Inclusionary Housing Program requirements for projects exceeding a stated unit size approved before November 1, 2023 included higher development impact fees and inclusionary affordable housing obligations. Projects were also subject to stringent timelines for obtaining construction documents and adhering to conditions of approval.

Temporary reduction in inclusionary housing fees and obligations, extension of time for obtaining site permits, and allowance for modifications of certain Planning Code requirements for eligible projects（Pipeline Projects）. Inclusionary housing rates will potentially be lowered from 22% - 33% to a range of 12% to 16% for new projects and for those approved but not yet constructed.

The changes should stimulate residential development, increase the production of inclusionary affordable housing, create jobs, and grow tax revenue. This may alleviate the economic infeasibility of residential development under the current conditions, supporting the city's policy priorities including housing supply expansion.

The current inclusionary housing rates were contributing to the economic infeasibility of residential development, as found by the Controller and the TAC. The change aims to optimize the inclusionary housing requirements to facilitate the production of market-rate and inclusionary housing.

Project sponsors can request modification of project conditions related to inclusionary housing requirements, timing for site permits, and other code requirements. The Planning Commission, or the Planning Director if delegated, will review and approve such requests. Significant modifications require Planning Commission approval. All modifications need to be granted before November 1, 2026.

If the Planning Commission delegates the authority to the Planning Department, the Director of Planning will review administrative modifications without a public hearing. Projects must procure a First Construction Document by May 1, 2029, or the modifications will be invalidated and the project will be subject to the inclusionary housing requirements in effect at that time.