New purpose-built student housing would also be exempt from the requirement for a mix of units in the property; currently multifamily projects must have a various-size units along with open space. This would allow student housing developers to have a high-density project and maximize their use of space.

The proposal was somewhat modeled after a plan implemented in Boston over a decade ago. In a letter to Mayor’s Office of Housing, the San Francisco Housing Action Coalition wrote that in the late 1990s, the City of Boston “began a non-binding policy that stated that all institutions of higher learning would be expected to provide housing for at least 50% of their students…With the city’s ‘Leading the Way II,’ the policy became more formalized in that creation of student housing became an explicit part of the city’s overall housing strategy.”

Boston not only exempted student housing properties from its local inclusionary housing ordinance—which required that 13% of all a building’s units be affordable at 70% of median income—but it also waived impact fees that are normally applied to traditional residential projects. “Not surprisingly,” wrote the SFHAC, “these policies appear to have resulted in the production of close to 1,000 units of student housing annually over the last decade.”

The ordinance would certainly make a difference to the industry, according to student housing expert Peter Katz, an SVP of investments with Marcus & Millichap. Land and development costs, along with the affordable housing fee, make it very difficult to build student housing in San Francisco, he says. The proposal, he adds, is “a huge thing. If you don’t have to pay subsidized housing fees—coupled some other incentive—you will encourage the real estate community to come in and build student housing in Downtown San Francisco. That may very well be viable and may very well be spurred by this initiative by the city. It’s encouraging that the initiative is there.”

The ordinance will go before the Board’s Land Use and Economic Development Committee today, and then go before the full Board for two readings on July 31 and September 4. “Assuming everything goes well, it could be signed by the mayor in September,” says Wiener. “We’re just trying to send a signal to the educational institutions that we want them to create this housing, and they would partner with developers to get that done.”

According to officials, discussions with some student housing developers are already taking place. But, says Katz, there’s probably more work to be done there, since San Francisco, like many dense urban areas, isn’t necessarily on the radar screens of many student housing developers. “The development community has to embrace the idea that there are so many other secondary institutions that provide an intense amount of demand,” he relates. In other words, while a particular city may not have one or two major schools with tens of thousands of students, it might have several schools that, when put together, offer an even larger pool of students who may need housing.

“The big student housing developers—the national platform players—need to understand the possibility that San Francisco is a place in which they should build,” says Katz. “Most people don’t see the Northern California submarket as a student housing market because there’s not a lot of growth in California state schools, and here hasn’t historically been a 30,000- or 40,000-student university.” There are several urban areas, such as Portland, OR; Seattle; and Washington, DC, among others, “that are struggling with providing housing for their student populations.”

In the case of San Francisco, while the city “is not yet on the radar screen of student housing developers, it will be shortly because of this initiative.”