For years, San Francisco has required a conditional use permit as a prerequisite to demolishing a residential building. In addition, the building could not be demolished until a building permit for the replacement structure was approved. The theory behind the prohibition is that existing housing is the City’s most affordable housing and should be preserved.
However, until recently there was an exception that exempted the demolition of a residential building in RH-1 and RH-1(D) single-family zones from the conditional use requirement if the residence was demonstrably unaffordable. A house that is demonstrably unaffordable is one that has a value greater than 80% of the value of single-family homes in the City. The value includes both structure and land value. Under the exception, an applicant had to provide an appraisal made within the last six months. Critics saw the demonstrably unaffordable exception as a loophole serving the wealthy, and one that could be manipulated.
In February, Supervisor Rafael Mandelman introduced legislation amending the Planning Code to require conditional use authorization for applications to demolish single-family homes that are demonstrably unaffordable (“Mandelman Ordinance”). The Mandelman Ordinance grandfathers applications made before the legislation was introduced on February 11, 2020. Supervisors Peskin, Fewer, and Yee joined as co-sponsors.
The Board of Supervisors unanimously approved the Mandelman Ordinance. It is now on the Mayor’s desk and will go into effect 30 days after the Mayor’s approval. The unanimous Board of Supervisors’ approval would be enough to override a Mayoral veto.
The Mandelman Ordinace removes the demonstrably unaffordable exception in Section 317 of the Planning Code that generally prohibits demolition of existing housing without a public hearing and a conditional use permit.
Before the Mandelman Ordinance left the Board’s Land Use and Transportation Committee, Supervisor Peskin proposed amendments to further tighten demolition regulations. As the amendments may require a re-hearing by the Planning Commission, the Committee carved out these amendments into a second ordinance (“Peskin Ordinance”) to be reviewed on a separate track.
The Peskin Ordinance would subject a broader range of projects to conditional use requirements for demolition by lowering the threshold of work required before a renovation, remodel, or alteration is considered a demolition.
The Peskin Ordinance lowers the threshold for two types of changes to a building that require conditional use approval. First, an alteration that removes more than 50% of the front and rear façade or the removal of more than 65% of all the exterior walls would be considered a Residential Demolition. Currently, an alteration that does both is considered a Residential Demolition. One or the other alone is not enough to trigger the restriction. Second, an alteration that would remove more than 50% of the vertical envelope elements or an alteration of more than 50% of the horizontal elements would be considered a Residential Demolition. Currently, an alteration is a Residential Demolition if it does both, but not one or the other.
Like the Mandelman Ordinance, the Peskin Ordinance grandfathers applications made before the legislation was introduced on February 11, 2020. However, the Peskin Ordinance is subject to change. It will be considered by the Land Use and Transportation Committee and may need to be re-considered by the Planning Commission before it can be enacted by the Board of Supervisors.
Please keep in mind that there are many subtleties to both new and existing law. Please contact Reuben, Junius & Rose, LLP for more information.
Authored by Reuben, Junius & Rose, LLP Attorney Jonathan Kathrein.
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.
