By Thomas K. Pendergast

With a 2-1 vote, the SF Board of Supervisors’ Land Use and Transportation Committee dropped an amendment to the Family Housing Plan aimed at protecting rent-controlled housing in buildings of one or two units from upzoning.

Upzoning means changing the maximum height and density of new housing by increasing both through changes to zoning laws.

The Family Zoning Plan will raise height limits for new buildings, mostly along major traffic and commercial corridors in the northern and western areas of San Francisco, from the standard four-story buildings up to six, eight or even taller, depending on the exact location.

Critics contend this will incentivize developers to buy up and develop properties with rent-controlled units, resulting in demolitions that will reduce the City’s rent-controlled housing stock.

District 7 Supervisor Myrna Melgar already put an amendment in that will exclude buildings with three or more rent-controlled units. District 1 Supervisor Connie Chan sought to expand that protection to also include buildings with only one or two rent-controlled units.

An analysis by Mission Local concluded that this change will exempt at least 84,000 rental units in 11,700 buildings from the plan, along with the ground-floor retail in them. But, this still leaves about 20,700 rent-controlled units vulnerable to upzoning and potential demolition.

The Committee’s decision appears to have revolved around how Chan’s amendment was written.

The previous line from Melgar’s amendment expands protection to sites “containing more than two residential units where the project would require the demolition of residential uses that are subject to the rent increase limitations.”

Chan’s amendment would have included another line immediately following this to say that the project “does not demolish, remove, or convert to another use any existing Dwelling Units, or Residential Flat.” Her amendment does not include the phrase “subject to the rent increase limitations.”

“This is another amendment that would have a major impact on our capacity numbers,” said Lisa Chen, the program manager for the City’s Planning Department. “So, we estimate it could affect tens of thousands of parcels. It would present a much-expanded exemption from the ones that have already been adopted … which are just three units and above, rent-controlled buildings.

“As written, it’s ‘all demolitions,’ so it would be single-family homes, not necessarily rent-controlled buildings, so it would be basically anything that has a residential use on it.”

The California State agency which will either accept or reject San Francisco’s housing plan, the Department of Housing and Community Development (HCD) has tentatively accepted the City’s draft plan, but in a Sept. 9 letter they cautioned against “Adding Governmental Constraints.”

“If changes are proposed to any additional rules, regulations, restrictions, land use controls, procedures or other related matters, HCD cautions the City to carefully consider whether to make any changes and ensure that governmental constraints do not reduce financial feasibility or unduly impact housing supply, cost or approval certainty,” the letter states.

“Changes to program implementation that may impact HCD’s finding of substantial compliance or trigger an amendment to the housing element include but are not limited to: introducing potential constraints on development, omitting or altering the specifics in the housing element program,” the letter continues. “Examples include reducing capacity… such that the changes have the effect of, among other issues, reducing housing supply.”

District 5 Supervisor Bilal Mahmood emphasized that if they fail to get final approval, the state might impose “Builder’s Remedy” in which the City loses all local control and developers have no local constraints.

“The reason we’re so focused on capacity is because that is a requirement from HCD and if we don’t meet the estimates of capacity then builder’s remedy takes effect and we lose all local control, isn’t that correct?” Mahmood asked.

Planning Department Director Rachael Tanner responded, “Certainly, if we do not have a compliant rezoning our housing element could be deemed noncompliant, and that’s when the builder’s remedy would be in effect in San Francisco.”

Mahmood added, “One of the criteria for non-compliance, as this has already been approved by HCD, if there are any downzoning amendments, if there is not any commensurate upzoning, that put us into non-compliance risk.”

Tanner confirmed and added that another concern is the word “constraints” to housing development.

“If we’re adding something that is reducing capacity or adding constraints, are we offsetting that in some way to make up for it,” she said.

Chan expressed her disappointment at the Committee’s vote.

“We will not demolish people’s homes to replace them with market-rate units. Our existing housing is our most affordable housing, including 20,000 units of rent-controlled housing,” Chan told the Committee.

“I think for many … there is a fear and an anxiety that puts them at risk of speculative real estate investment and those fears are real,” she said. “For us to simply ignore this because we simply say we want to meet the state mandate, when instead, we should push the envelope and push the boundary to defend the city that we love.

“(For) the proposed amendments that we’ve been working on for so long, to be rejected today,” Chan continued, “I think it’s a moment for San Franciscans to recognize that we must make some change in this City. If we can’t do that with our elected leaders, then we must put that power back to the people and make that change.”

Melgar brought up the history of San Francisco’s zoning laws to explain how the City got to this point, and to address the conflict between development on the west side versus the the east side.

“We have to acknowledge that we actually did downzone the west side,” Melgar said. “We did that in 1978 … the same year as California approved Proposition 13, which provided an enormous incentive for homeowners to stay in place. I point that out because land use decisions that we have made over time have reflected the power structure of our City,” she elaborated. “And also, racism and anti-renter bias, which is what caused a lot of the prohibitions against building multi-family housing on the west side.

“Part of this plan is also to rectify some of these land use decisions that we have made earlier,” Melgar continued. “But, we’re doing it with considerably newer outlooks; for example: tenant protections, affordable housing, the acknowledgement that rent control is a good thing and that not only do we need to keep it, but we need to preserve it and expand it.”

After this statement, Melgar voted against Chan’s proposed amendment, along with Mahmood, while D-11 Supervisor Chyanne Chen voted in favor of it.

As chair of the Committee, Melgar did offer one ray of hope for further amendments, noting that they will meet again to discuss the Family Housing Plan on Dec. 1, before it goes to the full Board.

“This does not preclude any supervisor from making amendments on December first or at the full Board. That is allowable under our processes,” Melgar noted. “That being said, we do have a timeline that we need to follow. Our general plan amendment becomes law on the 19th if we fail to vote. And that means all of the amendments, including the ones we’ve already agreed on, won’t make it there.”

The state originally required 82,000 units of new housing by 2031, however, by subtracting 58,100 units from this that are already in the pipeline, then adding an extra 15% buffer to the 82,000 for a total of 94,300 units, the new goal is adjusted to the current plan of 36,200 additional units, which is due to the state by the end of next January.