Plan-based Land Value Recapture The Eastern Neighborhoods Plan in San Francisco
San FranciscoA culture of planning exactions/linkages (based on a very strong market):• Commercial Linkage Fee ($20 Office, $18 Entertainment, $15 Hotel, $18 Retail, etc.)• Transit Impact Fee (non residential, $10)• Child Care Fees ($1)• Open Space Fees• Arts fees (1 percent of construction costs)• Inclusionary requirements (15 to 20 percent; $380,000 in-lieu-fee)
Appendix: Public Benefits Incentive Zoning (excerpt)“The purpose of Public Benefits Incentive Zoning is to ensure that any increased development potential resulting from a rezoning of the Mission District helps to develop a diverse, balanced, and healthy neighborhood. Where the rezoning allows an increase in density or buildable square footage, it not only confers greater development potential, but also creates greater land value for property owners and sales or rental value for developers. Increased private value is thereby conferred by a public act, but without gaining advantages for the local community. This program creates a mechanism to capture a portion of this increased land value in the form of Public Benefits that will mitigate the impact of the additional development rather than allow it to become windfall profit to the landowner. Public Benefits may take the form of affordable family and senior housing units above the required inclusionary zoning, community serving spaces, publicly accessible open space, and light industrial space where appropriate. For the purpose of this program, “rezoning” includes increases in height, bulk, buildable square footage, or density, or major changes in allowed uses.” How can we explain such sophistication?
Origins: Rapid Gentrification/Displacement in the SOMA area• Dot-com boom of the late 1990s• Super-gentrification in traditional working class neighborhoods• Wholesale displacement of families and businesses,• Aided by city policies that exempted “live-work” spaces in warehouses and industrial structures from processing and fee requirements Existing infrastructure of community-based organizations to build on
Ten year campaign: Whose city?• Struggle for residents and workers to remain in their neighborhood• Establishment of the Mission Anti- Displacement Coalition (MAC)• We don’t want to react to a city’s prepared plan• Strategy: From trying to stop what the neighborhood did not want to “What we want” and “How do we get it”
The People’s Plan for Jobs, Housing, and Community• Now what? (The People’s Plan meets the Official Plan—Collaboration between the City and MAC): The 2008 Eastern Neighborhood PlanAppropriate political juncture (Willie Brown-District Elections)Planning Department staff in charge sympathetic
Eastern NeighborhoodsThe EN Plan ties increased allowable intensities of development to higher fees Three tiers:• Tier 1: Increase in height of eight feet or less• Tier 2: Increase in height of nine to 28 feet• Tier 3: Increase in height of 29 feet or moreFee levelsTier Residential Non-residential• 1 $8/gsf $6/gsf• 2 $12/gsf $10/gsf• 3 $16/gsf $14/gsfIn formerly industrial zones the use change to different types of mixed use requires higher IH requirements
Land use changes (value creation) generatecommunity benefits (value capture), through theplanning system (in addition to existing exactions)• This approach is now applied throughout San Francisco when Area Plans or Specific Plans are updated• It reflects a more interventionist city to guarantee more equitable outcomes and offset the social and environmental costs of development
Does it work always and everywhere? No, it needs places and times with a healthy market• But how do cities, land owners and developers know what level of value capture is feasible?• “Community benefits cannot be calculated or negotiated without using development economics and real estate analysis, and the question is not whether but how” (Cameron Gray, former Director of Vancouver Housing Center)
• Mathur, Shishir. Under contract. Property Value Capture to Fund Public Transportation in the USA. Surrey, U.K: Ashgate.