No, San Francisco Did Not Eliminate Single-Family

Americans have grown numb, I think, to the claims that a post on the internet is “fake news” or “misinformation.” The words have just become another way of saying, “I don’t want to believe that’s true, whether it is or not.” However, one doesn’t need to be a philosopher to demonstrate that some things are true or false. San Francisco has not “just ended single family zoning” as a headline in Planetizen claims. What just happened in San Francisco is more complicated and sheds light not just on the media but on how the Board of Supervisors there remains unable to do anything to make housing less expensive because they worry about someone making a profit. The same is true of efforts by the California legislature to incentivize more housing.

First, the story in Planetizen is a summary of a paywalled post at the San Francisco Chronicle. The summary covers the passage of legislation on June 28^th that changes single-family zones in San Francisco. In spite of its misleading headline, the post does a pretty good job of summarizing the Chronicle story and the issue.

Here is the opening paragraph of the Planetizen post:

“’San Francisco plans to get rid of single-family zoning and instead allow fourplexes in every neighborhood and six-unit homes on all corner lots, a change long sought by housing development advocates,’ reports J.D. Morris in a paywalled article for the San Francisco Chronicle.”

So far so good, right? But there’s a catch. Morris notes that there is skepticism about the legislation because it seems flummox state legislation passed last year, SB 9, which was intended to allow the subdivision of one single-family lot into two. That detail is missing from the story, and I’ll get into SB 9 later. Other pro-development advocates pointed out that there were too many barriers to actually building 4 houses on a lot and six on a corner lot. What barriers exactly? The Planetizen summary doesn’t say, but again, we’ll get to that later.

Finally, the Planetizen post quotes San Francisco’s planning director, Richard Hillis, saying the effect of the ordinance will be “fairly small” although it is a, “pretty big step.” The sponsor of the legislation, Supervisor Rafael Mandelman adds that he’s frustrated that “a measure that was already modest and incremental to begin with ended up even more so.”

Did San Francisco end single-family zoning or not?

It took me a while to dig through San Francisco’s Board of Supervisor site and the State Legislature’s website to find out what really happened. But here it is. Last year Supervisor Mandelman and California Senate Majority Leader Toni Atkins both introduced legislation to address single-family zoning. Mandelman’s, of course, would only impact San Francisco, allowing more density in single-family zones. Atkin’s SB 9 was intended to do essentially the same thing but in cities all over the state, including San Francisco.

Atkin’s legislation passed (you can read the full text here), creating an allowance for single-family lots to be sub-divided to create additional housing units. The result of SB 9 is summarized this way by California YIMBY at their website,

• It allows homeowners in most areas around the state to divide their property into two lots, thereby increasing opportunities for homeownership in their neighborhood; and
• It allows two homes to be built on each of those lots, with the effect of legalizing fourplexes in areas that previously only allowed one home.
• SB 9 contains important protections against the displacement of existing tenants.

Shouldn’t this lead to a boom in new housing construction in zones previously off limits to new housing? No, it won’t. To understand why, you have to read the fine print offered by another explainer from the legislature.

“Recent amendments require a local agency to impose an owner occupancy requirement as a condition of a homeowner receiving a ministerial lot split. This bill also prohibits the development of small subdivisions and prohibits ministerial lot splits on adjacent parcels by the same individual to prevent investor speculation. In fact, allowing for more neighborhood scale housing in California’s communities actually curbs the market power of institutional investors. SB 9 prevents profiteers from evicting or displacing tenants by excluding properties where a tenant has resided in the past three years (emphasis mine).

The explicit intention of the law is to wall off “profiteers” to allow existing single-family owners “to provide affordable rental opportunities for other working families,” while creating wealth for themselves. How will these owners be able to do this without making a “profit?” That’s a mystery. The legislation silent on financing which will be impossible for most people with a single-family home paying a mortgage. Imagine a young family 5 years into their first mortgage trying to financing the sub-division of their lot, new construction of more housing on the subsequent parcels, and then managing the rental and maintenance of 3 rental units. Imagine any family being able to do that.

Let’s face it, SB 9 is simply a way lefty legislators can say they’ve “ended single family zoning,” pat themselves on the back, and then sit back and watch as nothing happens. Without investment new housing, of any kind, doesn’t happen. As I’ve pointed out before, the Keebler Elves are not going to come out of the trees and start hammering away to build the extra houses on the lot. It will cost money, lots of money. And developing any new housing unit is complicated and difficult by design and this would be true even if cities are forced to grant the divisions as a “ministerial” function, that is automatically.

Does the San Francisco legislation (full text here) improve on SB 9, make it worse, or have no effect? The complaint heard during the debate on the legislation is that the bill doesn’t do enough and that it does too little (you can watch the full debate here). Supervisor Aaron Peskin thought the bill did too little until rent control was added.

“Let’s be real about it,” he said of opponents. “They oppose this because they hate rent control.” Peskin went on to say he supported it because “communities have remained viable because of rent control. I rest my case.”

But Peskin’s comments were followed by those of Supervisor Matt Dorsey who said he’d vote “no” on the legislation because it “does take us in the wrong direction” and that it would create “little if any new housing production given added requirements.” He also expressed concern that now, with single-family technically no longer on the books, San Francisco is no longer covered by SB 9, even though that law, as I pointed out, wouldn’t create any housing either.

Back to the headline and the question, “Has San Francisco ended single-family zoning?” In the most technical sense, yes, it has. But as Supervisor Dorsey pointed out, all the requirements to the change mean, practically, just like SB 9, nothing will change. It took me hours of research to figure this out and explain it to you here. If you’ve read this far, congratulations. I’m sure that many people just posted the Planetizen post to Facebook with a happy face emoji with other sure to repost and repost again, just like they did with SB 9 and measures like it across the country.

Sadly, people will tell me, “Did you hear what they just did in San Francisco?” with enthusiasm. “Isn’t that what you want?” No, it isn’t. Watching left-leaning legislators and city leaders pat themselves on the back claiming that they’ve done something significant is exhausting. But worse, it convinces people that something has actually been done to address the problem of lack of supply. When the problem of rising prices persists, advocates of rent control, more money for expensive construction of non-profit or government housing will say, “the market doesn’t work; SB 9 and Mandelman’s legislation did nothing to help poor people.”

What is exasperating about these less-than-half-measures is that the reason that they fail is specifically because they are not market oriented solutions, but instead efforts to program an outcome that is impossible to achieve without investment that can yield a return, yes, profit. Democrats and socialists want property owners to somehow finance gradual increases in density without creating any value that can be captured to cover costs. That is simply impossible. By walling out developers and professionals, these efforts are doomed from the start.

What keeps this pattern of behavior going is the “fake news” that something has happened. The headlines are all that get attention, and the excruciating work of figuring out what happened is left for people to find on their own, and when reporting is actually done, nobody bothers to read it or understand the implications. The solution to this problem is obvious: legislatures at all levels need to stop passing legislation that does nothing and the media need to stop reporting that it does.