To Make Housing Affordable, San Francisco Should Look Beyond California for Solutions

By Sam Spiegelman & Jeremy Talcott

On November 8, voters in San Francisco weighed in on a pair of ballot initiatives aimed at easing the city’s affordable housing crisis. Let’s at least give city officials this much credit — they do, in fact, appear to recognize the city’s serious housing problem. But their solutions fall flat. Of the country’s major cities, San Francisco ranks in or near the bottom quartile on housing affordability and homelessness.  The principal cause is the city’s regulatory framework for new development.

Two weeks after election day, voters have rejected Proposition E and look likely to reject D — counting takes time, especially in California, where several congressional elections are still outstanding. Still, these two initiatives only scratched the surface of solving San Francisco’s woeful development permitting process.

If voters had passed Props D or E, housing officials would have been allowed to expedite approvals by several months for developments that are 100 percent affordable, are to be leased to teachers, or set aside 15 percent of their units for below-market rates. Either Prop D or E (on paper) would have kicked in a 60-day approval process for qualifying projects, but only Prop D would have automatically fast-tracked projects whose deadline the city misses. Still, neither of these initiatives would have done anything to address the city’s antiquated zoning code, which limits multifamily housing to a sliver of its residential land.

So, here’s some free advice: if San Francisco really hopes to address housing affordability and availability, its officials must allow more of it to be built. This requires reform of the city’s draconian permitting and zoning regulations to allow light to medium multifamily dwellings throughout its residential zones. And for a better understanding of how to repair the city’s dysfunctional regulations, other cities across the nation can provide guidance on approaches that work.

The permitting process for new development in San Francisco is excruciatingly slow: review and approval for a new housing project takes an average of 27 months, according to one recent study. The city has set an ambitious goal for new housing units — 83,000 new units by 2030 — but it’s highly unlikely to hit that mark with existing regulations in place. Streamlining the permitting process to encourage more timely development is needed but won’t be enough.

The city’s zoning laws make it impossible to build new homes in the number, locations, and price points the market demands. These laws stretch back a century; the first San Francisco zoning plan, enacted in 1921, mandated single-family residential developments in most of the city’s undeveloped areas. This decision set the city on the course for its current dysfunctional land-use policy. Today, single-family residential districts account for 40 percent of all land use in San Francisco, despite blistering breakneck (and wonderful) growth in jobs and population.

Existing residents often resist the construction of more homes, fearful that more building would diminish their home values or neighborhood character. That fear is likely misplaced. In fact, a treasure trove of data-driven studies illustrates how even a small amount of additional housing stock can make life better for all by unleashing more growth and productivity.

Other similarly situated cities have made real progress in addressing housing shortages by recognizing that steady, incremental development brings more than enough benefits to ease the anxieties of incumbent homeowners. And they’re pursuing this needed development through intelligent reforms of zoning laws.

Take Portland, Oregon, where reformers obtained meaningful zoning changes, most notably permitting up to six homes on any one lot. Seattle’s Sightline Institute describes this change as “the most pro-housing reform to low-density zones in U.S. history.” Within one year, Oregon’s homeless population declined by 7.7 percent. Other cities are successfully using zoning reform to make land more productive. Minneapolis, for example, has seen some success in building more medium-density units once it fixed a few obsolete zoning rules. From New York City to Charlotte and Atlanta, zoning reform has become a programmatic, long-term objective that is already reaping rewards.

San Francisco continues to enjoy a reputation as a historic center of commerce and cultural innovation. Still, that reputation has suffered in recent years, with 70 percent of residents polled seeing a city in decline. An important part of stemming and reversing that decline is addressing the city’s acute shortage of affordable housing — and that starts with spurring needed housing development by reforming the city’s dysfunctional permitting practices and zoning regulations—not just the former.

Jeremy Talcott is an attorney at Pacific Legal Foundation, a nonprofit legal organization that defends Americans’ liberties when threatened by government overreach and abuse.