Rich Family Zoning Plan delayed again as data shows it will not lower rents

Thanks to some last-minute organizing, the Land Use and Transportation Committee delayed approving a measure that would have threatened the city’s limits on chain stores in neighborhood commercial districts.

The bill, by Mayor Daniel Lurie, was flying under the radar until 48hills began making calls about it over the weekend and reported on it Sunday night.

Among those who contacted the supes to oppose the plan was former Board President Matt Gonzalez, who wrote the ordinance in 2004 limiting what the city calls “formula retail” in neighborhoods. From his letter:

While the legislation purports to allow flexibility for uses in historic buildings it would have the effect of reversing the formula retail prohibitions in the Hayes Valley and North Beach Neighborhood Commercial Districts and eliminating Conditional Use requirements for Formula Retail in the city’s other Neighborhood Commercial Districts.

In 2004 I sponsored Ordinance 62-04 (File No. 031501) to amend the Planning Code by adding Section 703.3 to define formula retail uses and prohibit formula retail uses in the Hayes-Gough Neighborhood Commercial District. Subsequently legislation was passed in 2005 to prohibit formula retail uses in North Beach and then in 2007 the voters passed Proposition G, requiring Conditional Use Authorization in most neighborhood commercial districts citywide

A representative of the Mayor’s Office appeared at the committee to request a continuance to make some changes. If it comes back in mostly the same form, it’s going to be a huge fight.

To nobody’s surprise, the committee also continued the Rich Family Zoning Plan for another two weeks, after several votes on amendments. Sups. Myrna Melgar and Chyanne Chen both voted in favor of amendments that seek to give at least some protections to small businesses and tenants; Sup. Bilal Mahmood opposed two of them, saying that they might limit the capacity for new housing development.

Ted Egan, the city’s economist, presented his report at the hearing, and under questioning, a few things became clear. The mayor’s proposal doesn’t include any specific plans for affordable housing; it’s all about the private market. Under the state’s mandates, San Francisco is supposed to find space and money for more than 40,000 affordable units—but that will cost $19 billion, and nobody at any level of government has any clue where the money will come from. It clearly won’t come from the modest affordable housing fees on luxury developers.

Chen brought up what seems to me the essence of the issue: Egan’s report shows that any decrease in housing costs caused by higher density will be minor, at best. A typical two-bedroom apartment costs $3,700 a month, Chen said—and under the economic analysis, if Lurie gets his way, that might drop in five years by $92 to $155.

“I’m not very impressed,” Chen said. “The price we are being asked to pay, the demolition of existing housing and small businesses” is hardly worth the tiny price impact.

The entire hearing took place under the cloud of laws passed by state Sen. Scott Wiener, former Sen. Nancy Skinner, and their Yimby allies that threaten the city’s ability to regulate any new housing and impose what are mathematically impossible mandates.

Melger has an amendment, accepted by the mayor, that would exempt rent-controlled buildings of three or more units from demolition. The Planning Department says that would not have much of an impact on the capacity of the city to meet the state’s goals. Sup. Connie Chan wants to protect all rent-controlled housing—and the impact of that has not been determined.

Chen has a comprehensive bill to limit residential demolitions and require that developers pay relocation fees for all tenants; that will come before the Planning Commission Thursday/6.

But the Yimby state laws allow for a lot more demolition of existing housing, “and there is nothing this plan can do about that,” Melgar said.

Wiener’s name came up repeatedly at the hearing, suggesting that some of the political focus is moving to what Sacramento has wrought. For most of the past two years, as the city has struggled with these impossible mandates, Wiener has gotten a pass from the news media. Now, as he prepares a run for Congress, the voters are starting to learn that the demolition of existing housing, the displacement of small businesses, and all the other impacts of blanked upzoning are as much his fault as any local official.

“Your authority has been stripped by Scott Wiener,” Lori Brooke, a founder of Neighborhoods United San Francisco, told the committee. “Blanket upzoning in a dense city does not create affordability.”

Nick Ferris, president of the Telegraph Hill Dwellers, noted that the upzoning measure has no plan to fund affordable housing, and that state estimates now say the city’s population will decline in the next decade. “Why are we letting Scott Wiener’s mandates” drive local planning, he asked.

The Race and Equity in All Planning Coalition sent a letter opposing the zoning plan:

REP-SF strongly opposes Mayor Lurie’s upzoning plan, which does not serve families, will make rent more expensive, will increase the displacement of tenants and small businesses, and will make it impossible for San Francisco to develop the affordable housing we desperately need.

“We urge the Board’s Land Use Committee to reject the Mayor’s displacement plan, and instead invest in a real community plan that protects tenants, supports small businesses, and focuses on truly affordable housing for families, seniors, and working people,” saidJeantelle Laberinto of the REP-SF coalition. “We appreciate Supervisors Chan and Chen’s leadership in introducing critical amendments to strengthen tenant protections, prioritize affordable housing, support small businesses, create real family-sized housing, and ensure sustainable, affordable development.”

“If we don’t exempt all rent-controlled buildings from upzoning, we are putting a target on the head of every tenant who calls those units home, and we would be asking investors to bring in a wave of displacement worse than the city has seen in the last 50 years,” said Fred Sherburn-Zimmer, Director of Policy and Campaigns for Housing Rights Committee of SF, a member of REP-SF and SFADC. “Tenant groups are asking for the City to exempt all rent-controlled housing from its upzoning plan and to pass tenant protections in buildings covered by the state upzoning. Tenant groups continue to pressure state politicians to expand protections of tenants under upzoning, including removing the Ellis Act.”

“The Mayor’s upzoning plan creates new threats to small businesses that are already struggling to survive. It marks our businesses for demolition, and it will incentivize the development of overpriced luxury housing that will be unaffordable for small business owners and workers,” said Justin Dolezal, co-founder of Small Business Forward, a member of REP-SF. “We strongly support Supervisor Chan’s proposed amendment to require developers to pay impact fees, including a nexus study that will allow us to require developers to pay into a small business relocation assistance fund for displaced commercial tenants.”

“Despite the plan being called the ‘Family Zoning Plan,’ it does not have the interest, nor the input, of our youth and working families in mind. The Mayor uses youth and families as a cover, while planning to price us out and demolish our rent-controlled homes, while prioritizing market-rate development over affordable housing for low-income families,” saidEmily Mock, lead youth organizer at the Chinese Progressive Association, a member of REP-SF.

In a few weeks, this will come before the full board. It will be a key test for the mayor—but also, it appears, for Wiener, who will have to defend his policies to both the progressives on the East Side, who oppose a plan that relies entirely on luxury housing, and more conservative voters on the West Side, who increasingly oppose the zoning plan.

If he winds up with a West Side opponent who has progressive credibility, he’s potentially in for a serious race for a seat he thought was his to claim.