San Francisco Housing Element Update

| Jody Knight
Housing Element

While the Bay Area works to recover from the impacts of COVID-19 on retail and hospitality, and digital nomads slowly return to the office, the pandemic has done nothing to slow escalating home prices. The California Association of Realtors reported this week that the Bay Area’s median single-family home price exceeded $1.3 million in April, with a median price of $1.8 million in San Francisco. The City saw an increase of 5.9% from last year and 2.6% from March.

As single-family homes become increasingly out of reach for many families, the City also continues to experience a shortfall in all housing types, resulting in ongoing debate about uneven development throughout the City and the introduction of legislation at the State and local level that takes aim at single-family zoning.

On March 18, 2021, Reuben, Junius and Rose’s Tuija Catalano updated you about the upcoming RHNA (Regional Housing Needs Assessment) cycle. The update explained how the draft allocation would significantly increase the identified need for housing units in the Bay Area compared with the last RHNA cycle. Under the draft, San Francisco would see an increase from 28,869 to 82,069 units.

San Francisco has begun the process of planning for those housing units. The City’s Housing Element 2022 Update began in May 2020. The Housing Element is a component of the General Plan that is updated every eight years.

The current update focuses on social and racial equity, while it looks at how to accommodate the creation of 82,000 housing units by 2031. The plan focuses on building in State identified High Opportunity Areas, which are mainly in the western part of the City. The Planning Department has a page dedicated to the process which provides information and allows for public input.

The first draft of the Goals, Policies and Actions of the Housing Element have been identified as follows:

  • recognize the right to housing as a foundation for health and social and economic stability;
  • repair the harms of historic racial, ethnic, and social discrimination for American Indian, Black, and other People of Color;
  • foster racially and socially inclusive neighborhoods through distinct community strategies;
  • increase housing production to improve affordability for the City’s current and future residents;
  • increase housing choices for the City’s diverse cultural lifestyles, abilities, family structures, and income; and
  • promote neighborhoods that are well-connected, healthy, and rich with community culture.

On April 22, 2021, the Planning Commission conducted an informational hearing on the Draft Housing Element. Planning Staff will be engaging in outreach to further refine the policies in the plan, with a second draft anticipated by Fall 2021. The Draft Environment Impact Report is anticipated in early 2022.

At the April 22, 2021 hearing, the Planning Commission also heard the 2020 Housing Inventory and Housing Balance Reports. The City saw a 1% increase in housing stock in 2020, with most new development in SoMa, the Mission and Downtown. While 2020 was a difficult year for development because of the pandemic, the Reports illustrate how far the City has to go to meet its RHNA target, particularly on housing affordable to lower income residents.

Given the already contentious environment surrounding housing equity and the geographic distribution of new units in the City, we expect this Housing Element update to generate significant debate. However, the Plan does not change allowable land uses, heights, or density, so meeting the City’s housing needs will depend on legislative changes. We will follow and report on both as the housing debate continues.

 

Authored by Reuben, Junius & Rose, LLP Attorney Jody Knight.

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.

Cities’ Upcoming Need to Identify Housing Opportunity Sites

| Tuija Catalano
Housing

The next RHNA (Regional Housing Needs Assessment) cycle is quickly approaching, which means that all Bay Area cities will be taking a closer look at their Housing Elements and determining whether they have enough land zoned to accommodate more housing.

In June 2020, the California Housing and Community Development (“HCD”) provided the Bay Area its Regional Housing Needs Determination for the next RHNA cycle (2023-2031), identifying a need for 441,176 new housing units.  The overall figure is further categorized into very low (26%), low (15%), moderate (16%), and above moderate (43%) housing and income levels.  This figure represents a significant increase when compared to the prior RHNA cycle (2015-2023) when the Bay Area was allocated 187,990 units.  In the Bay Area, the Association of Bay Area Governments (“ABAG”) is responsible for allocating the overall figure among cities and counties, and its Housing Methodology Committee spent much of 2020 in meetings to discuss and decide on different methodology options.  Regardless of which allocation methodology was going to be chosen, most Bay Area cities and counties are seeing a significant increase in their RHNA allocations.

ABAG’s Executive Board approved the Draft RHNA Methodology and Final RHNA Subregional Shares (“Draft Allocation”) for the Bay Area on January 21, 2021.  The Draft Allocation is subject to HCD approval on or before April 11, 2021, and thereafter an appeal opportunity by individual cities and counties during Summer/Fall 2021.  Historically, very few appeals by individual cities or counties have been successful, and thus most of the Draft Allocation figures are anticipated to be adopted as final allocations by late 2021.

Once the allocations have been finalized, individual cities and counties will need to amend their Housing Elements and identify sufficient number of vacant or underdeveloped sites that can accommodate the RHNA figure allocated to each city.  Many cities are currently starting the process by engaging consultants to work on their next Housing Element update.  The updated housing elements must be submitted to the State by each city and county no later than January 2023, and if applicable, cities and counties will thereafter need to rezone properties consistent with the updated Housing Elements and site identifications.

To understand the magnitude of the increases cities and counties are facing for the next RHNA cycle, it is helpful to look at some of the Draft Allocation figures.  The following represents a sampling of Bay Area cities, comparing their final 2015-2023 RHNA figure to those proposed in the Draft Allocation for the next, 2023-2031 cycle.  For a complete list of cities/counties, see the Draft Allocation.

City2015-2023 cycle2023-2031 cycle
San Francisco28,86982,069
Oakland14,76526,251
San Jose35,08062,200
Berkeley2,9598,934
Fremont5,45512,897
Concord3,4785,073
Lafayette4002,114
Walnut Creek2,2355,805
Novato4152,090
Tiburon78639
Daly City1,3504,838
Menlo Park6552,946
San Bruno1,1553,165
Cupertino1,0644,588
Los Gatos6191,993
Sunnyvale5,45211,966

Cities and counties are not required to build new housing, but they are required to plan for it and specifically plan for enough housing that satisfies their assigned RHNA figure.  Since most Bay Area cities and counties are subject to significant increases, local city councils and board of supervisors, along with their Planning Departments, will be taking a comprehensive look at zoning and development in their jurisdictions over the next year and a half.  This may also represent opportunities in the near-term for property owners of currently vacant or underutilized properties and/or those that lack the zoning necessary for residential development.

 

Authored by Reuben, Junius & Rose, LLP Attorney Tuija Catalano.

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.