SEC. 16.110. HOUSING TRUST FUND.

(a) Creation of Fund. There is hereby established a Housing Trust Fund to support creating, acquiring and rehabilitating affordable housing and promoting affordable home ownership programs in the City, as provided in this Section 16.110.

(b) Definitions. For purposes of this Section:

"First Responder" shall mean a City employee who responds first in cases of natural disaster or emergencies, including, but not limited to, all active uniformed, sworn members of the San Francisco Police and Fire Departments.

"General Fund Discretionary Revenues" shall mean revenues that the City receives and deposits in its treasury, that are unrestricted, and that the City may appropriate for any lawful City purpose.

"Household" shall mean any person or persons who reside or intend to reside in the same housing unit.

"Mayor's Office of Housing" shall mean the Mayor's Office of Housing and Community Development or any successor City agency.

(c) Funding.

(1) In the Fiscal Year 2013-2014 budget, the City shall appropriate to the Housing Trust Fund $20 million.

(2) For the next 11 fiscal years, in each of the annual budgets for Fiscal Year 2014-2015 through Fiscal Year 2024-2025, the City shall appropriate to the Housing Trust Fund an amount increasing by $2.8 million per year, until the annual appropriation required by this Section reaches $50.8 million in the Fiscal Year 2024-2025 budget.

(3) In the annual budgets for Fiscal Year 2025-2026 through Fiscal Year 2042-43, the City shall appropriate to the Housing Trust Fund an amount equal to the prior year's appropriation, adjusted by the percentage increase or decrease in General Fund Discretionary Revenues budgeted for the year compared to the prior year's original budgeted amount of General Fund Discretionary Revenues.

(4) Should the City adopt a fixed two-year budget under Charter Section 9.101, the adjustment for the Housing Trust Fund appropriation for the two years of the two-year budget shall be based on the amount of General Fund Discretionary Revenues estimated for the two-year period included in the budget.

(5) During Fiscal Years 2025-2026 through 2042-2043, if the Controller submits a revised estimate of General Fund Discretionary Revenues for a given Fiscal Year or two-year budget period that is lower than the amount originally budgeted for that period, then the Board may, by ordinance, reduce the appropriation to the Housing Trust Fund for that budget period in an amount that does not exceed the amount proportionate to the percentage shortfall in the discretionary revenue projection.

(6) The Controller's method of calculating the amount of and changes in General Fund Discretionary Revenues shall be consistent from fiscal year to fiscal year and with the Controller's method for calculating those figures under Charter Sections 8A.105, 16.108, and 16.109. Additionally, in determining General Fund Discretionary Revenues, the Controller shall not include revenues received by the City under the increased rates in Business and Tax Regulations Code Sections 953.1(g), 953.2(h), 953.3(h), 953.4(e), 953.5(d), 953.6(f), 953.7(d), and 953.8(i) adopted by the voters at the general municipal election on November 3, 2020, and shall not include revenues received by the City under Article 36 of the Business and Tax Regulations Code adopted by the voters at the general municipal election on November 3, 2020. The Controller shall treat General Fund appropriations to the Housing Trust Fund as reductions in General Fund Discretionary Revenues when calculating other funding allocations that are tied to General Fund Discretionary Revenues, including funding allocations under Charter Sections 8A.105, 16.108, and 16.109. The Controller shall correct errors in the estimate of discretionary revenues for a fiscal year through an adjustment to the next fiscal year's estimate.

(7) In any year during the term of this Section, the City may, in its discretion, reduce its annual contribution to the Housing Trust Fund for that year by an amount equal to or less than 56.7% of the annual debt service required to service any SB2113 Affordable Housing Bonds issued after January 1, 2013. "SB2113 Affordable Housing Bonds" are bonds issued by the City to support the acquisition and creation of replacement affordable housing citywide using property tax increment from former Redevelopment project areas under California Health and Safety Code Section 33333.7

(8) The Controller shall set aside and maintain the amounts appropriated to the Housing Trust Fund under this Section, together with any interest earned thereon, and any amount unexpended or uncommitted at the end of the fiscal year shall be carried forward to the next fiscal year and, subject to the budgetary and fiscal limitations of this Charter, shall be appropriated for the purposes specified in this Section.

(d) Uses of the Housing Trust Fund. The City may disburse monies from the Housing Trust Fund through loans, grants or other types of payments, on terms determined by the Mayor's Office of Housing in its sole discretion. Any repayment of a loan or grant from the Fund that the City receives, or any interest from a loan from the Fund that the City receives, will be returned to the Housing Trust Fund. The City, acting through the Mayor's Office of Housing, shall disburse the monies from the Housing Trust Fund for the following eligible expenditures:

(1) The creation, acquisition, and rehabilitation of rental and ownership housing affordable to Households earning up to 120% of the Area Median Income, including, without limitation, the acquisition of land for such purpose.

(2) No later than July 1, 2018, the City shall appropriate $15 million from the Housing Trust Fund to a program that provides loans to Households earning up to 120% of the Area Median Income and to Households including a First Responder (subject to Area Median Income limits designated by the Mayor's Office of Housing) for use as a down payment on the purchase of a housing unit ("the Down Payment Assistance Loan Program"). As soon as is practical, the Mayor's Office of Housing shall develop and implement a manual for the Down Payment Assistance Loan Program.

(3) No later than July 1, 2018, the City shall appropriate up to $15 million from the Housing Trust Fund to a program that provides funds to Households earning up to 120% of Area Median Income for use as assistance to reduce the risk to current occupants of a loss of housing and/or to help current occupants make their homes safer, more accessible, more energy efficient, and more sustainable (the "Housing Stabilization Program"). As soon as is practical, the Mayor's Office of Housing shall implement and develop a manual for the Housing Stabilization Program.

(4) The City may use monies in the Housing Trust Fund to operate and administer the Infrastructure Grant Program as described in subsection (e). The City may not allocate to the Infrastructure Grant Program in any fiscal year an amount exceeding the greater of $2 million or 10% of the amount appropriated to the Housing Trust Fund for that fiscal year under subsection (c).

(5) In any fiscal year, the City may allocate a sufficient amount from the Housing Trust Fund to pay for all legally permissible administrative costs of the Fund, including, without limitation, legal costs, associated with any use of the Housing Trust Fund.

(e) Complete Neighborhoods Infrastructure Grant Program. After conferring with the Director of Planning, the Director of the Mayor's Office of Housing shall design and administer a Complete Neighborhoods Infrastructure Grant Program ("Infrastructure Grant Program"). The purpose of the Infrastructure Grant Program is to accelerate the build-out of the public realm infrastructure needed to support increased residential density in the City's neighborhoods. The City may use monies from the Infrastructure Grant Program only for public facilities identified in the Community Facilities District law (Cal. Govt. Code §§et seq., as amended), and shall give priority to the use of such monies by residential development project sponsors, community-based organizations, and City departments for public realm improvements associated with proposed residential development projects.

(f) Bonding Authority. Notwithstanding the limitations set forth in Sections 9.107, 9.108, and 9.109 of this Charter, upon recommendation of the Mayor, the Board of Supervisors may authorize the issuance, without limitation, of revenue bonds, lease financing, notes, or other evidences of indebtedness or other obligations ("Debt Obligations"), the proceeds of which are to be used for creating, acquiring, and rehabilitating rental and ownership housing affordable to Households earning up to 120% of the Area Median Income, including, without limitation, the acquisition of land for such purpose. Such Debt Obligations shall be secured by and/or repaid from any available funds pledged or appropriated by Board of Supervisors ordinance for such purpose, which amount may include funds in the Housing Trust Fund allocated under subsection (c). Debt Obligations authorized hereby shall be issued in accordance with the Mayor's Office of Housing policies, and upon the terms and conditions as the Board of Supervisors shall approve. Funds appropriated to pay debt service on the Debt Obligations in such fiscal year under the terms of this Section shall be set aside in an account for such use until such payment is made.

(g) Legislation.

(1) The City may enact an ordinance adopting inclusionary or affordable housing obligations, including definitions that differ from those set forth in subsection (b) of this Section 16.110. After any such ordinance becomes effective, the City Attorney shall cause to be removed from the Charter this subsection (g) of Section 16.110, and shall cause the subsequent subsections to be renumbered accordingly. Thereafter, the City may by ordinance set and change the minimum or maximum inclusionary or affordable housing obligations, and may adopt definitions for inclusionary and affordable housing programs. In doing so, the City shall endeavor to meet affordable housing needs across a broad range of household incomes, family sizes and neighborhood conditions and may update the method of fee calculation based on different building types and sizes, and may set policies controlling conversion of rental units to ownership units, among other programmatic changes.

(2) Until the City enacts an ordinance amending the Planning Code, including but not limited to Section 415, adopting inclusionary or affordable housing obligations different from those called for in previously existing Charter subsections (g) and (h), the following requirements for inclusionary housing shall apply during such interim period for any housing development project that has not procured a final first discretionary development entitlement approval, which shall include approval following any administrative appeal to the relevant City board, or has not entered into a development agreement or other binding agreement with the City as of January 12, 2016:

(A) For housing development projects consisting of ten dwelling units or more, but less than twenty-five dwelling units, the requirements of the Planning Code, including but not limited to Section 415 et seq., in effect on the date this Charter Amendment is adopted1 by the voters shall apply.

(B) For housing development projects consisting of twenty-five dwelling units or more, the requirements of the Planning Code, including but not limited to Section 415 et seq., in effect on the date this Charter Amendment is adopted by the voters shall apply, except that the amounts of the inclusionary housing requirement shall be modified as follows:

(i) Fee. The development project shall pay an affordable housing fee equivalent to a requirement to provide 33% of the units in the principal project as affordable units, using the method of fee calculation set forth in Planning Code Section 415.5(b). In the event the City's Nexus Analysis in support of the Inclusionary Affordable Housing program demonstrates that a lower affordable housing fee is lawfully applicable based on an analysis of all relevant impacts, the City may utilize the method of fee calculation supported by the Nexus Analysis in lieu of the 33% requirement set forth herein.

(ii) On-Site Housing. If the project sponsor elects and is eligible to construct units affordable to qualifying households on-site of the principal project as set forth in Planning Code Section 415.5(g), the project sponsor shall construct 25% of all units constructed on the project site as affordable housing units, with 15% of the units affordable to low- and very low-income households and 10% affordable to middle income households, and shall comply with all otherwise applicable requirements of Section 415.6.

(iii) Off-Site Housing. If the project sponsor of a housing development project elects and is eligible to provide units affordable to qualifying households off-site of the principal project as set forth in Planning Code Section 415.5(g), the project sponsor shall construct or cause to be constructed affordable housing units equal to 33% of all units constructed on the principal project site as affordable housing, with 20% of the units affordable to low- and very low-income households and 13% of the units affordable to middle-income households, and shall comply with all otherwise applicable requirements of Section 415.7.

(C) Interim definitions of "Lower Income" and "Middle Income" households. For purposes of the interim period before the City enacts an ordinance amending the Planning Code, including but not limited to Section 415 et seq., "lower income" households shall be defined as households whose total household income does not exceed 55% of Area Median Income for purposes of renting an affordable unit, or 80% of Area Median Income for purposes of purchasing an affordable unit, and "middle income" households shall mean households whose total household income does not exceed 100% of Area Median Income for purposes of renting an affordable unit, or 120% of Area Median Income for purposes of purchasing an affordable unit.

(j)2 Disclaimer. Nothing in this Section shall be construed to limit or restrict the ability of the City to adopt any fees or exactions related to public benefits other than affordable housing, including, but not limited to, transit infrastructure, streetscape, public realm improvement, or child care fees.

(k)2 Term. Except as provided in subsection (l) below, this Section shall become inoperative on July 1, 2043, and after such date shall have no further force or effect and shall be repealed.

(l)2 Early Termination. At any time before January 1, 2013, the Mayor, after consulting with his or her Budget Director and the Controller, and after taking into account the City's projected revenues and expenditures in the City's financial plans, may terminate implementation of this Section by issuing a written notice to the Board of Supervisors and the Controller. The termination shall be irrevocable and apply to the entire Section 16.110. Upon the Mayor's signing of the notice, this Section shall become inoperative and after such date shall have no force or effect and shall be repealed.

Editor's Notes:1. The phrase "the date this Charter Amendment is adopted" in division (g)(2)(A) was added to this section as part of the amendments adopted at the election of June 7, 2016.2. The 2016 amendment to this section, among other things, deleted former divisions (g) and (h) in their entireties and redesignated former division (i) as current (g). That legislation did not, however, redesignate or otherwise alter previously existing divisions (j), (k), or (l). Accordingly, this section currently contains no divisions designated as (h) or (i).

(Added by Proposition C, Approved 11/6/2012; amended by Proposition C, Approved 6/7/2016 Effective 7/29/2016; Proposition F, Approved 11/3/2020)