Today, the housing-fee math finally hits the table — and we get to ask whether lowering the entry price actually gets even one working-class unit built. This is San Francisco Politics and Urbanism Daily. We're looking at the Breed-Peskin fee reform plan, the state's own review of how we got here, and the 2025 police staffing numbers Prop E promised us. Stick around — the arithmetic gets interesting. Two names on one housing proposal — Breed and Peskin. Yeah, I've got questions about that handshake. Let's get into it. Here's City & County of San Francisco Police Department:
In November 2020, San Francisco voters approved Proposition E, amending the City Charter to remove the previously established Police staffing baseline and requiring the Police Department to submit a report and recommendation on staffing levels every two years to the Police Commission for consideration when approving the Department’s budget.
So this is the document: the SFPD Staffing Analysis 2025, dated June 30. It's the deliverable Prop E required — the November 2020 charter amendment that stripped out the old fixed staffing baseline and told the department to recommend its own numbers to the Police Commission every two years. And here's what I want to clock — the methodology didn't start in 2020. It traces back to Resolution 63-17 in 2018, and before that, the 1994 Prop D baseline. So the city's been chewing on how to count cops for thirty years. Right, and this time they're framing it around workload — calls for service, actual demand for policing — instead of a number frozen into the charter. That's the rigorous version, at least. Now we find out whether the recommendation at the other end is rigorous, or just well-dressed. That's the test. A workload model is only honest if it sets a target response time and then tells you the staffing that hits it. If it just backs into the number the chief already wanted, it's the 1994 baseline in a new suit. San Francisco keeps floating the idea of cutting fees on new housing — but before we cheer or boo that, what are those fees actually for, and are they really the thing standing between us and more homes? Good place to start, because people say “fees” like it's one line item. When a developer builds new housing, cities charge impact fees — payments meant to cover the strain new residents put on shared infrastructure: sidewalks, sewer lines, parks, schools. The theory is that growth should help pay for growth, instead of dropping the whole bill on existing taxpayers. But the Terner Center looked at affordable housing projects built with low-income tax credits across California from 2020 to 2023 — nearly 700 projects — and found impact fees added almost $20,000 per unit on average. On a construction budget, that's real money. SPUR's San Francisco analysis is even starker: the City Controller's housing feasibility report found that across 80 project scenarios — low-rises, mid-rises, high-rises, different affordability mixes — developers could recoup their costs in only one. Per KQED's reporting on the Terner findings, those fees sit on top of already-high construction and financing costs, so the math on whether a project “pencils out” — developer shorthand for turning a profit, or at least breaking even — is brutal before fees even enter the picture. And the SF Examiner reported that the fee incentives the city enacted in 2023 still weren't enough to reverse the slide in residential building activity, even if they may have slowed the decline. So if cities just waive or cut those fees, don't they lose the money they were counting on for parks and sewers — meaning the neighborhoods that get the new housing also get worse infrastructure? That's exactly the tension SPUR flags — they're clear that inclusionary requirements and impact fees are a real funding tool, but if they're set too high, they can slow or stop the development they're taxing. Then the city collects nothing. The Sacramento Bee found one example where a developer faced roughly $700,000 in fees, but waivers for affordable and senior housing knocked that down by $620,000 — which points toward targeted relief, not just blanket cuts. For San Francisco, the hard part is modeling that tradeoff honestly: fewer fees collected per unit versus more units actually built. Here's London N. Breed at San Francisco Mayor's Office:
The Housing Fee Reform Plan is composed of two pieces of legislation that will reduce inclusionary housing requirements on new and already approved development projects and reform and defer development impact fees in order to spur development projects and economic activity. This legislation is a key piece of Mayor Breed’s Housing For All Plan, which is the City’s effort to allow for 82,000 new homes to be built over the next 8 years.
Okay, here's the thing — now we finally have a concrete proposal. Breed and Peskin, two bills: cut inclusionary requirements, and reform and defer the impact fees. That's concrete enough to grade. And let's linger on that pairing, because we've spent the week watching City Hall fight itself. Breed and Board President Peskin co-sponsoring anything is a rare moment of alignment — Peskin, with a long résumé of slowing projects down, signed onto this one. Which tells you how much pressure they're under. The fact sheet ties this to Housing for All — 82,000 homes in eight years. And here's the part I like: they say the new inclusionary numbers are set “based on data,” from the Affordable Housing Technical Advisory Committee. Not vibes. A committee actually ran the math on what makes a project pencil. Inclusionary, for anyone new — that's the share of below-market units a developer has to include. The pitch here is that the old percentage was set so high nothing got built, so zero percent of a project that never breaks ground is still zero affordable homes. Right, that's the whole argument. But the city's own chief economist projected the broader plan yields maybe 14,600 net new homes — against a state requirement north of 36,000. So my question on the fee piece: does cutting inclusionary actually close that gap, or just slow the bleed? This next one comes via California Department of Housing and Community Development. Okay, the HCD review itself — the actual October 2023 document. We've cited it secondhand for weeks; now it's open in front of us. For listeners: HCD is the state's Department of Housing and Community Development, the agency with the authority to enforce California's housing laws on a city. And the table of contents alone reads like a charge sheet — inconsistencies with state law, historic inequities in zoning, and right there in the key findings: “Public Hearings and Development by Negotiation.” That's the disease we've been circling all week, named in plain text. Right, and that's the line that matters. The state didn't just say “fees too high” or “permits too slow.” It said the whole system runs on negotiation — every project a deal cut at a hearing. So when the Breed-Peskin fact sheet we just hit says fee reform “unlocks the pipeline,” I want to know: does a cheaper fee kill the negotiation, or just lower the price of the same backroom haggle? And the chief economist already pegged the zoning plan at roughly 14,600 homes against a 36,000 requirement. A cheaper fee schedule helps only if the underlying approval machine changes too; HCD is saying that machine is the problem. Hacker News, weighing in:
The City’s failure to implement the Required Actions will result in HCD initiating the process to revoke housing element compliance. Various consequences may apply if the City does not have a housing element in compliance with Housing Element Law, including ineligibility or delay in receiving certain state funds, referral to the California Office of the Attorney General, court-imposed financial penalties, the loss of local land use authority to a court-appointed agent, and the application of…
Read that list again — court-imposed financial penalties, referral to the Attorney General, and loss of local land use authority to a court-appointed agent. That last one is the big stick. The state can take the zoning pen out of City Hall's hand entirely. That's the enforcement piece we kept asking about — and credit to the Hacker News thread for surfacing the exact consequences language. It answers the “are the threats real” question we've been chewing on: revoke compliance, lose funds, lose authority. And that changes the whole fee debate. The city is under real state pressure here, so this package has to be judged as a compliance move, not just a developer giveaway. Now the test is whether Breed and Peskin built something that actually satisfies HCD's required actions, or just bought a little time before the AG picks up the phone. This one's from San Francisco Planning Department:
Per California Government Code Section 65583(c), the Housing Element must include a program of actions that San Francisco is undertaking or intends to undertake to implement the Housing Element’s policies and achieve its goals and objectives. Implementing actions could include administration of land use and development controls, planning and community engagement processes, regulatory concessions and incentives to support housing…
So here's the document underneath all the noise — the 2022 Housing Element, adopted by the Board January 31st, 2023. Nine implementing programs, everything from stabilizing tenants to Program 7, expanding housing choices. Let's be precise: this is the blueprint the fee reform plan we just covered is supposed to deliver on. The Element sets the goals; the fees are one lever to actually hit them. Right, and look at Program 8 — “Reducing Constraints on Housing Development.” That's the whole ballgame. HCD's October 2023 review called development-by-negotiation the core disease, and Program 8 is where you'd cure it or not. But here's what I want to know — the Element claims roughly 60 percent of parcels get new housing capacity. Sixty percent of which parcels? If it's the lots nobody was ever going to fight over, that's paper compliance dressed up as reform. And that's where the chief economist's number bites — his projection was about 14,600 additional homes against a state requirement north of 36,000. The Element lists the quantified objectives; the math still doesn't close the gap. If this briefing helps you keep up with San Francisco politics and urbanism, consider subscribing and leaving a quick review wherever you're listening. It really helps other people find the show.
You'll find links to every story we covered today in the show notes, so if one caught your ear, you can dig into the original reporting there. That's San Francisco Politics and Urbanism Daily for today. This is a Lantern Podcast.