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California cuts red tape on housing in San Francisco

For decades, San Francisco has had a reputation for being too difficult to build new housing — even though the housing shortage is contributing to a growing homelessness problem.

But that is expected to change soon thanks to expanding state laws that promise to cut red tape and speed up construction.

The authorities presume the law, Senate Bill 423would shorten the approval period for projects in San Francisco from two years to six months, streamlining what housing advocates are calling a much-needed turnaround in a city plagued by delays and high costs.

Housing advocates hope San Francisco's new rules will mean other major California cities with housing shortages, including Los Angeles, will be encouraged to similarly accelerate development in coming years as the state tackles its housing shortage problem. An estimated shortage of 2.5 million units.

The state-mandated change would transform the Bay Area from having one of the longest approval times for new homes to one of the shortest, said state Sen. Scott Wiener, a San Francisco Democrat who authored SB 423, the bill signed by Gov. Gavin Newsom in October.

Wiener said the new rules would prevent developers from getting caught up in the “highly politicized” housing permitting process in San Francisco, a city known for its highly regulated areas around where and how housing can be built.

State Senator Scott Wiener (D-San Francisco) met with housing advocates and members of the California Board of Carpenters to mark the opening of an affordable housing apartment complex in San Francisco.

(Hannah Wylie/Los Angeles Times)

The law exempted most housing projects from oversight by the Board of Supervisors, allowing developers to skip lengthy wait times, public hearings and environmental review processes that have added months, if not years, to project timelines and caused some efforts to stall or be blocked outright.

“In San Francisco, it's been a process of red tape, obstacles, red tape and process for decades,” Wiener said. Monday's press conference Announcing the changes: “Over the past 50 years, one change after another has made it difficult or impossible to build the number of homes we need in a planned manner.”

Wiener's Law was expanded to extend for another 10 years a 2017 law that allows developers to bypass much of the often-stalled housing permitting process for construction in San Francisco.

The law, which was originally set to expire in 2026, 18,000 homes proposed in CaliforniaNearly two-thirds of these homes are considered 100% affordable, meaning all units are reserved for low-income tenants, according to an August report from the University of California, Berkeley's Tenner Center for Housing Innovation.

The law has been in place in San Francisco for several years, but only for projects that designated at least 50% of the units as affordable housing. Since then, more than 3,600 units have been fast-tracked for approval, about 88% of which are considered “below market rate,” according to the San Francisco Department of City Planning.

Still, San Francisco has fallen short of its housing construction goals by tens of thousands of units. Last year, the city adopted a blueprint for its housing construction plan, called the “Housing Element.” 82,069 units Over an eight-year period, the city has approved just 3,870 new housing units after 2023, the Department of City Planning said.

This slow start has allowed SB 423's more expansive rules to take effect. More frequent reviews of compliance with the city's housing goals.

San Francisco builders are now allowed to fast-track market-rate projects through the approval process as long as they set aside at least 10 percent of the housing for low-income families and adhere to certain union-approved labor requirements.

“It all starts with housing, and for decades this city has said no to housing,” said Mayor London Breed, who has pushed for more development in the city as a way to alleviate homelessness and lower soaring rents. “Enough is enough. San Francisco is not a museum that should stand against the times. … We have to move this city forward.”

It's unclear what broader impact SB 423 will have on other California cities.

According to the Los Angeles Department of City Planning, 3,587 housing units have been approved under the 2017 law, but the simplified rules are limited to projects that include at least 50 percent affordable housing.

Another 50,000 units have been approved for construction under a series of other city programs to encourage affordable housing near public transit and in multifamily neighborhoods.

Los Angeles' housing plan is due to be reviewed again in 2026. If the city is found to be falling behind on its market-rate goals as well, projects that contain at least 10% below-market-rate units could be subject to simplification, according to the state housing department's SB 423 rules.

But there are limits to what a single housing law can accomplish.

State and city housing officials have passed laws that could theoretically speed up development, but rising interest rates and expensive labor requirements have caused construction costs to soar in recent years. Developers also pay additional fees that can make the total cost of a project unfeasible in some cases.

There is also political opposition from the so-called NIMBY movement (short for “Don't Build It in My Backyard”), which resists further construction in traditionally single-family and low-density residential areas.

Breed and Wiener on Monday criticized and signaled their opposition to San Francisco's political opponents, particularly City Council Speaker Aaron Peskin, who has opposed apartment complex projects. Peskin, a progressive Democrat, has expressed concern that zoning rule changes will make it too easy to build large, expensive projects in certain areas, particularly in wealthy neighborhoods on the north and west sides of San Francisco.

Peskin is facing fellow Democrat Breed in the November mayoral election, which will focus on many of the city's key issues, including rising housing prices and homelessness.

Peskin said in a statement that the “real obstacle” to building housing is financing, and that SB 423 “could be a boon to speculators and developers building expensive housing that is out of reach for most San Francisco residents.”

“I'm not surprised that the mayor has enthusiastically supported this, as she has consistently supported the plans of speculators and developers at the expense of what is best and most needed for working-class and middle-class San Francisco,” Peskin said.

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