Throughout 2023, the State’s Department of Housing and Community Development (HCD) loomed large in San Francisco land use policy and politics. In January 2023, the City adopted and HCD certified a new Housing Element setting forth San Francisco’s plan for approving and building a State-mandated 82,000 new housing units over the next eight years (see earlier post). In October, HCD released its San Francisco Housing Policy and Practice Review, which concluded that San Francisco has the longest review and approval process for housing projects in the State. It deemed San Francisco an “outlier,” with “approval processes [that] are also notoriously complex and cumbersome, creating unpredictability and uncertainty.” At the end of the year, the Board of Supervisors passed the Constraints Reduction Ordinance contemplated in the Housing Element, after HCD advised in the fall that failure to do so could result in Housing Element de-certification.
The Constraints Reduction Ordinance makes numerous changes to the Planning Code to remove barriers to approving and building housing, particularly in well-resourced portions of the City that have traditionally seen less multifamily development. Among other changes, the Ordinance exempts certain housing projects from neighborhood noticing procedures; removes certain conditional use authorization requirements for some projects in lower height and density zoning districts; authorizes the Planning Commission to delegate to the Planning Director approval of many State Density Bonus Law projects without a conditional use or large project authorization; and relaxes rear yard, open space, and other development standards in specified zoning districts.
Looking ahead, no break in the action should be expected in 2024. In light of recent reporting that the City issued permits for only 581 new units in 2023—a 13-year low—we anticipate continued HCD oversight and involvement in the legislative process. In addition, SB 423, authored by Senator Scott Wiener (D – San Francisco) extended the SB 35 streamlined, ministerial approval program and added a San Francisco-specific annual HCD reporting and review requirement. If, as expected, HCD determines this year that San Francisco is not making adequate progress toward its market-rate housing production goals, a significantly larger number of predominantly market-rate housing projects may be eligible for streamlined, ministerial approvals.
