If SF’s Housing Plan Falls Short, One ‘Remedy’ Is a State Crackdown. Just Ask Santa Monica

Thousands of homes in high-rise buildings get a quick green light after regulators call the LA beach town’s bluff.

Adam Brinklow
The Frisc

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Apartment buildings taller than four stories were once allowed all over SF — and could be again if officials carry out new proposals. (Alex Lash)

Unless you’re giving dry January a whirl, January 31 isn’t typically a date to circle on the calendar. This one coming up in 2023, however, has San Francisco’s housing watchers counting the days.

That’s because Jan. 31 is the deadline for elected leaders to submit a plan for 82,000 new homes this decade that satisfies state regulators who are demanding that SF, like all other California locales, start building a lot more.

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If cities miss the deadline, or if regulators find the plan wanting, a reckoning could soon come in the form of a 30-plus year old law. It’s almost never been used, but it has the power to give housing builders a nearly unprecedented green light.

If the SF Planning Department’s plan (or Housing Element) doesn’t get Board of Supervisors approval next month or runs afoul of state regulators — a possibility, based on the state’s wholesale rejection of previous efforts — one penalty the state could levy is the so-called Builder’s Remedy.

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It may sound like a trendy bar in Hayes Valley, but it’s in fact a sudden and immediate erasure of nearly all local zoning laws. That would not be the only punishment SF risks: The city could face state lawsuits and lose funding for affordable housing and transportation. But while those penalties would do no one any good, some local builders and housing advocates wouldn’t mind the city getting whacked over the head with the Builder’s Remedy.

“The fact that we’re even talking about this is an outright win,” according to Sam Moss, director of Mission Housing Development Corp. “A lot of people who want to build but always had to worry about old lady Karen down the block” and “people who have had their souls crushed by the process” will finally get a shot at their dream project, he says.

To understand why, we only have to look south to Santa Monica, the tony town between Los Angeles and the Pacific Ocean, where developers suddenly found themselves with a golden ticket that would make Willy Wonka fans giggle into their top hats.

‘Happy people in a happy city’

Even though the Builder’s Remedy has only recently made cities like San Francisco sweat over housing plans, it has existed since 1990, buried in a state law.

Cities that shunned housing production mandates could be forced to accept the state’s “remedy” of green-lighting all new housing with at least 20 percent below market-rate units, with no restrictions on height or density.

For most of this time, cities ignored the threat, which the state had no means to enforce. But recent changes — particularly SB 828, a bill by state Senator Scott Wiener that went largely unnoticed at the time — put the squeeze on construction-phobic municipalities.

The Builder’s Remedy has always been an untested hypothetical, but then Santa Monica found itself subject to a brief but exciting trial by fire. For about three weeks in October and November, the state said the coastal town was delinquent on its housing plan and put the remedy in place.

The result was startling: During that tiny open window, developers fast-tracked 16 projects totaling more than 4,500 new units, some of them soaring up to heights of 15 stories.

Almost all of these (14 of 16) came from just one developer, WS Communities, which was apparently quite aware that this opportunity might never come up again.

Not all of these are new. The 51-unit project at 2901 Santa Monica Blvd., for example, got through planning approval previously but in the current market hadn’t started construction. “A lot of these don’t pencil out anymore,” David Rand, a lawyer representing WSC, tells The Frisc. “The Builder’s Remedy allows us to unlock more density,” which makes projects more economically feasible.

Imagine San Francisco started approving 17,000 new homes each week, scattering 15-story high-rises across the central and western districts like magic beans waiting to sprout into the clouds.

Santa Monica’s motto declares that it’s a “happy city” full of “happy people,” but many people are unhappy about the sudden upsurge of new housing, with one incensed letter writer calling it no less than “a pathway to authoritarianism” and “Miamification.”

San Francisco is much more populous than Santa Monica and has built many more new homes in recent years. (The census estimates that Santa Monica has fewer than 53,000 homes and added only about 5,000 between 2011 and 2020.) Nevertheless, they have much in common, both being relatively wealthy job centers with an entrenched homeowner class who like things just the way they are.

To make this an apples-to-apples comparison, imagine San Francisco started approving 17,000 new homes a week, scattering 15-story high-rises across the central and western districts like magic beans waiting to sprout into the clouds, and you’ll have an idea of how big of a change this could be.

What’s more, San Francisco has its own distinction: Housing regulators tabbed the city’s housing development process as the most onerous in the state and put it on notice earlier this year.

So if the state comes in and blows that status quo to pieces, will we see many thousands of new homes surging too?

Come and face the strange …

With the clock ticking, there are reasons to worry that SF won’t meet the regulators’ standards, or even their Jan. 31 deadline. The aforementioned state review is one; another is the Planning Department’s recent confession that it had misunderstood the deadline for the city’s 82,000-home plan.

And when the draft plan finally got to the Board of Supervisors for a full hearing before Thanksgiving, the tenor of the debate was less about confidence in getting it done, and more akin to a five-hour existential crisis. (Editor’s note: The Frisc live-tweeted that entire Megahearing here.)

With the Builder’s Remedy more than a faint possibility, you’d imagine developers licking their chops like the wolf in a Tex Avery cartoon.

No developer we spoke to would comment on the record about potential permitting plans, although Mission Housing’s Moss says he knows of “multiple affordable and market-rate developers that are well into their research on using the Builder’s Remedy.”

Even with a queasy economy right now, Sarah Dennis-Phillips, director for the developer Tishman Speyer, tells The Frisc that “down times” like these may actually be ideal for this stage of developing.

“If you are in the real-estate business, you generally don’t just stop cold during poorer economic times,” according to Dennis-Phillips, who is also a director at SPUR. “Entitlement” — that is, all the legwork that leads to approval and eventually construction — “is a good thing to do in the downtime if you can cover the soft costs” like administrative fees. And if the state steps in and allows you to suddenly cram years worth of entitlement into a few weeks, well, you don’t pass that up lightly.

To build 82,000 new homes this decade, SF will need to change zoning rules in the Sunset and other low-rise neighborhoods. (Mark Hogan/CC)

Still, housing enthusiasts caution that the Builder’s Remedy is no cure-all: “We definitely are encouraging all our members to look at the Builder’s Remedy and want them to submit projects if they think it can get built,” Corey Smith of the YIMBY group Housing Action Coalition tells The Frisc, but “it’s not a panacea on its own; zoning is one of many restrictive factors in SF. I think most developers are proceeding with caution right now.”

For example, the Builder’s Remedy does not remove California’s dreaded environmental review (CEQA) from the process. This means developers hazard a significant chance of failure on projects; still, if you normally have to jump through four rings of fire and someone comes along and extinguishes two, the risk-reward calculation becomes less intimidating.

Deep pockets and dental work

There’s one more bugbear to consider: Because it’s rarely used, the Builder’s Remedy has never faced a robust legal challenge. UCLA’s Lewis Center calls it “poorly drafted and confusing” and advises developers to “hire a crack land-use attorney” in case a Builder’s Remedy project ends up in court.

Where smaller cities like Santa Monica probably lack funds and willpower to sue the state over its right to seize housing control, housing activist Kevin Burke, board member for the YIMBY group East Bay For Everyone, says “of all jurisdictions, SF has the deepest pockets and the most inclination to tie up projects in legal hell.”

Housing hawks may welcome the challenge. “Nobody benefits when the rules are not clear,” says California YIMBY spokesperson Matthew Lewis. “If it turns out the [remedy] has no teeth, we can go to the legislature and have them do some dental work.”

The past two decades, SF’s southern, western and northern neighborhoods have seen very little new housing, affordable or otherwise, as these two maps show. (SFPlanning)

Change is coming,” Scott Wiener tweeted in 2021, after he and other lawmakers reformed California’s housing requirements. His prophecy has come true: To dodge the Builder’s Remedy or other punishments, San Francisco must follow through on a plan to densify quasi-suburban neighborhoods like the Marina, Richmond, Sunset, and others in ways no one could have predicted 10 years ago.

If city leaders drop the ball and the Builder’s Remedy goes into effect, nobody knows how quickly developers will jump into the fray, or how long a court challenge will last. The longer they have the option, though, the greater the temptation to push through thousands or tens of thousands of new homes will weigh on them.

The point is, no scenario exists in which things quietly go back to the way they’ve always been. The fight is here, it’s going to be loud, and by the time it stops ringing in our ears, we may be living in a very different San Francisco.

Adam Brinklow is a staff writer for The Frisc, covering housing and development. He’s lived and worked in San Francisco for over 15 years.

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