thursdays, i believe. wednesdays. see, we need to learn. on wednesdays. and that is the only use for it. i could potentially anticipate there is a commercial kitchen on the third floor. perhaps occasionally if there was a small event. the caterer might want to park their truck there long enough to unload and carry things up the stairs. however, the couple of times that we've in the five years we have used the building that we've had small events there, the caters have always wanted to come in through the front and use the elevator to come up. . so, it is a service door. there is no windows in it. if i was a business owner, i would not want to put anything on that side of the street if i wanted to do a business. because it is a residential street. as you can see from the picture, the beautiful part of the building is on valencia and that is the main entrance and yesterday when we had our

event, everything came in through the front and that is what we intend to use it for. if you go in those doors, it's a -- there is a landing about five feet wide and then it's 18 steps up to the third floor and 18 steps down to the first floor. so, there's no -- it is basically a back entrance and an emergency exit for exiting out thes rear of the building. >> so you would be fo*ek we recommended that the legislation has a prohibition on public use of that entrance. >> yes. we have no intention of -- we don't let our members go in or out that way. and we actually have a -- you know how when you have a pool, you have those doors that immediately set off an alarm if you open the door, it has one of those. >> i think that would solve a lot of it. the other thing is, when you -- i heard that the first performance of the chorus was the night of the assassinations on the steps of the temple. i'm sitting here -- >> steps of city hall. >> when you said here, that was

there. interesting. i would support the concept t rezoning as long as we make sure that there's prohibition on public entrance on elgin park that preserves exactly what it is for. >> one of the other concerns i heard was about hours of use and we have always been there until as late as 10:00 p.m. and we see no reason for anything to ever go later than that. and if for some reason we did need something, we would be talking to the neighborhood as well because we're very aware of having neighbors. >> so, ms. butkus, where did she go? oh, there you are. you were behind him. my question is on the nc3t, there is no 2:00 a.m., 6:00 a.m., it's all hours of the day and night? >> there no limits on hours of

operation in the nc3t. >> ok. if no public can go in or out of it, i mean, i'm having a hard time and the sound is contained within the noise ordinance, would there be an issue, do you think? >> it's hard for me to say. i'm not the police so i don't enforce noise violations. but considering that the building has been used as a institutional and community facility use and hasn't seemed to have been an issue thus far, i wouldn't think that that would be the major concern. >> ok. >> there was time for public comment earlier. so i looked at the picture that you have -- and i don't see a doorknob on the outside. so, these are exit doors and what you have said is that it is historic buildings that any physical changes to that door

would have to go through a rigorous process. right? >> that is correct. again, i'm not an expert in the fire and building codes, but anything that is not for bringing the building into compliance with fire and building codes because this is an historic building would need major evaluation. >> ok. thank you. commissioner richards, did you have one more thing? >> i do. the person whose bedroom is next to the -- can you please come up? that's my last concern before i want to moves on here. you're laying in bed. tough go to work early. it's 9:00. the chorus is in there practicing. do you hear them through the wall? >> absolutely. >> you do? >> oh, yeah. yeah. and so does my 3-year-old. >> ok. >> yeah. >> ok. thank you very much. ms. butkus again. if we were to rezone this nc3t

and a rock band bought the building because gay men's chorus is going to move somewhere else and they want to have rock concerts until 2:00 a.m. and they're loud without any special -- >> not exactly. because a rock band is probably not going to be a community facility use. so we start geting into what use would they be considered. and, again, as soon as you start rent, out the facility as an event venue, that comes with more process. so, it would -- it just depends if it was a nonprofit music school that we considered to be a community facility use. maybe that's the only thing i can see. but, again, even with the sfgmc, one of the first questions that a zoning administrator asked them was do you plan to host major evens and is this going to be a performance space on a regular basis? and the toons that from their representatives mr. pepper was no, they're far too large of an organization. they play much larger venues.

so, beyond it being a space that maybe has some ensemble performances or fundraising events every once in a while, this is not a constant performance space. it is very much a different use than the castro theater. >> nct3, by right, can have a bar or restaurant. and those -- and you had the picture up. the windows that are there, that's their big hall where they have event. so, that's -- you know, 10:00 p.m. singing, fine. i'm just concerned about the next owner and that is a by right with the nct3 zoning. >> thanks. where's mr. pefper? if we recommend on this that there was a restriction on time of 11:00 --

>> we're fine with that. >> ok. great. >> that's the shortest answer you'll ever get from a lawyer. [laughter] >> i don't think -- my understanding is that we could not do that. that it had to go in the legislation. >> we recommend that. >> ok. we can make a recommendation but we can't enforce it. >> what the project sponsor nodding and the neighbors getting kind of what they want, we can sing kumbaya here at tend and a public record. >> commissioner hillis? >> just -- it's a little odd because it is not a c.u. for us to put kind of hours of operation. it's zoning. so, i think it is a little odd to have the hours in zoning. ultimately i think we're kind of trying to figure out future uses in trying to get at zoning from that. i think people believe you'll be a good neighbor and i do believe that, too. i think the neighbors believe that. certainly you'll have to work them on issues about trash and noise and things like that. so, i mean, i feel i'm comfortable moving forward.

we're all trying to anticipate what happens and trying to solve this kind of through the zoning, which i'm not quite sure. it is an odd building that stretches through on to this lot. the next door building has the same exact problem as the retail space in it which could be kind of used differently also and it has their loading in the back. i think given this use in what you plan to do, i'm comfortable moving forward with the legislation. i get there may be some issues down the road. i think to the neighbors, you still have the ability to challenge those uses. maybe not through a c.u. process but through a d.r. process if this was ever changed hands and we would get that issue. that it could be a commercial use on a residential street. there should be some limitations as to how you use that back entrance. but ultimately those decisions should be made when that happens. not necessarily during this process.

>> so i would be comfortable moving forward in making a motion to approve. >> there a second? >> second. >> commissioner moore? >> i would like to ask the city attorney one more time. we have land use legislation which is in play here. and we have potential overlays of a neighborhood specific agreement. should there be the recommendation that there is a specific agreement made between the organization and the neighbors which speaks to some of the issues we discussed and will not forever kind of hardness that -- nothing wrong could happen in the future. however, for the time being, the assuming that this particular institution is really a san francisco institution who bought a building and most likely will not be moving out of there real soon, that they at least for time being have common ground in terms of how they're protecting each other. >> president melgar, kate

stacey from the city attorney's office. commissioner moore, i think that the planning commission could recommend some ongoing communication or dialogue between the project, between the property owner and the neighborhood. again, in this legislative context, it wouldn't really be sort of a condition of approval. it wouldn't be something binding but it certainly could be something that the planning commission included in its resolution of recommending the legislation. but, again, i think the distinction here is, as commissioner hillis pointed out, this is a legislative context rather than a conditional use permit context. so, it's a concern that the commission has articulated and could be communicated to both the board of supervisors and

the project sponsor. >> you're saying like community liaison, a phone number or something of where there is, indeed, dialogue should anything be running counter to what's expected. >> ok. commissioner richards? >> i know we're trying to solve for some potential future issue that probably is remote. but one question i guess ms. stacey or staff or the director, anybody, are there any other parcels in the city that are like an nc3t that have different criteria on them legislatively that have been put, i.e.s: no access from the public that kind of thing or is it always absolutely uniform. is nc3t, there's no exceptions or hashtags in the zoning table. >> mr. starr? >> no, not on a parcel by parcel basis. i would -- i mean, while the scary use is the nighttime entertainment t bar, are permitted on the first and second floor but not on the third floor. i don't know how the building

is divided up. they all require 311 notification and? if somebody did that, they could be defeated at d.r. or conditions put on it at that point. >> that makes me feel comfortable. i'm in support. >> thank you. commissioner hillis. >> this isn't uncommon that we have a commercial use on an nct3 that goes to a back alley or smaller street like elgin. >> it's not uncommon. i mean -- >> just for the neighbors. i think we've seen this happen where an entertainment use wants to use a building and it goes all the way through and we do get d.r.s and we'll put conditions of approval or project sponsors will work. i get the concern. but part of this is the unique building and how it's configured and trying to resolve the zoning. again, i'm comfortable moving forward. >> ok. i think we're ready, jonas. >> excuse me, sir. you're out of order.

unless the commission asks you up for a question. but i'm sure staff will be happy to answer your question after the hearing. theres a motion that has been sected. to approve this zoning map amendment on that motion. [roll call] is moved, commissioner. that motion passes unanimously 7-0. commissioners, that will place us on item nine for case number 2018-7007889 for the polk specific area design guidelines. thises a planning code amendment. >> good afternoon, commissioners. congratulations, president melgar, vice president koppel. david winslow, staff architect.

i'm here to amend the planning code to reference the polk pacific special area design guidelines and to adapt the guidelines. you may remember this effort came about as a result of public requests for guidelines that focused on the specific features and unique characteristics in their neighborhood commercial districts that may not have been captured in the urban design guidelines. sorry. technical difficulties. oh, come on. sorry. so, we started this process of creating the special area design guidelines by listening

to and walking with community members who wanted more localized guidelines. that addressed specific qualities and values of the polk and pacific neighborhood commercial districts. a process that allowed us to see, reflect and document some of the unique neighborhood characteristics to be maintained and enhanced. staff worked closely with several community organizations including members of the middle polk neighborhood association. the lower polk neighbors, pacific neighborhood association and russian hill neighbors meeting multiple times to review and develop the draft of the polk pacific neighborhood special area design guidelines from fall 2017 through the fall of 2018. these guidelines will apply to the polk and pacific n.c. and pacific avenue n.c. districts. planning code section 723 and

726 contain the zoning controls for the polk street and pacific avenue commercial districts representively. in addition to familiarizing you with the polk pacific guidelines, the pearl of this hearing is to adopt the resolution for the planning code amendment as well as the adoption of the guidelines. we did not start from scratch. these are the guidelines that are already in existence in the urban design guidelines found in the commerce and industry element. they're the foundation of the special area design guidelines. in some cases, we've added to the brevity, clarity and usability. but the content remains the same. the guidelines were added to respond to the desienl of alleys and roof decks with input from community members. the guidelines were structured

and formatted to be consistent with the recently adopted special area design guidelines and to also be more graphically accessible. they include a context statement that expresss a clear description of the physical features and values to be maintained and enhanced. and similar to the structure of the urban design guidelines, each guideline has a rationale and is illustrated with neighborhood examples that show several means of achieving the guidelines. and also similar to the -- also similar to the structure of the urban design guidelines, the guidelines are broken into three sections. site design, architecture and the public realm. now let's look at a handful of guidelines starting with s2 and s . i'm not going to belabor -- there's 16 different guidelines, i'm going go through a handful to give you a

sense of the packet. so, s2.2. respect rear yard open spaces was an issue of high concern to the community members. it places greater obligations on new projects to size, or cents and locate rear yard open spaces. and preferences rear yards located at grade. s2.4. step the height of the buildings with the slope. reinforces the idea of shaping the buildings to respond to topography. at the street front but also at the interior of lots as well. on wide lot, it may be used to articulate the massing of wide buildings.

we received a good deal of requests to include preservation guidelines. preservation districts have different regulatory requirements, process, staff and often have different boundaris that span different zoning districts. including residence, districts. however, we included a policy from the commerce and industry elements into guideline 81.1, which gives twightsing the retention of buildings that may not be preservation-worthy but nonetheless may have architectural merit worthy of being kept in whole or in part. 84.2, designed roofs and balconis to minimize visual noise and privacy impacts. i realize i probably can't use impacts as a word in the guideline since it is proprietary to our ceqa anymore. recognizing that they're

residential neighborhoods above commercial spaces, they are set to restrict privacy, noise and preferred locations either toward streets and away from smaller, quiet urban spaces such as rear yards and alleys. and 8.2, design storefronts with human-scaled features. the character of the district is exemplified at its best with small-scale store fronts that embody time-honored features. . the ground floor is where most people have direct interaction with the building day and night. this guideline describes several features that add comfortable human scaled storefronts, lighting, signage, recessed entries, protective overhangs and other scale giving features. the alleys in both n.c.

districts are recognized as special places and each gets a guideline. in the public realm section. p2.1, improve the polk gulch alleys for vision plan, simply introduces and references the great work invested in polk alleys with the vision plan. and we believe we created a guideline document that elaborates and responds to relevant issues in the polk and pacific neighborhood commercial districts and are eager to hear your feedback and would recommend approval. thank you. this concludes my presentation. [please stand by] [s please stand by]

>> i am in strong support of it, and find the draft of the legislation which is in our package very supportive of the idea. i am in strong support of it to, and very, very happy. congratulations to everybody who has achieved this. >> thank you.

>> i could not have said it better myself. it is a real testament to the neighborhood and the work of the planning department that i think this has been really celebrated by all sides, and can really help provide a framework both for developers, for community members, and for the city to think about how we do development in this neighborhood , and i hope to see this model spread to others. with that, i will make a motion to approve. >> second. >> commissioner koppel while. >> great job. this core door has got a bunch of different little microclimates. it totally just describes san francisco to be a german austrian restaurant. you have pizza places, you have many bars, many restaurants, many coffee shops, and i wanted to give acknowledgement --dash acknowledgement to the neighborhood groups involved.

whether it is small or large projects up and down the corridor, i have always seen and heard that these groups are very involved in their neighborhood, and i think we all highly value that, i wanted to acknowledge them as well. >> thank you. commissioner moore class. >> thank you for those encouraging comments. i do believe a great complement should be given to the various neighborhood groups. this is a long corridor, it has many problems. i think their proactive interventions of city hall and neighborhood groups has really changed this around. i want to comment about the freehand drawings and the sensitive photography as in place examples of far more expected -- effective examples. it is a good guideline to -- thank you for making this a very rich document.

>> very good, commissioners. there is a motion that has been seconded to adopt the guidelines and approve the planning code amendment. [roll call] >> so moved. that motion passes unanimously 6 -0. that will place us on item ten for the economic trend and housing pipeline informational presentation. >> and am i starting this? >> i wanted to introduce you to someone many of you have already know who has not yet been to the commission. miriam chung recently joined the department as a planner to be the program manager for the housing policy and community development team. mariam previously worked for the planning department between 1990 and 2004.

she is no stranger to the department. she worked on the eastern neighborhoods and various land use and economic development projects prior to coming back to planning. she was a policy director for the bay area regional health initiative, and most recently was the planning director between 2009 and 2017 where is where i first met her, and many people know her from. she did a sort -- a short stint to teach and conduct research at clark university, but we wooed her back and we are thrilled to have her back with the department. welcome. >> thank you. good afternoon, commissioners. it is good to be here. this is a first of 21 briefings that we have to be in response to several of the questions related to housing. this one will focus on economic trends and the pipeline.

and the second on january 31st will focus on housing strategies and policies here within the city of san francisco at the regional level and the state level. i am very fortunate to share this presentation, to share the podium with teresa, manager of the information and analysis group, and the person who has been able to gather a lot of the knowledge that has supported many of your projects and deliver a very sophisticated analysis. the reason why we are putting the two pieces together, economic trends in housing pipeline, is that we have been going through a long period of growth. this is one of our longest cycles. it has been about nine years of steady growth, and there are multiple questions emerging about the type of growth, the length of the growth, and when this growth might change the slope.

so here, what we have compiled a number of indicators to show you how we are still growing. we don't see the recession in this quarter. projects continue to come. however, the rate of growth is slower than it was a couple of years ago. so when you look at the chart, you can see how many years of sustained growth we have had, and in this other chart, you can see the green parts of growth. we used to be growing at 5%, now it is around 2%. the type of growth that we are having, as you can see, the top line of the services includes our tech sector, includes professional services, consultants, and several other business services. the second line is eating and drinking places, which gave you a glimpse of the diversity of

the economy and how we managed to have a more sustained growth. i want to flag your attention to the construction industry, which is a lot more cyclical than any of the other industries. and while we have increased construction jobs by 50%, we are barely over where we were ten years ago. and that represents one of the challenges as you will see related to housing. this is a similar picture at the regional level. you see that information is at the top, but followed by education and health services act leisure and hospitality. we do have a diverse regional economy as well that balances the high-tech and professional services with the number of personal services in all the businesses. you see again the red line, which is the construction jobs. while it has experience with substantial growth, the decline

in the previous recession was substantial. that relates to some of the increasing construction cost. if we look at san francisco compared to many other cities, we have the highest index, and if we look at san francisco and compared to 2003, we -- our construction cost has more than doubled. this is another dimension of the local economy. when we compare our value of products and services, our gross domestic product with wages, we have experienced a much stronger growth in terms of g.d.p., and wages have increased. to be clear there is a 10% increase, but compared to the more than 20% in g.d.p., it creates a gap that we have to do a lot more with less wages, and

the value of our housing that gets pegged to the g.d.p. the growth of wages has gone primarily to the top 10% or 25% of our workers. as you can see here, we have seen some growth at the bottom, but much smaller. and when we look at employee residence by rates, within san francisco, we still have predominant white workforce and we have seen increases in the asian employee residence as well as latino. >> we have seen a decline of four% even though we have had strong growth. this chart is in response to some of the questions you raised a few weeks ago. how does this economic trend relate to population and housing quote we stepped back a little

bit in terms of time, and also in comparison to other cities. we didn't grow much in the seventies or the eighties. san francisco and several of the other cities across the u.s. this was a period where we were experiencing suburban growth, subdivisions, but in the nineties, the cities across the u.s. have started adding more people and more housing. we still have a single family homes, we still have subdivisions in some growth index. so you can see that san francisco compared to boston or seattle or portland has experienced a much more substantial growth in recent times. within the region, this is the

overall picture. there was substantial growth in our neighboring counties during the sixties, during the seventies, during the eighties, santa clara added housing contra costa and alameda. that has changed in recent decades. it has been much harder for neighboring counties to shift from subdivisions to infill development. there is substantial growth at the regional level and some of those counties, but again, it is a substantial task. if you see on the contrary, the bottom dark blue, that is san francisco, and it shows how the number of housing units have increased in the city and how that has happened in the last two or three decades. it flags how important it is to address the housing question at the regional level. san francisco will continue, and

it is an important player in housing, but it is important to have a conversation with our neighboring county. this is -- in terms of if san francisco has grown and added population and housing, what is some of the profile in terms of income? we have seen a substantial increase in terms of high income , some increase at the bottom, but the middle income is the portion of the population that has contracted. it has increased by strong regional economy, a strong growth in g.d.p., a contraction of housing at the regional level that will provide some of the explanation for the high housing cost. as you can see in california, in the bay area, we have seen a substantial increase in home values. a similar picture in terms of rental rates, although we see

that in the bay area in san francisco, rents got a little bit more stable in the last couple of years. this is where we are right now. a median asking rent of $3,500, which makes those apartment buildings, those apartments or housing units available to households that are making $142,000 or more. in terms of the median price, $1.3 million, which makes it available to households that are making $287,000 or more. let me transition to the housing production section. >> i am with planning. the affordability crisis may not just be due to lack of -- the

affordability crisis may not just be due to lack of production. san francisco has been in a race to meet the demand for housing, and as the chart shows, housing production has been increasing, save for the troth reflecting the recession, the last ten years' average is twice that of production in the 1990s. in fact there were more units built in the last 18 years then were built in the last 36 years before the year 2,000. the production of affordable housing has remained steady at an average of 25% of net total units produced, moreover in 2017 , 1500 net affordable units were built. a rocky dish a decade -- a record in the last four decades. recent news reports and blogs have been feeding worries that the housing development pipeline is slowing to a trickle.

the commissioners have also been repeatedly warned about a crash in planning applications. i'm here to talk about the housing pipeline, as well as the general health of planning applications. planning applications should be familiar to the commissioners. while there are many application types submitted for planning, staff review and signoff, or approval, for this hearing, we are only talking about those applications that are considered , or are called planning cases, which require planning commission oversight and approval. this chart shows the turn in planning case application over the last 15 years. the green line shows how many applications were submitted, and the bar his behind show proportion of applications that the proposed new net housing units in blue, versus those that

won't. that dotted lines on the other hand showed the 15 year averages for total applications, and just those four projects proposing to add housing units. fifteen year trend captures two economic cycles, including the great recession of 2008, 2009, and the subsequent recovery. as you can see, we are not quite in a crash, and we are still well above the 15 year averages. still, was such a long run of economic good times, it is understandable that we should be cautious when the number start dipping, even if slowly and slightly. this next chart also shows the 15 year trend in planning application, but this time it gives a profile of the number of units proposed in the applications by project size. these long bars present the units in major multi- faith --

face and multi- projects have 1,000 units or more. the numbers of such projects and their sizes are unprecedented in the last 40 years. the chart shows other very large projects, those with 500 units that are similarly unprecedented throughout the 2,000 his, large projects were in the 150-499 unit range. the trend in the last few years shows increasing number of projects with one or two units, mostly in a.d.u. cases, as a study allowed legalization of illegal units, and encourages new additions of 80 use -- a.d.u. his. this is the same chart as a proxy for economic health. as you can see, application submitted to the planning department appears to be

tracking the economy, but the correlation is weak. before we go to the pipeline, i would like to say a few more things about how to look at planning application trends. the trend is the accounting of applications filed this year. it is static and does not follow the project through completion. furthermore, projects at certain sizes and complexity end up cementing two or more applications for the same projects through the course of its development. in addition, it is not a picture of what and how much housing is to come. and do not require applications for planning approval or even holding permits for the department of building inspection. there are, for example, projects approved by the state, by the office of community investment and infrastructure, the presidio

, and the port. these are projects that the pipeline captures. so what is the pipeline? it is a quarterly snapshot of where post residential and commercial projects are in the development process. it follows project application to entitlement and secure building permits. and when we say construction here, we mean vertical construction, not when a project starts digging a hole and moving earth around. when it is completed, it is removed from the pipeline. this graph is a very simplified representation of the development process. we know the projects can be quite complicated, and some projects can stall at one stage or another for various reasons. many of which are beyond our control. this can include appeals, litigation, infrastructure requirements et cetera. we have been tracking the pipeline since late 2002, and

with increased interest from the public, have made the data available online on a regular basis since 2007. this slide shows the 12 year pipeline trend by the development stage. it shows gradual growth and we now have the largest pipeline in years. the profile also shows that planning has been entitling projects, and now much of the pipeline has been entitled. anything below the light blue bar has been entitled. the light blue bar represents projects under review. the pace of completion, as shown as a blue line, barely makes a dent in the pipeline. curiously the 12 year average for units completed and that of the growth of the pipeline almost match, meaning that if you units -- if units are completed, about the same number of units are added to the pipeline. as of the third quarter of 2008,

there were almost 70,000 net units, about 20% of which are affordable. this chart also shows a very -- the various stages of development, and how many units are in those stages. 7,460 units are under construction. 5,870 have permits approved, 4,870 are in projects that have been entitled, but have not yet filed for a building permit. over 40 2% of the pipeline, or almost 30,000 units are in eight major multi- face, multiyear projects that have also been entitled to, but have yet to file for a secure building permit. and should be noted that phases of some of the projects such as candlestick point, hope s.f. have started to, in units in those buildings are not included -- are now included in the other

development stages, and not in a discount. the build outs of these major projects can take anywhere from 10-20 years. there are over 18,600 units currently under review. projects under review compose a total of 4,000 net units. this slide shows the location of the pipeline projects. much of them are in the eastern flank of the city, with balboa park dominating the southwestern flank. in conclusion, it should be -- it could be a time for caution, but the economy is still holding steady with the number of new job still growing, applications submitted to the planning department have not plummeted,

it slowed and dipped slightly. applications will continue to add to the pipeline. san francisco's g.d.p. is growing at a faster rate than wages. with the wages lacking, higher housing costs are over burgeoning lower income households, especially black and latino households. major increases in construction cost is dampening housing production. the construction industry may not be going fast enough to meet the demand for housing production. the profile for the planning application is wide and often changing. tenant major multi- face and multiyear projects in the pipeline well at over 35,000 units to the city's housing stock. very large projects of over 500 units are still coming in, but not as much. there are only two major projects under review. the number of projects proposing 80 use has increased dramatically since 2013, however these projects are usually one or two additions pick the pipeline is the highest we have seen. the bulk of it, however, is in

projects that will take it dead -- decade or more to build out. and with the pace of completion, and that of pipeline growth, roughly balancing out, the pipeline will continue to promise a substantial number of units to be built. the focus now should perhaps be built from the entitlement process, which we are pushing forward a large queue of entitled projects. at 7,500, the number of units under construction is above average. in 2017, the number of affordable housing units built, about 1500, is also the record in over 30 years. we think the commissioners for allowing us to present today. we are here to answer any questions you may have. thank you.

>> thank you very much. we will now take public comment on this item. >> good afternoon. >> i was expecting a lot more people to be here talking about this, which is a really good first step, but there is additional steps that need to be taken. one is the existing housing is being lost, and isn't being factored into this. how was existing housing being lost? one, the landlords have high motivation to push them out by hook or by crook. i am dealing with at least three

cases right now where all kinds of manoeuvres are happening to remove tenants and supervisors are aware of that somewhat, but it is very scary. they are very focused on its. organizations are very focused on it. second, you get people out and you do a building remodel, or something like that, and the planners don't look at the effect on existing tenants. i read 311 and 312, and i alert people to do them, but i am the only person that does that. the planning department should do that. the planning department should have someone who really gets on the case of existing buildings adding a.d.u.s for example. forty-seventh avenue.

or looking at plans with a cynical eye. because you are losing housing on 311 and 312 all the time. another thing is there is sometimes a legal use that happens. there were two supervisors here talking about a conversion that happened right across the street from s.f. state, and it was an unusual d.r. you actually took it against the staff recommendation. the entire building had been converted into student housing with individual doors. and then you have illegal demolitions, one is going to appeal to the board of supervisors right now, the one you did on hawkins street, and you also have mechanization, which is a great incentive if

you can take a building, and eliminate a cottage, and put in a 4500 square-foot building. no one can afford a 4500 square-foot building unless they are really, really well paid -- well-paid pick we are losing working people in the hospitality industry, in the construction industry. and just people who are working to serve us, to serve where you can build -- buy goods and services. and that it is a problem pick the planning department budget needs to be really focused on having someone not.

>> i will come back on your budget in two weeks. >> thank you. any other members of the public who want to comment on this item without public comment, public comment is closed. commissioner koppel? >> to say that regional housing needs to increase as a really big understatement. when i see a b.r.t. station, there should be a lot of housing around to that end near the freeways there should be a lot of housing. i really think we are doing as much as we can hear. we are making a huge priority of approving housing. as much as humanly possible, when it is done responsibly. i do want to acknowledge the developers that build their projects when they get approved. there certain projects, i don't want to single anyone out, but a small digit on oak street where we approved a project and asked the developer if they were going to build it when the project was already on the market, they said yes, and it hasn't been built. i really appreciate the developers that build their projects when they get approved, and they built them right away.

that is a big help. we need as many units as possible. the wages aren't going to dramatically increase enough for people to start buying housing. i personally kept track of our local six members that live in the city, and every year we lose 20% of our members that literally had a san francisco mailing address, and literally have to leave the city. that 20% happens every year. we are doing what we can, this is always on our radar, we are doing what we can to provide housing for all levels of income , and grow this city responsibly. >> commissioner richards? >> this is amazing, one of the most important first steps that this commission has been asking for about a where things stand in the current housing situation some call it a crisis, some call it other things. we have one public speaker, we have housing advocates a come

here every week, i don't know where they are at. it is amazing. it is actually kind of crazy. i guess when i look at this, i have a lot of questions and a lot of compliments on the level of data and the depth of the data, but i think this should start a narrative of truth. i think commissioner koppel started a comment on it that what we are doing in san francisco -- and it is time to get rid of a lot of the false narratives in the stuff that we hear when people claimed their hair is on fire, we have do not think and just go do stuff. the first thing i have, the first question i have is, i really wish judson true were here today. is he in the audience clapped a lot of this speaks to what the mayor is trying to do to appoint a person who has been trying to speed up housing production. to really understand where we are at now, and what is driving where we are at and why we are there. i think one of the first things is for me, population versus zone capacity.

and if the secretary can put this graph up on the overhead, i would love to see it. we always hear this narrative, we downs on the city, we downed the zone the city, and i don't know whether that is true or not because i hear people saying it, but if you look at this, this is actually -- here we go, this is a study that somebody did for los angeles, and they said look, the 1960s, we rezone to have 10 million people in l.a., what we only had two and a half million people. as population increased, the city down zones. i would love to understand what this graph looks like for san francisco. and the reason is i am troubled by the fact that we have 141,000 available units that could be entitled to, that nobody is getting entitled. we had a man who gave us that presentation, and this one here last october. it is in addition to the 70,000 units we already have. this notion that we don't have

enough capacity is quite frankly b.s. what i'm trying to understand is if i had one of those units, 141,000 that is available based on the current zoning, why am i not going to entitle it? maybe i can make a lot of money, maybe i can make a little bit of money, i'm not sure. that is my first question. population versus zone capacity. is the zone capacity -- what is a current entitlement rate of zone capacity, when you hear in s.b. 50 or you hear something that we have to increase capacity, is that because only a certain percentage will only get entitled or not? there has to be some kind of rule of thumb. of the zone capacity, only half gets entitled. what is the appropriate level of zoning capacity to get that production up? second question, big question is we have 70,000 units in the pipeline, we take out the ones that have yet to get fully entitled and we take out hunter

's point shipyard because that is a whole other story, but we have all these other units that are sitting there, and the question is, why aren't some even pulling building permits? there is an entitlement aftermarket going on. i think commissioner koppel mentioned one oak. people want the entitlement, they don't have the financing in place yet, so they want to go ahead and get this and flip it. how much have the pipeline, does how much of the pipeline is a result of that? i would have liked to understand that. why aren't things getting built? that is a big question. if we could categorize it based on a sample, that would help. i think the third thing is we touched on the cost to produce housing. i would really like to understand the breakdown.

the entitlement process, the cost to carry, and maybe even add litigation in their. and track that over time. track it over time and see what the heck is going on in the cost , and why aren't things getting approved. i came from a finance background capital goes to the highest return. maybe housing is not the highest return anymore, maybe it is a hotel, maybe it is something overseas, maybe it is cocoa futures, maybe at his orange juice, i have no idea, but the big money has to have a return either a pension fund, venture capital fund, whatever. there has to be a certain return you will not go for a low return out of the goodness of your heart. that is really what is driving a lot of why we are seeing things aren't getting entitled, -- aren't getting built because you

are not seeing the entitlement and all the returns aren't there the interesting thing is generally, what i am hearing now , and i spoke to someone pretty famous and knowledgeable about this too is an elected official, they want to start pulling the community benefits piece back in order to make things pencil out. why should the community be the only one that is holding the bag hear? everyone should take a haircut if you really want to get this approved. on the cost, i keep coming back to if it costs 500 or 600 or $700,000 to build a unit, how can anybody making 40 or $50,000 , or $70,000 ever afford it without massive subsidies co-opt this building our way out of the housing crisis, i challenge that. we can't, we just can't. even if they sell it at cost, people can't get the down payment or make the monthly payment, or do the ho hope -- h.o.a. fees as we see on the

b.m.r. units that we allow them to fee off because they can't afford it. on page 3, when i read this in the 21st century, that column, i started challenging planning, but planning is bigger, it is trying to understand the number of jobs, trying to understand the zoning as we get those jobs, and understanding the pace of change. we do 25 year plans. some of these projects are built out over 20 years, but it says the pace is happening faster than the scale of the problem. the cycle is five years, but we are planning for 25 years. i think that is -- we need to get way behind the eight ball. can the private market intervene and rectify this is a problem i have. what can we do to harness the private market? i want to understand commissioner koppel made a good point. i really get worried about the way the graph goes down on page 3. these other communities -- what

was the deal here? was it obstruction, down zoning, i want to understand why san mateo especially was an outlier and not producing any kind of housing or at least not enough housing. on page 4, it should be noted that not all projects go through the planning department entitlement process. is that a big portion of the portfolio are not? probably not. on page 5, we talk about what is already entitled, what is not getting built, and we talk about two years and five years and it will be a downturn. the question is, what is the plan to capitalize on the downturn. as things get cheaper, winning is the rainy day fund for the downturn to go by that land and hold it and secure it and be able to actually build more affordable housing on it with public subsidy? i would really want to understand --he