>> good afternoon and welcome to the land use and transportation committee for the san francisco board of supervisors for today. december 14, 2020 i'm the chair of the committee supervisor aaron peskin joined by supervisor safai. emergencdo you have any announc? >> thank you. due to the covid-19 health emergency and to protect board members and the public, the board of supervisors legislative chamber and committee room are closed. however, members will be participating in the meeting remotely. this precaution is taken per student to the state wide stay-at-home order declarations and directives. committee members will attend the meeting video conference.

public comment will be available on each item on the agenda. both channel 26, 78 or 99 and sfgosfgovtv.org are streaming te call-in number across the screen. each speaker will be allowed two minutes to speak. you can call the number on the screen, 415-655-0001. the meeting i.d. is 1465627595 then press pound and pound again. you will hear the meeting discussion. but you will be muted and in listen mode only. when your item of interest comes up, please dial star and 3 to be added to the speaker line.

written comments may be sent to u.s. postal service to city hall room 244, san francisco, california. items acted upon today are expected to appear on the board of supervisors agenda january 5, 2021. unless otherwise stated. mr. chair? >> thank you ms. major and thank you for your service to this

committee and the board of supervisors during this challenging year and best wishes to you and your family for the holidays. could you please read the first item. >> clerk: thank you. item number one is an ordinance planning code to extend from january 1, 2021 and january 1, 2022. members of public should call the item on the screen, that's 415-655-0001. meeting item is 1465627595 and press pound and pound again.

>> supervisor peskin: this item that has been brought to us before is sponsored by the mayor and cosponsored by supervisor mandelman. it dates back to an amendment that i made to then supervisor malia cohen's legislation wherein we allowed medical cannabis to convert to the prop 64 cannabis and this is a request for a one-year extension. ms. rodriguez from the office of cannabis. are you present to present? >> yes, thank you very much. good afternoon chair peskin and supervisors. i'm director of office of cannabis. i'm here with associate director law. legislation before you extend the date of planning code section 190 to january 1, 2021 to january 1, 2022.

session 190 provides pathway them to make this important transition. given the unexpectedly high number of applications submitted, in other city agencies and administrative capacity challenges not to mention the challenges brought to you by the pandemic across all city agencies as well as my own office. we are needing to extend the state. we are happy to let everyone know that we were able to make it through our entire backlog this summer and are gone on to other tiers for processing. our next tier will be the m.c.d.s. i'm hoping in q1 of next year, we'll be able to start processing them. we need to be extended for one more year in order to do so.

just an extension date is what is requested. >> supervisor peskin: thank you ms. rodriguez. you're in front of us, this is an opportunity to just talk about the numbers, can you quantify those different trajectories? >> we were able to clear the equity backlog. >> we're hoping by this time next year we would have reached parody. with respect to them, there are about 27 to 30 businesses and

the reason it's fluctuating, some are getting back their permits unable to stay afloat. we have about 27 that we will be processing. after equity applicants our next batch is incubator applications. then, those who are federally forced against, couple there and who are viable, folks needing to find locations until they can't move forward until they do. after we're done processing, all equity applicants make their way through and we continue to process them. we have about two new applicants who applied and the rest will be m.c.d.s. we have 160 permit holders.

>> supervisor peskin: thank you for that. just to slow it down and break it down, 14 in the first traunch with the remaining approximately 14? is that correct? which could be equitable for the second trajectory m.c.d. conversion traunch that is about 27? is that what you said? i would love -- i rarely like powerpoint presentations. >> i think that's right. it's fair to say that, there are probably about 14 that were actively processing and then, -- >> supervisor peskin: 14 approved and 14 being processed? >> that remain upon processed.

>> supervisor peskin: why don't we start ath the top. the first traunch is equity applicants correct? >> that is right. >> supervisor peskin: how many have been approved in that first year? >> 14 have received permits from our office. over 100 and maybe 15 have been sent to planning. we processed. 30 are still being processed by our office by going through our o.o.c. process to get prepared to sent to planning and d.b.i. we have maybe two waiting in line to get picked up who are equity applicants. there are several who are incubators. there were a number of there are probably about 22 incubators but it's taking some time -- most of them jumped in with their equity applicant. but now there are a few who

remained and still want to be incubators. we are processing actively about two or three of those with a fair number still looking for >> supervisor peskin: ms. rodrig uez, what i'm trying to drill down into, relative to what i think the board is agreed on which was equity first. that universe as i think you just explained it, is about 150 of which 14 have been approved. and hundred are at planning, 115. is that right? >> the universe for equity applicants is about, let's say, 100. 14 of which have been approved. we have in total sent 115 to

planning. >> supervisor peskin: there's hundred left at planning? >> relatively maybe, just under maybe under 75 or so. i was including those that have been approved that have their permits. >> supervisor peskin: which is 14? >> that's correct. >> supervisor peskin: the second traunch is m.c.d.s? >> yes. it goes incubators and then federally forced and then m.c.d.s and temporary permit holders. >> supervisor peskin: so the universe of one is you are saying approximately 115? >> yes. >> supervisor peskin: and the universe of two, which is incubators, is that correct? >> correct. >> supervisor peskin: approximat ely two or three because most of them are hooked up with the

first traunch? >> there were originally 20 something and that went down to two or three to be processed. quite a few are still looking for locations. >> supervisor peskin: okay. as the second traunch, which is really just the hand full, how about we do this. ms. rodriguez, how about we approve this item, i don't think anybody has any issues with it. we'll open for public comment. maybe we can do duplicate the file and bric bring you back whe you can actually lay this all out in the four traunchs, approved, remaining, timeline. i think that will be really helpful and i love to hear from my colleagues. are there any questions from supervisor safai or preston or

comments? >> supervisor preston: i have none. >> supervisor safai: no comment. >> supervisor peskin: okay. is there public comment on this item? >> clerk: i have james from d.t. confirms that we have ten listeners but none of them are in queue. just remind folks, if you like to be in queue for item number one, all you need to do is press star and 3. the system will indicate that you have raised your hand. i will give folks a second to see if there are anyone in the queue. james, can you confirm? we have confirmation that none of the listeners would like to be in the queue. >> supervisor peskin: okay, public comment is closed. ms. rodriguez i don't know if you have a handy slide.

>> i don't think i have a handy dandy slide. let me double check. i can e-mail you the numbers relatively easy. >> supervisor peskin: this is not for me. this is for the public. >> sure. let me see what i can find here. >> supervisor peskin: ray is working on it. i can see his light blinking at the bottom of the screen. [laughter] >> we have some outdated -- the numbers change daily. >> supervisor peskin: i don't need -- this is not like covid. i don't need today's numbers. i need -- i would like to see round numbers as the fur traunchs, what's been through, what's in the pipeline, what remains. >> we'll send that back. >> supervisor peskin: i'll tell you what, in so far as public comment is closed and we got one

more item that dean preston has been waiting for a week. how we defer the vote for this and that will give you time to put the slide together and we'll get back to you, supervisor preston, how long do you think this will go? >> supervisor preston: good question, it's not short. i think there's a presentation that i anticipate at least 15 or 20 minutes from departments as well as we've doubled that in >> supervisor peskin: ms. rodrig uez, you got an hour, at least. >> at least an hour. okay. >> supervisor peskin: we will without objection, continue the vote on this item pending a report on that which has been discussed. madam, clerk please call item 2.

>> clerk: item you 2 a is hearing on strategies to maximize creation of affordable housing on public land with goal of 100% affordable including a review of public land housing. members of the public who wish to provide public comment on item 2 should call the number on the screen, that's 415-655-0001. the meeting i.d. is 1465627595 press pound and pound again. if you like to join the speaker line, press star and star 3. >> supervisor peskin: supervisor preston and sorry for the delay last week where we went for four to five hours.

>> supervisor preston: no need for apology. thank you for accommodating -- having the hearing today and apologies to the members of the public and the department staff who were waiting patiently last week. hopefully you can join us again today. before we get started on this, i want to thank you chair peskin, vice chair safai and madam clerk, ms. major on our last agenda item for the year. i wanted to thank everyone. not just for all their work this year but also for welcoming me as a new supervisor a year ago on to this committee. it's constantly a learning experience and one that i enjoyed despite or maybe because of many of the things we've all been dealing with this year. thank you all for making the

time and using chair peskin to carving out the time. we got this one, from the title -- >> supervisor peskin: i reserve to right to call it special. >> supervisor preston: fair enough. [laughter] as you noted in terms of your question on time, this is a topic that we can devote quite a bit of time to and hope here really is to surface some issues and start a conversation. i do want to thank president yee for co-sponsoring this hearing. i called this hearing to maximize affordable housing on public site. an issue that's essential importance as we work to ensure that folks from all walks of life actually can afford a place

in this city. i requested the hearing the same day that the full board voted on the balboa reservoir proposal. a project that as you will recall, combined affordable and market rate units on public land. i heard from a lot of constituents and stakeholders with concerns about including market rate housing on public land. when i relaid those concerns and questions to departments, around could there be higher affordability levels or not, given this is public land, we were told repeatedly that wasn't feasible or doable in this project. that was in the late stages, obviously when we were on the verge of approval. it left me to question why are

we approving market rate housing on public land in midst of affordability crises. can we do better in terms of leaving more afford the on public land. how and when can the board of supervisors and public that will weigh in about affordability on projects on public land. how do we do that early in the process, not when the board is presented with something that folks worked on for five years or more. i want to be clear that although this is announced upon the passage of the balboa reservoir and that the hearing is really about more than a single project and i think we more broadly to understand what strategies we can employ as a city to get the most affordable housing possible on public land. i understand mocd and planning are here.

they have prepared a presentation to start the conversation and i appreciate all their time and attention and answering my many questions leading up to this hearing. i will leave bulk of my comments to questions that will follow presentation. i do think that terms of providing a framework for the discussion, i like to pursue three broad areas of inquiry. how do we achieve 100% affordable on public land? what are the challenges leaving thaachieving that opportunity. are we properly identifying surplus and underutilized public properties for housing. what's third, what creative strategies like acquisitions, land banking, are we utilizing or should we be considering so we have more opportunities to achieve our affordable housing goals. with that overview, i like to

turn it over to o.e.w.d. or mocd staff for their presentation. >> supervisor peskin: thank you supervisor preston. going back to balboa, one of the underlying questions you're asking about ground lease relative to a fee simple conveyance, is that part of your questioning? >> supervisor preston: i think we can get into that and which structures facilitate more affordable housing. i would say that can be part of the discussion. >> supervisor peskin: all right. i might invoke henry george before this is done. to oewd now. >> thank you chair peskin and good afternoon supervisors preston, safai and peskin.

thank you supervisor preston. thank you for the opportunity to discuss public land. i am with the office of economic and workforce development. i'm joined by colleagues from the mayor's office of housing and community development, the sfmta, the planning department and the real estate division who will be available for the questions and discussion following the presentation. i'm going to bring up the slide. assuming that everyone can see my slides. i'm going to get started. public land in san francisco is under the jurisdiction of a variety of city and non-city entities. within the city, department such as the real estate division and public works, own city streets, pleases, office buildings, libraries and public safety

sites. the city's enterprise agencies also own property and most are required to pursue revenue from real estate assets to fund agencies and missions. non-city agencies own land throughout the city. there are a number of city policies that have established goal and directives for building housing on public land that is not being used for city purpose. these policies promote building housing on public land with high levels of affordability and maximizing the production of affordable housing in the city. public land is located all across our city. we can expand our reach to be able to maximize the provision of affordable housing, to

achieve geographic housing balance, target historically underserved populations and meet the city's range of affordability and programmatic housing needs. next few slides will cover the process and criteria that we look at for housing. site selection fall into two main categories. surplus sites are the underutilized parcels that are identified through the annual surplus land report. these sites are prioritized for affordable housing and are analyzed by mocd for feasibility. they tend to be smaller sites and the other category is joint development sites, which are larger, multiacre sites and have a recent or active ongoing enterprise agency use requiring

investment. we can categorize the sites that are good candidates for country% affordable housing. these are sites with five stories with a unit yield about 100 to 130 units. this building site is optimal for leveraging our existing affordable housing funding sources, tack credits and mohcd funding. >> supervisor peskin: can i interrupt with supervisor preston's indulgent. how do we differentiate between surplus and 100% affordable candidates? >> well, it's a great question.

surplus is through the city's surplus property ordinance are directed to mohcd for feasibility. >> supervisor peskin: that's only if a department declares them to be surplus? >> that's right. >> supervisor peskin: that requires an affirmative action by the department? >> yes. they put it on the list. it gets included in the property surplus property report that is distributed and presented to the board. >> supervisor peskin: which generally are little slivers of useless land? >> they do tend to be very small kind of oddly shaped parcels that don't have an active use. that's right. however, when we look at what sites what's good for 100% affordable housing, that's not

limited to the surplus property report. we look at, specifically single building that are generally great for moving forward as 100% affordable housing. they do overlap clearly but we sort of look -- we start with the pieces of how much affordable housing can we build on a piece of property regardless of how it comes to us, surplus or otherwise. >> supervisor preston: if i can jump in, i will resist the urge to jump in. i know you have hundred slides to get through. at least for some clarification, just on the first part of that slide around the 10,000 square foot minimum, can you just explain -- is that ideally, my understanding there are a number of parcels in the 8000 or 9000

square foot that can accommodate 60 to 100 affordable housing units. i'm wondering if those are off limits in terms of setting or if it's they are not ideal? >> it's the latter, supervisor. they're not ideal. we can have a more thorough discussion about that after. we really look to figure out how to maximize unit yield within 100 to 130 unit frame. generally, given the kind of planning and zoning criteria that exist throughout the city, a 10,000 square foot minimum is kind of our good -- we would use it as a guide, not a hard line.

>> supervisor peskin: i will not interrupt again, sorry. [laughter] >> this is an example of a 100% affordable project on public land. the 1950 mission, 100% affordable project was built on 36,000 square foot parcel. it was owned by sfusd and transferred to mohcd if i 2013. the building is complete with 157 low income units. the total cost for the development was $105 million. the second category of sites that we can talk about are sites that are good candidates for mixed income and mixed use. these are generally sites that are multi-acre.

they require significant new infrastructure or neighborhood amenities or sites within active public use. these sites it carry high overall development cost and far beyond the scale of a typical mohcd subsidy. combination of uses or having market rate with affordable housing, brings in private einvestments that can makes the project feasible. in the case of enterprise agency sites, mixed use development may provide revenue for the agency's need. good example of this is recently approved balboa resident. it is an owned site.

the 550 affordable units will be if yoif youfunded by a developm, affordable housing grants and includes about $45 million in mohcd gap funding which will equate to 187 affordable units out of the 550. this is a similar amount of money from mohcd with a similar unit yield as the 1950 mission project. the development process follows the same path for 100% affordable or mixed income projects whether they are identified through the surplus land report or put forward by an enterprise agency. first, is the formation of a partnership between the relevant city departments and the land owning agency. here today, there's m.t.a. planning and and oewd and real

estate divisions, you can see lot of departments are involved in these projects. the city formal solicitation process move in tandem as the project details are developed. once the program is determined, the project can finalize its environmental review process, pursue city approvals permits and final implementation. one more minute on this slide to supervisor preston's point at the beginning, a number of these processes include formal and informal public, touch points. the developer selection process includes the public request for proposals and that generally

includes obviously a public process where a selection is made as well as meetings all the information is public another point at which there's public processes is prior to the start of environmental review, most of these projects are required to come to the board for a fiscal feasibility finding, which when the board has an opportunity really prior to a lot of the formal predevelopment work to weigh in and make a decision as to whether it's a worthwhile project to pursue. when you get to the city approval stage, there are a whole number of meetings and hearings. those are just couple of points i wanted to highlight in terms of more formal public engagement processes. >> supervisor peskin: lee, i promised not to interrupt. when you say fiscal feasibility, are you talking about chapter 29? >> i am.

yes. >> supervisor peskin: that would be a dollar threshold over what was that, i can't remember? i'm the author of that chapter. it's getting on 20 years. was that a minimum of $50 million? it was a lot of money. >> $25 million i believe. >> supervisor peskin: okay. sorry for the interruption. >> no problem. i do have that in my notes. >> supervisor peskin: basically, that's an early read by the board? >> that's exactly right. it's required affirmative resolution by the board is required before ceqa is begun. ceqa is really the beginning of the entitlement process. there's generally two to three-year period once the board has weighed in for the project to be developed. >> supervisor peskin: who would have ever knowned that a piece of environmental legislation

would have led to this public policy conversation. all right. >> how can we maximize affordable housing on these public lands? certainly, an overarching directive in developing housing on public land is to maximize the provision of affordable housing. it's the essential question we start with each time. we're always looking to find ways to create more affordable units, whether that's through bringing in market rate investment or expanding mohcd funding. this slide outlines few broadways to maximize affordable housing and we're looking forward to a discussion on these. first and most important, increasing funding for the 100% affordable pipeline. we fund our affordable pipeline in the city through a combination of state funds, voter approved bondings, philanthropy, market rate

development all in the city's budget through the trust fund. increasing the funding we have available will sort of directly catalyze additional units in many cases. second, we can reduce total development costs, which would allow limited subsidies to build more units. third, expand developer capacity so that we can do more projects, especially in underserved communities. fourth, to further leverage market rate development to increase affordable unit units t are built throughout the city. that's the conclusion of the presentation. i thank you for your attention. my colleagues and i are available for the discussion and for your questions. thank you. >> supervisor peskin: thank you.

supervisor preston, please proceed as to who you want to call on. >> supervisor preston: thank you. thank you for the presentation. i do have a number of questions and i try to raise these with you before the hearing. hopefully, not surprise to hear. some things to kind of get on the record for the public to have a better understanding of the context. first just to check in on where we are in terms of affordable housing on public sites since within the last five years. can you tell us how many affordable units we have built or approved on public sites in the last five years and then also how many market rate units have been approved on public

land. please include any kind of public land whether it's enterprise agencies or not. >> absolutely. my colleagues from mohcd is also here. i would love for her to join in the conversation as she see fit. we did compile a list of the projects that have been built on public land in recent years. i say that we in terms of foote, this is mayb-- affordable unitse approved projects on sfusd, p.u.c., m.t.a., court, d.p.w., real estate and public health

and public land. we really have looked through the entire city's land holding to see what we can make possible. we have approved, this is not necessarily that are built, we have approved primarily 100% affordable projects. let me just total this up for you. >> supervisor peskin: this is confined universe, is there a map oa or a chart you can share with this committee? >> i sure can. >> if i may, may i interrupt? >> supervisor peskin: lydia, you can interrupt.

>> i'm happy to join you all today. we did provide a little bit of information ahead to folks about the number of projects and number of units we've done as lee mentioned a number of different settings. city, state and federal surplus lands. to date we've done 1774 units. they're in predevelopment. actually couple of these are actually complete. depending on what goal post we're setting when we want to start the count. >> supervisor peskin: if you can share with us federal, state and local. only thing that's kind of under our control, the charter gives business enterprise agencies

like the p.u.c., autonomy, unlike general fund agencies from the legislative branch. if you can break down the federal state, local and the time frame for the 1774 units, that would be helpful. >> i will say the earliest project that i have on the list is broadway samson. >> supervisor peskin: i was there when the earthquake happened. i was there when state senator quinton cop passed legislation for $1. i was there when willie brown wanted to utilize those three properties for different uses. they are now all being used for affordable housing. they're not all 100% affordable housing supervisor preston. broadway samson will be the

first in that list. you're going to 2005, 2010. >> that site was actually went from caltrans to d.p.w. to mohcd. we purchased the site in 2006. >> supervisor peskin: that's why i used 2005. >> our timeline spans several years. i don't have it in front of me. i would guess just 2010 maybe 2011 when that was done. >> supervisor peskin: mayor brown wanted that to be a police station. >> that's the oldest one. the newest one would be a project in construction now 1068 mission. this is on federal land. we bought this land from the feds for i believe $1 from the f.s.a.

256 units for homeless individuals, 103 those will be seniors. i think that's probably the one that's kind of most up to date. we do have a number of units that are in development agreement or reservoir, mission rock. these are all not necessarily surplus land projects but public land projects that are in predevelopment or we have haven't even broken ground yet. >> supervisor peskin: we'rand nt necessarily 100% affordable? >> that's right. in the case the three i mentioned those are combination of affordable and market rate. those happen to be the largest projects. >> supervisor preston: back to my original question, total number of affordable or below

markets and total number of market rate on public land broadly defined since 2015. 1774 the number of below market units? >> yes, that's the number of blow market units. that does not include pier 70 mission rock. it does include the reservoir just because that d.a. is inked and we're going to get started on predevelopment for the first project. >> 1774 affordable and 550 market rate which are all in balboa. >> supervisor preston: thank you. again, just stepping back and for context here, looking

through the lens of our rina goals, can can you clarify where we are. how many unit of affordable housing and what income levels we would need to build annually to achieve our rina goals? >> well, there's a rina update on the way now. we don't have the final numbers yet. i think just even the methodology will be released at the end of the year. our goal for san francisco are 72,080 units, 26% of which are supposed to be very low income. that's 50% and 15% of those are supposed to be low income. i guess 50% and over. then moderate income is another

16%. according to a recent progress report, we made about $4.4 billion to meet just the goals for the very low income category. obviously, we're behind. this is a huge challenge, huge numbers and we expect that once the update is done on those goals, we'll find a similar -- we'll see a similar number. >> just to make sure i have these right and for the public, you mentioned about 72,000 units without regard to the update coming up. looking at a goal of 72,000 units and is it around 40 or 41 of those that need to be in those below market categories? >> between the very low and the low income categories, the goal

is 29,360 units. >> okay. the other below market category? >> those are the two below market categories. there's a moderate income and above moderate income. >> supervisor preston: right. how many in the moderate? >> another 11,910 units. >> supervisor preston: i was adding those together come to about 4 40,000 or 41,000. >> that's right. >> supervisor preston: we would to meet rina goals again without regard to revisions that are anticipated. we need to build as a city, 72,000 units of those 41,000 would need to be at below market level. over what period of time?

>> i'm sorry, supervisor, i'll have to get back to you on that detail. >> supervisor preston: okay. back to some of the slades that were presented around funds, is the sources of funding for affordable housing. if you can elaborate on the housing trust fund, can you explain how much is in there? i'm assuming that's capped at $15 million annually. is our budget for that $50 million annually and what are the restrictions on the funds? >> the housing trust fund is without of the more flexible funding sources that we have. when we find ourselves losing expected funding sources, for

instance, this year at the beginning of the pandemic, a number of millions of eraf dollars we have anticipated, have to be pulled back. we will often rely on the trust fund to build those kind of gaps. looking at my budget here, i can tell you once my internet connection stabilizes exactly how much we had in a particular year. the housing trust fund does increase, it's ramping up overtime. this year, we're expecting about 23 million in new sources. when i say this year, i mean in '21 and '22. we expect about $23 million trust fund to come to us next year. when we look at what we're

spending it on, we have a number of pipeline project, one for homeless individuals, one for families, currently programs. we have covid stabilization activity that we're implementing mohcd. we'll use those funds for that as well. we pay debt service on the housing trust fund, several million a year. that's just an example of one of our sources. >> supervisor preston: are those funds, housing trust fund all committed funds? >> again, if we're talking about -- when we say current year, we mean '21, '22, yes. i'll tell you what's left at the end of the year, about $3 million. i like to say also, in covid, we've experienced since covid, started affecting our affordable

housing project, we do have less interest from investors and lenders in projects because of the financial uncertainty. we also have increased development cost, additional safety precautions and more risk around project delays in case of an infection. that's new construction and occupy rehab project. $3 million balance at the end of the year, that's almost like a contingency or mitigation fund considering most of our projects, we put $30 million or $40 million in two. $3 million is very insignificant. >> supervisor preston: is our expenditures from housing trust fund money where those tracked? >> where are those tracked? >> supervisor preston: how would the public or any supervisor determine the breakdown annually

of where those funds go? >> i can tell you, we make, i think, reports nine months of year to the board on various expenditures. we make quarterly reports on our pipeline and expenditures. i can get you the details to whom those are submitted and what form. >> supervisor peskin: they are submitted to the clerk of the board and they appear huge stack that the clerk gets. minus an affirmative hearing like this, are publicly considered. >> in so far as our budget is approved by the board, we'll go through the budget process and etcetera. we'll look again here list of regular reports that we make.

>> supervisor peskin: what i really love to see, we're going to hear from the folks at the office of cannabis relative to a visual presentation of numbers later in today's meeting. if you actually set forth that 1708 unit units from 2006 to the current day in a visual presentation later this meeting, that would be worth seeing. >> i'm happy to share that chart now if that will be helpful. >> supervisor peskin: if supervisor preston desires, i will defer to him. >> supervisor preston: please. >> thank you, that would be great. >> it is two pages.

here is a snapshot. you can see the project listed here and the owner agency. >> supervisor peskin: some of these are entitled. some of them are in the pipeline and some of them are built. >> that's right. >> supervisor peskin: is there a way to sort this list under those three categories? >> i don't think we can do it in the moment. we can do it later. we organized it by agency. we can certainly organize it chronologically. >> supervisor peskin: some of these things have a lot of history on them and were built quickly. some of them were as francis scott key was the subject, a

ballot measure that supervisor fewer put on the ballot that many of us worked to pass but is far from built. it will be interesting to sort it that way for what it's worth. if you do all of the affordable units and you get to the bottom line and scroll down -- >> i apologize in advance, there's no total. which is perhaps obvious oversight. >> supervisor peskin: i would love to have that list in an excel or whatever sheet that i can sort -- i can do this on this computer during this meeting. >> i think we both did a total

while we were on the peer. we came up with 1774 as the total there. i do think, the more -- originally supervisor preston asked for sites within the last five years. obviously, there's few things on this chart that are older than five years and the few things that technically shouldn't on the chart. let us know what in particular we can provide. >> supervisor peskin: i will turn this back over to supervisor preston. i've been doing this too long. >> supervisor preston: no apologies. great questions. that is the purpose of this hearing. welcome any questions along the way from either you or our vice chair. it's interesting, i've been trying to piece some of this together. i think about the major step

forward that the housing and dashboard represents in terms of accessibility to the public and to everyone around really looking at how we're doing in a more detailed way. just hearing the questions and thinking about the various ways to present these, it kind of begs the question whether we need a public dashboard public sites or using the housing dashboard and potentially breaking it out in that way. the public sites raise policy questions and discussions are different with respects from other sites. i do have some other questions and just i wanted to go back to the issue in the presentation around the sort of larger sites versus smaller sites. first off, just getting at where is this dividing line between

the site that we need to -- that the approach seems to be to rely on private capital market rate development to finance infrastructure or other aspects of the project versus those that we don't? are these guidelines published in any way, who is making that threshold decision on which side of this cut off point we're on? >> i can take a stab on the mohcd side. as we're discussing our budget, it varies year to year. right now we're gearing up for really hard year, next year

because inclusionary fees that usually come in during a robust economy. may not be coming in. we also have -- our budget is very variable and subject to market forces lot of the times. it ends up being in point in time assessment. it depends on whether other commitments have been made. we don't have a special source of funds for public sites.

we don't separate funds for that purpose. some of the sites -- we just did an r.f.q. for nine sites last week. three site came to us to purchase by the city. five of us came to us via land dedication. we're under pressure and we want to develop those as well. we have a long queue. it's not always possible even if the site were able to support a larger number of units. it's just not possible given the funding that we have. i would also add that this year, for the first time, state of california is awarding tax-exempt bonds and 4% tax credits on a competitive basis. this is a new practice and it's

potentially to our pipeline. it may result in projects having to go on ice for a little while until funds are available. it's really much more of a subjective project and point in time process. >> supervisor preston: part of what i hope to accomplish is demystifying some of this. there are a set of decisions being made along the way. when you indicate that r.f.q.

going out, my understanding, mohcd, they are in some cases putting out the request for developers of 100% of affordable housing. in other situations, such as potentially the yard, it's a different request. you're saying how well can you do on affordability with a certain minimum. that one is 50%, sort of the floor that you're setting. someone is making the decision or subject to clear guideline. i'm trying to figure out which. if it's a decision-making it. on project a, we're asking for 100% affordable proposals on project b, we're okay with mixed income. you add another one, you look at

a site 1979 mission, which is 100% affordable even though it's a large site. who's making that decision on what levels of affordability we're required at the time we put out those requests? is there a clear guidance or is it just case by case? >> thank you for that question. the simplest answer is, it is case by case. we start with how much affordability can a site accommodate if not 100. one of the major cost factors in driving us to a decision of mixed income is the necessary amount of infrastructure amenities and site work required

for a site. which is why the presentation kind of neatly sorted our work into two categories. the mixed income case almost always arised when you have a large site. multiple acres, a site that would host multiple buildings on it. in all of those cases, you need to build the streets and the sewers and the powerlines to connect those buildings. i likely need to build new bus infrastructure. you need to build -- if we want to build new parks, new plazas neighborhood amenities that would require in order to be a successful place for people to live. all of those costs, we don't have a ready public source to fund those. we fund those through leveraging private investment, to allow mohcd to maximize the funding

they can put into the affordable housing component. that's how the financial piece comes together. >> i would only add, the example that you gave of the yard. in those cases where there's multiple agencies involved. those agencies may have different goals and different financial goals or public goals or agency goals, they trying to use the space for multiple uses and solve multiple problems. the decision-making does have to be collaborative and it has to be iterative those decisions tend to be more complex. when someone says to mohcd can you do 100 unit project at 100%

affordable, there's kind of a yes-no question. based on our available fund. if the question of sharing space with another agency, meeting multiple needs, building a bus yard, building a parking garage, using building a site on air rights over another facility, it does become more complicated and iterative. >> supervisor preston: who's call it is? it's clearly case by case analysis as to what we can afford. it's not happening legislatively for this body. chair peskin, i see you want to jump in. go ahead. >> supervisor peskin: i think the real question is not as the

general but as to enterprise agencies who a matter of charter law can choose to hang on to properties that they have noer for seeable use for that criteria. do you have examples of that? remember, the number one driver is land cost. if your land cost has happened in a number of these instances for $1, the one that you spoke about from the united states for $1, land cost is zero, you can get to 100%, even with high construction cost. the real question here is -- i understand that different enterprise agencies have

different fiduciary duties. can you speak to that? >> i can tell you that, i have no idea. we take the list that's put together every year as required under the legislation. that is the list we look at. i don't know what doesn't get on the list. >> supervisor peskin: i do. at least i have not a total view of this across very complicated government that has assets from here and largest landowner in i believe san mateo county and own huge chunk of land in alameda county. i can speak to something that may have never been 100% affordable housing eligible by

virtue, sfmta asset. when i first became a supervisor 20 years ago, the bus yard was a place where sfmta in its early days, they only existed as a non-p.u.c. agency for a hand full of years, said that we can build housing a large percentage of it affordable housing and it was surplussed to their transportation needs. the city had gone through extensive study, spent a huge amount of money or pro formas, architectural studies and sfmta in those days, decided it was not surplus. how does that work? >> supervisor if i may jump in,

the kirkland yard side that precedes my time, i think that effort with kirkland yard came to a halt. initially because of the economics, because of -- >> supervisor peskin: no. that's absolutely untrue. actually, what happened, this is documentably true, what happened was that they came to the conclusion that now being built, b.r.t., they needed a yard at that's what happened. >> what i can say as well, in terms of more recent facility planning efforts and the study that concluded in 2017, determined that to meet our

fleet capacity needs which are growing that kirkland remains a essential for that purpose. also for -- >> supervisor peskin: your fleet capacity needs are growing? >> according to our fleet plan. according to our current fleet plan which obviously covid sent things sideways. basically, our bus procurement plan for the next 10 or 15 years has been growing. in a way that current facilities can't accommodate those buses. >> supervisor peskin: i neglected to say that the sfmta declared that property surplus was mayor agnus was mayor. i'm not trying to put you on the spot.

i was trying to deal with the larger public policy issue how we make enterprise agencies accountable. >> i'll just jump in here, supervisor. in the case where we are partnering with an enterprise, land owning enterprise department, it is their decision ultimately. we are collaborating with them. we bring our city wide expertise. it is up to the board and commissions that run those departments to make the final determination as to what to do with their land. lot of the policies that spotlighted in the early presentation i gave, the city surplus land ordinance, promiseuproposition k, lot of te urged the departments to look at the land to develop land for housing and affordable housing. in those cases did not require those departments to do so.

>> supervisor peskin: supervisor preston and safai and i can be joined by no longer three charter to ask the voter it is they like to visit that. >> supervisor preston: thank you for the question. what i'm hearing, i want to headache sure i'm hearing this right, if we're talking about enterprise agency, the call as to whether it's going to be developed as 100% affordable or some mixed income, you're saying is the decision of that agency. if we're talking about other than enterprise agencies, i still curious who would be making that decision?

i think there's a policy decision being made around whether or a practical decision in a particular case. i'm unclear who's making it. the enterprise agency is the agency that decides whether it's 100% affordable? >> i would say the answer is always a collaboration. we work together among all city departments to -- we always start with the thesis of how much affordable housing can we yield out of a project. in the case of enterprise departments, they have fiscal needs. they sometime have charter responsibility and sometimes have other facilities that they need funding for. there's a lot of very specific agencies specific criteria that come into play with those particular parcels.

it's absolutely is a collaborative decision guided by our city policy. >> supervisor preston: we're investing in city funds outside the agency, making the decision whether to do that. we have some role in this. here's what's troubling me. i understand that one may make the decision that the quickest or most affordable route is to do a certain kind of mixed income project. there are other options. for a large site, you could, for example, do a phased approach. it would take longer to build the unit. you could do a different unit count. what i'm trying to get at and still unclear on, within mohcd

or oewd, who makes that call? you don't have a commission over you that is making that call in different department of these kind of questions might be policy decisions made by commission? what makes the call as that site accommodate 400 units on public land is going to be 100% affordable or not? outside enterprise agencies, who within your department or structure is making that call, that policy decision? >> i would add that -- i quickly say it's not necessarily a decision of a single person within our department. in the case of balboa, which is a relevant example, supervisor yee formed a community advisory committee that convened in 2015 over five years ago. that process held i think over

50 meetings before a request for proposal was issued to the public. that process is actually what yield oyielded community priorir having a high level of affordability but being comfortable with mixed income and demanding certain amount of park space, certain amount of amenities. all of that gets formed through a single department staff decision or director decision but actually through that community planning process to identify -- in the case of balboa. we wanted to build something that was sensitive around the surrounding communities in terms of density and scale. we needed to hear from those residents to find out what that was. >> i can speak up. these are phased rebuild of multi-acre sites in southeast part of the city.

four different sites. in one case, there was a partnership to bill the infrastructure in exchange for other development right and also to assist in the replacement of the public housing units. the additional affordable units. sunnydale and petre have more market rate. the infrastructure in those cases is built by the affordable housing developer on their dime, the city, mohcd is funding them.

the impact on community, being in a construction site, living in a site that's under construction for 20 years, may not be ideal and lot of residentses expressed that. as the city fortunes go up and

down with our affordable housing funding, we also sometimes have to delay the build out the affordable. there's a certain amount of risk involved and it's the trade-off of course. >> supervisor preston: looking at patreo yard, has a model of affordability, has that been considered or rejected or not considered? >> we did look at a phased approach. this is where, without diving too much into the specifics of the topic of that particular site, you can see how the particulars of the site kind of governs the path that you can take. we did explore conversation with mohcd of phasing the site.

there are sites constraints. first order is rebuilding. we have 105-year-old bus facility that has seismic considerations. we can't have a parcel that goes to the ground to reserve for any kind of housing development because the site occupies so much -- the use as bus facility little occupy the entire footprint of the site. that's one challenge. secondly, we did look at phasing construction but for logistical reasons that will be extremely difficult. we have to do the entire project at once. you have tremendous gistal gist-

logistical challenges operating 215 buses coming out of site over the course of a decade or decades. that's just one illustration of the challenges faced by that project. you need to build a four and a half acre site all at once. >> supervisor peskin: if you can get to your fundamental question. we can defer to city attorney pierson. i think the answer, i'm not a lawyer is that t by ordinance, this board can actually dictate things to general fund departments. not true pursuant to the charter as to most but not all enterprise agencies.

ms. pierson, would you like to comment on that completely non-legal piece of advice that i inappropriately gave supervisor preston? while we're waiting for ms. pierson, vice chair safai? >> supervisor safai: i had a number of comments. i don't want to lose your question. >> supervisor peskin: i'll hang on to it. >> supervisor safai: i think this is a really important conversation. appreciate supervisor prestton - preston bringing this up.

i don't want to lose this in sight of the conversation. people often say, you have a public resource, why would you attempt to allow that public resource to have private dollars come in and not use that solely for 100% affordable housing. balboa reservoir is a good example. there's a lot of other examples in the city. even the list she put up, the one project on the list that was designed has gone through extensive community input and lot of process to build, which is educator housing. i want to underscore during that time, thousands of teachers have left the city. thousands of teachers have left sfusd because they could not

afford to live in san francisco or in the bay area and continue to work and working for the san francisco unified district. how is the decision made. lot of the decision has comes back down to cost. when we're entering a phase that tax credits become credit oh competitive. tax credits are the number one driver for building affordable housing in the united states. not just 56 no san francisco non california but in the united states. when we're doing mixed, whether it's private dollars. if we add more time, we're adding more cost, we're making it harder to build and adding

more time. we're losing the opportunity to house people. that's real concern for supervisor i represent a district that represents working people and janitors. in the balboa example we're talking about millions and millions of truck cost. millions of dollars of subsidies that the city doesn't have access to and time ultimately to achieve 550 affordable units out of 1100. you can say let's take it and make it 100% affordable, 100% public dollars, you might add 10

to 20 years and then the city is completely gone in the direction. i don't want to lose that point. i think it's extremely important to say, that time is of the essence in lot of these conversations, particularly when you're talking about families that are being displaced and not able to continue to live in the city. we have to talk about real tradeoffs. i think that was part of the conversation around the balboa reservoir. you take this public outset, you invite in millions of dollars of private money to leverage against public money with the hope that you're able to do this in a lot quicker and more timely manner to house the people that you're trying to retain in it city. >> supervisor peskin: colleagues , i want to say that, deputy city attorney pierson has rejoined us. i did tell her earlier, she had lot of it stuff to attend to.

supervisor preston posed a comment about the authorities of the board relative to property that is available for 100% affordable housing and i opined inappropriately as non-attorney and not a city attorney, that ultimately by ordinance board had the ability to legislate that for general fund departments but not for most, if not all, enterprise agencies and wanted to see if i said that appropriately? >> i apologize, i was on mute.

your characterization what you said chair peskin sound correct to me. you have exclusive jurisdiction over their property. the board's authority over their property suspect extremely limited. i would have to look to see if there's any exceptions for any of the enterprise departments. i can do that to get back to you. that is the general rule. >> supervisor peskin: that's all i wanted to hear. i think what she said was this is ultimately a collaborative process. it's right. i think respectfully supervisor preston, if the board were to enact or were you to introduce legislation that said, we want to have 100% affordable housing on properties of a certain typology, subject to certain

thing, we can do that. it may or may not pencil relative to our general fund departments outside of rec and park, that has its own authority. if we want to complicate general enterprise department, we'd probably have to go to charter. >> supervisor preston: i will try to drill down a simpler question of actually who at the various agencies are making the decisions.

the analysis that you put forward is the analysis happening around the reasons for going to private investment and the perception of that being able to deliver that project sooner and respond to the very real housing needs of folks. i also want to just recognize, i think, i'll move on to few other questions, before i do, i want to recognize, i think there's a policy choice that we're defaulting into that i think we need to name which is that, once there's some unspecified level of infrastructure and apparently it's just case by case, there are no guidelines, once that hits, we go to the private market and market rate units in order to make it pencil out. it's often framed as

feasibility. i want to say, different than a private developer feasibility analysis where they need to deliver certain level of profit. it's not about feasibility. it's about how much public dollars are we investing and where are we investing them. we're making some policy choices that rather do larger public sites in a way that could deliver 100% affordable or higher level of affordability that as a city, it appears to me, we're making the policy or practical decision that the root -- route to making that it's not penciled out. the route is through market rate units. i think that's a decision, policy decision, chair peskin raised a question to what extent

policy decision in this board's jurisdiction versus some of the other agencies that control the property. i think it's an important one. i appreciate the discussion on that. i mentioned phasing is one possible way. other way we raise more money. we all support efforts to do that. whether it's through bonds or taxes or other efforts. i will shift to other related topics. chair peskin, i see vice chair safai waving his hand. >> supervisor safai: i want to add to a point. this is to your point. it's a fair one. there's an strong evolution over time in what that number would be. if you compared the mission rock project of the giants to the balboa reservoir. one was 40% and you go back to the hunters point shipyard, that i know supervisor peskin was on

the board at the time, this was 33%, so to 50%, that's an important piece of the conversation as well. if you are going to use private dollars, what's the appropriate threshold and what is the value statement on the city's behalf. only other point that i also want to underscore, it was said by -- i don't want to mispronounce, is it ealy, pointed to hope sf project. there's also the value of having mixed income community.

in san francisco, you can have folks who are very low income, low income, moderate, that covers a huge range. lot of values that i think you're correctly noting about a mix of income. can still occur 100% below market. the way the incomes are in san francisco, where you have folks earning $25,000, living with folks earning $100,000. >> supervisor preston: that's something we worked through organized labor and community groups since i've been in office to 100% affordable projects in my district. >> supervisor safai: we do have a range of incomes and fundamentally believe that folks that traditionally are priced out, they make too much to

afford that affordable housing, can live in it. when we started the debate on inclusionary housing, there was a feeling that even to the folks that from the side on the building trade, they are building the housing, they can't live in the housing they are building. they have to commute from far distances. carpenter, laborer or electrician or plumber should be able to afford to live in san francisco. that's being lost in this conversation. i wanted to insert that point. thank you for that and you can move on. >> supervisor peskin: if i may for a second, supervisor preston, i don't mean to cut you off. we have a rarity, which is the gentleman from sfmta actually has his hand up. with your indulgence, i will call him if that's okay. ms. ealy talked about long-term

projects with multiple phases that have pro formas that are predicated on decades of build out. we don't have a lot of those in san francisco because we're mostly built out. we've got a hand full of those in modern times, they were mission bay, the shipyard, treasure island. that's pretty much the universe. the pro formas that included rate of return for the private investors and capital, assumed market upturns and downturns. indeed in the case of treasure island, after the first market downturn, they came to the board and said, this whole project doesn't pencil. we need to reduce our affordability, increase our density, just gotten off the board. the new board said sure, fine,

whatever. i personally, took that to court and took it to the california state supreme court. unfortunately, i did not prevail in i that matter. it's very different in a one-off project the likes what we've been talking about. we make a determination that we don't have enough cash. we have to pay for the dirt. these projects that are phasing it over 20 years has happened in a hand full of instances. i think we should differentiate those typologies.

>> no nerves, i want to share my thoughts. thank you supervisor peskin. this issue came up earlier a process issue. who decides that kind of thing. i wanted to speak -- we're just one enterprise agency, the m.t.a. we understand for all these projects where we have a project agreement that has to be signed where there's a lease that has to be signed, that has to go before the board of supervisors. that is a very essential part of the process. the community conversations, we have similar balboa reservoir and we have a working group that's been meeting over two years now. the checking with the board of supervisors is very important. we've been having regular monthly meetings with districts 9 and 10.

it's very technical, it's really about procurement path and this joint development partnership approach that we're looking to pursue for delivering bus yard. one of the recommendations that the b.l.a. put in the legislation, it's early check-in with the board of supervisors. that the project details and we can spend 30 minutes talking about project detail an, early n in the process, go before the board of supervisors for board of supervisors review. it's not an up-down vote. we're a week away from signing the lease. we're kind of getting to some consensus with the board at that

time in terms of what that project looks like. all of those projects and specific details and constraints and opportunities we're having to deal with on site. i want to make that point that we hope to bring short order after making the selection, essentially preliminary project agreements to the full board of supervisors for your review. >> supervisor peskin: in the old days when willie brown was mayor, the notion of early readied not exist. i think it is a good thing for the public and for legislative decision makers. i welcome that. having said that, i do want to take exception with one thing that you said, which is that sfmta is an enterprise agency. let's be clear, it's not really. it is largely reliant on general

fund money that is set aside. very different than the p.u.c. that does not get one penny from the taxpayers. very different than san francisco special airport that does not get one penny from the taxpayer or the port of san francisco. it has chartered independence pursuant to props e and a. it is not truly an enterprise agency because it is reliant on general fund money. i wanted to be very clear about the definition of our terms. sorry. >> supervisor preston: thank you. i want to shift gears if that's okay on to smaller sites. we talked quite a bit about some of the larger sites and enterprise agencies. i do think there's some of the smaller sites are important part

of this equation. i wanted to find out what the current strategy is with regard to acquiring new sites? either available land or improved property to mohcd or department of real estate? >> thanks. as i mentioned earlier in comments to another question, we acquire fair amount of land because of the provision in both the inclusionary law and the job housing linkage fee allow that allows folks to dedicate land in lieu of paying a fee or offering