The SF Board of Supervisors played chicken with a state deadline to remove constraints on housing production, and while they theoretically met the deadline Tuesday, the amendments they added could still cost SF big money.
It is unusual for a state agency to step in and demand that the San Francisco Board of Supervisors pass a piece of legislation that Mayor London Breed’s office proposed. But that’s what happened in late October, when the state’s Department of Housing and Community Development (HCD) issued a scathing report that San Francisco needed to immediately pass Breed’s proposal to speed up its slow rate of new housing approvals.
The city is not approving anywhere near enough housing to meet its state-mandated housing element goals to build 82,000 new units by the year 2031, a goal that if we don’t meet it, we could lose potentially hundreds of millions of dollars in state funding for affordable housing and transit.
Last week the board delayed their vote by a week on Breed’s measure, despite receiving another nasty ‘Hurry the eff up’ letter from the state just 45 minutes before the meeting. But on Tuesday, the board did pass the legislation, albeit with amendments protecting rent-controlled and older housing from demolition. And they’re also asking the state for an extension on a deadline, which the HCD may not be inclined to do.
Supervisor Myrna Melgar was pleased with the amendments. “The end product is one that allows for the removal of barriers to building more housing, it is not at the expense of streamlining demolitions of our precious rent-controlled stock,” she said before the vote.
One of the Breed legislation co-sponsors, Supervisor Joel Engardio, argued these streamlining efforts were necessary to eliminate City Hall’s constraints on housing production.
“One consequence of our convoluted system was the creation of expensive ‘permit expediters’ which fostered corruption,” Engardio said Tuesday. “Another consequence was months of endless hearings which delayed or killed perfectly good projects.”
But meanwhile, Supervisor Ahsha Safai expressed concern that skyrocketing construction costs will likely doom many projects, even those approved. “We are looking at a market that even if you had a fully entitled project, you’re not going to be able to build it because of the cost of construction and cost of loans,” he told the board.
And Supervisor Dean Preston fumed that the state was threatening to take away affordable housing funds if the city doesn’t build enough luxury-level housing, which he finds counterintuitive.
He said that in our previous eight-year housing cycle, “We exceeded our market-rate housing production goals. We produced 150% of our target market-rate housing. But at the same time, we barely reached half of our affordable housing goals.”
While the board passed the legislation, there should be no spiking of the football yet. The amendments the board added could get the state HCD to decertify our housing element, and we could still lose out on those potential hundreds of millions of dollars. Plus the board is requesting a delay from a state agency that’s already furious with them, so we’ll see how their luck goes with that.