Last December, Mayor Ed Lee responded to the City’s current housing affordability crisis by issuing Executive Directive 13-01, which asked City departments with control over the permitting process take action to prioritize the construction and development of new housing. At this week’s Planning Commission hearing, the Planning Department will provide an update on the status of its response to the Directive, including a discussion of newly-implemented policies and anticipated work product of a recently-formed Housing Working Group.
The Executive Directive charged the Directors of the City’s Planning Department, DBI, Fire Department, Rent Board, and Mayor’s Office of Housing to form a Working Group with three primary tasks: (1) to recommend to the Mayor City policies and administrative actions that could be implemented to preserve and promote rental housing; (2) implement a process to have the Planning Commission consider Discretionary Review hearings when a loss of housing is proposed; and (3) serve as an advisory body to City department with permitting authority as a clearinghouse for code compliance checks for buildings that are being withdrawn from the rental market.
Planning and DBI issued a joint response to the Directive last February, which identified several process-improving changes intended to help in facilitating the production and retention of housing. Since then, the Departments have been implementing their recommendations through short-term administrative policy changes.
Most recently, the Planning Department prepared a Draft Director’s Bulletin No. 5, which summarizes and clarifies the new policies and, and provides guidelines for ensure their consistent implementation. These policies include:
Priority Application Processing
The Department revised its policy for prioritizing the processing of residential applications. The current policy prioritizes the review and processing of 100% affordable housing projects, followed by projects providing at least 20% on-site or 30% off-site affordable housing units, over all other types. The Draft Bulletin clarifies that market-rate projects will be prioritized based on the amount of new on- or- off-site units provided; the greater the number of affordable units, the higher the priority for processing. However, applicants will still need to submit and be approved for priority processing before they can benefit from this policy.
Concurrent Review Procedures
For 100% affordable housing projects and project with at least 20% on-site or 30% off-site affordable housing, the Planning Department, DPW, the Mayor’s Office of Disability, DBI and the Fire Department will review applications simultaneously, when appropriate. To take advantage of this process, applicants will need to request a pre-application meeting with all relevant agencies before filing a building permit.
Additional Process and Disapproval Recommendations for Certain Dwelling Removals
Applicant proposing the merger or removal of dwelling units in the City already face an uphill battle, but the Department’s revised policies would make the process even more challenging.
According to the Draft Director’s Bulletin, applications for the merger of dwelling units, where both units are “demonstrably unaffordable” (appraised within the last six months for $1.506 million or more), will continue to be processed administratively by the Department without requiring a Mandatory Discretionary Review or Conditional Use hearing.
However, for all merger applications where at least one of the units is valued under $1.506 million, administrative process is not available and the Department will automatically recommend that the Commission deny the merger application at the required hearing. The Draft Bulletin states that is policy reflects the “exceptional and extraordinary circumstance” created by the current housing affordability crisis.
The Department will also require a Mandatory Discretionary Review hearing for the removal of unpermitted housing (including Live-Work units) in buildings containing three or more units, and applicants will be required to submit a report by a qualified professional outlining the upgrades (and associated costs) required to legalize the unit. Where a feasible path is available to legalize the unit, the Department will recommend that the Commission deny the removal permit and preserve the unit.
At this week’s Commission hearing, the Department will also discuss the Housing Working Group, which was recently formed in response to the Executive Directive. Activities anticipated for this Group include (1) exploring changes to the City’s Inclusionary Housing Program to establish a “dial program” that would create more affordable dwelling units at a higher AMI and potential amendments to the off-site; (2) debating methods to improve the City’s entitlement and environmental review process; and (3) evaluating potential funding sources to support low- and- middle-income housing development.
Additional information on the Department’s activities in response to Executive Directive 13-01 is available at: http://commissions.sfplanning.org/cpcpackets/Executive%20Directive%20Status%20Update.pdf
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.