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SoMa developer dodges local laws, upzones new building automatically

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Almost any big project in the city has the same option, but nobody has pursued it until now

Courtesy Macy Architecture

San Francisco jealously guards its right to upzone new projects. But the catch is, in the majority of cases it’s not technically up to us.

Under a ruling in a 2013 court case with Napa County, developers in any California city automatically qualify for a 35 percent bonus in their number of units, provided that at least 11 percent of homes in the building are priced as affordable housing.

Since every big new building in San Francisco must include far more affordable housing than that anyway to comply with local standards, almost all of them qualify for the bonus.

But until last week, no developer had ever invoked this state-granted privilege. Micro developer Patrick Kennedy became the first when he opted to exercise his rights on a new residential housing project at 333 12th Street.

The result would be an eight-story building with a total of 200 units. (Although Kennedy is noted for his love of tiny homes, these units are more standard in size.)

Twenty-seven of those apartments would be affordable housing, or 18 percent of the pre-bonus unit count.

That yields him 52 more homes under California law, essentially just for showing up.

Why has nobody tried to invoke this state-mandated privilege before? Possibly because the law appears to be a complete mess.

Or so it seemed last Thursday, when the Planning Commission considered and ultimately granted the building’s permit applications, but not before hours of wrangling to figure out the ins and outs of how California law applies to things like student housing.

(The building’s market-rate homes would be leased to Golden Gate University and the San Francisco Art Institute, even though it was not proposed as student housing under the legal definition.)

There was some disgruntlement that the law doesn’t demand that any of the bonus homes be made affordable housing too, for example.

“I think it’s odd that with the state’s affordable housing tool you end up with less affordable housing,” said Commissioner Rich Hillis. “Something’s not right.”

“This is too complicated to decide here,” complained Commissioner Katherin Moor. “Everyone’s guessing and hedging.”

At one point a commissioner’s question yielded a response that began with the phrase, “This will make your head explode.”

Kennedy was granted his Conditional Use on a 5-1 vote, although, of course, that’s hardly the finish line for the project.

“This is not a planning decision or a city decision, this is state law,” Hillis added before the vote.

Peter Cohen, co-director of the Council of Community Housing Organizations, warned the commission that this would be a grim precedent.

“You’re now going to see this as standard practice,” Cohen said. “It’s a de facto upzoning of every project. It raises the question, how is this undermining your policies as a city?”

The developer-friendly non-profit SF Housing Action Coalition seems to agree that a precedent has been set, although SFHAC of course considers this a good thing, calling it “a tremendous win for housing advocates” on their blog.