San Francisco passes housing element to avoid builder’s remedy

The 11th-hour passage means the city will likely avoid builder’s remedy, other penalties

stopwatch, san francisco city hall, Aaron Peskin
San Francisco Board of Supervisors President Aaron Peskin (City and County of San Francisco)

On Tuesday, the San Francisco Board of Supervisors passed the city’s housing element, an eight-year state-mandated plan to create 82,000 new housing units in the city by upzoning much of its underdeveloped west side. At least for now, it has likely avoided quick-approval builder’s remedy projects and can seek to secure millions in state funds for affordable housing and transit

The item passed unanimously and without comment, an indication of how much was at stake in the quick approval of the element, which came before the board pre-certified by the state Department of Housing and Community Development just days before the meeting. A November board meeting on the element was much more lively, bringing indignation from supervisors who felt, in the words of then-Board President Shamann Walton, the state was setting the city up for “guaranteed failure” without additional housing funds for the mandatory 46,000 units set to be affordable to moderate — and low-income households.

“To the state of California: You can come and threaten and mandate but ‘Hey Mr. Newsom, put your money where your mouth is, too,’” Supervisor and current Board President Aaron Peskin said at the time.

At Monday’s Land Use Committee meeting, Supervisor Dean Preston questioned how the city was supposed to meet its ambitious housing element goals if Mayor London Breed refused to release hundreds of millions in Prop I funds, created when voters approved a doubling of the transfer tax for properties over $10 million in 2020.

“We are losing deals,” he said, while advocating for land banking to take advantage of the down market. “We are losing sites. It is not just a disconnect, it is offensive.”

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In response, Mayor’s Office of Housing and Community Development Director Eric Shaw said at the land use meeting that the city will have its Notice of Funding Availability for the Prop I money ready “soon,” though he could not give an exact date. He said that the city has been concentrating on buying properties where it is ready to build sooner rather than later.

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“If we get land, we want to build on it,” Shaw said. “Buy and hold has not been the priority. It really has been buy, hold and build as soon as possible.”

Despite concerns about the element’s feasibility from Supervisor Preston, Supervisor Myrna Melgar and Supervisor Aaron Peskin, the committee voted unanimously on Monday to pass it, sending it on to the board for its quick Tuesday approval.

Technically, the city will go right up to the January 31 deadline to approve the element as it needs to come back to the board for a second reading and passage on that deadline day. It must then be signed by Mayor London Breed before it can be certified and sent to the state.

“January 31 will be a busy day,” said Miriam Chian, the point person for the element at the Planning Department, which has been shepherding the plan through community, local legislative and state meetings for the last three years.

Planning received the news that the state had pre-certified the current plan on Friday, Chian said at the land use meeting, meaning it is very likely to find the city in compliance. That compliance likely quashes developers’ ability to use builder’s remedy, which bypasses most permitting and planning hurdles if the project has at least 20 percent affordable housing, to push plans through the city quickly.

The state has until at least Feb. 21 before it has to respond to or certify the last-minute submission, said Sonja Trauss at YIMBY Law, which has been holding seminars for developers interested in taking advantage of the “zoning holiday.” She also said it’s “ambiguous” if those who submit plans before HCD officially approves the element will be allowed to move forward since it was not state certified at the time the project was filed.

Therefore, the pro-housing organization is suggesting that developers have their builder’s remedy applications ready to submit on Feb. 1.
“San Francisco’s slow movement on their housing element has definitely created an opportunity for builder’s remedy projects,” she said, adding that the city has “too many decision makers who, although they may talk a good game on housing, obviously don’t think it’s an urgent issue.”