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San Francisco Takes Forever to Approve New Housing. California Officials Are Forcing Change

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The TransAmerica Pyramid peeks out behind wooden walls as workers construct two affordable housing developments in San Francisco in February, 2020. A new state report spells out 18 actions the city must take to streamline its approval process for new housing. (Jessica Christian/The San Francisco Chronicle via Getty Images)

California housing authorities are demanding a host of changes to the way San Francisco approves new housing following a yearlong state review into the city’s notoriously difficult permitting process.

The California Department of Housing and Community Development report, released Wednesday morning, concluded that delays are so baked into the city’s approval process that one person can stall or kill projects that should be allowed under state law.

The first-of-its-kind probe into San Francisco found that the city’s policies and politics stifle the construction of apartments or condos at nearly every step, driving developers to pursue business elsewhere. Under state law, HCD’s Housing Accountability Unit will now require the city to change a number of practices and rewrite city laws governing the housing permitting and appeals process.

The changes will make it far easier to build homes in San Francisco, said Gustavo Velasquez, director of the Department of Housing and Community Development, and far more difficult for neighbors and politicians to delay or kill projects that should be allowed under state law and existing local zoning.

“People who were born and raised in San Francisco cannot afford to stay and raise their own families,“ he said. “And why is that? Primarily because the cost of housing is exorbitant in San Francisco and the cost of housing is exorbitant simply because there just isn’t enough of it.”

Gov. Gavin Newsom’s administration launched the review in August of 2021, noting that San Francisco has the longest timelines in the state for approving housing projects and among the highest housing and construction costs. The city also received the most complaints about potential violations of state housing laws of any California jurisdiction, nearly double the next city’s.

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“California’s affordability crisis is one of our own making,” Newsom said in an email to KQED. “The decisions we made limited the creation of housing we need. Nowhere is this fact more evident than in San Francisco. This report is an important first step to address the decades of issues that have held back San Francisco’s ability to build more housing. City leaders have come to the table to work with us on addressing these issues and [to] implement solutions.”

The state’s report spells out 18 actions the city must take and a specific timeline for completing them. A series of laws passed in recent years gives state officials more power to force local jurisdictions to build.

“San Francisco takes more than 10 months longer than the next-slowest jurisdiction to give the green light to build a house. These entrenched problems have been going on for a long time,” Velasquez said. “We’re going to be watching closely what the city does next… Failure to meet [the 18 actions] in the specified timeframes will initiate a process [of enforcement that could lead to lawsuits].”

The scathing report finds that many of the city’s laws and policies are in conflict with state law and have created “major inequities across the city” — concentrating density and affordable housing in certain neighborhoods while allowing “affluent NIMBYs” to “weaponize” the process and prevent construction in their areas.

Among the key problems identified in the 44-page report are the city’s practice of making all permitting discretionary — that is, subject to review by city officials — and allowing appeals after a project has already been approved, and its local laws that add more onerous requirements to state environmental law, and go far beyond what’s required.

Those requirements allow for appeals that, even if dropped, delay projects and add costs to both developers and city taxpayers, the report states.

In both cases, the state is giving San Francisco a deadline to change those practices: It must revise laws governing the permitting process by 2026 and eliminate additional environmental requirements within one to three years.

Dori Ganetsos, HCD’s lead project manager on the San Francisco review, said the changes required by the report should make building far simpler.

“We just want a very clear, easy process where if you’re proposing to build what the city says you’re allowed to build, you get approval,” she said.

The report was largely based on research conducted by Moira O’Neill, an associate research scientist at UC Berkeley’s Institute of Urban and Regional Development. She noted that, unlike other cities, a proposed project in San Francisco will undergo exhaustive reviews by planning officials even if it conforms to the city’s zoning and planning laws. In other cities, those types of projects are automatically approved.

“The law, as it is written and as applied to the developments that I’ve showcased in this report, creates opportunity for a single project opponent to step forward and disrupt the approval pathway … even if the proposed development conforms to the local law as it is written,” O’Neill said.

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That opportunity for subjective review adds delays and risk for developers, O’Neill said. Her review found that the median time for approving multifamily housing in San Francisco was 34 months between 2018 and 2021 — up from 27 months just a few years before. That process can be dragged out further because San Francisco law allows additional time for appeals.

O’Neill said many of these local laws were written to encourage the proliferation of dense housing. But over the years, they have done the opposite.

“San Francisco actually has comparatively more land zoned for dense housing than a lot of the other jurisdictions in California I’ve studied,” she said. “So the local law is both written in a way to try to say we want to welcome people, we want to have multifamily housing, and yet it’s written in a way to make the process so onerous, so unpredictable, it effectively blocks the development of multifamily housing. And that has huge implications for how inclusive San Francisco truly can be.”

But changing discretionary policies works, the report states. It cites the implementation of a 2017 state law, Senate Bill 35, which required local governments to streamline approval of some projects.

Before SB 35, San Francisco approved just five affordable housing projects over three years from 2014–2017. Since it took effect, 18 were approved between 2018 and 2021, 14 of them directly because of SB 35.

Velasquez said that these numbers, and the lessons gleaned from this report and its outcomes, will help the state speed up housing production in other cities around California.

“A ministerial approval process is essential, to take politics, subjectivity out of the equation, out of the decision-making process. San Francisco needs to do that,” he said. “These lessons that we’re learning .… other jurisdictions will just learn from and try to apply.”

The report notes that to meet its housing goals, set by state law, the city would need to build more than 10,000 housing units a year, more than half of them affordable, each year through 2031. The city’s goals call for more than 82,000 new units to be constructed by 2031.

“Yet they have permitted less than one home per day in 2023,” Velasquez said. “The comparison just is egregious of what they have to approve versus what they’re approving now.”

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