SF officials approve new ordinance to satisfy state's housing mandate, avoid losing funding

SAN FRANCISCO -- On Tuesday, the San Francisco Board of Supervisors moved to satisfy housing policy requirements mandated by the state, while asking for exceptions at the same time.

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Mayor London Breed's Constraints Reduction Ordinance was approved. This was one of the requirements set by the California Department of Housing and Community Development, or HCD, in a Nov. 28 letter to the city. The state threatened to take punitive actions, like the withdrawal of state funding for affordable housing and transportation projects, if changes are not made by Dec. 28.

The mayor's ordinance, written with Supervisors Joel Engardio and Matt Dorsey, abides by the recommendations sent by the state following an in-depth review. It includes reducing permit approval times by 50% for most housing projects, streamlining paperwork, removing developer fees on some projects, removing barriers for office-to-residential conversions and reforming some zoning codes.

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The supervisors also voted to approve a resolution urging the city attorney and mayor to request a revision of HCD demands and seek an extension of the deadlines for required actions.

The resolution is supported by several community organizations who are fearful that the state will cancel the city's discretionary, or locally reviewed, housing policy and implement a ministerial process, which would automatically approve developments that meet code, possibly resulting in more market-rate housing being built.

The organizations, including the San Francisco Anti-Displacement Coalition and the Race & Equity in all Planning Coalition, issued a joint statement following the vote.

"Even with the passing of the mayor's housing streamlining legislation today, HCD can still de-certify San Francisco's Housing Element law which would trigger the so-called Builder's Remedy, which would allow developers to get automatic approvals despite only requiring 10% below market rate units. This is a far cry from the 57% affordable housing goal in the San Francisco's Housing Element law, and the previous city requirement of 22% below market rate," the groups said.

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"Tellingly, there is no accountability for developers who are sitting on 50,000 units of already approved housing and that they are not building," John Avalos, a former San Francisco supervisor who is now executive director of the Council of Community Housing Organizations, said in the statement. "The Builder's Remedy allows unchecked power by luxury developers, which HCD is greenlighting as their ultimate goal."

"An overwhelming majority of the proposed development will continue to be in communities that are occupied by Black, Indigenous and People of Color, such as the South of Market (SOMA) neighborhood," added David Woo of the SOMA Pilipinas Filipino Heritage District.

Wanting to add protections for rent-controlled and historic housing, Supervisor Rafael Mandelman added protective language to the mayor's proposal.

"Instead of eliminating Conditional Use from 100% of the homes built before 1932, we could require it only for those homes that have been designated to hold historic value," Mandelman said.

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Conditional Use means localized review, on a case-by-case basis. Also referred to as discretionary review, it is one of the procedures the state feels slows the permitting process.

In its letter, the HCD instructed the city to pass the mayor's ordinance without amendments, so it is unclear whether Mandelman's amendment will remain.

"I'm deeply concerned that since passing our housing element earlier this year, nearly every effort to that has been commenced by the mayor's administration has been focused on how to meet our market rate housing goals and little to nothing on reaching our affordable housing goals," said Supervisor Dean Preston.

"In our previous eight-year housing cycle, we produced 150% of our target market rate housing. At the same time, we barely reached half of our affordable housing goals," he said.

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Proponents applauded the adoption of the Constraints Reduction Ordinance.

"Today's approval of this legislation is one critical component to the mayor's broader strategy of advancing the city's goals of allowing 82,000 homes to be built in eight years," said Breed in a statement following the vote.

A statement from the office of state Sen. Scott Wiener, D-San Francisco, said that the city's housing permitting process will be utterly transformed, "making it much easier to build new homes and meet San Francisco's state housing goals."