Why Isn’t San Francisco Building Enough Housing?

From vicious fights over a vacant parking lot to housing prices so high even the rich are still renting, San Francisco has become a poster child for housing dysfunction. For years, NIMBYs (that stands for “not in my backyard” and refers to residents and activists who tend to oppose new housing) have duked it out with YIMBYs (you guessed it—they’re the opposite of NIMBYs) over San Francisco’s future skyline. But with roughly 8,000 homeless San Franciscans living on the city’s streets and $3,000 one-bedroom rental units, the tides are starting to turn. More and more residents are asking why it’s so hard to get housing built in the city, and we’re here to help you understand the issue so that you can demand your city supervisors work together to fix it. In fact, the state has mandated that they do so by 2031. Here’s what that means.

Who decides how much housing gets built in San Francisco?

In 1969, the state of California mandated that all local governments plan for the housing needs of their residents, regardless of income, by ensuring adequate opportunities for housing development exist within municipal boundaries. Every eight years, our regional planning agency, the Association of Bay Area Governments (ABAG), provides the city of San Francisco with the number of housing units the city must reach. This time, San Francisco must adopt a plan to build 82,069 units of housing by 2031. 

What is the Housing Element?

A “compliant Housing Element” is just urban planning speak for a state-approved plan to build new housing.  Primarily worked on—and ultimately approved—by the San Francisco Planning Commission, the Housing Element is a 1,000-page document containing all the policies and programs that account for how those housing units will get built. It’s kind of like a housing manifesto, also detailing the city’s vision and values around housing. Once submitted, the state determines whether the plan is “compliant.” The plan to build the 82,069 units, called the Housing Element, must be adopted by January 31, 2023—first, the Commission must certify the environmental impact report, approve the housing element, and submit the proposed housing element to the Board.  Then, the Board must pass an ordinance approving the Housing Element, which is subject to approval or veto by the Mayor. (The Board can only approve or reject the Commission’s proposal but can not make any amendments to it.)

If we have such a detailed plan for building housing, why is there so little progress in San Francisco?

For years, there just weren’t severe enough consequences for cities not implementing their housing plans. Cities could get away with submitting Housing Elements that relied on a theoretical maximum of housing units that could be built in a period of time, if every parcel of land were maximized for usage. While that made Housing Elements pass on paper, there was never enforcement from the state to make sure those plans were actually feasible and implemented. 

What is the builder’s remedy?

Enter Senate Bill 330, which passed the California state legislature in 2019 and transformed a legal mechanism known as the “builder’s remedy” into a nuclear option for the state to keep in their back pockets if cities do not build enough housing. That mechanism dictates that if a local municipality is not in compliance with California's housing development goals, developers are authorized to bypass that municipality's zoning laws and start building, as long as the new housing projects contain at least 20 percent low-income or 100 percent middle-income units.

In 2021, the plot thickened when Governor Newsom created a 25-person team called the Housing Accountability Unit whose job it is to enforce the mandate to build housing. They operate with a $4 million budget and also enforce laws like the Housing Accountability Act, Surplus Lands Act and Density Bonus Law. In other words, the state is really serious about putting pressure on San Francisco to build enough housing to meet the needs of its residents.

What does the failure of 2022’s Proposition D mean for the future of housing in San Francisco?

In order for even a compliant Housing Element to be implemented in San Francisco, some of the barriers to building housing must be removed. Pro-housing legislators in San Francisco have tried to pass housing streamlining measures for years. When Mayor London Breed failed to pass legislation to shorten the approvals timeline for new construction projects through the Board of Supervisors, 52,000 San Franciscans signed a petition to place streamlining on the ballot in the form of Proposition D. In response, some Supervisors placed a nearly identical, but competing measure (which would not make it easier to build housing) on the ballot to confuse voters, and it worked.

Prop D would have helped the city reach that 82,069-unit goal. Without the streamlining the prop would have provided, it is arguably impossible for San Francisco to implement a viable Housing Element.

We’ll be keeping you up-to-date on what’s unfolding in City Hall regarding the Housing Element from now until January. Stay tuned!