Supervisor’s Proposal Seeks to Address 'Housing Death Spiral' in San Francisco

A vacant car wash at the corner of Oak and Divisadero streets has for years stood as a symbol of San Francisco’s struggle to build housing.

Now, a new bill introduced by Supervisor Bilal Mahmood, who campaigned on turning the lot in the city’s Panhandle neighborhood into homes, could revise the city’s building permit timelines and prevent other housing projects from meeting a similar fate.

Mahmood said construction in the city often runs into a “housing death spiral,” where lengthy permit processes compound delays and add additional costs. The core problem, Mahmood said, is that every three years, San Francisco’s building code changes — and active or stalled housing projects must reapply to qualify for construction permits.

This was what supposedly caused the gridlock at the lot on 400 Divisadero: as development of the project stalled for nearly a decade, the code changed multiple times, forcing developers to reapply and adding millions to the project’s cost, Mahmood said.

Mahmood’s legislation allows builders to use the code at the time of their original application — a “simple fix” that the supervisor said should make it easier to get shovels in the ground.

“We have thousands of units of housing … just deadlocked,” Mahmood said. “And the longer these projects take … the more costs get incrementally added. The car wash is just one site emblematic of many in San Francisco that are stuck in San Francisco’s housing development hell, and we are trying to now do what we can, one step at a time, to jump-start that housing development.”

Nicholas Foster, a principal planner with the San Francisco Planning Department, said the bill “promotes more flexibility for the developers.” Foster noted the bill concerns permitting construction plans rather than land-use planning, and is a technical fix aimed at getting approved projects built.

Former District 5 Supervisor Dean Preston, whose office previously tried to acquire the site for affordable housing, argued that market conditions, not simply bureaucratic hurdles, stall housing projects. In the past, Preston has criticized former Mayor London Breed for not financing the project with city funds.

“The private, for-profit housing market has lots of sites around San Francisco that are fully approved and that they’re not moving forward on,” Preston said. “And that has far more to do with the overall market conditions, the costs of capital, their anticipated returns and their desire to wait until rents continue to skyrocket so that they can make more money when they build it.”

Mahmood’s bill is expected to go before the full board in October.