Expanding Housing Choice

Expanding Housing Choice is a set of changes to San Francisco’s restrictive zoning rules. These changes are required by state law and focus on property in the Western and Northern parts of San Francisco, specifically in and near the areas designated by the state as Housing Opportunity Areas ^[1].

^[1] This project is a required implementation action of the City’s Housing Element.

Expanding Housing Choice involves changes to San Francisco's zoning rules to accommodate new housing, increase housing affordability, and help advance racial and social equity.

While San Francisco has built more housing, including affordable housing, in recent years than many other Bay Area cities, housing production in both the City and the broader Bay Area have not kept pace with population and economic growth over the past several decades. This shortage of housing has caused home prices to soar in recent decades, and many residents have difficulties making ends meet and are vulnerable to being priced out of San Francisco and California. The state’s increased housing requirements mean that every jurisdiction will need to build more to address current needs and these long-term trends. Under these requirements, San Francisco needs to build approximately 82,000 housing units affordable to different income levels over the next eight years (2023-2031), or about 10,000 units annually – this is known as our Regional Housing Needs Allocation (RHNA, commonly pronounced “Ree-Na”). This figure is almost three times higher than the City’s requirement in the previous Housing Element (2014-2022).

The proposed map, including prior drafts published during the Housing Element and rezoning outreach are available at Expanding Housing Choice.

This project is a required implementation action of the City’s Housing Element. Under state law, the rezoning must be adopted by January 2026. San Francisco needs to build approximately 82,000 housing units affordable to different income levels over the next eight years (2023-2031), or about 10,000 units annually – this is known as our Regional Housing Needs Allocation (RHNA, commonly pronounced “Ree-Na”).

To promote inclusive communities and address housing segregation, the state mandates that a substantial portion of new housing, including affordable housing, be constructed in neighborhoods with better access to economic opportunities and essential services, such as public transit, parks, shops, and community facilities. These neighborhoods are primarily concentrated in the northern and western parts of the City. In addition to proximity to transportation and services, the rezoning is looking at the areas likeliest to produce housing, particularly those streets with vacant commercial buildings, parking lots, while considering ways to increase ability to add multi-family housing in surrounding areas. The proposed map continues to focus change on major transit routes, commercial streets, and other major thoroughfares and hubs of activity. Much of the eastern and southern parts of San Francisco have already been rezoned in the past. These areas can and have accommodated most of the city’s new housing in the past two decades. We expect to continue to see tens of thousands of new housing units in these areas.

Like many major American cities, San Francisco has a complicated and inexcusable history with urban development that reverberates to this day, particularly within our Priority Equity Communities (areas with a higher density of vulnerable populations, such as people of color, seniors, youth, people with disabilities, linguistically isolated households, and people living in poverty or unemployed).

The current rezoning program focuses on western and northern San Francisco where restrictive zoning polices currently make it challenging to build new housing, particularly multi-family structures that tend to be more affordable and provide diverse housing options for people in all stages of their lives. Over the past 15 years, only 10% of new housing in the City was built in these areas, even though they cover over 50% of the City’s land. In contrast, most developments in recent years have been concentrated in eastern San Francisco where mid– and large-sized developments are allowed. State and City policies require us to add housing in the western and northern areas of the city so that we can create housing opportunities for low- and moderate-income households and start to reverse historic patterns of economic and racial segregation.

Changes to our zoning rules are required by state law to maintain certification for our Housing Element. Without compliant rezoning legislation, San Francisco risks losing certification for the Housing Element, which could lead to a loss of vital state grants that the City relies on. These grants total hundreds of millions of dollars, used to build affordable housing, pave city streets, and keep MUNI and other key City services running. Failure to comply could also lead to lawsuits and state-imposed penalties, including fines and “builder’s remedy” projects. That means that the City would lose the ability to apply any kind of zoning rules (including today’s height, density, and setback rules), apart from basic life-safety building codes. In other words, the City would lose local control over the housing it currently approves, allowing the state to approve many kinds of developer projects with few, if any, limits. See SF Housing Policy and Practice Review.

Other California cities are facing this problem now because they don’t have certified Housing Elements or risk losing their certification for not completing actions they committed to in their Housing Elements. A significant number of cities are facing large “builder’s remedy” projects across the state, including cities such as Redondo Beach and Santa Monica to Menlo Park and Palo Alto. Just in the past two months, we’ve seen a series of dramatic legal rulings and settlements, including a Beverly Hills case where a judge suspended the city’s permitting power because the city didn’t have a valid housing element. Similarly, in the city of Davis – which was also without a certified Housing Element - was forced to approve a project that violated zoning rules and would have otherwise required voter approval.

The restrictions on the number of homes that can be built on most of the city’s residential land date back to the 1970s, when San Francisco’s housing context was substantially different. The city had lost population from 1950 to 1980 as many middle- and high-income households, who were typically white, moved to rapidly growing suburban communities of single-family homes. Regional housing production substantially exceeded today's levels, and housing costs were lower relative to incomes. Zoning changes in the 1970s that prohibited multi-family housing indirectly institutionalized racial and social exclusion in more affluent and predominantly white San Francisco neighborhoods. These types of practices and regulations are known as exclusionary zoning.

Expanding Housing Choice is a collaborative effort with City departments to align housing growth with essential infrastructure and services for healthy, connected, and resilient communities. New housing will be added gradually, and City agencies are planning to enhance community facilities to meet the pace of growth. Key infrastructure and service agencies, like SFMTA, SFPUC, Rec Park, and SFUSD, routinely maintain and update their own long-range infrastructure plans informed by population and housing growth projections.

The rezoning effort builds on 2+ years of citywide engagement on the Housing Element. This outreach aims to build community understanding of the purpose, impact, and benefits of rezoning. Outreach also aims to ensure that community members can participate in shaping the rezoning proposal through various opportunities, such as open houses, surveys, focus groups, briefings with neighborhood groups, and other events. It’s important for the Planning Department to engage in ways that are approachable to all people in the communities in which they live.

The Department offered community organizations and neighborhood groups opportunities to meet with project staff, learn more about the project, and have more in-depth discussions around community hopes, concerns, and priorities related to the rezoning.

Outreach continues to target several types of audiences:

• People facing the greatest levels of housing insecurity and with higher barriers to participation were recruited for housing education workshops, focus groups, and stakeholder interviews in addition to all general public events;
• The general public, who was invited to participate in open houses, online surveys, webinars, and informational hearings;
• Organized groups such as neighborhood associations and advocacy organizations who signed up for office hours or were part of Community Conversations (e.g. a presentation on the project followed by discussion);
• Sectors providing specialized expertise, such as social service organizations and nonprofits and professionals from the architecture and housing development community; and,
• Decision-makers and government advisory bodies, including district Supervisors, the Planning Commission, Historic Preservation Commission, Youth Commission, Small Business Commission, and Cultural Districts.

Where feasible, demographic information about participants was collected to ensure that feedback was broadly representative of San Francisco. In partnership with community-based organizations, outreach efforts focused on people facing the greatest levels of housing insecurity.

San Francisco, like many cities in California and the United States, acknowledges the discriminatory effects of past zoning policies on Black, American Indian, Asian, and Latino/e/x communities, as well as low-income people. Throughout the 20th century, cities often used zoning regulations, specifically by limiting multi-family housing, to maintain segregation in wealthy, predominantly white neighborhoods, contributing to systemic racism and discrimination.

The San Francisco rezoning initiative aims to address historical injustices by increasing affordable housing options in areas where Black, American Indian, Asian, and Latino/e/x communities, as well as low-income individuals, were historically excluded. It seeks to provide better access to affordable housing for families of all income levels, especially those who have faced housing discrimination like redlining. The strategy includes measures to protect current tenants and small businesses while promoting feasible housing solutions for all income levels, with a specific focus on developing housing that is more affordable for low- and middle-income workers and families.

Zoning is an important part of creating sustainable and equitable communities that increase access to economic activity and allow new homes and businesses. Expanding Housing Choice focuses on increasing housing capacity in the Housing Opportunity Area, on streets with commercial and transit where development is most likely to happen. Zoning changes do not force new developments to happen. The City generally does not directly build housing, and new housing mostly depends on property owners and economic conditions for construction.

No, changes to existing buildings would not be required when zoning is updated. Owners would maintain the same discretion and control over their property that they have today.

New zoning would not force any changes to historic buildings. Listed historic resources will continue to be subject to certain protections and the rezoning policies include policies meant to encourage or require continued preservation of designated historic resources. The City has started work on the San Francisco Citywide Cultural Resources Survey (SF Survey), a multi-year effort to protect our cultural heritage by identifying and documenting places and resources of cultural, historical, and architectural importance to San Francisco’s diverse communities.

Buildings identified as cultural resources will be subject to review and requirements intended to preserve cultural heritage even as new housing is added. SF Survey will produce information on many buildings that will then be newly listed among the register of local landmarks and other designated buildings subject to heightened scrutiny.

Zoning changes in the Housing Opportunity Areas will facilitate the development of 100% affordable housing development by increasing height and density to make more affordable housing projects financially feasible. The City currently requires mid-sized and larger housing developments (10+ units) to include 15% of affordable housing units, also known as “inclusionary housing” and “below-market rate (BMR)”. Current rules also allow projects to meet this requirement through paying a fee (equivalent to 20% of units) which is an important funding source the city uses to build projects with 100% affordable housing. The proposed Local Program would let projects paying the fee be eligible for the zoning benefits (as opposed to state bonus programs which do not allow this option). Additionally, in March, San Francisco Voters approved Proposition A that will allocate an additional 300 million dollars to fund affordable housing development.

Beyond subsidized affordable housing and inclusionary housing, the rezoning and related efforts will increase the variety and types of housing available, adding fourplexes, accessory dwelling units (ADUs), townhomes, and mid-sized multi-family buildings, all of which tend to be more affordable than single-family homes. Studies show that relaxing land use regulations such as limits to density and height, will increase the housing supply and stabilize or reduce rents and home prices across the market. Thes ares the trend we are seeing in Sacramento and Minneapolis. Sacramento, for example, upzoned in key corridors in conjunction with other reforms such as reducing development fees and transitioning to ministerial approval processes. Today, while the population continues to grow quickly, it is building more housing per capita than any other region in California, and the rents are falling faster than any other large city in the state ^[1].

Additionally, many studies conclude that market-rate housing development causes rents in nearby rental buildings to slightly decrease.

^[1] Sacramento found a solution to California affordable housing crisis (sfchronicle.com)

The rezoning aims to create a greater variety of housing options and more affordable housing choices so residents can live in the communities they choose. This means supporting current residents while also embracing new residents and development.

The rezoning aims to achieve this goal by permitting additional residential options along our streets with commercial and transit and key sites identified in the 2022 Housing Element. These are generally in neighborhoods that have not experienced significant housing growth in the past two decades. Fulfilling this policy action aims to alleviate some of the market pressures on existing housing while creating capacity for new neighbors to our community.

Studies show that gentrification and displacement are worsened by inadequate investment and insufficient housing production, leading to more intense competition for limited housing that drives up prices.

The latest census data from 2022, shows the rental vacancy rate is approximately 5.5% and homeownership vacancy is 0.8%, which are both less than the national average.

Recent studies indicate that in cities like San Francisco, where there are fewer vacant homes available for rent or sale and housing costs are extremely high, more individuals are susceptible to homelessness. This poses significant challenges, especially for those with low incomes. Research recommends promoting the construction of new homes across various parts of the city through initiatives such as rezoning. Go deeper: Quarterly Residential Vacancies and Homeownership, Fourth Quarter 2023

In a typical housing market, at least 5% of units are expected to be vacant and available for rent or sale at any given time, and a rate between 5-10% is not unusual nationally. This level is important to allow people the ability to move, find available housing in a range of neighborhoods and types of housing, and ensure low availability doesn’t put undue pressure to raise prices. And it is expected for units and buildings to undergo renovation and maintenance over time as buildings age. Higher than typical vacancy rates matter, and the voter-approved vacancy tax is one way in which the City is addressing the issue.

While efforts to encourage landlords to rent out vacant units are ever evolving and important, they will not adequately address the scale of our present and future housing needs or fulfill the commitments outlined in the 2022 Housing Element. State law mandates rezoning to address San Francisco's Regional Housing Needs Allocation shortfall, which is 36,200 units. The State does not consider strategies of relying on existing homes sufficient to alleviate the housing shortage or to meet our obligation.

San Francisco, like many cities, is facing high office vacancy rates since the pandemic. The City is actively encouraging the conversion of office buildings into housing and has changed our zoning to facilitate this process. However, conversions are extraordinarily complex and expensive, requiring extensive renovations while facing the same challenges as more simple housing projects such as high construction costs. Moreover, most office buildings are not physically suitable for conversion due to their layout and lack of residential necessities like windows and ventilation. Go deeper: How housing is developed

As the rezoning moves through the adoption process, zoning proposals and related topics will be reviewed at hearings at the Planning Commission and the Board of Supervisors; each of these venues is open to the public and provides space for participation. Sign up here to receive updates, as well as notifications about how to get involved.

Yes! The feedback the City receives has - and will continue to - directly inform zoning proposals. Over the last several years of outreach, San Franciscans shared perspectives from across the spectrum along with personal stories and experiences that continue to resonate with many community members and decision makers.

For a detailed overview of how feedback has shaped the process to date, please review Phase 1 and Phase 2 Community Engagement Summary (link forthcoming) and watch one on one interviews with community members.