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Supervisor Peskin’s proposed demolition prohibitions would purportedly prevent “monster homes,” but instead could limit ordinary renovations and stall the Planning Department’s pipeline. 

Supervisor Aaron Peskin recently introduced legislation to sharply limit allowable tear-downs and home demolitions, ostensibly in an effort to clamp down on speculative “monster-home” expansions that bring even pricier mansions to an already expensive city that needs anything but that. While Peskin’s office insists their aim is to incentivize more dwelling units in lieu of gaudier homes, the ordinance as currently drafted would likely make even the most modest renovations or expansions virtually impossible. The bill has some critics crying foul, arguing that it would halt new construction throughout the City.

In its latest form, Peskin’s bill would require new Conditional Use (CU) permits for any home expansion greater than 10% of existing square footage. Beyond that, it would limit both mergers and subdivisions of dwellings that end up larger than 1,200 square feet, and tearing down more than 25% of supportive walls. The ordinance dramatically increases previous financial penalties, and classifies any violation as a misdemeanor, resulting in fines or up to six months of jail time.

It contains very few exemptions for adding units, aside from expansions connected by stairs or cantilevered roof deck, or accessory dwelling units (ADUs), which were streamlined under previous legislative reforms.

That immediately presents two problems: imposing strict rules as a function of the home’s current area unduly penalizes the owners of smaller homes, who are less likely to have either the financial or political capital to undergo serious demolitions. More broadly, however, is the staffing problem: adding CU requirements to partial demolitions, whether mundane or meretricious, would overload an already sclerotic permitting process that the City is desperately trying to speed up.

Peskin’s bill, dubbed the Home Preservation and Expansion Reform Act, was announced in response to two high-profile unpermitted demolitions—including a now-$45 million home in Russian Hill that is now San Francisco’s most expensive listing. The other, a historically significant house in Twin Peaks, was met with an unusual penalty in which the Planning Commission ordered the developer to rebuild an identical replica of the demolished structure. So while there is significant support for demolition reform across the political spectrum in the City, this legislation may end up creating more problems than it purports to solve.

“It's pernicious because it is meant to clog up [Planning Department] staff’s time as well as the Planning Commission’s time,” said Todd David, Executive Director of the San Francisco Housing Action Coalition (SFHAC), an advocacy group that represents both nonprofit and private development groups. David further described the ordinance as “a backdoor attempt to stop the approval of all housing at all levels of affordability.”

Mark Hogan, an architect with OpenScope Studio, said he readily agreed with the intent of the legislation, but that many aspects would require clarification in order to avoid adverse impacts.

“It’s going to completely back up the Planning Department,” he said, noting that the ordinance adds many broad conditions that would make it difficult to enforce. 

“The inclusion of interior demolition of [load-]bearing walls in single-family homes doesn't do much to address the problems this legislation is supposed to address, but does make renovation projects more complicated for homeowners,” Hogan explained. Hogan added that the CU permitting requirement to demolish ADUs, even if the Department of Building Inspections (DBI) determines that the unit cannot be brought into compliance, could be “a huge disincentive for owners to legalize their unpermitted ADUs.”

So far, the evidence in support of this ordinance appears shaky at best. While Peskin’s office did not return repeated requests for comment, Lee Hepner, Peskin’s legislative aide, presented at a recent community meeting hosted by the Haight Ashbury Neighborhood Council (HANC) to discuss the bill. Hepner repeatedly pointed to the Planning Department’s most recent Housing Balance Report, citing the loss of over 4,000 rent-controlled units since 2008. Hepner told the audience that this legislation was intended to prevent this trend; however, the Planning Department’s data shows that less than 10% of these units were lost to demolition, while over 50% were lost to owner move-in evictions.

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Source: SF Planning Department, Housing Balance Report (September 2018)

Even so, gleaning relevant data from City records presents another hurdle to successful implementation—but that’s also an opportunity that Peskin’s staff and critics alike hope to address. 

Hepner also responded to questions regarding the 10% square footage threshold at the HANC meeting. “When we put ten percent out there, it was a signal to the Planning Department that we need some better data, and we need better justification for why we need to raise that number,” Hepner told a concerned architect in the audience. “I want the city’s data to be a lot better,” Hepner added, “to inform why that threshold should be higher.”

The lack of accurate data may reach Kafkaesque proportions since, as Hogan explained, the Planning Department may only have outdated and incomplete information on a house’s square footage on file.

“The square footage the city has on file has nothing to do with the size of the actual building,” Hogan said. “Take the typical single-family home you would see in the Sunset, that’s two stories with maybe a laundry room and parking on the ground floor, and the main living space upstairs. The way they measure that, the ground floor would count as a basement, and it wouldn’t be counted toward the total square footage. So on paper it may be 850 square feet, but that’s really only the second floor.”

Hogan added that more refined data could help the City better regulate demolitions and expansions, to prevent the sort of gaudy refurbishings making recent headlines. “It’s a concern in a lot of neighborhoods, but it needs a more sophisticated measurement,” he said.

Who benefits from such a herculean data project would depend on how the burdens of stronger demolition restrictions are distributed. The stated intent is to prevent speculative investment that removes lower-cost housing from the market; as written, however, experts contend that the ordinance still impacts homeowners more than big-pocketed developers.

“Traditionally we think of demolition as the total tearing down the structure, where it’s no longer there, but we know that there are other ways where residential units are lost,” Hepner told HANC members. “That thousand square foot home is a starter home for some folks. When you expand that,” Hepner added, “it becomes tangibly less affordable to any successive purchaser. And furthermore, we know that when an 800 square foot home has the potential to be expanded into a 3200 square foot home, that development potential is going to be baked into the sale price.”

But industry experts cautioned against inferring general market trends from the handful of high-profile demolitions eliciting City Hall’s ire. Kevin Birmingham, a broker with Park North Real Estate, explained that sale prices largely driven by homebuyers interested in the existing structure, and only a tiny minority from buyers investing in development potential. That accounts for the bulk of the City’s record-breaking $1.61 million home price (note that $1 million is over 50% below the median by definition—arguably not a “starter” home for many buyers).

“For most people, they’re buying a house based on their needs, rather than what the future capacity can be,” Birmingham explained. “Even when realtors tell them how they can expand, that often falls on deaf ears. They’re usually thinking about how they can live in this now. Homebuyers, by and large, can’t see past that. They’re not going to look at a two-bedroom and say, ‘I’m going to pay what I would for a three-bedroom because I can add it.’” Birmingham added that developers do pay different prices for single-family homes than individuals in rare instances, but such legislation applying to all homes would “punish the majority for a minority of purchasers.”

Similarly, Hogan said, “a homeowner in the Excelsior who wants to add a bedroom is not a savvy real estate developer who knows how the Conditional Use process works.” Adding to this process ironically may favor the kinds of purchases the ordinance explicitly seeks to discourage.

“Fundamentally, we believe that a CU should not be applied to things that categorically benefit the public,” Hepner told the HANC audience. “We’ve attached a CU requirement to home expansions because without some reciprocal benefit to the public in additional housing and tenant protections, I’m not sure we want to see that project move forward.”

Hepner also explained that demolition reform was necessary in light of impending statewide zoning reform, such as State Sen. Scott Wiener’s SB 50, intended to ease the housing crunch by lifting urban density limits.

“We would rather see additional units built. If you’re going to expand your home, add additional units of housing,” Hepner said. “We are not blind to the inevitable, which is that we need for more housing in San Francisco. We don’t want the financial incentive to create more housing to imperil existing housing and existing tenants,” he later added.

As written, though, the ordinance would not make such additions much easier, and may make plenty of them more difficult. In creating a new Section 319 of the City’s Planning Code, Peskin’s legislation adds additional requirements to receive Conditional Use for additional units, such as: “The size of the unit(s) in the expanded building shall not exceed 1,200 square feet or the average size of existing Residential Units within 300 feet of the proposed project site, whichever is less”—which would prohibit units sized for larger families. Even if a demolition is ultimately permitted, a replacement structure with variances from the Planning Code cannot be permitted.

Further, the same section requires that “[a]ll exterior changes visible from a public street or other public place shall conform to the height, scale and architectural details of the surrounding buildings and shall meet all relevant design guidelines, including applicable Residential Design Guidelines”—but notably, this would discourage adding additional stories, which is one preferred method for homeowners to add bedrooms. The Planning Department’s guidelines also state that they “do not mandate specific architectural styles, nor do they encourage direct imitation of the past.” Additions to historic buildings also “should be clearly distinguished from the original building so it can be understood as a more recent change. 

Conversely, though, the ordinance also requires that any demolished residence must be found to “not conform to the height and character of the neighborhood[.]”

“There’s a huge number of very small single-family homes—much smaller than you’d find in many cities in the U.S., below 1000 square feet,” Hogan explained. “Adding 10% onto that is by no means creating a mega-mansion. You could do an addition that was 11% larger than your house that your neighbors wouldn’t even notice.” 

Housing activists of different political stripes may at least take comfort in the outward signs that Supervisor Peskin and State Senator Wiener, once bitter rivals on the Board of Supervisors, are converging in their stated efforts to promote more housing construction in San Francisco. With costs among the highest in the nation and construction rates plummeting, political consensus couldn’t come soon enough.

Preventing frivolous demolitions while encouraging more housing is, on paper, an uncontroversial win-win scenario. The devil is in the implementation details, and there too lies the factional hostilities. So far, there is substantially more evidence showing a widespread shortage of housing than a widespread epidemic of monster homes.

“It is very much a work in progress,” Hepner assured the Haight Ashbury audience. “The intent is clear…but we are open to input.”

Responding to critiques and adjusting to input is, in hindsight, not a strong suit for Peskin. Most recently, in response to a City Controller report showing that his co-authored June 2016 ballot measure mandating 25% Below Market Rate housing in private development was infeasible and would produce less affordable housing, Peskin balked and initially resisted the statistically recommended 18% compromise.

The Home Preservation and Expansion Reform Act is scheduled for its first public hearing before the Planning Commission on March 7th.

Mike Ege contributed to this report.

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