Planning staff concedes that such a turnabout is unlikely, especially in the new economic downturn, saying that housing must be produced in the first place in order to have a successful inclusionary program. Developer Martin Dalton of Union Property Capital, Inc. says that's where the problem lays, as squeezing builders now may delay or halt many, if not all, new housing projects citywide.

Dalton believes that the off-site option as a creative way to construct more affordable units. One example is arranging with the New Hope Church of Christ to build up to 160 affordable units in the Bayview District instead of the 80 he would normally be required to add to his 800-unit upscale development project at Spear Street and the Embarcadero.

Leno says that his approach is supported by a broad array of business and community leaders who have been working on a compromise for nearly two years. And Dalton's public relations representatives suggested that Leno's plan is a more moderate one he could support.

As the planning commissioners consider what to do about housing rules, a proposition placed on the March ballot by the supervisors asks voters to change the way people are appointed to the powerful panel. If Measure D is successful, the mayor would lose his power to appoint the entire seven-member commission and be forced to hand over authority for three appointments to the president of the Board of Supervisors.