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San Francisco looks headed for state housing approvals—if city leaders sign off on new plan

UC Hastings Student Housing is under construction at 198 McAllister St. in San Francisco on Sept. 21, 2022. The building is an example of a major residential development that made it through the lengthy San Francisco permitting process. | Felix Uribe Jr. for The Standard

San Francisco may avoid harsh state housing penalties after all, now that the state has said the city needs to make just a few changes to its eight-year housing plan to come into compliance with state housing laws. 

The city’s latest draft of the Housing Element Update checks all the state’s boxes and should be on track for approval, according to Miriam Chion, director of community equity at San Francisco’s Planning Department. 

“We’re on a confident path to approval,” Chion said.

She also said the state’s Housing and Community Development Department, which is responsible for signing off on the plans that individual cities are required to submit every eight years, has reviewed San Francisco’s changes in response to a Wednesday letter from the state and indicated they pass the smell test at the state level.

The Planning Commission took up the adoption of the Housing Element at a Thursday afternoon meeting, approving it before it will go before the full Board of Supervisors in early January. It must be fully certified by Jan. 31 if the city wants to avoid state penalties. 

The state’s latest review letter, posted Wednesday, confirms that if the city makes the outlined changes, most notably imposing its own strict “midterm evaluation” for hitting its housing goals, and approves the plan, it could avoid the first of the penalties, the dreaded “builder’s remedy.” 

The temporary loss of power to deny new projects due to zoning inconsistencies would go into effect Feb. 1, 2023, if the state doesn’t approve the city’s plan.

“SF needs this midterm evaluation desperately,” said Robert Fruchtman, volunteer lead for pro-housing group SF YIMBY. 

However, San Francisco’s promises didn’t entirely win over the state this year. Sacramento did not include San Francisco in the latest batch of cities to earn “pro-housing” designation on Thursday after the city applied in the fall. Chion said the city has yet to receive any feedback from the state on its application. And it’s still not clear just how severe its review of San Francisco’s housing policies and practices will be; the initial results of the investigation opened by the state are expected early next year. 

The biggest challenge—actually getting the housing built—is yet to come. Chion said the city’s success in actually hitting the goal of around 10,000 new units per year goal requires more help from the state and federal governments. 

“That’s the big challenge—to secure the funding, to identify the places and to clear the path so our private sector and nonprofit sector can build and secure the units that we need,” Chion said. “This is not something San Francisco can do by itself. We’ve never done this before.”

The city’s legislators, who ultimately will have to sign off on the plan, agree. A Board of Supervisors hearing on the latest draft dredged up disbelief that the goals set by the state are achievable.

Plus, San Francisco has to hit highly ambitious housing goals all while a recession is on the horizon, and one has already hit the Bay Area housing market.

“I think the expectation from the Planning Department is that we will go back to a business-as-usual economy within a few years,” Fruchtman said. “We’re in a very different economy now.”

But Fruchtman has little sympathy for the city, which he credits for erecting barriers that have made building in the city notoriously expensive and difficult

“The fact that we are unable to build more housing is the hell of our own making,” he said.