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SF
Prop D
Affordable Homes Now
Charter Amendment
Affordable Housing: Voter Initiative

Amends the San Francisco City Charter to speed up the approvals process for certain types of housing developments. Prevents eligible housing projects from being blocked or delayed for discretionary reasons if they meet the city’s code.

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Jump to SPUR’s Recommendation

Note: SPUR is a co-sponsor of Prop. D and has conducted policy research and advocacy for the measure.

What the Measure Would Do

Proposition D would expedite and streamline approvals for three categories of multifamily housing projects: 100% affordable housing, mixed-income projects that provide additional affordable units beyond existing city requirements, and housing for educators. Prop. D would reform the permitting process in the charter, which currently allows various city boards, commissions and officials to deny approvals for discretionary reasons. Instead, eligible projects would be subject to review by the Planning Department and the the Department of Building Inspection to confirm their compliance with building codes, using objective standards.[1] Permits would need to be issued for eligible projects between three and six months after a complete project application is submitted. Because permits would no longer be discretionary, Prop. D would also shield eligible projects from nuisance lawsuits under the California Environmental Quality Act, which is often misused to delay or completely stop the construction of new housing. Projects that get streamlined would not be able to demolish any existing homes to build new housing, ensuring that no residents are displaced by these new housing projects.[2]

Developers of all three types of eligible projects would be required to pay all construction workers at the government-established “prevailing wage” rate, which is considered a middle-class wage. For projects of 40 units or more, contractors would be required to provide workers with health care coverage and apprenticeship opportunities.

Three types of housing projects would be eligible for streamlined permitting:

  1. 100% Affordable Housing: To be eligible, all units would have to be affordable to low-, moderate- or middle-income households earning up to 140% of the Area Median Income. The overall project would need to have an average affordability level of 120% AMI or below. To ensure that the units are below market rate, the prices or rents would need to be set at 20% less than the median prices or rents for the surrounding neighborhood.
  2. Increased Affordability Mixed-Income Housing: Mixed-income projects with 10 or more units would be eligible if they provide 15% more on-site affordable units than required under the city’s current inclusionary policy. For example, in a 100-unit building, current law requires 22 affordable units. For projects to qualify for streamlining, Prop. D would require 25 affordable units.
  3. Educator Housing: Projects would be eligible if four-fifths of the units are designated for low-, moderate- or middle-income families where at least one member is an employee of the San Francisco Unified School District or the Community College District.[3]

The Backstory

One of the root causes of San Francisco’s high housing costs is the city’s ongoing failure to build enough housing, a problem that’s been compounding for decades. The reasons for this shortfall are many, and solving it will require every tool in the toolbox, including eliminating bureaucratic red tape that delays the construction of much-needed housing development.[4] According to the California Department of Housing and Community Development, it takes longer to get a housing project built in San Francisco than anywhere else in the state.[5] The median time frame for housing projects to complete the process in San Francisco is four years.[6] The city’s own housing plan identifies the discretionary permitting process as a major constraint to housing development.[7]

There are multiple examples of projects that met the city’s planning and building codes but were denied approvals by boards and commissions for discretionary reasons. Recently, the 469 Stevenson project that would have built 500 units (including 89 affordable units) on a valet parking lot was rejected by the Board of Supervisors even after it had been approved by the Planning Commission.

Former Mayor Ed Lee implemented some internal processes to streamline permitting, but a complete reform of discretionary review requires a voter-approved amendment to the City Charter. Mayor London Breed planned to place a housing streamlining measure on the ballot in 2020, but it was postponed due to the onset of the COVID-19 pandemic. Supervisor Ahsha Safai proposed a streamlining charter amendment on the ballot in 2021, but it was tabled by the Rules Committee and never went to the full Board of Supervisors.

Prop. D was placed on the ballot through a voter initiative sponsored by SPUR and a coalition of nonprofit groups, including Habitat for Humanity Greater Bay Area, Nor Cal Carpenters Union, Mission Housing, GrowSF, Greenbelt Alliance, Housing Action Coalition and YIMBY Action. Mayor Breed also supports this measure.

Prop. D was criticized by some members of the Board of Supervisors for proposing to streamline mixed-income housing and to expedite 100% affordable housing that includes units that would be affordable to moderate- and middle-income households. To defeat Prop. D, seven members of the Board of Supervisors placed a competing charter amendment, Prop. E, on the ballot. (Read our analysis of Prop. E.)

Prop. D requires a simple majority (50% plus one vote) to pass. If both Prop. D and Prop. E meet the threshold to pass, the proposition with more votes will prevail.

What’s the Difference Between Prop. D and Prop. E?

Prop. E was put on the ballot to defeat Prop. D. They sound similar but would have very different outcomes.

1. Prop. D would fully streamline 100% affordable projects.

Prop. D would accelerate all 100% affordable projects that conform to existing rules and shield them from unnecessary lawsuits. Prop. E would not. Prop. E would require 100% affordable housing projects to have a much lower overall average affordability in order to be eligible for streamlining, so it would apply to fewer projects than Prop. D. In fact, Prop. E’s affordability level replicates existing state law, making it ineffective for encouraging the development of more affordable housing projects. Prop. D would expand streamlining to include 100% affordable projects that serve moderate- and middle-income households, including first-time homebuyers.

2. Prop. E would impose more onerous requirements for mixed-income projects.

Mixed-income projects deliver about 40% of the affordable housing that is built in San Francisco. Prop. D would require a modest increase in the number of affordable units in mixed-income projects. Prop. E would require a much higher percentage of units to be affordable, which would render mixed-income projects financially infeasible to build. This requirement means that Prop. E would be unlikely to speed up the production of affordable housing.

3. Prop. D would do more to deepen the bench of construction workers in the Bay Area.

A lack of local skilled construction workers is a major obstacle to the construction of new housing in San Francisco. Prop. D would require eligible projects to pay middle-class wages, provide health care and offer apprenticeship opportunities to create pathways into middle-class construction jobs. Prop. E would require eligible projects to hire “skilled and trained” workers who have graduated from specific state-certified apprenticeship programs; about one-seventh of California’s construction workforce meets this standard. Prop. E's labor standard would not deepen the bench of construction workers or provide a pathway to bring non-union workers into higher-quality construction jobs.

4. Prop. D would set strict time frames for project approvals.

One serious roadblock to building enough affordable housing in San Francisco is the time frame for the approval and permitting process. Prop. D would speed up approvals by mandating time periods for the city to determine an application’s completeness and eligibility for streamlining. Prop. E would not provide these mandates, which means that many projects could continue to experience significant permitting delays without recourse.

For more details, see SPUR’s July 2022 article, What’s the Real Difference Between San Francisco’s Two Affordable Housing Ballot Measures?

Equity Impacts

Prop. D would speed up the construction of affordable housing in 100% affordable and mixed-income projects, which would benefit low-income households. Black, Latinx and Asian/Pacific Islander residents are much more likely to be rent-burdened and face housing insecurity.

Removing barriers to affordable and mixed-income housing development would help encourage more housing development in lower-density neighborhoods in the western and central portions of the city, which have a much lower share of affordable housing than the eastern neighborhoods of San Francisco.

Prop. D would not directly displace existing residents because projects requiring demolition of homes are excluded from streamlining.

Pros

  • Enabling 100% affordable, mixed-income and educator housing projects to use a streamlined process would result in faster delivery of much-needed affordable and workforce housing and shield housing projects from unnecessary lawsuits and obstruction.
  • Removing discretionary review from these types of housing projects would help to depoliticize housing development and create a more equitable distribution of affordable housing citywide.
  • The labor provisions in Prop. D would raise the quality of jobs for many construction workers and create pathways for more San Franciscans to enter the construction industry with healthy wages and benefits.

Cons

  • Prop. D only addresses one constraint to housing production: reforming the city’s approvals process for projects that comply with the city’s existing code. It does not propose any other changes to encourage more affordable housing development, including zoning more sites for housing and providing more funding for 100% affordable projects.
SPUR's Recommendation

Prop. D would fully streamline approvals for affordable housing projects for low-income households. It would facilitate the construction of moderate- and middle-income housing for teachers and other working families. It would require projects to be approved within three to six months, and those projects would have to provide prevailing wages and health benefits for all construction workers. The competing measure, Prop. E, would not fully streamline 100% affordable housing, leaving projects open to unnecessary lawsuits. Prop. E would also impose additional burdens on mixed-income housing development that would only make it harder to build affordable housing. It is clear that Prop. D is the only streamlining measure on the ballot that would eliminate obstacles to construction and address San Francisco’s housing shortage.

Vote YES on Prop D - Affordable Homes Now
Footnotes

[1] Under the San Francisco City Charter, the Planning Commission, the Board of Appeals, the Historic Preservation Commission, the Arts Commission and the Board of Supervisors are currently allowed to make discretionary decisions about whether to approve new housing developments, even if proposed housing projects meet all of the city’s codes and laws. Under Prop. D., eligible projects that comply with the code would no longer be subject to discretionary review by these boards and commissions.

[2] The following types of projects would not be eligible for streamlining: projects on sites under the jurisdiction of the Recreation and Parks Department; projects on sites in a zoning district that prohibits housing; projects that would cause the removal or demolition of a historic landmark; projects that would cause the demolition or removal of existing housing; and projects that would demolish, remove or convert a movie theater or nighttime entertainment use.             

[3] At least four-fifths of the units in an Educator Housing project would have to be affordable to households with an income from 30% to 140% of AMI, with an overall average of 100% AMI across all such units. Up to one-fifth of the units could be affordable to families at 160% AMI.

[4] Moira O’’Neill et al., Examining Entitlement in California to Inform Policy and Process: Advancing Social Equity in Housing Development Patterns, September 18, 2021, paper available at SSRN, paper available at SSRN, https://ssrn.com/abstract=3956250..

[5] J. K. Dineen, “Gov. Newsom Launches Unprecedented Review of San Francisco’s Housing Approval Process,” San Francisco Chronicle, August 9, 2022, https://www.sfchronicle.com/sf/article/Gov-Newsom-launches-unprecedented-review-of-San-17362055.php..

[6] Brian Goggin, Measuring the Housing Permitting Process in San Francisco, Terner Center for Housing Innovation, July 24, 2018, https://ternercenter.berkeley.edu/research-and-policy/measuring-the-housing-permitting-process-in-san-francisco.

[7] San Francisco Planning Department, Draft Analysis of Governmental and Non-Governmental Constraints, March 2022, https://sfhousingelement.org/draft-analysis-government-and-non-government-constraints-report.