A Carrot and a Stick for New Housing

New Housing

Last week, Mayor London Breed proposed an initiative that would exempt San Francisco housing projects that comply with zoning and volunteer additional on-site affordable units from the arduous and sometimes frustrating discretionary entitlement process. A few days later, Supervisor Hillary Ronen announced plans to further restrict office projects in the UMU zoning district, with the aim to encourage property owners into residential redevelopment instead of commercial. They show different approaches—a carrot and a stick, perhaps—to encourage the production of new housing.

According to a campaign website, Mayor Breed’s latest effort to provide more housing would amend the San Francisco Charter to provide a “streamlined” six-month approval process for all 100% affordable housing projects, and for any code-compliant mixed-income project that provided 15% more affordable housing units on-site than required by code.  In exchange, it would get approvals and start construction months if not years earlier.

The ballot measure is not yet publicly available, but a San Francisco Chronicle article suggested qualifying projects will not require any hearings at the Planning Commission. Other details to track in the initiative include AMI levels for the additional affordable units; the degree of design flexibility regarding certain Code requirements such as unit exposure and rear yard size; workforce and prevailing wage requirements; how the streamlined process will interface with the realities of each project’s CEQA processing; and the amount of design input afforded to City staff.

Supervisor Ronen’s proposed legislation—which is also not yet publicly available—would ban new upper-story office space in parts of the Mission District, Potrero Hill, and Dogpatch that are zoned UMU. Instead of upper floor office, the Supervisor hopes her legislation will spur property owners and project sponsors to consider residential developments instead.

UMU zoning is meant to encourage a mix of uses including but not limited to office, residential, light manufacturing, institutional, arts activities, and retail. Office use is already limited by building height in UMU. It generally cannot be located on the ground floor, promoting retail and other non-office uses in the pedestrian realm. Buildings with 2-4 stories are permitted one floor of above-ground office; 5-7 story buildings can have up to two; and buildings with 8 or more floors can have up to three. So under current zoning any property owner or project sponsor that builds to the height limit already cannot do a 100% office project.

Interestingly, Planning Department data shows that residential development in the Eastern Neighborhoods over the last 10 years outpaced what was anticipated, and less office and other commercial development occurred. If passed, Supervisor Ronen’s legislation could further that trend.

We will continue to track each piece of legislation. Check back for updates.


Authored by Reuben, Junius & Rose, LLP Attorney Mark Loper.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient.  Readers should consult with legal counsel before relying on any of the information contained herein.  Reuben, Junius & Rose, LLP is a full service real estate law firm.  We specialize in land use, development and entitlement law.  We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.