Jan 27, 2023 - News

San Francisco leaders foresee challenges hitting housing goals

sutro tower

View of Sutro Tower from the Sunset neighborhood. Photo: David Paul Morris/Bloomberg via Getty Images

San Francisco is on track to meet Tuesday’s deadline to submit a state-mandated plan to build more housing, but some leaders are concerned about how the city will hit its goals without adequate funding and specific plans to address infrastructure needs.

Driving the news: The Board of Supervisors this week unanimously approved the city's housing element, a plan that requires SF to create a little more than 82,000 new housing units over the next eight years.

  • It also mandates that nearly 46,600 of those units be for low- and moderate-income households.

Why it matters: Without a fully compliant plan, San Francisco stands to lose tens of millions of dollars in state grant funding for affordable housing and transportation projects, as well as forfeit local control over zoning laws, the San Francisco Examiner previously reported.

  • More inventory could help bring relief to homebuyers and renters in what's become one of the most expensive markets in the country.

What they're saying: San Francisco Mayor London Breed called this week's vote "a major step to fundamentally change how we approach housing," in an emailed statement to Axios.

  • Breed said she will sign and submit the housing plan to the state following next week's final vote by the Board of Supervisors.

Details: San Francisco's planning department intends to change zoning laws in the west side of the city, home to some of the least dense and highest-income neighborhoods, District 7 Supervisor Myrna Melgar said.

  • Yes, but: The city's west side has resisted this type of change in the past, Melgar told Axios. She expects there will be resistance this time around as well.
  • Separately, she sees the lack of adequate infrastructure for transportation and conversions to electric appliances for buildings as just two potential challenges.
  • Still, Melgar said she’s “optimistic” the city can achieve its housing goals.

Meanwhile, there are also concerns about what it will take to meet the plan's affordable housing goals.

  • District 5 Supervisor Dean Preston told Axios the city will not come close to hitting its goals "if there is not a fundamental change in the approach to affordable housing from both the mayor's office and from the governor."
  • In addition to needing more money from the state, he said, there's also an issue with the city not spending the money it has already allocated toward affordable housing.

Flashback: San Francisco voters in 2020 passed Proposition I to impose real estate transfer taxes on properties worth more than $10 million, with the understanding the proceeds would generate money for affordable housing.

  • Due to California tax law, however, the revenues went into the city's general fund.
  • In November 2021, supervisors approved a measure to allocate $64 million from Proposition I proceeds to fund a program that buys small apartment buildings where residents are at risk of displacement.
  • A spokesperson for the mayor’s office, Parisa Safarzadeh, told Axios it will take a range of funding sources for the city to meet the goals of the new housing plan, but it’s not clear if the $64 million will be included.

What to watch: Preston plans to introduce legislation that would enable affordable housing nonprofits to sue the city in the event it fails to meet its affordable housing goals.

  • "The part that people don't want to talk about is that we're setting affordable housing goals that everyone knows we're not going to meet," he said.
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