S.F.'s housing approval process takes 10 months longer than anywhere else in California, state says - San Francisco Chronicle

On Wednesday, the California Department of Housing and Community Development released its San Francisco Housing Policy and Practice Review, a “comprehensive analysis of the patterns that created decades of costly building delays in San Francisco,” according to the agency. 

The scathing report found it takes an average of 523 days for a housing project to be entitled in San Francisco, compared with 385 days for the next slowest jurisdiction in the state. The process after approval is even worse: It takes an average of 605 days for San Francisco to issue a building permit to an already entitled housing project, compared with 418 days in the next slowest jurisdiction.

In a statement, Gov. Gavin Newsom called the report “an important first step to address the decades of issues that have held back San Francisco’s ability to build more housing.”

“California’s affordability crisis is one of our own making — the decisions we made limited the creation of housing we need,” Newsom said. “Nowhere is this fact more evident than in San Francisco.”

One Steuart Lane in San Francisco is among the city’s many condo buildings.

Scott Strazzante/The Chronicle

The report comes as the city is under pressure to increase production to meet the goals of its state-approved housing element, under which the city is obligated to permit 82,000 new homes by 2031, or about 10,000 a year. So far in 2023, the city has permitted only about one unit a day. 

The report lays out aggressive deadlines by which time the city must reform its practices and come into compliance with state law. Failure to do that could lead to the revocation of the city’s state-approved housing element, which would leave the city open to the “builder’s remedy,” where a developer could bypass the city’s planning process altogether. The city could also potentially lose millions of dollars in state funding if the housing element is revoked.

HCD Director Gustavo Velasquez said San Francisco’s byzantine planning process has created an “entrenched” system that is so hard to navigate that many developers have given up on building in the city. The result is a housing market that only wealthy households can crack, unless they are lucky enough to win the lottery for a subsidized affordable unit. 

“People who were born and raised in San Francisco cannot afford to stay and raise their own families there,” Velasquez said. “It is egregious and must be addressed.”

HCD enlisted researchers from the UC Berkeley Institute of Urban and Regional Development to analyze San Francisco’s housing approval policies and practices, including discretionary decision-making that creates excessive and costly delays. The investigators interviewed hundreds of developers, contractors and planners to “get at the root of what is causing these delays,” Velasquez said. “Very few people will want to do business in San Francisco if the current environment continues.”

Laws the city routinely violates include the California Environmental Quality Act, the state “density bonus” law and the Housing Accountability Act.

The report lists 18 required actions the city must take as well as an additional 10 recommended actions. Some of the actions must be completed within 30 days, like the mandate to “eliminate planning commission hearings for code-compliant projects in most parts of the city.” For others, like “establishing a local non-discretionary entitlement pathway,” the city has until 2026.

The report also gives the city 30 days to eliminate the use of terms like “neighborhood character,” “neighborhood compatibility,” “light,” and “air” in case-report findings. 

San Francisco Mayor London Breed and state Sen. Scott Wiener, D-San Francisco, join others during a ribbon-cutting ceremony for Kapuso at the Upper Yard, a 131-unit affordable-housing project, in September.

Scott Strazzante/The Chronicle

In a statement, Mayor London Breed said many of the mandated changes the state is requiring are already in the works through her “housing for all” initiative, which includes proposals to do everything from removing density controls on commercial corridors to lowering the city’s inclusionary housing requirements, which the Board of Supervisors approved last spring.

Breed criticized the board for not taking quicker action on a “constraints reduction ordinance,” which was introduced in April and passed by the Planning Commission in June, but has yet to be heard by the board. The HCD letter calls on the legislation to be passed within 30 days.

“I agree wholeheartedly with the State that our current housing timelines are unacceptable and we cannot afford the obstruction, delay, and denial of the changes we all know this City needs,” Breed said.

State Sen. Scott Wiener said the report laid out a set of violations that “were even more extreme than I realized.” He said the findings show that without state laws that mandate approvals, “San Francisco would be building almost nothing.”

“What this report shows is that San Francisco is truly an extreme case of housing obstruction and has a system designed to obstruct housing. That is why we had to step in with greater state oversight,” said Wiener.  “San Francisco’s housing system is completely broken. It needs to be scrapped and recreated. It’s time.”

While real estate development is cyclical — and the combination of high construction costs and rising interest rates have made building increasingly difficult throughout the Bay Area — HCD officials said the lack of activity in San Francisco is still out of the ordinary.

“We heard directly from developers, some of who said they were still starting projects in the Peninsula and other jurisdictions but not in San Francisco,” said Dori Ganetsos, a senior adviser at HCD.

The mandates of the housing element have been criticized by some members of the Board of Supervisors, who say the state should be investing more in affordable housing. Velasquez pointed out that the governor has committed $10 billion for affordable housing over the next two years.

Planning Director Rich Hillis said “some of the timelines are aggressive,” but that the report didn’t contain any big surprises. 

“We recognize in our own housing element that the codes have been loaded up over the past decade with process and discretion,” he said. “They are asking us to unravel that quickly, but I think it’s doable given the progress we have already made.”

Reach J.K. Dineen: jdineen@sfchronicle.com

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