Category Archives: Housing

deregulated housing bills, Housing

Developer wants to ‘supersize’ S.F. project under new state housing law — while it ’s being built

By Laura Waxmann : sfchronicle – excerpt

Oakland developer oWow is the latest builder planning to “supersize” a previously approved project in San Francisco due to a recent change in state law.

An application filed with the city’s Planning Department on Wednesday proposes updates to the design of 960 Howard St. in the Central SoMa neighborhood, which, in recent years, was approved for redevelopment into a three-story creative office building with a 9-story, 113-unit residential addition.

Developer oWow purchased the site, that was long home to a small industrial building, in 2019 and has nearly completed the three-story office component of the plan. It is now seeking to add a total of 16 stories of high density housing.

“The approved 113 units will not achieve a product that meets the returns that anybody would want to invest in today to get that project started,” said Danny Haber, oWow’s CEO and co-founder. “It is not financially feasible.”

The new plan proposes a total of 274 rental units. If approved and constructed as currently designed, the project would provide 158 studio apartments and 116 two-bedroom apartments. Out of the total proposed apartments, 42 units would be designated as affordable housing while the remaining units would be rented at market rates.

Per the application filed Thursday, the approved three-story office building would serve as the base of the residential tower — in total, the project would rise 19 stories.

The Central SoMa District limits building heights in the area to 85 feet, but OWow has proposed using the State Density Bonus law, which provides a density boost of up to 50% in exchange for greater affordability for very low income households, to waive that cap.

And, as a result of Assembly Bill 1287, a new state law that became effective this year, that 50% density bonus can be doubled so long as 15% of a qualifying project’s residential units are set aside for “middle income” households earning up to 120% of the Area Median Income, or AMI. …(more)

Housing

This Real Estate Company Dumped Its Downtown San Francisco Mall. Now It’s Gobbling Up Apartments

Kevin V. Nguyen : sfstandard – excerpt

Thirteen years ago, Veritas Investments took advantage of the fallout from the Great Recession to start snapping up San Francisco homes by the thousands at a steep discount.

Fueled by a combination of private equity investment and lots of debt, Veritas continued its buying spree in the years that followed—eventually becoming the city’s largest residential landlord by 2016.

Now, amid a pandemic-induced real estate crash, a new outfit is poised to take Veritas’ place. Another opportunistic group—this time, a partnership between Ballast Investments and Brookfield Properties—has swooped in to buy up nearly $1 billion of mortgages that Veritas had defaulted on, public records show.

As a result, over 2,100 units across 76 apartment buildings in the city will have a new owner by the month’s end. While the foreclosed properties are technically on the market, industry observers say it’s most likely Ballast and Brookfield will just assume ownership of the buildings themselves, as they are now effectively Veritas’s lender…(more)

CEQA, Housing, Planning, Politics

Letter to the editor: Yes, a taxpayer can sue over the state’s housing laws

By Tim Redmond : 48hills – excerpt

Retired real estate lawyer weighs in on state law.

I love letters to the editor. Here’s one from someone who actually knows the answer to a question I raised:

In “Peskin, Chan want to know if SF can sue the state over impossible housing rules,” Tim Redmond asks, “Could a San Francisco citizen, or organization [as distinguished from San Francisco itself], sue? ‘That,’ said Peskin, ‘is a very good question.’”

The answer is that any citizen who has paid taxes to the state can sue the state (or an agency thereof) to restrain illegal, injurious, or wasteful expenditures under section 526a of the Code of Civil Procedure. Any such lawsuit needs to be brought in state court because federal courts have strict standing requirements…

The portion of SB 423 singling out San Francisco is illegal because it violates the California Constitution, Article IV, Section 16(b): “A local or special statute is invalid in any case if a general statute can be made applicable.” A taxpayer action could seek a declaration that this portion of SB 423 is an invalid special statute. Notably, there isn’t even language in the bill, as there is in other special statutes, purporting to justify it as addressing a problem unique to San Francisco.

A taxpayer action could also seek a broader declaration that the state housing laws do not take precedence over San Francisco zoning laws, because as a charter city, San Francisco has a right to home rule protected by the California Constitution. This power includes zoning. A conflicting state law, even on a matter of statewide concern, only prevails over home rule if the law is reasonably related to resolution of a matter of statewide concern and narrowly tailored to avoid unnecessary interference in local governance.

The state housing laws fail this test for numerous reasons. Studies by the Terner Center show the laws have failed to achieve their goals and scholars have described them as “ad hoc and not model based.”

Nick Waranoff

Nick Waranoff is a retired real estate lawyer.

CEQA, Housing, Politics

The year in housing policy: State forced SF into a no-win situation (and Breed went along)

By Tim Redmond : 48hills – excerpt

Photo shot from the year that the voters stopped SB50 from going through. Since then Wiener and company have gotten better at ignoring the will of the public. There might be enough pissed off voters to take him out this year. We finally have some opponents running with other ideas of how to do his job so voters have a chance to take him out and show the other Sacramento legislators that there are other ways to govern that do not involve forcing unwanted changes on the public.

The supes did what they had to do, although a lot of them didn’t like it—but it’s not going to matter anyway.

It was a crazy year for housing in San Francisco, with the state forcing to city to adopt new rules for “constraint reduction” to comply with a new construction mandate that nobody, even housing developers, thinks is remotely possible.

The Regional Housing Needs Assessment calls for 82,000 new housing units in San Francisco, 46,000 of them affordable. (I love that terminology; it means the state wants to see 36,000 new units in the city that nobody but the very rich can afford.)

The city has six more years to reach that goal…

So now Sen. Scott Wiener, Gov. Gavin Newsom and the folks at the state Department of Housing and Community Development are going to have to deal with a basic problem:

They are asking cities like San Francisco to approve housing that doesn’t meet community needs and that developers don’t want to build…

What’s the state going to do? Penalize San Francisco for something completely out of the city’s control?

Or admit that this whole RHNA gambit was a fraud?.…(more)

RELATED:

Letter to the editor: Yes, a taxpayer can sue over the state’s housing laws by Nick Waranoff, retired real estate lawyer

Housing

These Bay Area housing developments are delayed because PG&E can’t get them parts for power

We have one of our eternal projects still under construction for this very reason. It’s absolutely nuts!
But Sacramento doesn’t care – they want us to fail to get SB423 streamlining, then possibly decertify our housing elements and they get BR projects across the state.

On 12/19/2023 1:03 PM PST zrants <zrants@gmail.com> wrote:

By J.K. Dineen : sfchronicle – excerpt A 19-story tower in the heart of downtown Oakland has made headlines both because it is one of the few significant housing developments under construction in the neighborhood and because it is one of the world’s tallest “mass timber” structures.

Developer oWow has been gearing up for a January grand opening of the 236-unit complex at 1510 Webster St. But, last week, company president Andy Ball was shocked to learn that the opening could be delayed by months, and perhaps as much as a year, because of something unexpected: a shortage of electrical transformers.

Ball said he called Pacific Gas & Electric on Dec. 11 to place the order for three subsurface distribution transformers, which transfer electrical energy from one circuit to another. He was told that the equipment would not be available until the second half of 2024 — at the earliest.

“It was a bombshell, the last thing I expected,” Ball said. “They are going to put developers out of business. They are going to destroy projects.”…

Sarkissian said it had informed 540 customers that they have two choices: redesign their projects to use above ground “pad transformers,” or “wait until the equipment becomes available.” Sarkissian cited a study by Edison Electric Institute, an industry association of investor-owned electric utilities, showing that approximately 75% of all utilities are experiencing similar shortages.

The issue is that above ground transformers can be large and unsightly, taking up space better used for retail or housing units or gyms or landscaping. In addition, most urban infill districts, including downtown Oakland, require developers to put their transformers below ground…(more)

How are they going to spin this one to blame the cities? Guess they will have no choice but to relax the requirement for below ground transformers if they want to meet their RHNA deadlines.

deregulated housing bills, Housing, Politics

Did one of California’s biggest new housing reforms go too far?

By Chris Elmendorf : sfchronicle – excerpt

The state desperately needs changes to its housing laws. But did a recent fix create more problems than it solved?

Last month, Gov. Gavin Newsom signed into law a package of more than 50 housing bills. Most seemed inconspicuous, but sometimes changing just a few words in a statute makes a world of difference.

AB1287 is a case in point. It makes a small tweak to a state law that gives developers “bonuses” for building low-income housing.

On the books since the 1970s, the Density Bonus Law has a simple idea at its core: If a developer agrees to dedicate some units in a project to affordable housing, it should be allowed to make its project a little larger than a city’s rules otherwise allow. For example, if a builder dedicates 10% of the units to low-income housing, it receives a size bonus of 20%. This allows a site zoned for 40 units to be developed with 48.

AB1287 makes a seemingly minor change allowing developers to base their number-of-units calculation on what is allowed by a city’s general plan for land use rather than a city’s zoning. 

This might sound like a hair-splitting distinction. It is not…

Continue reading Did one of California’s biggest new housing reforms go too far? →

deregulated housing bills, Housing

Big San Jose apartment complex may convert to all-affordable units

By George Avalos : mercurynews – excerpt (audio track)

City officials prep decision to clear path for conversion

SAN JOSE — A big apartment complex in downtown San Jose could be converted into an affordable homes property, a shift that would terminate its status as market-rate housing.

Modera The Alameda, a 168-unit apartment building on The Alameda near the SAP Center and Diridon train station, is currently slated to be transformed into an affordable housing complex.

The San Jose City Council is scheduled to meet Nov. 14 to consider a conversion proposal for Modera. This decision also includes a financing package to enable the transformation to affordable housing.

A $100 million package of tax-exempt bonds to finance the purchase of Modera The Alameda is the funding centerpiece of the affordable housing conversion, according to documents on file with San Jose officials…

The proposal though, would remove Modera from the property tax rolls — which means the complex would no longer generate property tax revenue once the new owner takes over…(more)

Here is a relatively new program that seems to rely on government funds to convert market rate to “affordable” housing. What does this do to the tax basis? And is this a reasonable approach to generate affordable housing?

Housing

State’s housing suit put on hold. Judge wants federal case over charter city question to be decided

Huntington Beach – Top state officials took a legal blow in their ongoing lawsuit that accuses Huntington Beach of violating state housing laws, when a Superior Court judge halted their suit until a related federal case is decided.

A state Superior Court judge ruled Friday that the lawsuit filed by the state Attorney General’s Office and California Department of Housing and Community Development must wait. The ruling is a win for city officials who hope to fight off state housing mandates to keep the “suburban character of the city.”

The state earlier this year sued Huntington Beach for refusing to adopt a housing element in compliance with state law. The city fired back by filing a lawsuit in federal court that argued because it is a charter city it’s not subject to state housing laws.

City Attorney Michael Gates called the judge’s decision “a huge loss” for the state and said the decision can’t be appealed.

“The state is stuck and can’t take any further action against the city for failure to adopt a housing element,” Gates said.

A spokesperson for the Attorney General’s Office said, “We are disappointed by the court’s ruling and considering all options to obtain the swift relief that state law requires.”

For decades, on a regular cycle, the state has required local communities plan for allocated amounts of housing at a variety of price points, including some amount of affordable homes, to meet needs of the future. More recently the legislature has given the process more teeth.

The state wants Huntington Beach to adopt zoning that would allow developers to build 13,368 new housing units over the next eight years. Huntington Beach officials have argued the city’s allocation is a disproportionate burden compared to other jurisdictions, such as Marin County.

The state filed a motion on June 22 to dismiss the city’s federal lawsuit, but a judge hasn’t ruled on it yet.

“I don’t see how the court is summarily going to be able to dismiss it,” Gates said. “We await the ruling, but I think the motion to dismiss is not going to be granted, at least not in whole.”

The state filed a motion on Oct. 30 asking the court to make a decision on whether the lawsuit would be dismissed or not. The state argued the court had 120 days to rule on the motion to dismiss.

Huntington Beach refused to join in on the request with the state for the judge to make a decision. State officials and attorneys for Huntington Beach differed in opinion on when the 120-day clock started for the judge to make a decision.

Deputy Attorney General Matthew Struhar said both sides needed to make the joint request, and state officials ended up filing without getting signatures from Huntington Beach attorneys.

The state also took issue with the city’s request to depose Gov. Gavin Newsom and other top state officials at City Hall.

CEQA, Housing, Politics

Mission ‘group housing’ moves forward, likely to cut some affordable homes

By ANNIKA HOM : missionlocal – excerpt

It could be one of the first projects to utilize a
dial-back of inclusionary units

The long game may just be starting to pan out for the developer brothers Chris and Brian Elsey.

After four years, a 149-unit group housing project at 401 South Van Ness Ave. near 15th Street moved one step closer to development on Thursday, when the Planning Commission unanimously approved a special permit the project needed.

The four-year process, however, also means the project can incidentally abandon its previous 25 percent affordability requirement and slash it to just over 15 percent, thanks to city legislation that took effect approximately two weeks ago…(more)

People are looking for proof that the state developer bills are decreasing affordable housing in the state and this is one of the first projects to take advantage of those bills. This is also proof that there is no incentive to build on these lots since the longer they wait, the better the deal gets for the owners. They started with a 20% affordable, now they are down to ten. If they wait another year, the incentives to build any will diminish along with the fees to pay for the infrastructure. Those are shifting from developers to the taxpayers. Say goodbye to your city or wait to be screwed by the state.

Housing

How Long It Really Takes to Get a Building Permit in San Francisco — and Why

By Adam Brinklow : thefrisc – excerpt

Whether you’re swapping windows or putting up new homes, SF’s red tape is notorious. Those in charge say relief is finally coming.

It’s a simple project,” says John McDowell, a permit expediter who helps would-be builders untangle San Francisco’s legendary red tape. His current clients, who own an early 20th-century, mixed-use building on Market Street, want to replace wood windows with more durable materials that he swears will look “exactly the same.”

McDowell says SF’s planning commissioners, who must approve the swap, won’t be able to tell the difference, let alone someone walking by on the street. The windows “are on the second floor, even,” he adds. He wouldn’t disclose the specific address…

Plenty of people with experience developing in San Francisco — be they architects, engineers, developers, permitting experts, and property owners large and small — have a horror story to share, perhaps more than one…

Mayor London Breed, some supervisors, and the Planning Commission are pushing for reform — and surprise, so are the very city bodies whose practices are under the microscope. In interviews and recent public meetings, staffers at both the Planning Department and Department of Building Inspection say they’re eager to speed up the way things work…(more)