>> the projects would. >> commissioner richards: an 827. >> that simply changes zoning, but individual projects would have to go through review. if i could on the flower mart, steve mentioned this earlier, not only will you have to approve that project, it includes a development agreement. so you will be seeing that project in a number of different ways. >> commissioner richards: so ab73 applies to housing, not office? >> yes, that's right. >> president hillis: commissioner moore. >> commissioner moore: it's a codify rule that cannot be explained without the buildings, had that on harrison. there are rules that can be easily explained. >> president hillis: thank you. and thank you, staff, and members of the public, who continue to positively shape this plan. we'll see you back here on april

12. all right. we're going to go to the item that was called off consent next. >> clerk: moving to items 7a and b for 2009.0753c and v, 3155 cesar chavez street. consider conditional use authorization and request for variance. >> good afternoon, commissioners.

>> if people could keep it down. >> constructional use authorization to construct a second story to a religious institution within an rh2 zoning district. requesting a variance to address planning code requirement for front and rear setback areas. the existing two-story building was constructed in 1922. and was originally used as a key making foundry and a concrete construction facility before it was converted to a church in 1972. the project includes a horizontal addition to the second floor and facade remodel. it would include an enlarged sanctuary, new elevator, office space and updated bathroom. it includes nine offstreet parking spaces the expanded two-story building would be 28 feet, 8 inches in

height, measured to the highest point on the roof. to date, the department has not evidence is any formal comments regarding this project. staff recommends approval of this conditional use as noted in the executive summary. it promotes the expansion and operation of the established religious institution. the project is consistent with the general plan. the use is desirable as it will provide a vital service for residents of the neighborhood. it's president 4able for and compatible with the surrounding neighborhood, in that the site has been occupied for a church for the last 45 years this concludes staff's presentation. i'm available to answer any questions. thank you. and i think the project sponsor is here.

>> project sponsor? >> hello. i'm sergio. and about a year ago, the church was in need of having somebody to come over and refine the design. i think i did what they wanted. i minimized the size of the unit. it was a lot bigger than what it was. the church has been helping a lot of people. my understanding is that there are 200 people in the streets and in need of something like what we have right now. so i would like to go ahead and -- i can -- i will provide you with some information about what the church does and i would like to pass that to the staff, if you don't mind.

right on forms, you will find out who founded it and the amount of money we have spent, to be able to do the church, the design for it. and i think that we should probably approve it the way we have it right now unless somebody else has any issues on the matter. if you have any questions -- >> thank you. we may. thank you. is there any public comment on this item? you can sit down. thank you. come on up. >> good afternoon, everyone. my name is jeremy cooper. i filed a speaker card earlier. i'm a neighbor of the church. and have been for a while. i'm here today to present my own opinions. i would like to ask you to postpone this and perhaps put it

on for continuance. i'm fortunate enough to be here today to make my comments. i have neighbors that have concerns as well, due to the time period of 20 days of notice and the fact that some of them are teachers and people that cannot make it during the day, they're not able to offer their comments here. it looks like i'm the only one that can summarize the comments. i will deliver my concerns with the project and voice some of the concerns i've heard from my neighbors. i would like for them to be able to speak of course, they won't be able toll -- to do that. i do hear a lot of noise from the church. it's a residential neighborhood block. residenidence residences, single-family homes, a couple of condo duplexes. if you have attended a church of god service, i've played as a musician in one, marin city, i don't know if it's affiliated with this one. the services are very joyous and

contain a lot of loud music. i've played organ in one. and you can unfortunately hear it a lot of times when they have services. this is a residential neighborhood. there is the catholic church, st. anthony's, in the next block, and we very rarely hear them. the services are different and think i the building is constructed as such it does not leak the noise as much. we can hear the drum beats and loud music on at least sunday afternoons. i know there are services there in the evenings. and it's been going for quite a while. it's hard to approach a church and say, hey, guys, we don't want you to be so noisy, that's why we haven't made much comment about it. i would like to see something in the design that recognizes that this is an intense religious experience there and it's loud and it needs more soundproofing,

especially if you are going to grant a variance to come back further into the backyard, where a lot of the bedrooms are. the houses are designed to tolerate noise from the front, but not built to withstand sound coming in from the back where the church is. my neighbor's concern, she said there's a parking lot that's been illegal. there's a trailer on the lot that's parked there illegally. these are concerns she wanted to raise. the traffic on cesar chavez has been steadily increasing. there's been a traffic calming measure to put in medians, but it's narrowed it. and it will increase the traffic at the church. if you see that, they have traffic handlers. i've seen them wearing vests. i would like to see the concerns addressed and give people a chance to comment. >> thank you so much. any additional public comment on this item?

if there are any additional speakers, please line up on this side of the room. >> i'm glad i'm here today in front of you. and the reason that i'm happy that i'm here is because this building and this organization that is there otherwise i would not be here today because i had the opportunity, that somebody invited me there. it's a place -- i think the commission and the commissioners, they look at a building. and they look at the people, like me, that at least have choice and opportunity when they think that everything's lost. that there's hope. in this organization -- i hear the comments about the noise and i think that can be dealt with.

but i think the commission to look and think about the people that the organization serves, which are aligned with the philosophy of the citizens of san francisco. and there's people at the church that have been living under the bridges in san francisco that are on alcohol and drugs and new have been rehabilitated and working with caltrans and serving the community. i'm not here on behalf of the church. i'm here on behalf of myself. i want to have people like me to have the opportunity that i have. my broker didn't have that opportunity. when the housing opportunity went down, he hung himself. he thought everything was lost and paid too much attention to money and not on the human being. and i know that san francisco can feel like that.

that values the person. i think what the church does and the organization does aligns, that young people in the church go once a month or often to the people that are doing drugs under the bridges and tell them, feeding them bread and hope, that there's a chance that they're worth something, not because of what they don't have, but what they are as a person. so i think that when the commission thinks about that, thinks about this, the church has a lot of members that have children. there's no space to accommodate them. and the church is not going up. it's going sideways. and so i think -- i felt that i had the obligation to come here. and i'm here for myself. >> thank you. next speaker, please?

>> good afternoon. my name is juan segura. i'm pastor of the church. i thank you for very fthe attention you have given us this is one of the reasons why we try to enlarge our church, because we -- what we're doing and we expect to do the same thing and help the people. we have more than 200 leaders right now, people who come from the street, we are hope. and then we start to teach them and starting to tell them about the love of god. and tell them about a better life, than being in the streets, robbing and doing drugs. so they pay attention to that and now they're in different

places in the united states. some are teachers, some preachers, some musicians. and this is a little place, a little place, because it's -- we don't accumulate the people. we bring the people. they come to us, like carlos, he tried to commit suicide. and thanks to the little church, he is doing good with real's -- real estate and have a good life. the noise they make, there's a reason, when we tried to reveal the church and with all the city, which we've don't have right now. and begin to put some people -- you know, right now, we don't expect the church to get a lot of people because of situation,

the rents, and people have to move to other places. we had to move because of rent. but the people we have there, we try to continue to do the same. help the people. help the neighbors. there's is a church committed to the city. we will go and clean it up and clean up the streets. we clean up the graffiti. we have about 800 to 900 people. so this is an active church. we don't have no money to do this project. we have to do it ourselves. so i appreciate it. we have 27 years trying to do this and we can make it becau. 27 years. we're asking, please, this is a church that does good things in

the neighborhood. and we're continuing to do a good job outside our walls. thank you very much. god bless. >> thank you. next speaker, please? >> hi. my name is jonathan. thank you for this opportunity. been in the church for 26 years, since i was born, born and raised in that church. born and raised also in the mission district, which is just that area. went p went to school next to the church. i've been a product of that church, that establishment, and i would appreciate your help in extending this project. it's been a project that been in my head and in my mind and my ears for 26 years. so to have the opportunity to expand it, it would be something magnificent for our community, our youth, who a lot of people have come to church and have been around the neighborhood. a lot of people, if you know the area, ask for jobs in the corners of the streets. we've taken the people in.

we have advised them. we have guided them to have better jobs. we have a lot of projects and a lot of evidence, the food we have distributed to the community. the people in need. we extend from the mission district as well. we've gone into this area, too. a the will -- a lot of projects that will give to each other and that we always have an open heart for people that come into our doors. i'm part of the music group. i'm one of the chorus singers and i can show you that if the noise complaint, that's something that we can deal with. it can be added to the project to lower that noise complaint. and we have a school and a park, so noise will be everywhere in that area. but i'm here to just ask you to hook at this project and dream

and place that helps people. we don't discriminate and we would like for that project to continue. thank you. >> thank you, jonathan. next speaker, please? >> good afternoon, commissioners. my name is russell thomas. man, i'm a living testimony of the things that church of god has been doing in the neighborhood. 8 years ago, i gave my life to the lord in that place. and i'm still the one and only black guy over there. but it's been a blessing for the community. because -- let me tell you something, the shootings and the things in the neighborhood has been less than it was before. we've been going out to the young people, being a blessing for the community. going to the neighborhood,

sharing some food. praying for everybody over there. it's been a very big blessing for us. please, begging you guys to do the best to approve our project. look at me. eight years ago, i was a piece of something in the street, but now i'm a new man. i'm born again in that church eight years ago and i'm very thankful for the lord and thank you, guys, i really appreciate it. thank you so much. >> thank you, mr. thomas. next speaker, please. >> good afternoon. i'm sonya dulow. i've been in this church since i was 12 years old. i'm already 45. i've been raised there and this church is more than a church. it's been a family to me. i've been receiving a lot of good advice and i've been helped

with my kids. i have three boys, raised in the church. one of them is in the army right now, serving this country. i have two other boys that are going to school. and they're doing really great and one of them will graduate soon and start to go to university. besides, like i said, i know there's been complaints about the noise, but that's something that can be workable. and more than anything, i want you guys to take a look how the church has been helping people around the neighborhood. we tried to do our best and to help our youth, our youth are in so much need and we're there to help. and everyone who comes, it's welcome. so i want you to look at this proje project, please. thank you. >> thank you. you have already spoken. sorry. we may have questions for you, but if you could have a seat. thank you.

if there is no more public comment on this item, commissioner moore, please? >> commissioner moore: i'm glad we took this off consent. i supported it on consent, but i'm even more convinced to support it now since we know the details. one, i think, is to really clarify that houses of worship and religious institutions are part of residential neighborhoods, an integral part of residential neighborhoods such as schools, playgrounds, etc., are. throughout the city, we see churches and houses of worship right in the middle of residential neighborhoods. i live away from a very large religious institution, basically 1 1/2 blocks. do i hear them? yes, absolutely. fabulous. i hear them during the holidays. you hear them for recitals and you hear them, yeah, i live in a

neighborhood. i think it's great. i don't see any problems. walk by on a sunday morning and you hear it like two blocks away when they're singing and they're singing loud and there's a reason why they're singing loud. and i do believe that that what community is about. the hours are not disturbing anybody unless they work at night and they're probably in a deep sleep cycle. i don't see any reason -- i looked at the architectural plans. i think it's modest. if it was at an hour or time that may interfere with children going to bed early, that can be done. i'm in full support and would move to approve it with the conditions as the department described in our motion. >> second. >> okay. >> if there is nothing further,

a motion has been seconded to approve the matter with conditions on that motion. [roll call] >> so moved. commissioners, that motion passes unanimously, 5-0. commissioners, that will place us on item 13, divisa de ro and fillmore ncts economic feasibility study. >> maybe we will hear this one and take a break before the candlestick, since we're down to five? >> good afternoon. jakon bintliff, planning staff,

thank you for the opportunity to present the findings of the most recent feasibility study. in this case, here to talk to you about a study done in the divisadero and fillmore district. it's required by section 415 of the planning code. it came in with all the changes we did that were adopted in july of last year. the requirement is that there should be a study done by the controller's office and planning commission jointly for anything over 5 acres where there's significant upzoning after january 1, 2015. so we looked through rezoning actions that have occurred and these two districts were the only ones that made the standards laid out. in july, 2015, through two ordinances passed by the board of supervisors, it was changed from divisadero and fillmore

street neighborhood commercial transit districts, which primarily removed the limit on residential dwelling units. so that's where the "upzoning" came from. the limit on residential units was removed, so no change to the height. so the we have the full envelope that could be filled with as many units as the project would want to move forward with. we have the study with the help of a consultant and i would like to introduce ted egan with the controller's office to present the findings of the study and i'm here to answer any questions that you might have. thank you very much. >> thank you. >> good afternoon, commissioners. ted egan with the controller's office. as jacob said, our office, planning department, with the assistance of the office of economic work force development and outside consultants have

been working on this study for the past few months. we issued a report on it last week. i would like to walk you through some of the details. jacob has reiterated the reason for the report. what we're attempting to do is try and understand what is the value of the upzoning, going from the mcd to the mct and how does that value translate to additional ability to support affordable housing? first of all, jacob said this was another inclusionary housing study. we had, of course, recently finished the city-wide inclusionary housing study, which we began in 2016 and finalized last year. we worked with a number of consultants on that study. the lead consultant on that is the same one on this study, so same consultant, using the same method, same pro forma approach.

they collected new market information and there were significant changes with the market in terms of the cost of housing, price of housing for residence and also the cost of construction, different from two years ago. i think it was an important thing. however, the methodology of the study is largely the same. and what that really involves is, taking a look at a proto typical housing project that makes sense for the neighborhoods in question, the divisadero and fillmore in this case. using the up-to-date information open how much it would cost to build this thing and how much could you sell it for or rent it for. for the price side of it, revenue side of the project. they got specific numbers from the neighborhood, because they vary across san francisco. for the cost side, not so much. building low-rise housing costs the same wherever it is in the

city. essentially when you deduct the cost of construction from the revenues, you get, selling the condos or renting out the apartments and accounting for a rate of return. what you are left with is the amount of money that the project can afford to spend on land. and that's the land residual. it would start with prototypes that would make sense before the rezoning. to do an analysis of that and see what the land would be worth there. both of the projects took us to projects that were less than 25 units, relatively small projects. after the rezoning, they became somewhat larger projects. what we said was, take the land residual that comes from the old zoning and leave it the same. take all of the additional value from the upzoning and see how

much you can drive inclusionary housing up. in other words, take the additional value and put it to affordable housing. so that was at a high level what the exercise was that we asked the consultants to do. as i said, we worked with two prototypes. we called them a and b. it's worth remembering that when we say prototype a, web need divisadero. what is important to remember is that the original zoning was more favorable to developers. the zoning was -- sorry, it was less. >> the cap was lower. >> so one unit of housing for 800 square feet of land area. the most prevalent height is 65 feet. and in the fillmore, it was one from 600. so originally under the old zoning, more housing was allowed and the height district is 50

feet now. so what that essentially means is that in the divisadero case. the movement to the nct conveys more value on the project than in the fillmore case. we'll show you different results, but there's no reason to think they're the same because they started from a very different place. as i say, for each of the two situations, we developed a baseline case under the old zoning. we then ran a series of alternatives. for sale condominiums and then two rental projects. a rental project, assuming that rents at the time of completion are the same they are now and no increase in rents. and a second one that assumes there's a slight increase of about 2% in rents between now and then. so the reason we did this sensitivity testing around the apartment rents, is that

apartment developers particularly care about what people will pay in rent at the time that the project is completed and people pay rent to move in. so we'll come up with a range for -- it's not a wide range, but it's a range for the apartment projects and single number for the condo projects. again, given the difference between the two zoning changes, if we look at the difference and type of projects that will be built, there's roughly 100% increase in the residential square footage that could be built, but only 30% increase in square footage for the fillmore prototype. and we can talk about why that is. the divisadero rises from 15 units and could support 53 units for an apartment complex.

fillmore starts with 21 and rises to 37 for condos or 43 for apartments. these are prototype projects and can vary. the inclusionary housing requirements that apply are different under the old zoning and new zoning. under the old zoning, the projects would be less than 25 units. less-than-25-unit projects have a 12% requirement. so what we're saying is, what is our land residual that results from the old zoning or inclusionary that applies to projects then and now compared to what the new requirements that are in place now. to summarize it, the divisadero

prototype is 35 feet. it goes to 65 feet. total square footage 24,000, up to 48,000 for both condos and apartments. number of units i've alluded to. in the fillmore from 35 feet to 50 feet. the growth and square footage is less of an increase and the number of units is less of an increase. as i mentioned at the beginning, the consultants updated research from the 2016 study and they found an increase in construction costs and not much in housing prices or rents since the 2016 study. what that means is it's not as hot of a housing development today as two years ago and that's reflected in term of the inclusionary requirements what the project would support. we're also looking at -- i'll

show you how much the differences are and the net square foot of projects on the next page as well. just to give you a sense of what they're assuming for the price of housing in the two neighborhoods, it's about $1.3 million for a new unit in both projects on average. that's a little less than the city-wide average for existing housing. so that's quite on the low side for new housing. total cost per net square foot. it's for the built, occupied square feet, between 784 and 811. under the condos, new zoning, the price is a little bit less, because the units are smaller. the total costs are a little bit less as well, and not and not that different. they're not assuming giganticdy

-- differences. to get to the results of the exercise, i mentioned that under the old zoning, we're assuming the rent affordable housing requirement. and i mention the idea is to set the land value constant in both cases. it's important to explain how they represented affordable housing for the new zoning. as you will remember, under the new city-wide inclusionary housing policy, a certain amount goes to low-income, a certain amount goes to moderate-income. and a certain amount to medium-income. it is the 50% low income, 25% moderate. 25% middle for ownership. so when we see the numbers, it will reflect that split. it's not a policy recommendation

that anyone adopt that. it's simply saying, if you use that split. what level could you attain? under the proforma they developed, total value would be $2.3 million and for fillmore $3.9 million. those are held constant. under the condo zoning, and again with the 50-25-25 split, divisadero gets to 20% affordable. the fillmore does not. it's a lower number than it is

originally. in other words, not 12% of the same thing movering ing ting t moving to 13%. that's true for the rentals, which at the fillmore is 5%. the upshot, it's a different performance. on rentals, the divisadero that received significantly more upzoning could do 20% to 22% more. the lesson of the two corridors is quite different because the upzoning is different between the two. the prototype can support something that's higher than the city-wide, inclusionary requirement. the fillmore one cannot be feasible at the city-wide, current housing requirements. and that is for a number of reasons. construction costs have increased. and it is a neighborhood that's not the highest-value

neighborhood in terms of housing construction. and when we did the city-wide study, we talked about the possibility of doing proformas to get a neighborhood-by-neighborhood look, and we decided it would be too time consuming the upside, you will find neighborhoods where the construction costs are not feasible and not able to support additional inclusionary housing requirements on top of that. so i think those are the high-level conclusions of our report. i'm happy and jacob is happy to take any questions that you have. >> thank you, mr. egan. >> i have one speaker card. laura clark. anyone else that wants to give public comment, please line up. >> laura clark.

i don't think you want to give us 5 minutes. >> don't worry. you won't get it. [laughter] >> even i don't want that. i appreciate that this is a relatively data-driven analysis. i think we need to take a critical eye at addressing inclusionary. i think we all know that the costs of building housing keep going up. and meanwhile, the good news is, we cause rents to plateau. and the bad news is, maybe it means that further construction is more difficult. so having data driven analysis of our policies is really good. that means that the data has to be high quality. and this has underestimated the rising costs of construction. i think that that is something that we need to really keep an eye on. and that means that maybe we're going to have to be cutting some of our fees and inclusionary. and that means that maybe we

need to be looking towards things like the $4 billion bond that will be on the ballot in november, to be doing a lot more funding for subsidized, affordable housing. we cannot rely on inclusionary as a funding source for affordable housing. it's cyclical. we need affordable housing to be counter-cyclical. we cannot say that we'll put all of our affordable housing needs on to development. we know that's not reliable. this body can come out in favor of the $4 billion bond that nobody is paying attention to that is at risk of failing. it will be on the november ballot. it's california-wide. this body can search for other ways to get more funding and especially more land for subsidized, affordable housing. this body can expedite finding sites, especially in the

richmond. there's a -- there's been talk about supervisor fewer about identifying sites in the richmond. i think the planning department has a list of soft sites. so we can help that, move that along. affordable housing needs land and funding and if we put all of the funding requirements on the market rate development, we'll be disappointed, because we will have killed the golden goose and neither have the regular apartments that we need or the subsidized affordable and data-driven policy is where we need to be going. i appreciate the study. i think it needs to be more rigorous. thank you. >> thank you, ms. clark. mr. david? >> i want to thank president breed and the planning department for doing data-driven housing policy. it's great that that's how we're

deciding what is the correct feasibility so that that's outstanding. we just have one concern about the input into the specific, excuse me, feasibility study. in line 17 of the appendix, it talks about construction costs. if you do some division, it comes out to about $330 a square foot, is what that -- right. and it's our understanding that from our members that construction costs are about $200 more per square foot. so once again, really great that they're doing data-driven policy. want to make sure that the inputs going into the data are correct. it is one specifically we would like to see looked at to see if that number is correct. if it's not correct, can we see what the number is. and so there's that.

and what i'm about to say builds on what i said earlier about the basket of costs. this is what we're talking about. how there are these baskets of costs that go into the cost of building housing. and what we see is that even at this lower construction rate of $330 a square foot, we're not getting a big bump. we're getting a very minimal bump on what is economically feasible from inclusionary. with the fillmore, we're seeing that the economic feasible range is 9% lower than what the current inclusionary is. so it just goes back to the need, our thought that the need and desire to have more realtime, realtime, dynamic inclusionary and impact fee policy so that we're not stopping housing at all levels of affordability. thank you. >> thank you, mr. david.

next speaker, please? >> good afternoon, commissioners. i'm speaking on behalf of genesis real estate group. it would replace the touchless car wash with 177 mixed-incommune its and ground floor retail. i'm here to express our concern about the lack of transparency exhibited in the preparation of this feasibility study. from the onset, we offered to share relevant project information with the city to ensure that the assumptions that were used to calculate the onsite inclusionary were to include the data. but we were never asked for the data from the controller, the department, the consultants or given the opportunity to provide any real-world information. we were able able to review the study when it was release the

three days ago and it shows some errors. for example, base inclusionary of 12% is what it shows, but the height limit is and was 65 feet and the base unit is closer to 70 units, plus it qualifies for a pud, so base density is 1 per 600, not 800. being that the inclusionary rates would apply to it. what is puzzling about that, it's one of only two pipeline projects in the area and the prototypes had nothing to do with the type of project we're talking about. based on our understanding of the numbers, total project costs are lower than current

development costs. those costs continue to rise. we estimate that it's in the range of 30%. these rising costs, it's the result of projects being mothballed or delayed or converted to hotels. we don't want that to happen on divisadero street. it is in the best interest of the city to ensure that affordable housing is sustainable for real project sponsors so opportunities like touchless car wash site will not remain a car wash, but instead, provide affordable housing. we're asking to be included in the study, so we're confident that the recommendations are based on real assumptions and a prototype that is representing what is possible to do. we fear that the current study doesn't do that. thank you. >> thank you. next speaker, please?

>> i'm jim chapel. land use consultant. over several decades, i've been a part of many community and city studies to establish good planning policies. the key to getting the right answer is to involve knowledgable stake holders in the process and be sure that the inputs are correct. if the inputs are inaccurate, the results will be inaccurate. mr. egan just badly misspoke when he said there is 100% increase in the existing square footage in the new zoning. that's absolutely incorrect. there is no change in the total square footage. the height and bulk stays the same. it is just that the number -- the limitation on the number of units has gone away. 400 divisadero developer has

been trying for months to have input and has been rebuffed. our intent is not to direct the findings but ensure that the data used are based on the most current information. in all the years i've worked in and with city government, i've never seen a process so shrouded in secrecy. here we have a case where the two, the only two current property owners affected, were frozen out of the process. the numbers for the property report seem to be academic and not based on feasibility. i have no confidence that the information used to create the findings is drawn from real-world scenarios. i'm neither confident in the input or in the output. the costs used in the study are

off by at least 30%. the city was wise to adopt form-based funding to develop sites that would not be developable. these sites will not move forward if the burden based on them is not based on accurate, realistic data. all we're asking is for the opportunity to share current project costs with the city and for the controller's office to revisit the assumptions used. we would even be willing to do a joint process with the city to bid out our drawings so we can both see where the market is. assumption of the study is that 100% of the delta accrues to the city. why would any developer do this? should not the city consider that the risk-reward be shared between affordable housing and the people funding the study? i ask the commission, if you want to see the sites contribute

to alleviating the housing crisis in san francisco, to direct staff to meet -- thank you. >> thank you. next speaker, please? >> hello, commissioners. corey smith. i'm speaking on behalf of the haight ashbury neighbors for density. there is a group of us that have come together. we have gotten together to be urbanists and engage our neighbors and our pro-transit, pro-business friends to be more active in the process. the organization is figuring a lot out. we've had one public meeting. we have our first community meeting and we'll give an update

on the study, hey, this is what happens. we'll explain how the analysis was done. but generally speaking, the idea that we're using data to inform our decisions is smart and we have all the information, we have all the internet in san francisco. so whenever we can capitalize on that information, we think it's good government. thank you. >> thank you. next speaker, please? >> good afternoon, commissioners. gus hernandez with affordable divis. i want to correct some things that i heard. first of all, president london breed actually tried to stop the study from happening. affordable divis petitioned the commission and land use committee to include divisadero and fillmore in the study.

president breed was trying to exclude us. and thankfully the commission and the supervisors listened to us. we were the only ones that qualified for the study, kind of interesting. no need to thank supervisor breed. we're north of the panhandle and alamo, not hate asbury -- haight ashbury. it's a different neighborhood. 5 also want to ask the people who wrote this report if they could actually base it on the pipeline projects that are currently in the pipeline and on divisadero. we have some very real-world examples of before and after. 650 went from 16 units to 66 units. 400 didn't have a plan before the rezoning. there's saying that they would

have built 51 units. and now it's 177 units. i'm not sure how they came to that calculation, but at least it's a starting point. and i feel like -- i also felt like this study was done in secrecy. we kept asking where it was, if we could get a copy. we were told, by the end of january. and then we kept asking for it. i think on friday, we were expecting it. it was supposed to be part of the agenda packet and didn't get to us until monday afternoon. i'm sorry that president hillis isn't here. on monday night, affordable divis hosted with -- sorry, the neighborhood association hosted a meeting at the independent for the community to hear about the 400 divisadero proposal and commissioner hillis came to that

presentation and he found me afterwards and found me afterwards and asked me what i thought about the feasibility study that had come out 6 hours before. i was at work and i had this meeting to run that i organized, so i had no time to look at it, except to see that fillmore was lacking feasibility, miraculously, which doesn't make any sense to me. i haven't had time to digest the study. i don't know if it was properly agendaized. those are my comments. thank you. >> thank you. next speaker, please? >> good afternoon. tess willborn with affordable divis. yes, these projects have been in the pipeline for how many years now? this feasibility study was promised about two years ago.

take the data from the two projects and run them through a simulation there and see what you get. i any -- think you have real-world examples. they've been in the pipeline for like three years. let's make sure that we have good numbers, when we look at a subject that increases construction costs. that relates to jobs-housing balance. when workers are coming from terlock to construct buildings in san francisco, because they can't afford to live in san francisco, that's something i would ask you to think about, too. main point, let's use the two projects and cheng what the developer says against real numbers that other developers say and see what kind of a profit margin is built in there

and about what is feasible and realistic. thank you. >> thank you. any more public speakers on this item? no? okay. commissioners? >> commissioner richards: i guess i'm more disappointed than the public. because i'm looking through my email. i don't even have a copy of the actual report. all i got was this one-pager. nothing in my packet. so i just want -- every time we have one of these big reports, i never get a copy. >> we did forward the property to you electronically via email. >> commissioner richards: maybe it's in my junk. >> it would have come from me. >> commissioners, i apologize for that. we had it targeted to be in your packets last week and we had a

hiccup with the consultant doing a time review, so we ended up emailing it to you on monday, which we were not thrilled about that either. >> commissioner richards: i didn't mean to berate. i'm getting a little cranky. we have the theoretical world and the real world. i paid retail on a project for three years and i saw costs go up and profit margin go way, way down. if $230 was used for construction costs, where did that number come from? i don't know anywhere you can get rough-in and finish. where did the number come from? mr. egan? it just seems miraculously low. >> if i can address the general concern that trying to do

data-driven policy in this world. it's something that we experienced with the inclusionary study as well. we cannot simply tell people, tell us what your construction costs are when they're part of the part of the policy makers. we can't say, send it to us secretly, because we cannot keep it secret. we cannot shield anything. so we're, therefore, reliant on outside consultants to do their own research and to report back to us and we're dependent on the credibility of their work. we're fortunate in this case to have a consultant that's helped us that's proven to be credible on the same subject times in the past. where does the $330 come from? it comes from them asking general contractors, what are your costs for this type of construction. i would also mention, it's about 12% more than what they reported

for the exact same type of construction in the process that we had for the inclusionary. so they are reflecting increased construction costs. it's not 30% more because they didn't find 30% increase from 2016. they found a 12% increase. >> commissioner richards: what is the rate of return that developers expect? >> 20% rate of return for condo and 5% trended for rental. >> commissioner richards: 20% is yearly? >> no. based on the assumption that you exit the project and return on equity is 20%. >> commissioner richards: regardless if it's one year, three years, five years? >> yes. and these are identical to the ones vetted with the

inclusionary tax. >> commissioner richards: i saw the sales prices and just saw price per square foot. and we used to do it by neighborhood. the prices look lower than what new construction brings, in my opinion, pretty much any where in the city. so that jumped out at me as well, $700 per square feet. i think projects are getting more on new construction. >> the per-square-foot numbers were costs. but you may see that the average per unit cost are lower than otherwise. the consultants did a comp analysis. there is not a lot constructed in the neighborhoods, but nearby. >> commissioner richards: what selling price per square foot did they use to get the $1.3 million? >> $1,200.

>> commissioner richards: okay. that's reasonable. the other question is, my real estate friends always say, the smaller the unit, the higher the price per square foot because it's become more naturally affordable. the bigger the house or whatever, becomes less per square foot. was that included in here in terms of the first, the two compariso comparisons? >> i do believe that price per square foot is higher when the units are smaller. >> commissioner richards: okay. great. thank you. what's interesting is, we have a push for more units, more units come on the market, rents plateau, but push for units make construction work scarcer. and so we're in a pickle. a pickle, i think. and part of what the public comment was, it'st