San Francisco is enacting significant changes to its housing policy, reducing developer fees and requirements while advancing a ballot measure to substantially increase funding for affordable housing projects.

On the 1 Dr. Carlton B. Goodlett Place, San Francisco, Mayor Daniel Lurie signed an ordinance this week that substantially revises the city's approach to housing development, easing financial burdens on developers and reducing affordable housing requirements for new projects. The move comes as the Board of Supervisors prepares a related ballot measure, slated for November 2026, aimed at critically expanding the city's Housing Trust Fund.

The new ordinance slashes the inclusionary housing requirements for projects with 25 or more units, bringing the on-site requirement down from 15% to 5%. For off-site or in-lieu units, the requirement drops from 20.5% to 10%, though certain areas may see a 15% figure. Crucially, projects within the 10 to 24-unit range, which previously faced a 15% inclusionary requirement, are now fully exempt. Beyond these changes, the ordinance introduces a 67% cut across all Article 4 development impact fees, a broad category of charges developers pay to fund new infrastructure and services, with the Inclusionary Housing Fee being the sole exception.

This reduction in fees and requirements is intended to stimulate housing construction, particularly after a Budget and Legislative Analyst report found that no inclusionary housing rate was financially feasible under existing macroeconomic conditions and fee structures. As Supervisor Alan Wong noted, "We cannot collect affordable-housing fees from projects that are never built. We cannot require below-market-rate units in buildings that never leave the drawing board."

In parallel, the Board of Supervisors is backing a charter amendment championed by Supervisor Myrna Melgar, set for the November 2026 ballot. This measure seeks to significantly grow the city's Housing Trust Fund, aiming to increase its annual contributions from the current $52 million to $125 million by approximately 2036. The ambitious plan proposes to fund this expansion by allocating 20% of future property tax revenue increases, with contributions growing up to 3% annually. The amendment would also extend the fund's sunset date from 2043 to 2058, potentially unlocking an estimated $3 billion in additional affordable housing funding over its extended lifetime.

However, not all city leaders are uniformly supportive of the paired approach. Supervisor Chyanne Chen voiced concerns, stating, "There's no guarantee that the funding will be approved. This is an unnecessary leap of faith, and I believe it is dishonest to advance this legislation without the guarantee that the funding will be dedicated." This sentiment highlights the critical juncture at which San Francisco's housing policy stands, with the future of these linked initiatives hinging on both developer response and voter approval.

Residents and developers alike will be watching how these changes on paper translate to physical shifts across San Francisco's blocks — from shovels in the ground to the composition of its neighborhoods. The ordinance seeks to revitalize a lagging construction sector, while the ballot measure aims to secure a more robust future for affordable housing, albeit through a mechanism that depends on the city's continued property value growth. The actual impact on specific addresses will become clear as permits are filed and projects break ground under the new regime.