State regulators declare San Francisco compliant with housing law

Mayor’s “constraints reduction ordinance” streamlines projects, thwarts builder’s remedy

San Francisco has slammed the door on builder’s remedy applications from developers.

The state Department of Housing and Community Development has declared the city officially compliant with state housing law, closing the window for the legal loophole that could allow developers to bypass local zoning rules, the San Francisco Business Times reported.

San Francisco fell out of compliance at the end of last year after it failed to make state-mandated changes to the way it approves and permits housing projects.

The state regulator, during a scathing audit in October, had given San Francisco a November deadline to pass Mayor London Breed’s ordinance to streamline the glacial process to get homes approved and built. 

The city blew its first deadline, but was given 30 more days to approve the legislation.

If San Francisco had failed to pass the “constraints reduction ordinance,” state housing regulators had threatened to decertify its Housing Element plan for 82,000 new homes by 2031 — which could jeopardize hundreds of millions in funding for affordable housing and transportation.

It could also allow developers to apply for builder’s remedy projects that skirt local planning review. 

The Board of Supervisors passed the constraints reduction ordinance in December. But they did so with several modifications to the ordinance, even as state housing regulators had repeatedly encouraged the board to pass the ordinance exactly as authored by Breed.

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After a week of review, the housing department confirmed ahead of the December deadline that the modified ordinance met its standards, positioning San Francisco to return to compliance with state housing law. 

David Zisser, who heads the state department’s housing accountability unit, said last month the agency needed a letter from the city describing the actions it had taken to come back into compliance before it could give San Francisco the all clear.

The Jan. 16 letter cements the OK for San Francisco, while the city will dodge any punishments for California governments that fall out of compliance with state housing law, including the builder’s remedy.

“HCD looks forward to continuing to collaborate with the city in meeting the commitments in the housing element and the San Francisco Housing Policy and Practice Review,” the department wrote.

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Jeff Cretan, a spokesman for the mayor, said the mayor’s office appreciated the all-clear from the housing department, but that the city should move to accomplish state housing goals on its own.

“If we are going to be a city that has homes we need to thrive, including for the next generation growing up here, we have to be aggressive in doing our part to get new housing built,” he told the Business Times in an email.

— Dana Bartholomew