City Continues to Get Creative to Encourage More Housing Production
The San Francisco Planning Code has become an immensely complex collection of growth controls, design mandates and development fees. Virtually every aspect of a proposed project size and use is regulated by the Planning Code.
That of course includes the floor area of the building as well as, for residential projects, the number of dwelling units permitted. In addition to height limits and floor area limitations that put a literal ceiling on how large a building can be, the Planning Code has, for a long time, regulated residential density based on lot size. In other words, it directly linked the number of residential dwelling units allowed on a site to the size of the site. This makes some fundamental sense, but when combined with many other rules in the Planning Code, it ends up being one of a number of rules trying to regulate the same thing. Height limits, and a variety of rear yard and other setback requirements, effectively limit the size of the building. It has always seemed like overkill to further regulate the number of drilling units that can fit within any given building otherwise permitted by the Planning Code. And the Planning Department has recognized this, and is moving toward more “form based” zoning (i.e., the envelope of the building is regulated, not the number of units or floor area within it…).
In an effort to support more density on our remaining in-fill sites and to incentivize the production of more affordable housing, Supervisor Wiener has proposed a completely sensible Planning Code amendment that would exempt affordable housing units from being counted under these lot density provisions. This means that the density will be calculated based on the number of market rate units provided on the site, and then the affordable on-site units will be added in without penalizing the project in terms of density.
The proposed rule links up nicely with the Mayor’s push for accelerated construction of housing units, as well as the Planning Department’s apparent willingness to “prioritize” projects with at least 20% on-site affordable. The Scott Wiener Rule would only apply to projects with 20% on-site affordable housing. The Planning Commission will be hearing this matter this week on June 12. We will continue to track this legislation.
PDR Back At The Commission
Also at the Planning Commission this week is an informational presentation on the status of production, distribution and repair (“PDR”) in San Francisco. While no formal action will be taken, it will be interesting to listen to comments from both commissioners and members of the public as to whether this type of zoning is actually working.
PDR uses – generally considered light industrial and manufacturing uses – have quietly been making a comeback in San Francisco in recent years. The City’s manufacturing sector grew in 2012 for the first time since 1989. Manufacturing jobs have grown from 2,500 in 2011 to 4,000 today. The high-profile departure of chocolatier TCHO for Berkeley has raised concerns about whether current City policy is adequately protecting and providing space for home-grown small manufacturers.
On the other hand, there do appear to be a number of buildings in PDR-zoned districts that are not quite living up to their potential – and there are of course companies lining up to extract the highest and best use from these buildings.
In the end, it is always important to remember how lucky we are in this fine City to be dealing with the problems we have. The unemployment rate currently stands at 4.4% – the third lowest of all California counties. Kudos to Ed Lee as well – the unemployment rate has been cut in half from when he came to office – at the time the rate was 9.4%. This economic rise really has lifted all boats – the Chronicle reported last week that restaurants are having trouble filling jobs in their kitchens.
A nuanced conversation about PDR is certainly due – we hope Thursday’s hearing does not devolve into a zero-sum conversation.
And Finally…Formula Retail Stores Sales Are UP
And while the City continues to struggle with its formula retail controls, as the economy picks up speed both regionally and nationally, formula retailers’ sales across the country are up significantly.
ICSC reports that US formula retailers posted a mice 4.8% year over year gain for May according to their index. This uptick in retail sales is a full 1% higher than a year ago on May 2013.
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.