to the regularly scheduled meeting of the san francisco planning commission for thursday, october 27, 2016, may sound off during the proceedings. and when speaking before the commission, if you care to, do state your name for the record. i'd like to call roll at this time. commissioner president fong commissioner johnson commissioner koppel commissioner melgar and commissioner moore we do expect commissioner hillis

and the- items proposed for continuance item one ab thomas melon cycle until november 10, 2016, item 2 an van ness avenue conditional use authorization is proposed until february 9, 2017, and item 3 polk street conditional use authorization has been withdrawn commissioners i'm also pleased to inform you that further on our calendar under our regular calendar item 16 ab chestnut

conditional use authorization and variance we've received a request from the project manager to continue that matter indefinitely also under our discretionary review calendar item 19 waiting to street discretionary review has been withdrawn okay any public comment on the items proposed for continuance. >> hi michael for the item 1 ab we have continued to do our outreach to the supervisor cowen office and at this time we'd like to request a continuance for the december 1st hearing. >> okay. >> and write down november 10th correct. >> right now november 10th december 1st actually is light enough to accommodate. >> okay. thank you. >> no public comment?

hello jody speaking for chestnut we've requested a continuance i heard indefinitely but hoping to get a date on the coordinated in may and right mr. harris over six months you'll have to readvertising we'll pull it off >> 6 months from today then. >> it will require renotification. >> i'm aware i'm trying to get a date on the calendar to keep things moving and you'll not have a problem getting a date and okay is there any public comment for items proposed for continuance not seeing any, public comment is closed. >> commissioner moore. >> move to continue including those that were called other not previously on the continuance calendar. >> second. >> thank you, commissioners on

that motion to continue items as proposed and just for clarity items one ab to december 1st. >> yes, thank you. >> very good commissioner johnson commissioner koppel commissioner melgar commissioner moore and commissioner president fong if the planning director would be so kind to be the acting zoning administrator for item 16 b. >> i continue item b that's fine thank you. >> very good thank you, commissioners that that motion carries unanimously 5 to zero and places us under our consent calendar are considered to be routine and may be acted upon by a single roll call vote of the commission. there will be no separate discussion of these items unless a member of the commission, the public, or staff so requests in

which event the matter shall be removed from the consent calendar and considered as a separate item at this or a future hearing. item 4 for case - mission street conditional use authorization and item 5 for case no. - octavia street conditional use authorization i have no speaker cards. >> >> any p.m. on the items on consent calendar not seeing any, public comment is closed. >> commissioner johnson. >> move to approve items 4 and 5 under the consent calendar. >> second. >> thank you, commissioners on that motion then to approve before consent commissioner johnson commissioner koppel commissioner melgar commissioner moore and commissioner president fong so moved, commissioners, that motion passes unanimously 5 to zero and places you under commission matters item 6 consideration of draft minutes

for october 16, 2016. >> any public comment on draft minutes public comment is closed. commissioner johnson. >> move to approve the minutes. >> second. >> thank you, commissioners on that motion to approve or adopt the minutes for october 16th commissioner johnson. >> commissioner koppel commissioner melgar commissioner moore commissioner vice president richards and commissioner president fong so moved, commissioners, that motion passes unanimously 6 duo to zero and places you on item 7 for commissioners questions or comments. >> commissioner vice president richards. >> just wanted to i - we talk about that every week about the future of cars and it's relation relationship to parking sorry - >> and i noticed in the chronicle business section one and 20 mile along beer run with

70 tons of beer in imperial county the driver was sleeping or sitting in the cab and the truck went by itself this is an indication of what is going on in the woshld will have an impact on parking and car ownership and traffic we should look at this when we talk about parking and cars another example that was in the press yesterday. >> do did you see that two? >> commissioners, if there's nothing further, we'll move on to item 8 your 2017 hearing schedule for our review and adaptation i realize it is early we generally take it on in the middle of december but given your advanced calendar how helpful it might be wise to get dates locked in to fill them i

forwarded each of you a proposed 2017 hearing schedule to - as well as a list of holidays and when their observed i included january 5th we'll be coming off a two week break for commissioned and new year's and far enough away from new year's i feel we can hold january 5th so the first proposed cancelled hearing the first fifth of thursday the second proposed cancelation is april 20th for easter that is following the easter holiday or choose april 15th prior to the easter holiday in may, may 25th memorial day and the 5 is property to be

cancelled here's where you might have deliberations last year for the first time i cancelled three weeks for summer hiatus i'm sure you enjoyed that it came at the end of august and the beginning of september so for personal reasons as well couldn't have been possible with the board of supervisors i'm suggesting to take the first three weeks of august off my kids go back to school in the middle to late argue it will benefit myself personally but if you want to choose the last two weeks of august and the first of september that's fine it so happens that september 21st is - what is it ranc

ranchotion - and thanksgiving for the fifth thursday in december 30th and for the christmas and holiday cancelation looking forward suggesting cancelling january 4th of 2018 and those proposed suggested holiday cancelations and the fifths thursday cancelation you, you can do as you, please a cough if you that the chinese new year is you do understand on january 28th you'll cancel january 26th and wanting day if you choose to say a cancelation date in either of the most. >> just maybe for first of all, thank you jonas for putting this together and to the new

computerization a little bit of the policy to stack on more meetings to cancel them if they're light or combine them to add them back so it's been a little bit of a tradition to load up on the tradition dates by nature some will fall off. >> commissioner johnson. >> thank you very much and thank you jonas for giving us not only the hearing schedule but the list of holidays some of those in here i've not heard of before. (laughter) to commissioner president fong comment i think a a minimum we should consider adding back november 30th a cancelation the fifth thursday after the meeting cancelled for the holidays and it allows us to realistically get to taking the last two ones off i suggest that in terms of

the summer i am for whatever 3 thursday period we want to take i'll note that the 31st is the thursday before labor day that means nothing in particular to me it is a 3 day weekend but highlight that that's my one suggestion definitely be back on november 30th >> thank you. i'll make mention i appreciate the three weeks in a row and appreciate and it will support having that in later in august in september. >> commissioner moore. >> thank you jonas great work great to put something forward and have people examine it i need to commissioner walton with any family that is actually a schedule that can't be chosen or object or approved so i said i check dates because three weeks

sounds like a good idea but maybe other reasons to switch it like commissioner johnson just described that like in general to have we don't have to vote today i'll appreciate we don't. >> commissioner vice president richards. >> i'm happy to say the three weeks off in august that's an incredible gift this year to us what as fresh i favor the three weeks in august i came back from the russian river and take that three weeks in august that was a bear the other question i'll throw out i'm happy to add the bear weekend that was a real bear (laughter). >> we got it. >> i had a bad hamstring thursday, november 30th i'd like to swap that for sometime in

february without a break from march to august. >> what's that. >> like the 16 off this why were around president days a bet of a nice break. >> so suggested i realize it so the chinese new year january 28th and presidents days on february 20th. >> i like president's day that coincides with a federal holiday. >> that's my $0.02 and february 23rd. >> okay. >> commission oh, go ahead. >> commissioner hillis. >> i want to echo i'm not sure when - i mean, i have kids in school i tend to take a break in july or early august and have to miss the meeting and work when they're out in school so it that

coincides with the school calendar that would be helpful. >> commissioner president fong shall i open up for public comment. >> well anyone is listening we're talking our personal calendar but the person to try to get a large quorum are full quorum the purpose of this family discussion is for that purpose. >> commissioner moore. >> commissioner hillis because of the prohibition of your microphone i couldn't hear. >> i was overlooking the august or in july for the three weeks instead of late august school starts in mid-august. >> opening up for public comment. >> in all seriousness you should take july, august and half of september and relax and

have a good time. >> (laughter). >> i'm serious think about it. >> really. >> next speaker, please. >> on this item - thank you. >> sorry open up for public comment. >> public comment is closed. and i don't know if we need a motion we'll continue this and bring it back up. >> if you continue it we should - yeah. >> an action item. >> yes. review. >> a motion to continue this discussion. >> to next week. >> second. >> thank you, commissioners on that motion to continue this matter to november 3rd commissioner hillis. >> commissioner johnson. >> commissioner koppel commissioner melgar

commissioner moore commissioner vice president richards and commissioner president fong so moved, commissioners, that motion passes unanimously 7 to zero and commissioners that will places us on departments matters director's announcements. >> thank you jonas commissioners, i want to make a couple of comments about the transportation to demand management tdm you in an amount voted to support this legislation in august and adopted the program standards and we had anticipated i think as you may know that legislation would have moved by now it is not and the hearings not scheduled at the land use and transportation committee and we don't think that will be scheduled for a couple of weeks the effective date of the ordinance is later on we originally he hoped last week you requested the project sponsor on van ness to meet the standards that project sponsor agreed to do so i wanted to

inform you given the importance of policy and your support and the direction you gave it project sponsor last week as well as how those policies are supported in the general plan planning code i've asked the staff to look at the tdm measures and work with the project sponsors to best meet the standards even if they're not technically required to use the existing policies that you put forward in the general plan or planning code to support the measures in the tdm ordinances and maybe those projects can't be specific count, if you will, the point system but we believe we can work with them to get as close as possible to meeting the standard in the tdm ordinance he said to give you an update on that program thank you. >> thank you commissioner moore. >> director rahaim i have a question back to the eir we're given today, i on the basic

assumption of evaluating the impacts you were saying will that deprecate policy matters in the eir i wanted to clarified i was so happy to see the new way of thinking how they're looking at eir draft eir issues. >> yeah. i was - remember 3 parts to the program one rfp los and the third the tdm the transportation to demand management program so that tdm program you recently voted on and not effective the board has not scheduled hearing we're in the period he r we have projects in the office that we thought would have been subject to the new orientals but it is not effective we're asking them to

meet the policy continued as we move forward they're not technically subject to the ordinance yet. >> commissioners, if there's nothing further, we'll move on to item 10 review of past events at the board of supervisors and no board of appeals report and the historic preservation commission didn't meet. >> hello, i'm standing in for any fearless leader aaron starr at land use committee two landmark designations for ocean avenue also known as the presbyterian church and the great cloud of witnesses this ordinance recommend the approval for the landmark designation that was designed allergy the locals architect in 19 if the ingleside church is for known for its architecture and significant for the mural

collage entitled the great cloud started by reverend in 1980 that he posted mohammed ali and intended to inspire people they may not read the black history books but the wall reverend has work has grown to many rooms in the church by media and primary newspapers and other objects that includes the rooms dedicated to the history and most entertains and performances and politicians it standards as the largest executed folk arts dedicated to the role models in the country the historic preservation commission initiated the definition on may i 2016 and on june 1st, the historic preservation commission conducted a site visit and unanimously vote to recommend it based on the distinctive art one

speaker spoke in support and went to the full board the landmark designation was maiden lane the morris gift shop sponsored by supervisor peskin in 1975 the building was landmarked and in that ordinance the landmark said that should be preserved in all the exterior features but not list them in any amount of detail and not include the defining features as part of landmark frankly the morris gift shop breaks the rules instead of an open floor plan the facade with tunnel entrances gives no images - with the distinct sales areas that is the first building to be conducted that has become the

favorite shape the spiral that dominated his work the morris gift shop was the first park in decades the design piece he used in many of his work the influential art and other buildings the d c morris gift shop was the only one realized as a rare modern designed building the hpc dedicated it and conducted and site visit and recommended that at land use one speaker spoke in support and forwarded to the b full board with support. >> the land use committee heard the two ordinances you've heard a few weeks ago together those owners will strengthen the advertising enforcement

penalties and align with the fourth amendment for the species and have better issues and removal of language that commission considered into ordinance on september 15th and recommended the support with 3 minor modifications that included eliminating the reference to the candle stick point and the definition to include one banner and the historic sign since the planning commission supervisor peskin asked for the modification did committee meeting was short and forwarded with a recommendation of approval to the board of supervisors. >> there was also a hearing on place for people programs sponsored by supervisor wiener that amends the public works and do. please note: any of the members may speak without taking and ordinance for people to all short-term and community driven and parklets and inner prototypes it was lead by the

planning department through the pavement to parks and partnering with the sfmta, the daems and the entertainment commission it was sponsored by supervisor wiener to the do. please note: any of the members may speak without taking that will lower the - resource to increase the public paerpgs and meaning for the graphic distribution in all neighborhoods and enable for activation for the increase of public and streamline the permitting and agency right-of-way processes by establishing a clear and transparent sequence of approval by the agencies and create self-financing opportunities to better support stewardship and define the perimeters for terms and enforcements the ordinance officially codifies the historic roll in leading the supergreen agency pavement to parks and the earlier programs the planning

commission heard an informational he presentation on the legislation in april 2016 and at a point you gave support of proposed legislation at the the committee supervisor wiener introduced minor amendments such as clarifying the of relationship of the admin public works to the transportation code and the role of public works in the mta and that is for review the committee review was held by many organizations speaking no support and the committee forwarded with the recommendation to the full board of supervisors supervisor wiener also plans to introduce a trailing piece of legislation for the permit use the department would last week to have a fee structure to lower the costs for nonprofits and other groups at the full board the planning code passed the first reading the summary street vacation and temporary navigation center passed 2e9s second reading

and the planning building code the better roof requirements confusing the living room passed the fdr and rh1 and rh2 and that was adopt in the general advertising and sign penalty was passed on its first reading there were several introductions as well as from the board of supervisors one was planning code for potrero avenue and initiate and supervisor yee introduced a planning code amendment for designated childcare a trailing legislation to the childcare and childcare unit that he introduced on october and finally several peeves legislation related to the development and planning code changes for the potrero and sunnyvale for the hope sf and the project as you may know was to replace one thousand plus

public housing unit in sunnyvale and created housing units and additional market-rate housing and 92 thousand square feet of community retail as well as community childcare facilities supervisor campos and the mayor introduced legislation to address a small sized program with the market-rate housing for 25 units or fewer to designate their fee to the program. >> any public comments. >> i'm delighted to see the francisco could building with the exterior designated commissioners, if there's nothing further, we'll move on to go to general public comment not to exceed 15

at this time, members of the public may address the commission to the public that are within the subject matter jurisdiction of the commission except agenda items. with respect to agenda items, your opportunity to address the commission will be afforded when the item is reached in the meeting. each member of the public may address the commission up to three minutes. i did have a couple of speaker cards. >> (calling names). >> good afternoon commissioners last week when you had the udg informational i think you had a really good conversation about that i want to the udg website to see when the next meeting will be there's that language of udg overarching guidelines for design in the city i know that we need to consider having the udg done on a parallel track the udgs are in pretty good shape k3i79 what the

community is talking about but the r d g people are not be as upset of the overarching guidelines and you going to reapprove that originally only because community got involved that was changed as an informational i suggest that the r d g which is sponsor to so many neighborhoods be considered on a parallel track and not wait until the spring ever fwhefrn thank you very much. >> good afternoon, commissioners public school commissioner president fong and fellow commissions anastasia a noah valley resident i was leaving the noah valley library other 6 o'clock on tuesday and peaked into the meeting room i said what is going on it happened to be a

preapples to apples meeting for a property on 23 street between guerrero and van ness e valencia i was occurs. >> saw my name and sat down a developer the real estate agent and the two architects and 3 people showed up neighbors so i had some time to ask questions and the thing we want to bring up that remits to georgia and the start time is comment that building will replace a single-family residences with 4 story situation underneath for a garage and garden unit, a floor through unit and two townhouses with individual roof deck on top on 23 street you saw the

streetscape and all that is a glass building floor to ceiling windows entirely of glassy ask you if you get the residential design guidelines is this addressed maybe it should be last week georgia showed you guess a picture we agreed look at this thing on valencia street with glass why are we not looking at the residential design guidelines and have those projects coming up and why is many townhouses being built is that a demolition they say an alteration okay this is what i want to bring up you should look at the r8dz because what we're getting the end product that comes out on the street are not things compatible with your

neighborhoods thank you good afternoon rob pool and my first time speaking before you commissioner melgar and commissioner koppel you got the fun room so i want to bring up a topic you may or may not have read in the papers recently a local developer has an idea for the housing for the homeless the housing path one and 60 foot modular seeltd units they believe a financial way to build those can have an impact on what is a chronic problem and other urban streets of san francisco around did country he's patrick the developer is bringing a demo

unit outside of his office on 9 and mission street starting starting monday there for two weeks be maybe longer for the public to see and walk inside i think that is clearly explained in the media there are challenges to bringing these units to the city and we need to work out we rarely have an opportunity to walk inside one of the homes you talk about while we're here this is a tremendous opportunity for you and he general public comment to look at a problem we see everyday in the city you know as we move forward i think what is most important to keep the context in mind where we're coming from in 2017 we counted over 66 hundred homeless people in san francisco that was

up from previous years and spent 200 and $51 million to address the challenge we have dwindling subsidies to build homes for those without a home and construction costs continue to rise if there is financially a viable plan out there that provides real homes for people 80 that have no access to one it deserves our attention so we highly encourage i to check it out and thank you for your time. >> would you, please send me veld the dates those will be demoed. >> great, thank you. >> good afternoon, commissioners lisa president for the neighborhood association we got an e-mail about the planning

department's upcoming workshop for november 16th when i read it over i was actually kind of shocked and appalled that the language will be the overarching documents for all design review in the city was still there and not only that that is still on the website in two places sfaerth and the informational hearing on october 20th and other meetings i've attended i thought there was fairly extensive discussion and, in fact, you have brochures in orange and blues showing the zones the udg will apply in the residential residential design guidelines there anyway, i would really - i was decimated to see that work and really, really ask you to change that back to the agreements that

have been made thank you. >> good afternoon, commissioners peter cohen i'm compelled to speak in public comment by mr. pools presentation from the housing action coalition i wasn't going to speak i want to make sure you've read about this issue of modular housing what mr. pool is referred to have substantive we're talking about non-union build on or about in san francisco all you are avenue is built with prevailing wage and is a wall to wall union project going to modular housing the housing is built in another state or offshore changed that conversation not an easier thing to solve we don't want to be

trading affordable housing and the next is free land from the city city subscribe so for this particular subject that raise the affordable housing development community in this conversation as far not invited that that affordable this is an interesting creative idea by a private developer out of berkley but adding to the way we do affordable housing in san francisco affordable housing developers have the experience in that world should, part of that and two-thirds an important question when it comes to the homeless population service providers one 0 thing to provide the homes and the service context is different and pathways out of homelessness and step ups those are difficult elements of providing housing and services so for homeless populations need for part of the conversation i'm going to checkout the modular building but ask to you think about the

building affordable housing but also providing the service packets and the pathway for personal development that is part of providing housing for the homeless thank you. >> okay is there any additional public comment? >> in any order public comment is closed. >> commissioner vice president richards. >> a couple of things on the udg or r d g director we were here last week and one of the thoughts staff is commented to go to the neighborhood and getting us all the ferry building he made a comment to mr. dawson he noted in response while you're out there instead of doing two mooefrg but get feedback from r d g and the second one was in the

presentation it mentioned there were udg complimentary i think it was said some gray areas but thirty other residential design guidelines i was trying to understand what necessary recover with the r d g and udg and 3, 2, 1 maybe call those on a few residential design guidelines i didn't realize there were 32 thanks. >> commissioner moore and regarding the modular housing i've schedule an appointment to seeing them on tuesday i was on the commission for the student housing the first student housing project on 1321 mission street two possibilities and will see them for informational purposes in addition to the questions that

mr. cohen raised is a question of architectural quality that going beyond a modular unit together with open space and other side amenity that need to be put into a larger confusion and there will be bigger size but later for a future discussion i have questions and a lot of curiosity to see that the idea of modular housing is used and been used successfully there are student housing modular in the growing enforcement to larger european place i think i talked with director rahaim if i recall that correctly and in addition the modular unit part was very, very useful at the fantastic exhibit

inform southern california actually in santa monica the devil is in the details as i often say and commissioners, if there's nothing further, we'll move on to your regular calendar for item 11. >> inclusionary housing workshops informational presentation. >> good afternoon commissioner president fong and commissioners kirston planning department staff a citywide division the item before you is purely informational on the phase one of the support analysis of inclusionary housing the planning commission requested this informational hearing to keep and i breast the advisory committee and the results of the study as you recall the prop c support of last spring called

for a comprehensive feasibility analysis with the planning department specifically the legislation stayed as part of planning code section the board of supervisors whether consider for the inclusionary housing from the planning department based on the feasibility analysis with the guidance with the city nexus study so today ted egan the chief economists will provide the first phase of analysis as you'll find several recommends in the phase one most of which were unanimously supported by members of the pack additionally they called for research in 3 areas with the bonus law and the date the inclusionary rate will be effective and the discussions with the pca apac was the first

meeting on october 12th and the pack members are confidence that the phase two the city will have adequate information to establish a colleagues, can we take that without objection? program that, ma'am misses the production in a variety of zoning conditions throughout the city without further ado, i'll introduce ted egan thank you >> very much kirston ted egan from the controller's office i've been the project manager and briefly lay out our process and recommendations are and our on-going work and i'll be happy to answer any questions you may have. >> any of that kirston went through the prop c requirement for the feasibility studies and i'll start by talking about our process we

began this summer so contract request quality firms with looking at the feasibility issue and wound up contracting with 3 consulting firemen's with 3 entrances of research century urban does underwriting research for developers in the city and supported is the mayor's office of housing working group that was an important part of team helped us to understand the impact of the residual land use and blue sky consulting is an connective firm they've built a rather large and expressive mold that stimulate how changing inclusionary housing fees will effect the likelihood of development and what's the trade off been higher fees and production in the city and third-world we krabtd with an

internationally known person with the principle of the best practices research how other cities approach the study of colleagues, can we take that without objection? program and had a series of monthly held meeting from june to september at the september meeting we asked for opinions and voted on the remains that came out of our research i'll turn to those now so we essentially agreed with the pack on 5 recommendations i'm going to go through them and briefly discuss the research that supports it is of the first is that in contrast to the way it is done in san francisco in line with how it done in other places we propose it has

different colleagues, can we take that without objection? for rental projects the reason for that is because the underwriting research found the condominium projects are in san francisco, california support and higher fee so we recommend that the city has a two tier approach for both onsite and in lui projects for onsite i'm sorry for ownership and rental projects so that is specific recommendation was unanimously adopted or endorse by the pack, and, secondly, based on the underwriting we century urban and the blue sky model we recommend the onsite requirements for ownership i'm sorry for rental start from the range of 4018 and ownership for condominium in the range of 17 to 20 percent the way we arrived at that to

look at what land is selling for on a per unit basis as of 2016 obviously with the growth in the city's economic and the growth in the housing prices in the last 4 or 5 years land it trading highly and the parcels that are potentially developable are looking at higher returns then several years ago it was our belief we could raise the fees that has the effective of the prices for those parcels as long as fee didn't reduce the land value to blow that was in 2012 that that would not adversely effect the landowner selling to developers we thought the land what driven to blow envelope that will a.d. vefrl

effect the likely hallowed of a land transfer why do we reach that conclude at the bottom of the housing market landowner were saying not to delay an off-road less than one hundred thousand dollars per unit per house they'll certainly not say yes to less than one hundred thousand dollars per unit in 2016 or any point in the future again, the owners of those papers are considering not only what their worst as potential housing projects but their existing use as the economy grows their use increases in many cases their value of housing will be more you don't want to choose a fee that requires a developer to bid so little for housing it is worst more in the current use that's the way the level is too high

and you lose all the inclusionary housing requirements so that's how we arrived at the recommendation at a high-level of 14 to 18 rental and 17 to 20 percent for ownership he realizes those are broad ranges given the conversation but we don't have a tremendous millennium of data what century provided was what was transacted going back several years we don't have a great deal of of status for different types of projects so those reflect an average cross the prototypes that single e century urging looked at this roves as a level we're xhofkt the city will not be adversely or creating a high likelihood of housing not moving forward and an additional

feature of the recommendations the city commits to a phased and consistent increase in inclusionary housing requirements so forth time over the past 15 to 20 years housing prices in san francisco and land values are increased absent a couple of years in the great recession as housing prices and rent grow faster than construction that has the inclusionary prices that housing can support and therefore it is reasonable to think that projects in the future can support more than they are today, we felt and again, this was something in principle it was unanimously endorsed by the pack oh, the developers in the land development those are what the fees will be over a 15 year period is a significant

improvement over our approach to the policy now even if they're increasing so essential our recommendation is given the past trends on the relationship 2w7b housing price growth and construction cost growth that projects can support an increase of .5 percentage points a year if it starts at the 16 percent in the first year for 16.5 in the next year and 7 and stoeshth we're recommending the city comment to a 5 year phase there of .5 percentage points a year those are the 3 main recommendations that come out of our research in the first phase we also have a recommendation that if your changing the onsite requirement the city needs to chance the in lui fee we'll take that on in the fall and additionally, there is discussion among members of pack and the general public

comment that tend to be meeting regarding the ab 20 projects we're recommending that the pack endorse the idea those projects need to be there the city recommendation and therefore we're not specifically adding two additional requirements on the assumption every project will be that way there were 3 items we felt we needed to have more understanding and more research time in order to complete and he will just mention those now and what we're planning to do of each of those the first the state density bonus program that is complicated and for the essence of this issue as far as is relates to our work the taking the state density bonus program leads the developer to

have more bonus manifesting without it that decreases the possibility of the project and in principle probably in reality increases the inclusionary requirements that project can supported the research that we are conducting on this to try and understand what is the level of additional onsite requirement you must do opt out in order to get the state density bonus program and the onsite requirement pa makes a project or developer essentially inner different 24/7 the taking the state density bonus program with a higher inclusionary requirement and first of all, not taking the inclusionary not recommending that level but that data point is going to be an important input into the decision i have to say this is a complicated question in terms of making policy recommendations for amongst other reasons we

don't feel we have great data on how many developers will take this and it is in early days for the adoption of density bonus program we've heard from the planning department some but not every project even if they're entitled to it we don't know how that might change in the future so issues that are also we're considering as we think about how to make the recommendations around that, and, secondly, the onsite remits requirements are bans what we call the prop c income levels 60 percent of 50 percent of ami and below and 40 percent of subsidy going to households of 80 percent and below we adapted that those income limits that is the subsidies is essentially a matter of convenience to allow

us to do this work we're not making a recommendation that those are the right splits and the right income levels we're also going to try to create a memo of option if if so the the mix you want to see those are the in lui fees you should be starting off regardless of the income levels the 5 percent annual increase in requirements is something that the city should move forward regardless of the initial income my look like and then finally on the plate for phase two from the city is committing to phase increases annual increases to be inclusionary requirements it matters more than it had in the past when in the development process those requirements essentially invest and so this is something where we're relying greatly on the

insights of planning department but making represents 89 city be clear which the development process a developer will know and the public will know when the inclusionary requirements 19 are set that's my brief overall and i'll be happy to answer any questions you may have. >> okay. thank you mr. egan we'll open up for public comment any additional questions okay open up for public comment on this item. >> public commen >> hello my name is teresa imperial from the housing program and i would like to make in suggestions on top of the tax adjustments as well

we've notice that there was a lack of analysis when it comes to sensitive neighborhoods what we mean by sensitive neighborhoods our neighbors neighborhood are experiencing displacement such as admission and south of market and tenderloin and we would like to see more analysis in a way to increase the inclusionary the prop c inclusionary in it also i know it is just recently been discussed about the onsite collaboration of 60, 40 he heard that today the they know is that we with the prop c legislation the main thing about 3 to make sure that the 15 percent is for low income we want to make sure it takes a

hold onto that we want to take back from the along the prop c and that still we want to make that it should be the main requirement that the 5 percent allowed for low income households and also when it comes to the in lui fee we want to suggest the methodology that is based on oust development costs not on the sub decided cost but what it takes for a developer to build a unit how much doesn't a unit cost that's the amount that we put in the in lui fees those are the suggestions that we would like to make thank you. >> thank you. >> is there any additional public comment? >> good afternoon, commissioners peter today i'd like to make a

few comments on behalf of the economic development agency and echo some of the thoughts about sensitive neighborhoods i think that interesting the analysis of that that draws the 15 to 18 percent conclude on the surface means with the 2012 levels he wanted to point out one aspect like the mission we're seeing right now an enormous amount of projects like 24 or 25 anymore units on the way picture 50 something development we're seeing some of the projects another many, many higher numbers what that points to toss not by any means an analysis that works across the board the willingness of developers to build in neighborhoods we want to think not only to think about

protecting areas that are over built and facing higher levels of displacement due to this but also what is that do in terms of neighborhood to neighborhood there are other neighborhoods; right? in their simply not building plenty of opportunities to build i'll suggest not every single housing project needs to go forward not a suggestion of stopping but there are financial lines all over the place so in the lennar project does 25 permeation now that is significantly over the line other neighborhoods are not building i'm suggesting a policy decision making to where are we can. >> how we're protecting the sensitive neighborhoods right now i even that the state density bonus program we're seeing it start to ramp up and director rahaim can acknowledge that

there are more people finally doing 2 we don't know how pa fast and furious the 18 street project they're coming online the new normal as developers get used to building that into their numbers i think that - the last thing i want to say the 55 ami when you think of the sensitive neighborhood that's what we're tracking in the mists by oewd was 78 surveyed were making 50 thousand or less that's who is on the ground we're looking out for and who we want to think of

that 55 number thank you. >> good afternoon, commissioners peter cohen, san francisco council of community housing organizations. we submitted and brief memo by e-mail and i brought copies for the commission and staff i'll attach on a few points in the memo you have a few seconds to grace over that the two items he was to emphasize the importance of the controller's office talked about in two which are not in there the first the state density bonus program a significant issue and in the recommendations of the report is a significant issue and likely to have a significant potential increase in the inclusionary an item that needs to be resolved before we get to the sweet spot i'm claesht that that is a top

priority and the inclusionary fee the controller didn't disagree they need to be adjusted we can't do that has a second step but dysfunction simultaneously the only way our inclusionary program can work properly all the choices they have a leveling the fee is a cheap way out for developers self-we're lagging behind while tifrlg with the policy discussion we're continuing to have an sensitive fee out that will need to be accelerated and catch up the two items not included in the remedies were brought up by the pack whether their sixth or one whether the inclusionary requirements should

differ by building to thatly some of you know a 5 story stick frame building in the excelsior or the southeast has a different inclusionary requirement than the three hundred or 4 hundred luxury tower in downtown san francisco the question how much of that difference the same exact inclusionary or slightly different we felt it needs to be looked at further particularly for the tall building a provision for the inclusionary in the bottom 2/3rd's of building you folks know that the top third is a requirement and lastly the issue of the sensitive neighborhood you've heard from the previous speakers san francisco is not a 234r59d landscape the gentrification is

immense what is the argument for the counter gentrification measure perhaps a larger land emphasis i'll be happy to answer any questions you may have. >> is there any additional public comment? >> >> in the first place public comment is closed. >> commissioner moore. >> thank you mr. egan the complexity of what you're doing are mind boggling can i ask a question the question has to do with with the simple fact that under this commission we are seeing increased neighborhood push back for developers of not including onsite affordable and fee out or passerby in lui fees are the correct word my question the process of methodology by which are applied can we guarantee that they're not

insensitive vision zero but on the semen vision zero suicides we've running out of plant and for those 100 percent affordable we're having fewer and fewer abilities to go into a market where we pay higher prices and release the developments the second part from what i hear the preference to have the blended neighborhoods why where we have all income levels that is typical hiv as now for the composition of how san francisco start and we are still today. >> thank you for your question commissioner you you know as we've considered your kind of prime task of was 2 the maximum inclusionary requirements we can require without jeopardizing the feasibility a number of kind of

ancillary policy objectives have been brought into the decisions you've heard them and raised something related to the onsite issue we've heard another side projects where you rather have a pay a big fee rather than after hoa fee and a lot of complexity when you want onsite or generally wanted to encourage offsite or onsite our office approaches 24 we have a lot of complexity handling the basic questions of finding the sweet spot and adding to that question wherewith the right income or promoting balance developments with onsite or not i think that the way we're going to handle that the controller's office is to be clear a what you are analysis says and didn't say and

not represent our recommendations as the right answer for everyoneers concerns of every issue that's a great question we're not experts on what the right way to land ton to question we'll not make a fee recommendation go on the basis of promoting onsite versus fee but to a developer this fee feels like this onsite requirement those two are dental e identical and that's a data point the decision makers will look at go when they look at realty. >> commissioner melgar. >> so you're not off the hook yet i have a comment and also a question so i totally understand what you just said it sounds reasonable i think for that us that is slightly different; right? i think that sometimes as planners

we tend to think oh, technical issue when in reality when you're talking about land value what the market will bear and the result of decades of racism and lining and inclusive policies it is complex as a result of your society you know stiff stuff. >> so for us we're thinking about inclusionary and dealing with gentrification and all sorts of things we need a nuance historic understanding of the land values and what we're trying to do in neighborhoods workplace said you know, i understand that what. >> presenting insisted i'll welcome a decision what that means in terms of the fte inclusionary i want to see what that looks like by neighborhoods

i think that having you know one tool you know like a hammer to build a house; right? but other things off the table i'll be interested in seeing you know what that means for the southeast and neighborhood and the mission and the west side to have 5 and 25 percent i would think that it is you know different and also he welcome a discussion that if we are doing you know return for the investment that is asked in the neighborhood that is historically having land suppressed because of land value for the developers to capture that is that the based on the suffering in neighborhoods for decades as opposed to somewhere else thank you very much for the hard work and we have work to do taking our numbers but would

like you know a little bit more nuance with that. >> okay i can speak to our question about geography it was something that started on the plate at the start we were not sure to you u how to handle that we went down the road and had a consensus with pack not to do certain things that's where things are now we start from the question of looking at geography bit considering when we are talking about different neighborhoods we're talking about in many cases different types of building under the planning code when you talk on outer neighborhood for our purposes a type of prototype and not a 20040 feet high-rise tower we approached it do we want different requirement for different prototypes that effects will that be different

neighborhoods or the neighborhoods would be a proxy for that we were building off the common sense notation that peter cohen said that that make sense a taller building should support a higher fee with a higher land eventual value the research and the two consultants did that modeled this separately reached a different conclusion the 1ir7b9 urban consultants felt the relative spiking construction costs happening for the highest buildings that at present they don't support the idea that a higher building will support a higher fee and no trend in the prototypes and there were differences another reason a 14 to 18 and 7 to 20 percent range no clear pattern this prototype supports a lower

fee than a lower unit requirement we went down the road and it is 55 percent project in 2, 3, 4 city able to support different because of the rents and the prices are different not down the road a road that can be gone down. >> the team from blue sky team which parcels were added from 2017 and characteristics and the prices or the market conditions that loudly it to happen they found the bigger project that had actually more sensitivity fees than lower projects that was counterintuitive to us but backed up with century urban informed those projects are more

less likely to build from the slightly increase to a lower project we can explore o that in the future but that's what we found as far. >> commissioner vice president richards and mr. egan great work. >> i guess the mother of all issues on your page 2 the recreates of return on equity is that the rationed guidance or the key holes trying to pull things backwards is there a standard rate of return is that thirty or if i'm in singapore or tokyo why would i want to pay money here. >> i riled on our consultant not as the person that did this the feasibility of a project for the residual that is the rate

of return a key source of feedback the pack provide to us and makes a difference where you approach the rate of return what's called trending or untrending that is to say - at the point at which you have the project if it is a rental project for example, making money or looking it from the day i build it and ios kinds of assumptions are important we had back and forth between the consultants and members of pack it seems like the pack was okay. they thought that might be aggressive but it does you know to our question it reflects the fact that housing in san francisco has to attract capital like other kinds of investments or housing anything else and a

developer can't put together a project and get it financed without the rated of return. >> one other dimension of the rate of return coming from a fence background is reflex i've had people say to me two years you build it and sell it and make a fortune given a no risk proposition the rate of reflex should have been lower what's you are thoughts. >> that make sense i think that probably did our consultants drew their data from actual projects they basically surveyed existing developers and the developers and the people know about development on the pack talked about the numbers and what you are using i'll agree that san francisco look at a less risky development the

rate of return should be lower we were satisfied the consultants did due diligence. >> one other question piggybacking i'm a developer i see things as a moving target prop c if i provide certainty to the provider that will reduce the risk push down the rate i don't know the question i don't know understand is the rate the same everywhere in the world do you know that. >> i'm sure it is not. >> i'm sure is varies and it varies with the officially market conditions when the market-rate rise we can't engineer that rate i'll certainly is a if we can work to reduce reflex in the development process or even reduce risk in what the

inclusionary retirement is that helps but we don't determine the risk associated with building in san francisco a much bigger market does that we will be fed illegal at the margin. >> can you or your team shed the light on what other places do that will be educational that is a standard rate what do you mean is that standard for california or the union station this is maybe something people will be interested in hearing a couple of other questions why 2012 to bring the recespiration like you sayou said the. >> if it was $200,000 a door

people are assessing not to delay $95,000 a door at the lowest point the idea if you put the inclusionary requirement up to a point developer will bid $95,000 a door they'll much likely to get yes when the price on the property it generating and supporting a higher rent that is it really is not - that's the level of science but a belief that was expressed among the members of the pack that it was not equitable to expect the landowner to be entitled to that additional 4 years of windfall that surplus is what the city will devote to affordable housing but sprinkler from our level of what maximize

of feasibility it can go blow the 2012 numbers the risk is quite high. >> one more question we saw a huge downturn in the housing market people's homes were won't 6 and 7 - you see that kind of like economic behavior inland here it used to be worst will it be worth that again i'll hold on to it and sell that. >> in 2009 they did that but 2012 they had a different attitude towards that that is a real estate marketing tactic it may work but the experience that a lot of people wound up selling their houses as at a loss but

there are signs in 2016 the housing market is going down fundamental in the connective that is not just a whim. >> i'm a developer this whole in lui versus onsite in lui is 20 percent to the face of it a normal person on the student the 23450u fee is more expensive why did the developers find it for attractive an fee. >> i'm not the person to answer that question we did a little bit of research who did the onsite and offsite versus the in lui it was not overwhelmingly in lui fee it was contrary to exceptions and maybe we're thinking about more recent years and looking at a longer

time period it maybe how the fee itself is calibrated that came up in one of the comments and getting to the costs of construction but again i'm not the person to ask. >> to clarify more build onsite than in lui. >> no, but extinguished to exceptions i was surprised by the amount that was built unit looking at a wide period of time i don't have in mind that exact chart. >> okay thanks maybe ask the developer can you come up a second. >> i don't would anyone want to do the 20 percent pay out rather than the 12 percent. >> it costs 5 hundred to 6 homicide told us to build onsite and the in lui is 200 and 75 thousand it is roughly double to

do it onsite that's why so it sounds like the in lui is much more expensive it is less expensive. >> you're the developer we're at a point our indifferent the same onsite or in lui what would you choose. >> it is complex san francisco i think interests a lot of forces and we'll talk about as developers in san francisco your job is not only to maximize but certain thank you and why we should have lower there is a political process in san francisco and helping to manage that certainty to help do the community likes to see build onsite so you, you may shrink our bottom line but to justify the lower returns you create for certainty by helping the community to build onsite.

>> i'm going to build in the outer mission and 55 foot and have the same rate of fee whatever onsite or in lui was it make sense to have a lower recreate net outer neighborhood with less development and less of potential profit than a hot area what do you think about that. >> historically land values are the driver the in lui fees depending on the values of you are talking about product the land values should go down and rents are hot and land values have justify to the market what has happened of a san francisco smoothly out almost everywhere in san francisco it is less of a differentiate if i want to

generate lwv the fees and actions to certain areas like visitacion valley actually might have a motivating effect. >> okay quick thank you one more question mr. cohen if you don't mind one more question as of right thing is kind of interesting we've heard about the 250 one erica i comment on that versus this program where we made or missed the mark you brought this up. >> yeah. the calculation for asking me to claesht to recapture the density bonus program is the mathematics we need to get into but the situation is now deft than 6 months ago is that the state

density bonus is an entitlement there's nothing our aspires at city hall can do anything about the developer demands it and gets it that's the 2505 that of sponsored by a person out of santa monica we were active and fortunately allies and other advocates in trying to make the point that kind of one-size-fits-all was going to center a negative impact in san francisco we set our inclusionary based on controlling our own bonuses and know that your department 25e78d that that are the local bonus program and aside 2 did work at that time, we set the bonuses as a city and recaptured with with an sclshgs did sate 2502 preempts that and here's the formula they have to provide in inclusionary you have to

choice so the only way you and all of us since last month the governor signed the bill to make it cerebroinclusionary it has to be part of baseline you must assume that every developer will take advantage of their entitlement maybe creative ways to discount back if they don't use all of it but policymakers you're forced two a corner assuming the maximum case with every developer take advantage of the of their entitlements. >> can that be produced because rates are lower. >> it is a formula. >> okay. >> and there's a sort of top of formula i mean you can get a maximum of 25 bonus the staff can did you have the numbers but the controller's office did with

the pack of up to 18 and 20 percent didn't account for the reality a 35 percent density increase we need to capture that and your calculations is up to 7 percent on top of so that gets you close to prop c counted for . >> one on the question it came up and have a higher inclusionary higher levels of displacements how would you say that neighborhood gets a higher level of inclusionary. >> what the amount of c is a combination of analysis and good policy judgment in terms of of geographically one potential way you may be aware of the mothers and fathers was able to negotiate with hud to define

consensus tracks where there is high levels of gentrification displacement and using that to place folks in lotteries for housing that defines maps of san francisco there's a lot of drungs and turnover and commissioner melgar's point you look at those neighbors as the bayview and western edition and south of market and central city the mission district even the castro historically places that had that kind of juxtapose theirs entuff you can use it as a proxy so say we know that. >> thank you commissioner johnson. >> thank you very much i appreciate the work as well as from the pack and the controller's office i have a couple of things i'm sure some of them will end up being questions for mr. egan.

>> i i want to put that out there i think we should try your best to move forward as quickly as we can with a level to provide that certainties to the marketplace and get units built not only inclusionary as market-rate to that point i reason what will help framing our conversation i think we're mixing up different policy we were argument and trying to use inclusionary for the hammer for all nails i'm not sure we're getting it right first of all, i want to start off with any comments and separating the policy and using the inclusionary tool and hoping move forward with the legislation and move down the path i want to recharacteristic what i heard from commissioner melgar's comment from the historical inequalities on land values across the city so when i

agree we've looked at that with a kwkt lens how we sort of prioritize development of various seconds of the city there is a historical and lens we often is there we often don't talk about it or so it the problem with how that is overlapping in the decision evening that inclusionary is the tool to get there sort of right those inequalities what i put together of the logic of public comment and the comments it sounds like there is one vein if we were to raise the inclusionary fees in certain neighborhoods you may get certain units and or have the impact of lowering the returns on projects that are done in those neighbors with higher

inclusionary because developers can pass the bid less than on the lands and in fact, turn the ease of development to other neighborhoods where the land value is essentially more; right? the developer can pay more their project will be worth more otherwise i'm not sure that's how it works given some of what we've seen already with development over different cycles of san francisco i'm not sure we can direct it that's not a tool for directions redevelopment was helpful you can draw a circle and provided for certain improvements and certain planning in those neighborhoods that's how we'll spur the eyes of market-rate development that includes you

inclusionary without that tool inclusionary on its own and trying to have that in neighborhoods will get us there which i think it should continue there is more to pull to value day or night it that's one way i will have a question in a moment sorry i will get holly to a question for you. >> i'm hearing that i'm agreeing with a lot of the argument but want to make sure that we in some ways separate that from the discussion about inclusionary i'm not sure that inclusionary is the tool to solve that problem although i agree with having an equity lens with the patterns in the city. >> so i think one thing- mr. egan he totally now have any question. >> - so we talk about the

inclusionary rate and continue to talk about percentages but we're talking about two different things one is the impact fee itself and how it is calculated so thank you. i think mr. towel and the lady collaborated to tell us when you say 20 percent; right? you really mean percentage of the units multiplied by the rates you're paying per unit that you are subsidizing and that's the dollars value that the city gets in lui or the value of whatever is put into the property onsite right now that in lui fee the dollar value their saying in the units give us $300,000 maybe 50 percent we want to start off with my first question and

second validating you guys didn't look at construction costs versus the subsidy costs maybe mr. towel. >> it is on the list in our preliminary report we need to change the costs and we have not done it yet. >> okay. okay. >> i wanted to provide a little bit of history it is an interesting and important question when in 2006, we did our last really big study of inclusionary we made a choice to try to make the option of onsite and the fees be equality we want to make many cost neutral for the developers and mentioned the methodology we use to calculate the fee really make sense at that point in time at that time, this was something the aide staff wanted to move to the

medic like the other impact fees the next annual keeps up with that dynamic whatever 9 policymakers make that equivalent or lean people towards the fee will remain snapshot as the construction changes to put it simply the questions that were dancing around the support of work lead by the controller's office mohcd and planning will come to i with a set of options. >> sorry i'm not done yet so one second so okay. so i appreciate that one given that is a second phase one lens of complexity sorry making that complex i want to add on the fact that the fee were set the way they were not index means the inclusionary tool is not count way in a way

that is helpful for example, mr. egan you referenced that land vails are gone up equip for one time in the recession arguably it would have been great to see more inclusionary units built when time these are hotter he feel that inclusionary is something we want to be counter cycle california we want more actual gross units than in other times i feel having a fee not indexes one doesn't get a fair if we're indexing it in times where construction costs are lower are we're going to get for units; right? the purchasing power of a dollar by a unit is not much when the person power

is higher that's brown when that we want to increase the gross number of units can you talk about what tool or how we approach that solution to the problem. >> i'll hate to preference the discussion with planning it is very complex if for example, you index the in lui fee when the market go down it maybe more advantageous that is the exact opposite you want to think of those things separately in phase two is enough complexity for us at the moment we are trying to found out when is a fee relative to the new onsite recommendations that does not harm before the prop c that's what we'll characterize. >> i'll adding on to think

about how can we get the same of inclusionary units. >> we're happy to support that in terms of what is on our plat right now yes. >> the other way the percentage distorts our discussion that is getting at the sort of the question of state density bonus program and/or our future state density bonus program i think there is room in future discussions to talk about the impact of gross number of units in the program and getting towards the objectives or not i feel that talking about percentages is distorting the fact with the state density bonus program is mrimd to a project you're getting more units than you would get without the state density bonus program no matter with the actual

percentages of the underlying inclusionary or what the projects reaches in state density that's not for today but future discussions a data what i want to see i feel your conversation is distorted we care about more units of housing and then i think before i talk about commissioner melgar he apologize for disrupting i want to get this out of strong diagrams and whatnot i agree with the recommendations that the controller has made i know in the prop c number two passed in june there was a piece about every 3 years the boards taking a look at where we are and reciprocal probating or having the conversation he would close out any initial comments

assuming we don't get it to that in our discussion that is a really, really great starting point and getting to the projects that people have major areas of the city and a 3 year we'll see where we are and one last thing i'll say we've talked about that before at the commission level or at least i have i really think that there is room in the argument to start talking about the development agreements this kind of gets to people think that some projects can support 25 percent others say and can't and kaint having that template agreement the city decides what we are wanting to get for asking inclusionary in certain projects especially larger projects i think having a template what the city would last week is that

would be helpful help things move faster without months and months of discussion about the recommended discussion centers also going to be an exception to the rule thank you commissioner hillis. >> a couple of questions since the voters have passed prop c with the 25 percent inclusionary have we've seen you know what impacts not land transfers or projects with that have you seen any impact to that. >> i've only access to the same anecdotal information that i have a sense the land is not moving we have monthly building permit data through hud it is lengthy and hard to read i wouldn't is a real information beyond the sense not a great

time to trans act lands. >> we could complicate this in building types and sales prices but at some point we've got to select the best polly alternatives and move forward it will never be perfect and respond to every even though ration of building types of in the neighborhood but one thing that came up in the past a lot i think you've talked about that the neighborhood there's sales prices differences a condo in the marina i'm sure sells higher than a condo in the outer sunset but due look at sales prices will differ there will the land prices correspond with a different what mr. do you was saying and the trick with the

commissioners we have pretty good data on what houses sell for and the different levels of rents and the housing prices across the city the thing that drives the fee for flexibility what is the value of the lands and the existing of it's a non-residential use that will differ across the city if you're willing to pay more for rent in one part of city that is likely the commercial businesses are paying higher and the lands is higher the problem in studying in in a last year scale sense no great large-scale data sources you can use to estimate we can go down the road a labor intense testify process about studying prototype and not leveraging all

the residential price data that is out there that is only one pies of equation. >> the rental every project we've seen maps as an ownership project whether me rent it or not is another factor. >> so how will be - i mean how will be drermd whether our a rental or - >> the timing when the fee the requirements are set not something that is unheard of there are examples of cities that won't go get our inclusionary requirement until after you're done and cities negotiated worn by one for every project and lots of ways it can be done we intended to on the basis of best practices research try to recommend things

easy but this is something we've had some discussions with mohcd this is something they feel they can do but defer to them on the practi practicality and. >> you're saying it is a rental you can collect the higher fee or the defense inclusionary rate. >> so we've thought about the implementations and you're right month projects map with the condos we're working with mohcd and kate connor and the implementation staff to map that out right now, we're imaging there is some sort of conversion fee if a project is billed as rental and choices to sell out we're collect that deferential.

>> the recommended there by half a percentage in a year 5 years he i get it but say we're in a cycle nothing that built and you know sales prices are going up it seems kind of not a good policy to increase it by a half of percent on the flip side if they're increasing by 20 percent maybe too low but over time i guess your point a better way to do that tie it to a indicator to have a floor and ceiling and do that that way. >> there's a trade off because this is the recommendation we're trying to establish to get two policy winds for that one of which to make sure that future

increases inland values to some extent turn into higher inclusionary requirements automatically and, secondly, to be able to provide assurances to participants that your land will not be worth more in the future because at some point in the future the city will lower the requirements we had a discussion about and we went into a lot of options around will if there is a recession should the ramps go down and everyone will wait for the revision and say i'm not going to sell when our fees are high wait until you over me more some the ramp pause during a recession that will prevent that speculative behavior but announce when it starts and

ended 24 idea of 5 year requirement didn't sit easily with the existing requirement to redo this ever 3 years the preference of the controller and myself to actually make that is not a 3 but 5 not a full redo but a check in because it is almost i think the members of task will agree with that statement the value is more important than getting the number piling right. >> that's right a great point i think the kind of doing it every 3 or 5 years if depends on where that hits the cycle it is awkward so i think yeah. this is not perfect but you raise good points why it maybe preferred and tying it to some indicator or setting a point in

time or south of market or whatever it is that's the thinking behind the recommendation to answer your question and i agree with the fees comments i think ones on inclusionary percentage is set the fees should be set it is near the same economic impact i think we've seen? in the past mr. tow was saying the developers will choose the onsite because in that case is helps the entitlement process both in the neighborhoods here at the board where every it is obvious that happens but tying to correctly so to the economic impact is important. >> that is something we know how to do we don't know want to leaned other policies on top of that. >> the impacted neighborhood discussion is interesting

and he agree with some of the comments before i on the policy discussion it should be not necessary changing the sclrgs in those neighborhoods can be an alternative but another things will be more helpful focusing on 100 percent favorable and the fees are an alternative or the acquisitions program reserving onsite incentive fees things will get us more units in impacted neighborhoods changing the inclusionary from 14 to 15

density bonus program how we tackle that i get it but i don't think that everybody will get it for the same reason take the onsite some developers will not take the density bonus program it accidents process and uncertainty it will happen that every project will not take the density bonus program i think that maybe a large percent will not take it especially where we have already no density requirement and the only way to get more units is to go up and maybe inappropriate in some places the biscuit kind of unanswered questions changes to state law are probably the eyes it way we're trying to change what is wrong about state law changing the rules the best way to do it is next the law in the state (laughter) you know where there is this is

not an c count towards the new units especially a city like ours the inclusionary rates are higher i mean, that's where we should focus our energy on the density bonus program question. >> so i guess my final question what's the next step this may not be a question for you but for planning department staff. >> kirston. >> there is 3 major components to the phase of analysis we're optimistically hoping to complete that analysis by the ends of the calendar year and following that a joint effort with the planning and mayor's office of housing to come before you with options on a lot of the complicated policy questions and really heavily influenced and sort of guide by the work of the controller's office we see an

update to the inclusionary program. >> there are opportunities for people to chime in and obviously the pack is helpful the group is not huge and other developers and other neighborhood groups how will they - >> i mean. >> the program development is thinking through that process and procedures we've not had that conversation. >> the next conversation is not easy it is complicate you can make that more complicated but we've got to land somewhere about but getting more input and continuing to get this is great, thank you. >> thank you. >> just to add a couple of thoughts educating this topic what one of the better conversations and it is focused on the future we don't know but

mr. egan clearly says the remedies are simple and deliberately simple logic tells me to agree on something that withstands the test of time and the change up and down and not always last week 24 and construction prices will not always be like this and land value not i ask that everyone that has a hand in this think about that and how it applies in 2017 and 3 or whatever. >> for mr. egan on page four months of items were approved unanimously equipment for item 2 those two december sending votes. >> the annual increase she think should be higher. >> one more comment this is

obviously a good healthy discussion from the community and iris and mr. egan department and all society parties i think that is the place to have this discussion that maybe during certain election kiegz that suggestions are made that is the more proper way to look at the feasibility studies and the connective study and having the discussion with more facts and data i applaud the fact we're doing this now. >> commissioner vice president richards. >> a couple of more questions mr. egan briefly when you started your presentation i went through the public policy can you go through that again, this whole exercise. >> was it found on - >> the overall policy objectives. >> i think i went over the

slide briefly because cannabis dispensary stone spoken to most of it really the premiers as dedicated in prop c and essentially to identify the maximum amount of affordable housing the city can require. >> in your opinion with everyone in the room does anybody can disagree with that in your opinion. >> you've not heard during this project anyone proposing an alternative. >> we're on the same line that's the goal he hope so okay i won't go further mr. cohen made a suggestion the hammer is the inclusionary the thing we can do extraction is that your opinion the only thing we have.

>> i'm not a legal expert around the policy i'll have to pass on the question. >> one other thought that came into my head 72 hours great to take advantage of the time when it is lean and prices are lower it is a thought potentially we take the - it is hard to do that everything is lower at the same time, if i wanted to sell a house i'll get less of a price but pay less on another house this is a recession potentially looking at the ramp up fee to have that go into a lockbox it would be a simple last. >> that's a clever way to think about budgeting more affordable housing. >> commissioner johnson. >> yes. it is i love that idea commissioner vice president richards that would be the

concept behind the housing trust fund and great to add that on to that's what i am getting at some cyclical tool poach are concerned we're not seeing the gross production of housing just quickly commissioner vice president richards you asked about refineries and so are the global sort of the 25 percent global i can say i think the answer would vary depend on how ask and where they're getting their money from it is worth requesting the question depending on the question they get o money from a pension fund or some other vehicle that is a complex question that is interesting i hope that