerald fund. just one point before i address this issue. i was on the committee that senator leno's committee on affordable housing. i went to meetings for nine months every wednesday at 12:00 o'clock and contrary to what supervisor peskin says we considered economics of that affordable housing very, very carefully, spent an enormous amount of time on it and widely supported by many of the market rate developers contrary to what supervisor peskin says. i was one of them. i worked very hard on it. it was very good legislation and that should be the way what we approach this legislation. we should do an economic analysis to make sure it's prudent. i have passed out a letter that was signed by the people who build, develop and construct well over 90% of the housing in the city. you can

not build despite what supervisor peskins and i would love to hear the names of these individuals. you cannot build with 25%. it is impossible. it drives the land below zero. you can't do it. you have raised this twice that you talked individually. i have had budgets run by six of the market rate developers and flee of the affordable housing -- three of the affordable housing developers. it's impossible. you pass this. you kill housing. you layoff thousands of union jobs. you should amend the legislation and include an economic feasibility into the ordinance. that's the way you should do it and grandfather the projects. it's too important for the city. thank you very much. >> madam chair if i may respond. >> supervisor peskin. >> because his comments were directed at me. first of all

relative to the letter that just received because you're requesting my veracity. i have been contacted by folks that have never seen the letter and did not authorize their name -- >> you have been contacted by one person that said that by the swig company. i have a letter from the swig company authorizing it. that's true. they have done it -- >> [inaudible] >> all right. >> [inaudible] >> take it off line. that would be great. >> respectfully calm down. it's not correct. it's not the swig company but i would like to also go back to 15 years ago because you're questioning my veracity. yes, there was a negotiation and yes it was done in conjunction with people in the development company as supervisor kim and supervisor mar and of the sponsors of this measure are trying to do. my point to mr. rich was it was done absent a feasibility study.

it was a negotiation. that was the point that i was making. i suggest you calm down, but we want to get this thing right and we appreciate your input. >> thank you. and now if we can move on to the next speaker please. thank you. >> hi. my name is alyssa and representing spur. we support the mayor's measure for the feasibility analysis to inform san francisco's inclusionary housing requirements. inclusionary housing produced thousands of units since introduced in san francisco and we agree there's more to be done and there is room for change. we agree we should periodically challenge our assumptions but finding the right level is key to maximizing the production of affordable housing. too low and not asking enough and too high developers will not produce housing at all levels that we

like. it can be done thoughtfully and smart based on the controller and the department and inform discussion that is currently under way. spur hopes that the discussion reports market rate and affordable housing rather than pitting one against the other. we continue to believe that what it will take to drive down housing cost is a set of changes to enable the production of more housing at all price levels. supervisors we encourage you to incorporate teasablity language into the charter amendment currently on the table. thank you. >> thank you very much. next speaker please. >> good afternoon supervisors. my name is lea chang [inaudible] and in san francisco doing development for 25 years and an advocate for affordable housing but we're concerned about the proposed amendment on the table right now. first increasing the percentage as you propose is

not economically feasible to obtain any capital projects -- [inaudible] you have to show a certain return and what you're asking those returns are not achievable. the end result would be end to housing supply and bmr supply and on site, off site -- in lieu fees. second any policy that we believe needs to to be made with this significance requires a analysis and feasibility study and we highly encourage that the supervisors consider such and last that we ask that you consider the projects in the pipeline be grandfathered in and not unreasonably subjected to a significant change like this. we appreciate your time and ask you to consider these points. thank you. >> thank you and at this time if anyone wants to speak on item 1 on the agenda please line up by the windows and come up for

public comment. >> thank you supervisors. my name is patrick kennedy and the owner of panoramic interest. . share the desire to produce affordable housing in the city as well and have focused our firm's efforts building affordable units by design, micro apartments and the similar. i would like to bring to your attention a to -- potential issue and cost to hawkins and that bill as you know limits rent control on new construction and old construction, and although there is a san jose case that upheld inclusionary requirements it specifically

limited to for sale units, and if you double the inclusionary requirement and make projects both going forward and the past ones financially infeasible i think there's a very good chance you may drive developers to the courts to question the legality of the inclusionary requirements in san francisco in light of cost to hawkins. i have been part of the development community here supporting the 12% set aside and the current efforts to see whether more can be done, but i think to summarily decide to impose a 25% requirement could in fact be the straw that breaks the camel's back and throw all of this bmr question into the courts with nobody benefiting from it. thank you. >> thank you. next speaker

please. >> good afternoon. my name is craig hemberg with ddt. we're a local real estate investment firm. thank you for the opportunity to speak today regarding the mayor's proposed feasibility analysis and inclusionary housing requirements. during the previous recession our firm purchased several of the market octavia freeway parcels from the city. we then spent the next five years working very closely with the neighborhood and local jurisdictions to design and build multi-family projects and help to sell the vision of the market octavia plan. all of our projects fall in the smaller and moderate scale, 35 to 50 units and for sale condominiums. we included on site inclusionary units in all of our projects and very proud to say that. in preparation for today's hearing

i reviewed our performance to better understand how increasing the on site inclusionary component or percentage 25% and the revenues to off set the change. on average our units sold below the current average per unit sale price of 1.1 million dollars. our average unit size was 150 square feet in size. in order to make the same projects work with a 25% on site inclusionary percentage our average unit prices would have have to increase over 140, $150,000 per unit. essentially wiping out our land base in the project so they could be zero and our projects would not come to the same returns. unfortunately

given current construction costs and increases we have seen over the years north of 20% long lead times and the politicized -- (off mic). >> thank you. sorry. we have to give everyone the same amount of time. next speaker please. >> my name is jon stewart. i am a resident of san francisco and principal in our company and been involved with affordable housing for 30 years. we don't oppose the 25% threshold per se. in fact with a 12% let threshold the way it's turned out in the market is probably too low. we think there are cases where deals could go through in excess of 25% particularly with public support. we oppose the one size fits all. what are you going to do with a small in fill project? let's say it's a lazy asset to

bring into play and no economy of scale, 50 units. what is the unit if you have a environmentally challenged site and high land basis because you have to clean it up. what is the plan for the market changing in two years when rents plummet faster than costs? my recommendations are four fold briefly. if we solve this problem through an ordinance and i am in agreement with supervisor peskin we shouldn't do it through the city charter. let's make a provision for change at a global systemic level, the number for all projects. one. two, let's make a provision of change at the project level and there are good deals you don't want to baby the baby out with the wash on so i think you want to look at two folds. let's address the grandfathering and lastly i hate to

say this and presumptuous and bringing the for profit and non-profit communities in and go to a bond school. remember the adage from divorce lawyers and a muses me -- [inaudible] leisure. >> thank you. and last call again for public comment on item 1? >> good afternoon. my name is david sternberg, i do have comments about the second item which i'm going to hold until that comes before us but regarding the nekts nexus study i still to this day don't understand why real estate developers have to bear the burden of all of the affordable housing that the city supplies. i don't understand why people that benefit from buying houses

for $50,000 and 20 years later they're worth $2 million why they don't bear that burden? why people that flip existing houses bear that burden? why microsoft or any of those companies that maybe in the city paying payroll tax and paying taxes on that why they don't bear the burden? i'm not an attorney. i'm not a politician. but it seems that there are three forms that could generate an ongoing constant amount of money for affordable housing, and that would be transfer taxes, payroll taxes and property taxes. again developers are here d business the same as everybody else in the business and i have been an architect in the town for 40

years. most of my clients are building small to medium projects. they're not wealthy people like so people think. they're not land rapers. by the pay city fees and capital gains taxes and need money for the next project you're poor again, so i just don't understand. maybe somebody can explain it to me. thank you. >> thank you very much. any other members of the public who wish to comment on item 1? seeing none. public comment is now closed. [gavel] and colleagues any additional comments or questions on the first item? supervisor peskin. >> i just want to make one kind of overarching observation which is i'm delighted that we all agree that the number should go up. i appreciate the gentleman that said proceed cautiously. i agree but where was that caution in 2012 when

the market was already going through the roof when some decision was made to reduce the percentage from 15 to 12%? where were the advocates who claim to care about affordable housing and claim to want to obtain as much as is feasible where were they in 2012? mr. rich with all respect, and i mean it sincerely. i think the administration can do a bond at the same time that it can be do a feasibility study. they're not mutually exclusive. i am delighted that we have sparked this conversation. i am delighted that we have sparked it six months earlier in june rather than november because i don't think we can or should wait and i for one look forward to working with my colleagues on the board and the administration to find that sweet spot. >> thank you. supervisor kim. >> i wanted to respond to a

couple of things. i know supervisor peskin mentioned this earlier but i have talked to developers also, personally more than one and 25% is feasible and they can do as long as it's baked into the deal as they move into the process and i am happy to make sure they speak publicly and i think we need to be careful when we scare people about job loss. i think that's inappropriate and that we're scaring people about the future and depend on construction. construction is doing well in san francisco and i never seen an inclusionary housing policy that has hurt our housing construction and what hurts it is our economy. it's financing. it's not building more affordable housing and mad rot housing and for the workers in the city today. i want to address who contribute toss affordable housing? first when we reformed the business tax a

few years ago and moved from payroll tax to gross receipts we did actually dedicate a portion to the housing trust fund growth. we have also looked at increasing the real estate transfer tax every few years and in fact i have two ballot measures in the hopper today and 1% increase to the hotel tax where our hotels and tourists contribute to helping us house family homelessness, the fastest growing demographic in the community today. that hopefully will be on the ballot in june. in november we're looking at increase in the transit tax and luxury building and $5 million or more and $25 million or more and everybody is contributing to the affordable housing crisis and not just the developers although they play a key role as they build and profit in the city we expect them to give back to the city. yes we want you to build more affordable housing

so to say that only one category folks is targeted to build affordable housing i think is incorrect so just wanted to address that point. i know we will make further comments as we speak about the next ballot initiative. >> thank you. supervisor cohen. >> thank you. my question is through the chair to supervisor kim and my apologies if my question makes you feel uncomfortable but in the interest of transparency and discourse in the conversation who developers are you talking to? who has agreed and acknowledged that 25% is doable? >> supervisor i am happy to speak to you off line and get the developers to speak publicly themselves but i have definitely heard from a number of developers and we should clarify when talking about 25%. 15% is always what developers have done and that is building affordable housing at 55% of ami and below. what we're merely asking is

build another 10% for middle income housing and requires less subsidies and much of the market rate housing should be affordable to middle income housing and it's not and they're building at two 70% of income and seeing the numbers developers are often building for housing of four that make $270,000 a year and i don't know how many people in the room that make that much in san francisco but it's a problem and a problem that developers say theant can't build this housing and make 80 to $100,000 a year and can't live in san francisco and if developers can't build to this category and we're in a lot of trouble but i have to remind the board and many in the room that over ten years ago when talking about increasing inclusionary from ten to 15% developers said over and over again it would

kill all development and it did not so i think it's important as we continue to move forward and push the envelope what it means to build in the city and yes we need to do the analysis. yes, we need to make sure everyone's at the table but we all need to give a little more. >> so i guess i'm going to take a page out of your book supervisor kim. you didn't really answer my question and i think it's fair for us to put it out in the public. i too talk to developers all the time as chair of the land use committee and being the supervisor for district 10 there where there is a plethora of development happening and i don't that as a good thing but it's a reality, a reality that i have a pretty good ear with the development community, and i quite frankly and i will go back to everyone, big and small ones and surveying them. i want to know which developers are saying that 25%

is certainly doable. the other thing and i want to make sure that i heard from the mayor's office correctly they didn't say nobody is able to did but my take and understanding is most of the development community wouldn't be able to do this. i'm not looking to do favors for the development community and we need to come to the right number and supervisor peskin nailed it and you put on a measure and the mayor's office put on a measure and it's bullshit and we need to keep it going and there are important things that we need to deal with. [applause] thank you. there are important things that we need to deal with, homelessness being one and talk about building for them and the affordable housing crisis. it's frustrating that we have a special rules committee and all these people come for the conversation and admittedly we can deal with it by pulling it off so it's frustrating to sit

here and deal with this. let's get on to item number 2 and get on with it. >> thank you supervisor cohen. any other questions or comments from colleagues? okay. seeing none can we get a motion to file item 1. >> yes. >> second. >> moved and seconded. the hearing is filed and now call item two mr. clerk. >> item two is a hearing for the initiative ordinance by four or more supervisors for the june 7, 2016 election ordinance amending planning code to set forth the minimum inclusionary affordable housing fee requirement. >> thank you. do any of the sponsors wish to make comments on this? >> i think it's been made. >> any department staff wish to comment on the second item? >> sorry. >> i'm sorry. mr. rich. >> we wanted to quickly go over a couple of things and i

wanted to preface this we definitely understand there's been a lot of discussion about compromises and discussions that should occur. i am obviously not authorized to have a negotiation sitting here in the board chambers but we understand it will happen and we understand there's a lot of stakeholders such as the construction trades and others that want to be part of that conversation. i did want to spend a quick moment having my colleague describe and we will do it quickly because it sounds like this is a short presentation why we are concerned about a 25% across the board number. again very clearly there are times when 25% will work. it will certainly work when there is a lot of public investment in a project. it will probably also work sometimes anyway when there is significant up zoning from 40 feet to 200 feet and may work but i wanted emily to take you through quickly the overall

concern with 25 percent. i do want to point out unlike the charter amendment which we're not talking about today the initiative ordinance before you today can't be changed and if put on the ballot by the voters it could only be changed by going to the ballot so we feel the obligation to give you the results of a preliminary preliminary analysis on the 25% because it can't be changed in the form before us today so go ahead. >> and if i may -- >> supervisor peskin. >> before she speaks let's just be clear, and i have been remarkably transparent. had the previous item not been introduced on january 19 at 4:24 p.m. this item wouldn't have been introduced ten minutes later. that's reality, so i just want to put that on the record. >> certainly. we just have to respond to something before the committee. >> i actually have a question for either sponsor of this particular item, number two. i

mean out of a very basic level can you talk how it is that we arrived at the 25% across the board? any sponsor, supervisor kim or supervisor peskin? >> i think supervisor kim touched on it and as you have heard and scene and interestingly enough when i was quizzing mr. rich about projects that went far north of 25 the response was "those were on city land. those had been conferred major height increases or density increases or what have you." that doesn't address the situation from last week relative to the project on bryant street. here's a perfect example and it's not a 25% example but we had a situation on december 8 with the board and rejected a project on van ness and the financial terms and low

and behold said the developer can do 8% more affordable housing at the same sale price the city is offering. the reason i am telling you this it's our job to move the numbers as high as we can and still have market rate with affordable housing occur. we know that the numbers can and should have moved north of 15 for 55% ami and below, and as supervisor kim said we believe that creating an inclusionary amount for middle income actually -- because it requires significant less subsidy is feasible and while we're not naming folks -- excuse me, in the fraternity, that told us they believe it's feasible going forward because ultimately it's a function of land costs, and yes we have heard from at least one individual that says at 25%, 15 and 55 and ten at

120 that you would drive land costs down to where the land cost is zero. that is absolutely not true. nobody in the business is saying that except it's scare tactics, hyperbole and brought a wonderful conversation and to all of us agree that prop c is a conversation of the past and our job to find the sweet spot. >> if i may add on. and i appreciate developers or examples going beyond the 15% but what analysis went into how you arrived at the 25%? supervisor kim you're the sponsor. supervisor kim. >> so going to the charter amendment and the ballot initiative that is before us today the main premise of the charter amendment is what we of course all agree on and get rid of any ceiling in the charter that restricts the amount of

affordable housing that our developer community can build and currently set at 12%. we are bringing back our original percentage point which we know builders can build at which is 15% on site and on top added 10% for middle income housing and we believe developers can do. with that said because we want to spend to make sure these projects are feasible for broad range of developments for 25 units and above we set this as merely an interim controls and the important part of the amendment is read the board to be flexible and how much affordable housing our private developer community can build and in many cases as mr. rich points out with city subsidies and achieve higher and 33 and 40 of affordable housing housing. the measure before us today and sets a floor of 25%. we are

again open to withdrawing this measure with the krawrl of the other measure as well and we know there are conversations with projects in the pipeline that depended on the previous formula and far enough down the road in their process where it would be difficult to change their pro forma. that is one piece of the negotiation. the second of course is what is feasible for the wide range of developments to build in the city? what can large and medium size projects do? of course we excluded projects 24 and under because we believe they can't build more than they currently do. that is really the conversation before us. i don't think in the room is trying to halt development or layoff construction jobs. what we're trying to do is push the envelope on the discussion what has become the number one issue in san francisco today which is

maximizing our affordability and building the most affordable housing and middle income that we can and these ballot measures kick off the dialogue and ensure that we have that conversation so our offices have already started meeting with the developer community to see what we can do and again i want to reiterate we can pass this all via ordinance as long as we remove both ballot measures that are before us at rules committee today. >> okay. i appreciate and hope that certainly there will be more discussion. i think the main question again is what kind of analysis was done behind the 25%. i will just say that i appreciate us trying to incentivize building housing for middle income, absolutely, but if there is a percentage that means that potentially we may not see that that is concerning to me so again i wanted to what analysis went into the 25%. >> mr. rich you had something.

>> through the chair if it's okay i would like emily to do what i said and a quick presentation. i want to comment on supervisor peskin for the land going to zero. staff hasn't said it will go to zero but below the current use would support and retail rents are high in san francisco. if you have a piece of land with a retail store on it or a parking lot that is worth a lot of money so it doesn't have to go to zero for development to stop, but just below the current value of the land and with lots of sites and commercial corridors you have i business or parking lot bringing in hundreds of thousands a year and capitalize that and get a piece of land and emily will show seven, eight million dollars and in many cases a developer under 25 couldn't pay them. that landowner will not sell the land so that's the issue. it's not

about a zero land value. >> before the presentation i want to ask are you saying that development cannot do 15% affordable and 10% middle housing in any scenario? >> no not any scenario but in many scenarios that's what we're saying. >> so you're saying in some scenarios it's impossible for developers to hit 25% and it's a surety. >> yeah, that's what i am saying and based on a surety and looks like many projects can't hit 25%. that's correct. >> all right. let's move to the presentation. >> i will be brief and i will go over the slides and part of the record and in your packet so as ken mentioned we had an economic consultant teed up for the feasibility study with the working group and do the

analysis of the 15% plus the 10%, the 25% proposal so to be clear this isn't the feasibility study but backed up by extensive research by the consultants and vetting by the mayor's working group so you find the report in the packet. it's also posted on-line at the mayor's office of housing and community development website. the consultants looked at a number of types and midrise, low rise and apartments and condos and studied the inr inclusionary rate of 25% and the in lieu rate of 33%. i will walk through one case as an example. it's a midrise apartment project so seven story rental building and assuming it has on site inclusionary and 12% under today's requirement and 25% under the proposed requirement, so just as the first exercise we want to show what a rate of return would be for this

project under today's market conditions so the industry standard for a return for this type of rental project is return on cost and it's a slsmcasion and divide annual revenue and the development costs and that's what an investors looks at when deciding to give money to a project or not worth it and give the money elsewhere so with this building and the 25% the preliminary analysis showed 4.nine return and substantially below what financial institutions are targeting today and i would stress is a historic low and based on the interest rates are today. so that difference between the foirntd 9% and the five and a half to 6 percent is significant and it

strongly suggests that a developer who is trying to build this project wouldn't be able to get financing. the project wouldn't be able to go forward unless of course they found a way to adjust one of the other inputs and the return on cost equation so looking at revenues adjusting the market rate housing revenues line is -- you know that is set by the market the affordable housing revenue is set by the inclusionary policy and based on the 25% in this case so they're not things we can adjust. construction costs are largely driven by regional factors and that leaves land and part of the discussion today so if uktd change you could convince the developer to go down in land value and change the value so that's what we looked at next. we took -- first of all we studied this project under the current rates of 12% and calculated a land value that a developer could reasonably afford to pay a owner and hit

the five and a half minimum return on costs. it came out $138,000 per unit and vetted with the mayor's office working group we found that was really in line with what their comfortable paying for land today. we then adjusted the land value -- sorry, plugged in the 25 percent affordable housing requirement which changed the top of the equation, the revenue line. we kept the return on costs constant and the minimum of five and a half percent and see how far land value would have to go down to keep that constant. for this particular prototype it needs to drop by 40%. again the land value that ken mentioned we described in the previous presentation for that same type of same piece of land, same type of projected retaining a retail use, you know that $8 million

value comes up about $130,000 per student so the 82,500 is substantially below what the land is worth to the owner running their current business. this is just one example in your packets and the report posted on line we show the land value changes for the different types and it varies by building type, by tenure type. and the feasibility analysis of course would explore that further. there is one more thing to synthesize from the numbers and how much a developer could pay for land under the new policy if they're planning on building on site unders versus the in lieu fee and what we found with the exception of one product type, a low rise apartment building, the economics will work notably better to do the in lieu fee rather than built inclusionary units. >> what do you mean by low rise

if you could break out the low and high? >> we about it based on construction type and why we segmented it and construction costs are higher when you get into a taller building type and it's in the packets. i believe we're at five stories for low rise and seven for midrise -- i don't have it in front of me and 12 for high rise is the minimum threshold. it maybe lower for high rise in fact, but in any case only when you have this low rise apartment building which will have the lowest relative construction costs does it make economic sense for a developer to do the on-site program and in every other case when you have the choice of 25% on site or 33% in lieu it makes more sense to do the in lieu so what we could end uch having is almost all of our projects deciding topate in

lieu fee and very few of providing on site inclusionary and as i said in the previous presentation we think would be a good policy is a mix to serve as many families as possible. that concludes this. i wanted to give an example now that the numbers are out there. >> thank you very much for the presentation. colleagues any questions or comments? okay. i just have one quick question. i know in this particular initiative measure there are three extensions from the requirement so for example one if they're on a site and a height limit has been approved by the vote of the electors. secondly if they entered into a development agreement and third if they procured a final discretionary inclusionary approval and i don't know if this is for planning staff or who else and wanting to know

what the exception covers and currently in the pipeline or why they're in here? >> good afternoon supervisor. john ram planning department. i don't have the numbers on that in front of me but there are a number of projects that received entitlements and meaning planning commission approval or staff approval that aren't yet under construction. they're in the process of being approved primarily through the building of inspection and i don't have the numbers in front of me and i don't know if we have them here either. with the other question that was certainly the exceptions they wanted to put in there. i will say i am of staing a working group and the mayor's request to look at which should be done and looking at entitlement application to actual entitlement so there's a range of options on the table

that we're discussing right now. >> thank you. supervisor kim. >> thank you. this maybe a question for director ram or ken rich, but in looking at an ordinance which is sponsored by our president and also our mayor which increases affordable housing in the viz dare i don't and fill more corridor and to 23%. i know this is in case where the developments elect to go to the higher density or height in the rezoning and i am curious that in kind of the greatest height or bulk that we could provide in this rezoning what would most of those projects qualify? would they be low rise? midrise? high rise? >> you're referring to the visadaro corridor. >> yes and fillmore. >> in that case the rezoning was not an increase in height. it was removing a density limit. >> okay. >> which we did in planned

areas so that had a dramatic effect on the area and what could be built on the site and the controlling factor is not the units per acre but the height and bulk and prop c allows us to ask for more affordability -- >> i think that's a positive thing. i support the direction that this legislation is moving in, but if we take out the constraint on the density what would most of these projects qualify as, low rise, midrise, high rise with the mayor's office? >> i believe most are below 65 feet so i guess midrise per your analysis if i have that correctly. >> (inaudible). >> they are low rise and based on the building type i guess. >> so we believe that midrise projects can achieve 23% affordability some. >> maybe it's low rise

affordable itd. -- >> i'm sorry. i don't know if that qualifies under the analysis. >> i'm sorry. is there a further question. >> yes. this ordinance states that certain types of buildings and elect to no longer have the density bulk constraints and reach 23% of affordability on site and i am curious to these developments and what are they, low rise, midrise, high rise? >> i think they're generally low rise and the zoning in there changed and with that you do as (paused)i wasn't

involved in that piece of legislation but this is voluntary. a developer would have the ability to look at going by the old rules and doing fewer units and the affordability and the density and affordability and it's a choice made. >> i appreciate that. but if you're putting forth legislation to increase the affordability and it's not symbolic and developers will elect to move the density constraint and build at 23%. that's the hope; right? so i then move to the next step is that you do believe that low rise developments can hit 23%

affordability, that it's possible? >> again it's possible. >> i heard previously was that you believe that certain types of developments could never achieve 25% -- >> supervisor -- >> and -- in other cases you're saying -- >> supervisor -- >> and please let me finish. >> and that's what i got from the presentation and never achieve that and we putting forth legislation that developers could do that. >> the situation there supervisor -- the situation there caught us by surprise. maybe it shouldn't have. the land was bought before there was a inc.ling of a zoning change and assuming that you had four, five story height limit and in that zone fairly limited

ability. out the sites and not like doubling the height. if you left the density increases the same but doubled the height you would get the same number of units and in a case there has been public subsidy conferred. it can take two forms. one is cash and one is more development capacity. these parceled doubled or tripled the capacity and therefore it could work, yes. >> what would prevent the landowners selling on the market with the additional value conferred? it would limit what they sell for; right? >> i didn't understand the question. sorry. >> you are saying that the land was prebought i think the assumption is that the landowners will develop because there is a wind fall and it's

limited (pause, change of captioners).

>> i'm hearing that we are actually in agreement in this room that what we are impact the the greatest when it comes to land based on affordability is land value. we have how we maximize this is actually grandfathering. the real issue is the grandfathering issue and not in the future where it will impact the land sale. >> in order to make that statement be true in my opinion you would have to assume that most parcels in the city could get a density bonus like the ones in dwis droe, when emily made the presentation she just made, she assumed a doubling, i think more in this case of a doubling of a

number of units done on the parcel. we said from the beginning, when you begin offsetting, it sometimes works. you could propose that the 25 come along with a doubling of the zoning and that would frankly be a lot closer in working with more cases. >> it wouldn't be fair to say that it's impossible for low rise projects to achieve 20%. it's possible, just depends on the number of factors required. >> it's a factor and in general a subsidy from the city from a development capacity. >> it would not be impossible ? >> with those conditions i just stated, not impossible. >> thank you. >> thank you, colleagues, any other questions or comments? okay. i'm going to open up for public comment. please lineup.

names names ( calling speaker names ) >> i'm going to call a couple more cards. >> committee chair, before we go to public comment. i have a question for you. i don't know if this was already proposed. i wanted to know if owd did a ballot analysis of this measure? >> that's what we presented. there is a report, a much more detailed report in your packet. we presented the review of that. >> did you answer my question? i didn't hear it. did you answer the question that 25% is not the right percentage? >> i think our position is

no percentage is the right percentage. we are hoping for many projects that might be built in this city. >> do you have a percentage that would work? >> not until we complete the feasibility study. >> how long is the feasibility study going to take? >> a few months. okay. any other questions? okay. seeing none, let's go to public comment. public speaker: hello. we are aware that the ordinance follows a legislation but it's a 25% requirement for the ordinance. if the ordinance is required for inclusionary housing. it will make matters worse. it's

important to ensure that the 25% requirement is not already too high. the information gives us no -- assurance that 25% is not too high. to ensure that any increase requirement for inclusionary housing does not mean that fewer units means inclusionary housing. thank you. >> next speaker, please. public speaker: we are encouraged by supervisor's presentation hearing today as essentially being part of our -- as being a bargaining chip that would drive negotiation with regard to more rational higher housing percentage.

>> i myself was astonished at the number. it could be easily higher. it would be higher in different degrees depending on circumstances so that it would be a calculated result and where and when and how much it could be increased. as noted we did a public records request and the information we received, the actual feasibility had been considered. we are not confronted by private assurances from developers to say something publically that i have usually said only in labor circles and with all due respect with never underestimating a capitalist stabbing you in the back. in the 1980s supported or opposed an extension of

an exemption for mission bay from the prop m requirements. so these are possible that with developers who feel they will be grandfathered in and the properties with more value and the rents higher after deconstruction of the measure that frustrates construction. we would ask you to take this into consideration. thank you. public speaker: good afternoon. my name is tony rodriguez. my mom and dad met in san francisco. they got married, they had great paying jobs and bought a house and raised four of us. i like them followed on with the american dream. i went to school here.

joined the union jobs that paid well. met my wife and got married and bought a house in the city but now that dream doesn't seem to be there for my kids. my two kids who are narcotics, -- nurses, they went to live outside of the city. my other kids can't even buy a house let alone rent a house. i am for affordable housing. what really scares me is this cat and mouse game. we are held hostage, my kids are held hostage and the rest of san francisco are held hostage by this game. i understand the need for affordable housing and the 12% being way too low, but to put forth something that the voters are going to vote on and not do a feasibility study. i don't understand that. the only thing i have seen so far is that it's going to hurt. every report i have read it says it's

going to hurt. so why the rush? it takes 10 years to approve a project and yet you are rushing through this like it's got to be done tomorrow. instead, do it responsibly, get the study out there. that's your job, not our jobs. say this is a good ordinance. you need to do that. be responsible, thank you. >> thank you. next speaker please. public speaker: hello. my name issalia from spurs. there is more information based on what we have seen. from staff, we do not think that 25% is viable. imposing this requirement will disrupt the production of many thousands of units that are in the pipeline plus units that have not been