As affordable housing costs skyrocket, Mayor Farrell creates working groups to find solutions

Public and private groups assembled during affordable housing summit in City Hall

Mayor Mark Farrell announced the creation of three public-private working groups that will provide recommendations by July 31 to reduce affordable housing construction costs and increase the number of affordable homes in San Francisco.

“Our teachers, janitors, nurses and other working-class residents cannot wait forever for the City to find ways to build homes quicker and cheaper,” said Mayor Mark Farrell. “I am directing these working groups to find real, actionable solutions to the affordability problems that are causing gridlock in our housing production. We cannot provide affordable homes for our families if we cannot afford to build these homes to begin with.”

Due to a variety of factors, building affordable housing has become increasingly cost-prohibitive in San Francisco. In the last year, the total development cost per affordable housing unit surpassed $750,000 for many buildings – a price far too high to achieve the affordable housing production San Francisco needs.

To address the soaring costs of affordable housing, Mayor Farrell hosted an affordable housing summit at City Hall on Monday, attended by City agencies, contractors and sub-contractors, architects and labor representatives. As a result of the summit, Mayor Farrell created the three working groups, which will present their recommendations for lowering housing costs and speeding up production in July. The groups will have specific areas, with one focusing on regulatory action, one on design action and one on workforce action.

“We’re grateful for the engagement of affordable housing stakeholders in San Francisco in an effort to collaboratively bring construction costs down,” said Kate Hartley, Director of the Mayor’s Office of Housing and Community Development.  “Every dollar we save will be reinvested into more affordable housing, which is so desperately needed in our communities. This work will also keep work flowing to construction workers, design professionals, and property management staff over the long term.”

“This is a very challenging cost environment for construction in all sectors, and we understand that it feels particularly difficult when looking at affordable housing,” said Kathryn Cahill, Chief Executive Officer of Cahill Contractors LLC. “We need ideas and efforts from all sides to work towards reducing costs in this market. We look forward to the opportunity to brainstorm ideas with stakeholders about how to bring down costs and enable the City to build more units of much needed affordable housing.”

The convening of the three working groups is the latest effort by Mayor Farrell to tackle the ever-growing costs of building housing in San Francisco. Last month, he introduced legislation to streamline City permit processing in an effort to produce more housing faster, following up on an Executive Directive issued by former Mayor Edwin M. Lee in 2017.

Mayor Farrell’s legislation will create consistent public notification requirements with improved clarity, consolidate multiple redundant hearing processes and streamline the approval of housing projects. The legislation will also eliminate the need for multiple hearings for most projects in the Downtown and eastern neighborhoods.

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