A controversial State Senate bill, which called for circumventing local land use controls as a means to accelerate housing development, failed to make it through the State Transportation and Housing Committee last month. The legislation is dead this year. Its author, Senator Scott Wiener (D), indicated he’ll introduce a revised proposal in 2019.
Senate Bill (SB) 827 would’ve allowed developers, regardless of local zoning laws, to construct 55-foot buildings, essentially five stories, if a parcel is within one-half mile of a ferry terminal or rail station, including Muni stops. Forty-five-foot buildings would’ve been allowed within one-quarter mile of most bus stops. The bill would’ve overridden local height and density limits in 96 percent of San Francisco, although some City locations already allow buildings up to 45 feet.
“California has a housing deficit approaching four million homes,” Wiener explained before the bill went to committee. “Our housing shortage is a huge threat to our state’s diversity, economy, environment, and quality of life.”
The bill split environmentalists, housing activists and City leaders. Committee members who voted against it questioned whether it’d provide sufficient affordable housing, and whether it was a good fit for smaller towns. Wiener and co-author, Senator Nancy Skinner (D), who both sit on the committee, were only able to muster two additional votes; the proposal failed, six to four, with three abstentions.
California YIMBY, a lobbyist group largely backed by big technology firms concerned about recruiting and retaining talent, was the bill’s sponsor. The organization believes that by vastly increasing housing supply, rents will decline and housing prices drop. By building next to transit, automobile emissions could be cut as well. The legislation was supported by the San Francisco Housing Action Coalition, whose membership includes builders, architects, engineers and construction unions.
Bill proponents frequently cited a 2016 McKinsey Global Institute study that found California ranked 49th among states in number of housing units per capita. According to the report, from 2009 to 2014 the state added 544,000 households while only 467,000 new units were built.
In an early draft, SB827 raised height limits as high as 85 feet, contained no language addressing the displacement of existing residents or affordable housing creation, and left unclear whether local controls over demolition would remain. That sparked a diverse opposition that included wealthier residents of low density neighborhoods, tenant’s groups, affordable housing activists and anti-gentrification forces. Several cities condemned the bill, including Los Angeles, Palo Alto, Cupertino and Milpitas, as well as the League of California Cities. The San Francisco Board of Supervisors expressed its disapproval by an eight-to-three vote.
“It’s a giveaway without asking anything in return,” said supervisor and mayoral candidate, Jane Kim, prior to the vote. “It’s just a bill that enriches the pockets of landowners and developers.”
According to Kim, public policies that increase density generate more profits for land owners; in San Francisco, a typical political strategy is to use such a change as a bargaining chip to secure investments in affordable and middle-income housing, public transportation or parks. Kim’s assertion echoed a San Francisco Planning Commission memorandum which, in evaluating the proposed legislation, stated, “The bill provides huge additional value to property owners throughout the state without concurrent value capture.” The Commission’s memo indicated that the HOME SF program, which provides for increased heights in exchange for 30 percent affordable housing, would have been put at risk.
Opposition led to amendments that scaled down maximum heights, preserved municipal control over affordable housing requirements and demolition of existing buildings, and added protections for displaced renters. Wiener extended affordable housing requirements to projects with more than 10 units even for communities that have no such policy.
Despite the changes, opposition hardened. While the San Francisco Planning Commission admitted that greater amounts of affordable housing would likely be developed due to a significant increase in construction activities triggered by the legislation, it was otherwise critical of the proposal. “SB827 appears to eliminate the ability to enforce Planning Code standards or other adopted Design Standards that are the backbone of livability, walkability and urban design quality,” it stated. There’d be no controls over a building’s envelope; it could cover the entire lot. “This would preclude the ability to maintain any standards regarding rear yard, lot coverage, exposure, open space, setbacks, and bulk controls of any kind.”
The revised bill also overrode local planning controls related to density. Supervisor Malia Cohen expressed concerns that, to maximize revenue, developers could construct buildings consisting largely of one-bedroom condominiums “accessible only to the ultra-rich.” Cohen, nonetheless, supported the concept of the bill, citing theories circulated in academia that low density development in wealthier communities leads to segregation.
“Restricting zoning and related land use policies have, since their very inception, played a critical role in establishing and maintaining patterns of residential segregation,” stated a letter signed by 17 university professors from around the country in support of SB827. As examples it cited, “single-family housing, front yard and building setbacks, restrictive floor to area ratios, parking requirements, and height and density requirements.”
Another letter, signed by 23 California professors, 13 from the University of California, Los Angeles, pointed out that, “There is no path out of the crises that does not involve new supply” and that “cities that block housing out of fears of congestion or aesthetics are prioritizing amenities of a lucky few over basic shelter for the many.”
Nonetheless, in San Francisco and Los Angeles, low income community groups overwhelmingly lined up against SB827. A protest in front of San Francisco’s City Hall pitted African-Americans, Hispanics and Asian-Americans against a mostly white crowd supporting the bill.
According to Jeff Cohen, co-director of the Council of Community Housing Organizations (CCHO), equity groups don’t agree with the trickle-down economic theory that housing prices will decline just by saturating market rate supply. “If you want affordable housing, you need to build affordable housing. If you want low income housing, you build low income housing. If you want market rate housing, you build market rate housing,” he said.
CCHO, a coalition of 25 community housing developers and tenant advocates, claims its members have been involved in every affordable housing project in the City over the past 40 years except those being driven by large companies, such as Bridge Housing, which is redeveloping the Potrero Annex-Terrace housing complex.”
The basic ingredient is land and money,” he added. “Everything has to go somewhere. There are only so many sites that can be developed, and every site that has market rate is one less spot for affordable housing.”
While bill supporters claimed it’d encourage development in higher income, low density, areas, rather than sparking a building boom in poor neighborhoods, Jeff Cohen said he’d have liked to have seen an amendment protecting those communities. He also pointed out nothing required developers to actually construct, explaining that an owner, who has already seen land value increase as a result of the bill, could continue sitting on the property if they believed maximum value could be achieved at a later date.
Bill advocates pointed to SB827’s environmental benefits. To discourage automobile traffic, the legislation would’ve required developers to buy transit passes for all building occupants and limited local requirements for providing parking for new residential units.
Building near transit to avoid sprawl-style development was a key element of the bill’s strategy. “The carbon footprint per capita of urban residents is much lower than people who live in suburban areas requiring cars,” explained Ethan Elkind, a University of California, Berkeley law professor who directs the school’s climate program. Last year, Elkind, one of the professors who signed in support of SB827, co-authored a report, Right Type, Right Place, that detailed ways housing can be built to help California meet its ambitious 2030 climate goals. It concluded that if new residential development goals were met by focusing housing in areas with easy access to public transportation, greenhouse gas emissions would be lower by 1.79 million metric tons annually.
However, while environmental advocates, such as the Natural Resources Defense Council, Climate Resolve and Environment California endorsed the bill, the Sierra Club opposed it on the grounds it could spark community resistance to transit expansion. The Planning Commission voiced a similar concern; that by tying zoning to bus service, neighborhoods opposed to density might fight to suspend or avoid service growth. The Sierra Club, in its letter denouncing the bill, stated, “The increase in the cost of land from new luxury units can increase rents that further displacement.” Lower income residents, those most likely to use public transit, could be pushed further away from job centers. In Los Angeles, transit use has sharply declined over the past five years, particularly in neighborhoods that’ve seen gentrification.
With 323 pages of letters and emails sent to the San Francisco Board of Supervisors in opposition, the bill had become an issue in the mayoral election. A bulk of the correspondence came from Marina and West of Twin Peaks addresses, neighborhoods which’re moderate politically, where low density homes are common. Others voicing hostility included the Potrero Boosters, Save the Hill and Grow Potrero Responsibly. While Kim was strongly against, fellow supervisor and mayoral opponent, London Breed, indicated she’d have supported the bill if it ultimately was limited to parcels where no one currently lives. “What is clear is we have a deep housing shortage all across the state. And we need to do everything we can to address it. The status quo everyone claims they don’t want to see continue happens time and time again,” she said.
The McKinsey study touted by proponents calls for reducing the building approval process time and reforming state incentives to push local governments to approve housing. However, the study, A Toolkit to Close California’s Housing Gap: 3.5 Million Homes by 2025, doesn’t endorse a one-size-fits-all solution. It notes that efforts “must be developed and employed at the local level” due to unique market demands and area preferences and “the local strategy should be tied to a vision for a better city that connects housing to citizens’ broader goals.” It identified 373 vacant parcels in San Francisco capable of supporting 4,500 units and noted that 31 percent of multi-family parcels have been built under capacity, capable of sustaining another 70,500 units without a zoning change.