Increase in San Francisco Office and Laboratory Use Development Fees to Pay for Affordable Housing
The San Francisco Jobs Housing Linkage Fee (JHLF) is set to more than double under the "Housing for SF Workers" ordinance recently passed by the San Francisco Board of Supervisors (Ordinance). Mayor London Breed refused to sign the Ordinance, but even without the Mayor's signature, Housing for SF Workers becomes effective on December 15, 2019.
Increase in Jobs Housing Linkage Fee and Inclusionary Housing
The City creates seven jobs for every one unit of housing, causing a crucial jobs/housing imbalance. The JHLF impact fee was established in 1996 and applies to certain new commercial spaces in an effort to solve this issue. The JHLF is supported by a Jobs Housing Nexus Analysis showing that non-residential uses create a potential demand for affordable housing.
On October 29, 2019, the Board unanimously passed the Ordinance, which more than doubles the JHLF and applies to construction or expansion of more than 25,000 square feet of entertainment, hotel, integrated PDR, office, research and development, retail, and/or small enterprise workspace development. The new rates approved by the Board impose a $52.20 fee for office projects of 50,000 square feet and above that submitted a complete Preliminary Project Assessment (PPA) to the Planning Department before September 10, 2019. A PPA is an initial evaluation process that the Planning Department requires for certain projects, including construction of a new non-residential building or an addition of at least 10,000 square feet. The PPA process is separate from the primary Development Application procedure. The fee increases to $60.90 for projects that submitted a complete Development Application between September 11, 2019 and January 1, 2021. Starting January 1, 2021, the fee increases to $69.60. Projects in the application pipeline are not grandfathered into the current JHLF. Thus, projects must obtain a building or site permit prior to the effective date of the Ordinance in order to avoid the JHLF increase. There is a lower rate for projects under 50,000 square feet. A summary of the JHLF increases for office construction is below:
Current JHLF | Projects that submitted a PPA on or before September 10, 2019 | Projects that submit a Development Application between September 11, 2019 and January 1, 2021 | Projects that submit a Development Application on and after January 1, 2021 | |
Large Office Project (≥ 50,000 gross square feet.) | $28.57 per gsf | $52.50 per gsf | $60.90 per gsf | $69.60 per gsf |
Small Office Project (< 50,000 gross square feet) | $28.57 per gsf | $46.98 per gsf | $54.81 per gsf | $62.62 per gsf |
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