What’s the Plan? Planning Director John Rahiam visits Vanguard

Going up and up in San Francisco

“This is an extraordinary moment in San Francisco,”  John Rahaim, Planning Director for San Francisco said in his visit to Vanguard Properties last Wednesday. And it’s not just him, Portland’s Planning Director just moved to San Francisco as he wanted to be part of “something extraordinary.”

Rahaim said that there are currently 6,000 residential units under construction in the City and another 4000-5000 that are fully-permitted that can or will get started soon. He said the peak of new project applications was in December and now that deluge is subsiding. What’s setting this recent boom apart from others both past and across the nation is that commercial space growth has also blossomed with nearly 3,000,000 sqft of new office space being built currently. Next year, the department expects to see 10,000 new units of housing being built, with many of those units being rental with 1/4 of those being Below Market Rate units.And bear in mind there are about 40,000 units that are entitled to be built.

“It’s an extraordinary boom on both sides,” he said. Rahaim said most cities only see surges like San Francisco’s in either residential or commercial, not both. The only notable exception to this rule is Seattle. But that growth is mainly being pushed by Amazon whereas San Francisco’s is comprised of several large and small players.

“But there’s a bigger shift going on here,” Rahaim said. While he acknowledged what most people know — that the tech sector is the engine driving commercial growth — he also elaborated on what he thought was driving the trends he saw that are at the root of the City’s broader growth.

1. The Baby Boomers are moving into cities to be close to culture and transit with walkability being a major concern;
2. The economy at large is growing — especially tech-related sectors;
3. A more fundamental change is taking place with younger generations who are adamently avoiding the suburbs. These folks are spending money on bikes and gadgets instead of cars. He cited data that shows the average number of miles driven in the U.S. is actually dropping.

While this may mean more bike lanes in the future, the long term impact of these trends on San Francisco may well be far more profound. True or not, these trends are important as they’re guiding current planning policies. Rahaim elaborated on his comments to Vanguard on several topics:

BYE-BYE CALTRAIN?

One of the long-term ideas the City has been studying is utilizing the 24 acres south of SOMA that separates it from Dogpatch and Mission Bay — otherwise known as the Caltrain rail yards — for housing. As Rahaim said himself it seems “crazy” that some of the most valuable land in the city is devoted to storing trains. Whether the idea comes to pass will depend on the alignment of the high speed rail lines coming and how much the state will charge for the land. Specifically, the idea would to have I-280 stop at 16th Street and tear it down; 280 itself takes up 5-6 acres of land.

THE BIGGEST ISSUE IS AFFORDABILITY FOR A MIDDLE CLASS

We’ve all read and heard about the “acute” shortage of affordable housing in the City but one segment Rahaim said is getting attention is the true middle class. In fact, only Manhattan rivals San Francisco in terms of expense according to Rahaim. Combined with Mayor Lee’s stated goal of adding 30,000 units in the next 5 years, which will be a feat considering it will be require that triple the development that’s been taking place over the past year in the City take place from now until 2019. The City’s levers are limited however. Current city laws require new developers set aside 12% of units in new construction for buyers who make make 80% of median income for the Bay Area, which is $75,000 for a single person and $95,000 for a family of four. One Change Rahaim thought possible: change that balance whereby developers could set aside 20% of units for folks who earn up to 120% of median income. Rahaim said the city was also exploring other options including direct subsidies and identify surplus city land that could be used to build housing.

THE LAW ABOUT LEGAL ILLEGAL INLAW UNITS

The absurdity goes on in the debate of legalizing illegal in-law units with competing ideas warping what policymakers can do. Homeowners who have an unwarranted or ‘illegal’ unit in their home that is rented out always had the option to ‘remove’ that unit from the rental market if they gave the tenants proper notice, pay them any mandated relocation fees and procure the proper permit allowing them to do displace the tenant. Otherwise the building would be subject to the Rent Ordinance (rent control and eviction control) and a tenant could possibly live there long enough to gain protected status. But starting with David Chiu’s legislation at the Board of Supervisors and with Mayoral executive order to the Planning and Building departments this practice has stopped. Instead, the policy presumption has turned to one where the city agencies will “do what they can” to legalize those units instead, Rahaim said. The only exceptions Rahaim noted was that updating some units to Code or to proper standards would be cost-prohibitive.  Rahaim said that this task is tricky and that trying to find a balance may even require going to the Planning Commission itself to determine what’s legal for your in-law and what’s not and everything in between. And to make matters more confusing the only exception to this meandering process is demonstrating a unit is ‘unaffordable’ otherwise at being worth more $1.4M, which would only require staff level approval.

Compare and contrast that the policy change conflicts with Chiu’s other legislative push to legalize AirBnB and VRBO that would sanction the practice of renting out units so long as a unit isn’t used solely as a rental unit — how are you going to police that one?!