S.F. to miss state housing deadline, jeopardizing local control - San Francisco Chronicle

San Francisco could lose control of future housing plans if the city doesn’t meet a deadline imposed by the state of California.
Jessica Christian/The Chronicle

Under a set of state mandates laid out in an Oct. 25 “San Francisco Housing Policy and Practice Review,” the California Department of Housing and Community Development, or HCD, gave the city 30 days to pass Mayor London Breed’s “constraints reduction” ordinance, which would slash red tape and allow many projects to go forward without a hearing at the Planning Commission.

While that deadline is Nov. 27, the ordinance has still not had a hearing at the committee level or before the full Board of Supervisors. While it could be heard at committee next week, it would likely not be before the full board for adoption until the second week of December.

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San Francisco Planning Director Rich Hillis said he anticipates that next week HCD will send a letter warning that the city is out of compliance with state housing element laws, under which San Francisco is obligated to plan to accommodate 82,000 units before the end of 2031.

After the warning, the city would then have 30 days to come into compliance, or risk decertification of the housing element, which could allow property owners to apply for “builder’s remedy” projects, allowing them to bypass all local planning review. The city could also lose out on money for affordable housing and transportation as long as its housing element is not certified.

Hillis said he is hopeful the Board of Supervisors will pass the constraints legislation in time to avoid decertification. “It’s a tight window, but I think we can get there, given the schedule,” he said.

The deadline comes a month after HCD released its first ever review of a city’s housing practices, which included 18 actions the state said San Francisco must take in order to remain in compliance with housing laws. At the time of the review, HCD Director Gustavo Velasquez said San Francisco’s byzantine planning process has created an “entrenched” system that is so hard to navigate that many developers have given up on building in the city. The result is a housing market that only wealthy households can crack, unless people are lucky enough to win the lottery for a subsidized affordable unit.

“People who were born and raised in San Francisco cannot afford to stay and raise their own families there,” Velasquez said. “It is egregious and must be addressed.”

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Last week, Mayor Breed sent a letter laying out everything the city has done thus far to accelerate housing production.

“I will do everything in my power and ability to advance the Housing Element goals, and meet the objectives of the Policy and Practice Review,” she said.

Jeff Cretan, a spokesperson for Breed, said that San Francisco was one of the first cities in the Bay Area to have its housing element certified and that now failing to follow up on promises would “blow it all up.”

“We cannot go down the path of housing element decertification,” said Cretan. “That is deeply concerning. Not only would it put at risk affordable housing and transit funding but it would set us backwards in a significant way.”

HCD spokesman Pablo Espinoza confirmed that the agency will send a “corrective action letter” next week as well as offer “technical assistance” to help the city get back on track.

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“If the city misses a deadline for a required action, it will start the process to revoke housing element compliance,” he said.

He said the state housing element laws spells out that “various consequences may apply if a city does not have a housing element in compliance with Housing Element law,” including ineligibility or delay in “receiving certain state funds and the application of the builder’s remedy, among others.”

Over the last few years, HCD has funded nearly $600 million on affordable housing in San Francisco, including $230 million for Project Homekey, which funds housing for homeless people, and $350 million in “accelerator” funding, which has allowed eight stalled low-income projects to move forward.

While the penalties for not following the state mandate are severe, some members of the Board of Supervisors are pushing back. On Nov. 7, Supervisor Aaron Peskin introduced a resolution urging the City Attorney David Chiu and the “city lobbyist” to work with state officials to extend the deadlines.

The resolution, co-sponsored by Supervisor Connie Chan, also takes issue with what it calls HCD’s “singular focus on private development policies and practices, and without sufficient measures to address racial equity, fair housing practices, affordability, and displacement.”

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It points out that the city exceeded its goal for market rate housing over the last eight years, but fell short of its affordable housing goals. It said that the state deadlines “require adoption and action within time periods that may conflict with or are contrary to San Francisco’s Charter and other law.”

Rushing to decertify the city’s housing element “would completely deregulate development of market rate housing and put the approximately 65% of San Francisco’s population that are renters, as well as San Francisco’s historically marginalized low-income communities and communities of color at heightened risk of displacement,” the resolution reads.

Espinoza said HCD “does not plan on revising the timelines or content” of the review, which he said was informed by “extensive community outreach” which included “city staff, appointed and elected officials, community-based organizations, housing advocates, affordable developers, market-rate developers, attorneys, and others.”

He said all 11 members of the Board of Supervisors were invited to participate in the review, but that only five did so.

Reach J.K. Dineen: jdineen@sfchronicle.com

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