Supervisors Lurie Dorsey and Mahmoud propose waiving impact fees in Market Octavia area

The San Francisco Planning Commission convened on July 24, 2025, to discuss a significant legislative proposal aimed at waiving certain development impact fees in the Market Octavia area. This proposal, introduced by Mayor Mary Lurie and Supervisors Dorsey and Mahmoud, seeks to address the stagnation of housing development in the region, which has seen minimal progress since the onset of the COVID-19 pandemic.

The Market Octavia Plan, established in 2007, originally implemented multiple impact fees to fund affordable housing and community infrastructure. However, the current economic climate has led to a sharp decline in development activity, with only two residential projects completed since 2020, resulting in just 37 new units. In contrast, there are 26 approved projects representing 2,700 units that remain stalled due to high costs associated with the existing impact fees, which can add between $20,000 to $60,000 per unit.

Jacob Bintleff from the Office of Economic and Workforce Development highlighted that the fees, while initially successful, have become counterproductive in the current market. The proposed legislation would eliminate five additional impact fees specific to the Market Octavia area, while retaining citywide fees. This change aims to stimulate housing development, thereby unlocking potential revenue from citywide impact fees and increasing property tax income, which is crucial for funding city services.

The discussion included a range of perspectives from community members and stakeholders. Supporters of the proposal emphasized the urgent need for more housing to alleviate the city's housing crisis and to support local businesses. They argued that reducing fees could make projects financially viable and encourage development in a region critical for its transit-oriented location.

Conversely, opponents raised concerns about the potential loss of funding for essential community projects and infrastructure improvements, which have been funded through these impact fees. They called for a more thorough analysis of the implications of waiving these fees, particularly regarding the long-term effects on affordable housing and community development.

The commission also addressed the proposed sunset of the Market Octavia Community Advisory Committee, which has struggled to maintain quorum and relevance in recent years due to the lack of available funds for community projects.

In conclusion, the commission is poised to make a decision on this legislation, which could significantly reshape the development landscape in the Market Octavia area. The outcome will not only impact housing availability but also the future of community infrastructure and services in San Francisco. Public comments will continue to be collected as the commission weighs the potential benefits and drawbacks of the proposed changes.