San Francisco housing crisis: New state bill may force city to build faster

San Francisco has the dubious distinction of having the longest housing approval timelines in the state, according to a California housing agency.

Now, the city has been singled out in a piece of legislation that, starting next year, may force rapid approval of housing projects that would otherwise be subject to hearings and appeals. 

Senate Bill 423, authored by state Sen. Scott Wiener, looks at cities’ progress in meeting housing targets laid out by the state every eight years, known as the Regional Housing Needs Assessment (RHNA). Building upon a 2017 bill called Senate Bill 35, the new bill would require cities that aren’t on track to meet their housing targets to automatically approve housing projects that otherwise comply with local codes. 

But a last-minute amendment to the bill made San Francisco subject to annual reviews of its progress on housing—making it the only jurisdiction in the state receiving elevated scrutiny. The bill passed the California Legislature on Monday, sending it to Gov. Gavin Newsom’s desk for signature. 

“We need to support San Francisco in reforming its approach to housing and hold ourselves accountable for tackling the housing crisis,” said Wiener, who introduced the amendment. “This provision in SB 423 does exactly that: It provides close oversight for San Francisco’s housing permit system and ensures the city can expedite the housing it so desperately needs.”

For most cities, the state’s Department of Housing and Community Development checks in midway through each eight-year housing cycle, looking at permitting activity to conclude whether a city is on track to meet its housing target—which, for San Francisco, totals 82,000 housing units by 2032.

In practice, the amendment means that starting next year, the discretionary processes that slow down housing approvals in San Francisco—such as appeals, required neighborhood meetings and interventions by local lawmakers—could be rendered obsolete, at least for the foreseeable future. 

“While we’re still reviewing the new bill’s provisions, we anticipate that it would result in a broader range of projects becoming eligible for ministerial review,” said Dan Sider, a spokesperson for the city’s Planning Department. “We welcome additional tools like this to help us meet the ambitious goals of the city’s recently adopted Housing Element.” 

SB 35 is credited for fast-tracking the approvals of more than 3,400 affordable housing units in San Francisco, Sider said. 

That’s because, during the last RHNA cycle, San Francisco and many other cities built sufficient market-rate housing but lagged behind affordable housing targets. As a result, developers building subsidized affordable housing projects were able to cite SB 35 and have their projects ushered through quickly. 

The law was viewed as a game-changer in a city where developments are often subject to lengthy reviews that can drag project approvals out for years. And SB 423—which extends the provisions of SB 35—is expected to be even more consequential. 

Just 2,852 units were permitted in the city last year, according to the state’s housing agency—far below what would be needed to hit the current eight-year housing target. Under the current RHNA cycle, the city needs to allow for some 10,000 new units annually on average.

That means under SB 423, San Francisco “will have to streamline market-rate as well as affordable housing” starting next year, said Annie Fryman, a former aide to Wiener and current director of special projects at the San Francisco Bay Area Planning and Urban Research Association (SPUR). 

There are some caveats, however: In addition to complying with local height limits and other codes, projects eligible for streamlining must include the minimum number of affordable units required by law on-site, as opposed to paying development fees. 

But once SB 423 takes effect, and the state completes its first annual review of San Francisco’s housing progress, any project that complies with local codes and other objective requirements will be approved “by default” in a matter of weeks or months as opposed to years, Fryman explained. 

Corey Smith, director of the Housing Action Coalition, said that the San Francisco-specific amendment in SB 423 mimics some of the provisions in Proposition D, a housing streamlining ballot measure that failed at the ballot box in November 2022.

The Housing Action Coalition, Wiener, Mayor London Breed and the pro-housing supply group YIMBY Action all backed Proposition D, which fell just short of winning a 50% threshold of voters. A rival competing housing measure, Proposition E, also failed. 

“The Mayor very much supports SB 423 and is excited that it is on its way to the Governor's desk,” said Parisa Safarzadeh, a spokesperson for Breed's office. Newsom’s office didn’t immediately respond to a request for comment on the bill. 

But SB 423 will likely mean a smoother execution of some of the streamlining goals of Proposition D, Fryman added. Because it’s based on SB 35, which has already been subject to legal challenges and emerged intact, it’s less likely to get bogged down in litigation or the administrative grind of training planners how to work with the law, she said. 

That’s not to say there won’t be pushback. The League of California Cities, which lobbies on behalf of local governments, opposed SB 423 on the grounds that it “[allows] the state to determine local building requirements.”

But if the bill takes effect, it would follow a trend of the state cracking down on San Francisco’s lengthy and fickle housing processes, which remain an outlier in California.  

After the Board of Supervisors declined to approve a 500-unit housing project on Stevenson Street near Downtown in 2021, the state’s housing agency launched a review of the city’s housing policies. 

In January, the Board of Supervisors unanimously approved the city’s Housing Element—a document laying out how it plans to make room for 82,000 housing units, such as through rezonings and process reforms. But adapting and breaking out that document into pieces of legislation is another matter. 

One key piece of legislation, called the Constraints Reduction Act, is expected to hit the Board of Supervisors’ Land Use and Transportation Committee next week. That ordinance would make a flurry of changes to city rules to cut down on neighbor notifications and other discretionary processes. 

A group called the Race & Equity in all Planning Coalition plans to oppose the ordinance at a Monday meeting, writing in a press release that it "turns the entire City over to speculators and developers" and ignores affordable housing.

In a June letter to the Planning Commission, the California Department of Housing and Community Development urged policymakers to approve the Constraints Reduction Ordinance and reminded the city that the Housing Element is an “enforceable commitment.”

Regardless, SB 423 could mean a new ballgame for local policymakers, developers and advocacy groups next year.

The law will effectively “[cut] out anti-housing neighbors and anti-housing supervisors,” Smith said.