Layla Zulfa
San Francisco, a city synonymous with innovation and technological advancement, is grappling with one of the most severe housing affordability crises globally. Even the seismic shifts brought about by the COVID-19 pandemic did little to cool its stratospheric home prices. In a bold move to confront this persistent challenge, Mayor Daniel Lurie spearheaded a sweeping zoning reform, colloquially known as "Family Zoning," designed to dismantle long-standing prohibitions on higher density housing in numerous San Francisco neighborhoods. This landmark legislation aims to unlock a wave of new housing development by integrating local zoning changes with a series of state laws enacted over the past three years to bolster housing supply. However, this ambitious initiative has found itself caught in a "Goldilocks paradox," facing legal challenges from both sides of the housing debate: pro-housing advocates argue the reforms don’t go far enough, while opponents contend they have gone too far.
The "Family Zoning" package represents San Francisco’s strategic response to meet its state-mandated Housing Element requirements, which necessitate identifying sufficient zoning capacity for projected future growth. The city successfully adopted these permanent zoning changes ahead of the crucial January 31st deadline. This proactive measure stands in contrast to other major California cities, such as Los Angeles, which have pursued more phased approaches to comply with separate state mandates related to transit-oriented housing development.
A Critical Solution Meets an Escalating Housing Need
California’s stringent housing targets mandate that San Francisco identify the capacity to accommodate approximately 36,200 additional homes by 2031. This figure is a significant component of the city’s overarching Regional Housing Needs Allocation (RHNA) target, which calls for the creation of 82,069 homes within the same timeframe. The "Family Zoning" initiative directly addresses this mandate by permanently altering zoning regulations to raise height limits and expand housing capacity in designated areas across the city.
The vast majority of these zoning modifications are strategically concentrated along commercial corridors and transit routes, areas deemed most suitable for increased density. These rezoned districts are predominantly located on the city’s north and west sides. It is crucial to understand that the "Family Zoning" provisions do not automatically approve new construction projects. Instead, they fundamentally expand the permissible parameters within which developers can propose and seek approvals for projects under existing local regulations. Furthermore, the reform establishes a more robust local framework that allows developers to leverage state density bonus programs. These state laws offer the potential for additional housing units and significantly streamlined approval processes, thereby incentivizing faster development.
Housing supply advocates have hailed this zoning reform as a long-overdue catalyst for apartment construction. SPUR, a non-profit public policy organization that actively lobbied for the zoning changes, has highlighted how the new regulations will open up dense housing opportunities in west-side areas that have experienced minimal recent development. YIMBY Action, a prominent advocacy group, has characterized the reform as San Francisco’s most significant upzoning effort to date. Myrna Melgar, a member of the Board of Supervisors, articulated the significance of the legislation in a statement following its passage: "This is an historic effort to course-correct for decades of policy that limited housing options for a large part of San Francisco." This sentiment underscores the deep-seated nature of the housing challenges the city has faced.
Developers Respond to New Opportunities and Challenges
The transformative potential of "Family Zoning," when combined with state housing laws, is vividly illustrated by a revised development proposal in the West Portal neighborhood. This project exemplifies how local zoning reforms can synergize with state legislation, specifically citing compliance with "Family Zoning," Assembly Bill 1287, and Senate Bill 423. The proposed development is slated to replace a site currently occupied by the shuttered Empire Theater, a Goodwill store, and a Supercuts salon. Plans envision a substantial 12-story building that would yield 172 apartment units. Crucially, the proposal includes 26 deed-restricted affordable homes, addressing a critical component of housing equity. Additionally, the project incorporates approximately 7,000 square feet of ground-floor retail space, aiming to contribute to neighborhood vibrancy.
This West Portal project represents a significant evolution from its initial conception. DM Development, the developer, initially proposed a more modest nine-story building with 64 apartments. The subsequent revision and inclusion of an adjoining parcel significantly increased the site’s land area and, consequently, its development potential. While the "Family Zoning" reform did not solely drive this expansion, it established a more permissive baseline for height and density, making such ambitious plans feasible. Assembly Bill 1287, in this context, provides a "stackable" density bonus for qualifying projects, allowing for a greater number of units beyond the base zoning allowance. Senate Bill 423 further streamlines the process by offering ministerial approval for multi-family developments that meet specific criteria, including affordability, labor standards, and objective zoning requirements. This collaborative approach between local reform and state incentives is seen as a key driver for new housing creation.
The San Francisco Planning Commission has already demonstrated its responsiveness to these new regulations by approving the first "Family Zoning" project in Lone Mountain. This development, an eight-story condominium building, will comprise nine homes. In Presidio Heights, developers have filed plans for a seven-story apartment building containing 49 homes. This project utilizes "Housing Choice–San Francisco," the city’s local density-bonus program, further illustrating the integration of various policy tools. Early project filings in other diverse neighborhoods such as Cow Hollow, Laurel Heights, and the Inner Sunset collectively indicate that developers are actively exploring and testing the boundaries of these new development rules across a spectrum of neighborhood typologies.
Discontent and Legal Battles Emerge
Despite the optimism from housing advocates and the proactive engagement from developers, the effects of "Family Zoning" remain a subject of intense dispute. Ted Egan, Chief Economist for the City and County of San Francisco, projected a substantial increase in the city’s housing supply as a direct result of the zoning changes. His analysis further forecast broadly positive impacts on housing prices and the wider economy, with a high-growth scenario estimating the addition of 14,646 new homes by 2045.
However, this projection falls short of the city’s state-mandated planning target, according to YIMBY Law. This discrepancy served as the basis for a lawsuit filed in February against the city by YIMBY Law, in conjunction with the California Housing Defense Fund and Californians for Homeownership. This legal challenge underscores the sentiment among some pro-housing groups that the reforms, while significant, do not go far enough to adequately address the scale of the housing crisis.
Conversely, a coalition of neighborhood groups, including Neighborhoods United SF, Small Business Forward, and a group of concerned residents, filed their own lawsuit against San Francisco in January. Their challenge centers on the city’s environmental review process, specifically alleging improper reliance on an addendum to the 2022 Housing Element environmental report under the California Environmental Quality Act (CEQA) of 1970. The plaintiffs are demanding a more comprehensive review before the zoning changes are fully implemented. Their petition cites potential adverse effects on tenants, small businesses, existing infrastructure, and historic resources, seeking to invalidate the approvals and compel further CEQA review. This case remains pending, with the zoning changes currently in effect while the litigation unfolds.
CEQA lawsuits have become a prevalent tactic employed by opponents of housing development and zoning reforms across California. The challenges faced by San Francisco’s "Family Zoning" are not unique. In a broader effort to curb such litigation, California lawmakers are actively pursuing legislative measures. Two bills, awaiting Governor Gavin Newsom’s decision, aim to further restrict the use of CEQA challenges against housing projects. Senate Bill 344 seeks to shield the updated environmental review for San Diego’s nearly $4 billion Midway Rising redevelopment from further CEQA challenges, a project that has been significantly delayed by such lawsuits. Senate Bill 958, if enacted, would prevent building height from being considered a significant environmental impact for qualifying non-industrial infill projects statewide. Governor Newsom has until September 30th to sign, veto, or allow these bills to become law without his signature. The outcome of these legislative efforts could profoundly influence the legal tools available to those who oppose housing development and citywide rezoning initiatives throughout California, potentially reshaping the landscape of urban development for years to come.
