After three tries, the fourplex-centric plan from Sup. Rafael Mandelman to unlock more housing across San Francisco finally made it through. His colleagues on the Board of Supervisors passed it on a veto-proof 10 to 1 vote Tuesday, and it’s gotten the blessing — if not yet the signature — of Mayor London Breed.
Mandelman’s soon-to-be new law allows construction of up to four residential units on nearly every lot in the city, and as many as six on corner lots.
An earlier version passed the board this summer, but ran into a mayoral veto. Breed fretted that various conditions of the bill would make it harder, not easier, to build, in part by adding an onerous ownership constraint and by skirting a 2021 state law, SB 9, meant to allow more construction on plots of land previously reserved for single-family homes.
The new version won broad approval by scaling back the ownership requirement and honoring the spirit of SB 9. It even won the vote of progressive lawmakers who had added constraints to the previous version. With no debate, Tuesday’s vote took roughly the same amount of time that the supervisors spent landmarking a tree.
“While we have much more work ahead to streamline and lower the costs associated with building new housing, this is an important step in the right direction,” Mandelman said on Twitter.
Mandelman’s modest description belies what’s remarkable here: In a city where lawmakers (the District 8 supervisor included) often torpedo housing proposals for baffling reasons and voters are forced to referee their policy conflicts, the board and mayor’s office deserve credit for crafting a plan that almost everyone can live with.
That said, we need to be realistic about what this change will, and more importantly, won’t do for our housing crisis.
Fear of the wrecking ball
Like a desert mirage of a lush oasis, some of SF’s ambitious housing plans can look at first like a formula for tremendous new density.
When the city in 2014 legalized ADUs — in-law apartments in basements and backyards — hot-tempered planning commissioner and density skeptic Dennis Richards said it would double density across the entire west side. He might end up being right, but so far, only 622 new ADUs have been built.
Similarly, while Mandelman’s upzoning has potential to radically change neighborhoods, the reality will probably be more discouraging. Right now, about 37 percent of buildable lots in SF are zoned RH-1, or one home maximum; RH-2 (two homes) and RH-3 (three) lots make up a combined 21 percent; so the plan in effect upzones nearly 60 percent of the city.
Sounds great, but historically, very few San Francisco homeowners take the option to build more densely, even on the rare occasions City Hall hands them a golden ticket for it. In 2021, just six single-family homes were demolished in all of SF, and only 56 have faced the wrecking ball since 2017.
There’s not much financial incentive for a costly conversion, analysts note. ‘Single-family home buyers paying current prices for most homes would typically outbid a developer.’
Century Urban consultancy
Most of those were replaced with new buildings with additional units. Officials are pretty reluctant to approve demolitions these days that do not result in a net gain in housing. But more than eight times as many demolitions leveled buildings with five or more units during the same period.
Despite this, supervisors remained fearful enough of demolition by “speculative real estate investments that may seek to maximize profits” that the final bill requires at least one year of ownership from anyone seeking to take advantage of the new upzoning. (The previous plan was much tougher, demanding five years.)
Protection against predatory redevelopment versus new units that the law can deliver — that’s the trade-off.
Those protections were still not enough to impress Board of Supervisors president Shamann Walton. He cast the single “no” vote against the new fourplex plan, which he has opposed at every juncture for fear that it will point a wrecking ball at Black property owners and families.
Walton’s District 10 includes Bayview-Hunters Point. The Planning Department estimates 28 percent of the neighborhood’s population is Black, and 52 percent own their own home, a very high rate of ownership by SF standards. Although developers are producing thousands of new units in Hunters Point, Bayview and the surrounding area in 2021 saw just six new units added through construction, and only 15 through alterations and expansions.
But Bayview homes are cheaper than most of the rest of the city; in 2021, houses there sold for a median price of $970,000, compared with a cool $1.8 million citywide. Developers haven’t started knocking down these cheaper homes en masse, but with SF’s Black population dwindling, Walton consistently has framed the fourplex plan as an attack on Black neighborhoods.
Reached for comment, Walton’s office referred The Frisc to his previous comments about the bill.
Four’s a crowd
With all the fear of demolition, it’s easy to forget that a homeowner can add more units to a property by just bolting on one more. Under SB 9 rules, smaller add-ons were in fact a more feasible way forward than tearing down and rebuilding, according to consulting firm Century Urban, which wrote an analysis earlier this year for the Planning Department.
(Given the average SF single-family home sold in 2021 was about 1,800 square feet, conversion to four units would be quite a squeeze; but that size has quite enough room in there for, say, two units.)
SB 9 only went into effect in January, but thus far we’ve seen few homeowners take the plunge. It’s all about the money: With single-family homes selling for a median price of $1.8 million in 2021–50 percent higher than duplexes and 64 percent more than fourplexes — there’s not much financial incentive for a costly conversion.
With the average rent around $3,600 a month, multiunit buildings can generate huge revenue in the long run, but not every buyer wants to be a landlord or spend years recouping their investment.
As Century Urban noted in its SB 9 analysis, “In other words, single-family home buyers paying current prices for most homes would typically outbid a developer,” whereas big-time developers get more value out of larger multiunit buildings. Writing again about SB 9, UC Berkeley’s Terner Center For Housing Innovation expressed similar subdivision skepticism, estimating that only a fraction of eligible plots are likely to be activated for new uses.
None of this is to pooh-pooh Mandelman’s fourplex plan, which will eventually create more homes. But San Francisco and the rest of California need dozens of equivalents of this new law — maybe even hundreds — to make a real difference. Our officials need to pass, or at least consider, a bill equivalent to this every month.
Sounds crazy? Well, so is the housing crisis. Those of us buying or even (may the gods help you) renting in the city at current market rates know that crazy is in the eye of the beholder.