Mayor signs new law to speed up construction

May 25, 2010 7:48:36 PM PDT
San Francisco, like many other cities, is struggling to give its economy a much needed jolt. One barometer of the tough times is condominium construction.

There were just 188 projects this year compared to more than 3,000 four years ago. On Tuesday, Mayor Gavin Newsom signed a law that might stimulate that industry.

The sounds of a construction site is one people don't hear so much anymore. The recession has caused the once-booming construction industry to go bust. Newsom hopes the law he signed will help jump-start stalled projects.

The center piece is a new law that allows developers to defer upfront payments of certain fees. The city charges developers impact fees to pay for things like sewer lines or streetscaping. Under the law, they can delay payment of 80 percent of those fees until they near completion of their project.

"We've again identified nine specific projects, over 2,500 housing units already in titled projects, ready to go. They just have a financing gap. This is decrease the upfront costs," says Newsom.

The mayor says he doesn't want to oversell, but he believes this law could generate over 4,800 jobs, more than $894 million in spending, and create 2,500 housing units. He also believes it would speed up project start dates by as much as two years. Manuel Flores is with the carpenters union whose workers are struggling to survive.

"Let's hope it'll shorten up the time frame for projects to get going," says Flores.

The new law also streamlines the permit payment process. Instead of going to various agencies all over town, developers will have a one-stop shop.

Among the projects on the drawing board is the second tower of the One Rincon Hill high rise. If construction begins, development consultant Marc Bobsin predicts a tremendous impact.

"There will be approximately 800 construction jobs created. Number two, fees. Phase two will pay $18 million in fees and finally three, property taxes," says Bobsin.

But he says for that to happen, city lawmakers need to change the rules which require developers to provide affordable units or pay a hefty price.

But there is another big piece of the Mayor's package that still needs approval by city lawmakers. He wants to allow developers to cut one-third of the affordable housing the city now requires in exchange for agreeing to a permanent 1 percent transfer fee each time the property is sold. That money would then go into an affordable housing trust fund.

Supervisor Sophie Maxwell is one of the critics of that plan. She says the city's current requirement works and the only reason to tinker with it is to make it better and she's not sure this does.

"These are some of our principals of San Francisco. Affordable housing, inclusionary housing and it's not for sale," says Maxwell.

So that debate continues. The mayor's fee deferral law takes effect July 1.


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