Construction stimulus drives new projects 

An uptick in building-permit applications filed this month suggests that a 3-week-old local construction stimulus program is working, The City’s top building official said.

A sharp slowdown in construction activity followed the late-2008 credit crisis, leaving scores of San Francisco’s blue-collar workers unemployed and creating a growing shortage of new condos. Developers and builders have long complained that fees charged by The City on building projects, which help fund neighborhood improvements to offset project impacts, create barriers to construction and are difficult to finance.

A law championed by Mayor Gavin Newsom’s chief development adviser, Michael Yarne, that took effect July 1 allows payments of many of the fees to be deferred.

On Wednesday, Department of Building Inspection Director Vivian Day told building commissioners that the program appears to be meeting its goal of stimulating construction.

“It is working, albeit very slowly,” Day said. “It is having an impact on the amount of projects that are being submitted for plan checks.”

Since July 1, 30 applications to build new homes or conduct other construction work requiring payment of impact fees have been filed, Day told building commissioners. None are related to high-rise buildings.

Builders do not need to immediately apply for the fee deferral in order to qualify, but Day said she expects fees on many of the 30 projects to be deferred to some extent.

Today, Yarne plans to unveil a second phase of the local stimulus program to the San Francisco Planning Commission.

Part of the program would help builders borrow money to pay impact fees using government bonds, which can be less expensive for big projects than private bank loans.

Another element of the program would fund construction of neighborhood parks and other infrastructure through a seldom-used California financing tool called infrastructure finance districts.

Such districts, which could soon be tested in Rincon Hill, allow neighborhoods to direct increased property tax revenue toward local infrastructure instead of sharing it citywide.

“We’re already seeing positive economic results from the mayor’s development stimulus legislation, and that’s a hopeful sign for our local construction industry and our economic recovery,” Newsom spokesman Tony Winnicker said.

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