Government Audit and Oversight Committee Meeting — July 2, 2026

The Government Audit and Oversight Committee of the San Francisco Board of Supervisors met on July 2, 2026, at 6:15 PM. Chair Stephen Sherrill presided, joined by Vice Chair Blahmakmood and Supervisor Fielder. The committee heard two items: a hearing on city compliance with state workforce reporting requirements (Item 1) and a major ordinance reducing inclusionary housing and impact fees to spur development (Item 2). The meeting featured detailed staff presentations, public testimony, and a divided vote on the housing ordinance.

Hearing on AB 2561 Compliance (Item 1)

• The committee heard a report from Gigi Whitley, Director of Policy and External Affairs at the Department of Human Resources, on the city and county’s compliance with Assembly Bill 2561 and Government Code Section 3502.3 regarding vacancies, recruitment, and retention.
• Chair Sherrill stated his questions had been answered and moved to file the hearing. No public comment was offered.
• Motion: To hear and file the item. Passed unanimously (3-0).

Public Comments & Testimony (Item 2)

• Over 30 speakers provided one-minute comments. The majority spoke in favor of the ordinance, including representatives from building trades unions (Glazers Local 718, Elevator Constructors Local 8), housing developers, and advocacy groups like Abundant SF and SF YIMBY. They argued the current inclusionary rates block projects and that paired with the housing trust fund the reductions would unlock construction.
• Several speakers urged support for the unanimous TAC recommendation and noted the critical need for both affordable and market-rate housing.
• Opponents included David Wu (Somo Filipinas), who argued the cuts permanently remove hard-won area-plan agreements in SOMA; Peter Papadopoulos (United Save the Mission Community Development Committee) who requested a trigger tied to the housing trust fund; and Zachary Friel, who cited BLA reports showing earlier reductions failed to jump-start development and would cost the city $34 million in potential revenue. Other opponents raised displacement concerns, particularly for the Mission and Bayview neighborhoods, and questioned the lack of a fallback to 10% if the housing trust fund fails.

Discussion Items

• Ordinance to Reduce Inclusionary Housing and Impact Fees (Item 2)
  • Jacob Bintliff (OEWD) presented the staff report, explaining that the Controller’s triennial feasibility study (issued April 30, 2026) found no feasible rate of inclusionary housing under current market conditions. The TAC unanimously recommended a 5% on-site rate citywide and a proportional reduction in impact fees, paired with a renewed housing trust fund charter amendment providing ~$3 billion over 30 years.
  • Ada Tan (Planning Department) detailed the ordinance provisions: raising the applicability threshold from 10 to 25 units, reducing on-site rates from 18–20% (current temporary 33% reduction) to 5%, setting off-site/fee rates at 10% (15% in higher-cost areas), reducing Article 4 impact fees by 67%, expanding land dedication options, and establishing an administrative modification process.
  • Nicholas Menard (BLA) reported fiscal impacts: reduced annual revenue of about $3 million based on current collections, offset partially by new construction but unlikely to fully close the feasibility gap. He referenced a separate BLA report on affordable housing funding options.
• Supervisor Questions and Debate
  • Supervisor Fielder questioned the evidence that cutting inclusionary unlocks projects, given macroeconomic factors. She noted the TAC’s recommendation was conditional on a recurring funding source (housing trust fund). She asked why the ordinance sets 5% now instead of the TAC’s fallback of 10% if funding fails. OEWD responded that placing the housing trust fund on the July 14 ballot satisfies the condition; waiting until after the November election would delay action and risk the November 1 expiration of current temporary reductions. OEWD committed to working with the board to adjust the rate back to 10% if the housing trust fund does not pass.
  • Supervisor Fielder also raised concerns about the Mission Area Plan, where higher inclusionary rates were a bargained trade for increased density. She argued the 5% rate breaks that bargain and that the area’s high displacement risk warrants higher on-site requirements. OEWD noted that the TAC did not consider displacement risk but that the ordinance preserves higher off-site/in-lieu rates (15%) in those areas to incentivize on-site units. Supervisor Fielder stated she would introduce amendments at the full board and voted no.
  • Vice Chair Blahmakmood asked about the choice of 5% specifically. OEWD explained it was the result of TAC debate, seeking a number close to zero (which was deemed infeasible) but retaining some requirement to capture units if conditions improve. Vice Chair expressed disappointment that the ordinance was not explicitly coupled with the housing trust fund but accepted the commitment to revisit and voted yes.

Key Outcomes

• Item 1: Motion to file the hearing passed unanimously (3-0).
• Item 2 – Amendments: The committee approved non-substantive technical amendments (as presented by OEWD) by a 3-0 vote.
• Item 2 – Duplicate File: A duplicate file was continued to the call of the chair (3-0), to allow future adjustments if needed.
• Item 2 – Original File: The original file, as amended, was forwarded to the full Board of Supervisors with a positive recommendation. Vote: 2-1 (Chair Sherrill and Vice Chair Blahmakmood in favor; Supervisor Fielder opposed).
• The item is expected to appear on the Board of Supervisors’ agenda on July 14, 2026, alongside the housing trust fund charter amendment.