SAN FRANCISCO—On Monday, February 11, Mayor London Breed introduced a proposal to eliminate Department of Building Inspection (DBI) permitting fees for Accessory Dwelling Units (ADUs) and 100 percent affordable housing projects. According to the Mayor’s website, eliminating the fees is part of Breed’s strategy to get rid of barriers to new housing, building on her Executive Directive to expedite the approval of ADUs and her newly announced ballot measure to streamline the creation of affordable housing and teacher housing.
Enabling fees are a significant part of ADU project costs, comprising nearly 8 percent of total project costs, and fees on 100 percent affordable housing can range upwards of $100,000-$150,000 per project. Mayor Breed will be introducing legislation to eradicate these fees at an upcoming San Francisco Board of Supervisors meeting.
“To address our housing shortage, we need to break down barriers to building housing,” said Mayor Breed. “That includes eliminating fees that might prevent a small building owner from adding an extra unit to their home. We need to encourage property owners to add in-laws, not add burdens that prevent them from coming forward and prevent us from adding new homes to our neighborhoods. Cutting fees for affordable housing projects also makes sense as we try to make every dollar count in the construction of new housing, especially when City funds are being used to help finance these projects. We can absorb the loss of these fees, but we cannot absorb the loss of new housing in our City.”
ADUs are a key part of Mayor Breed’s strategy to add more housing in San Francisco. The backlog of nearly 900 ADU applications, and slow approval, led to Mayor Breed issuing an Executive Directive in August 2018 to have outstanding ADU applications be answered within six months, and requiring moving forward, all new applications be addressed within four months.
On average, DBI fees represent 7.8 percent of the total costs of an ADU project. Permit fees are an important part of ADU project costs, waiving permit fees can help reduce the financial burden for single family homes that finance ADU construction via loans or through the use of their savings.