San Francisco Supervisors Aaron Peskin and Rafael Mandelman introduced the "Housing Preservation and Expansion Reform Act" in December 2018, a proposed law which hopes to limit major renovations and demolitions plus limit the size of newly built or newly altered residential structures. The two sponsors believe the current process results in too many larger units and demolitions, and that there is a connection between the two. Many on the City's Board of Supervisors believe that the most affordable housing is existing housing in its existing condition or with only minor expansions. Industry experts (and small property owners) feel that enough disincentives already exist to discourage demolition or excessive remodeling/additions to an older structure, that existing housing is not always in good condition, and that improving the condition of existing housing will extend the useful life of such housing so that the City does not lose housing that is not adequately maintained.

Removal of Units

The legislation seeks to make it more difficult to remove or make major alterations to residential units in several ways:

Additional criteria would need to be met in order to obtain Planning Commission approval, which will be required in more instances than in the past. Below you will find several of the most significant new ones:

1. The City would look at the building envelope of a replacement building (often known as the ratio of the square footage of a proposed new building to the square footage of the lot). That would be compared to the building envelope of structures within 300 feet (within the same zoning district). The City would look to see if a new building proposed by the applicant would exceed the neighborhood average ratio of structure size to lot size.
2. If two units were proposed in a new building, neither new unit could be larger in square footage than 1200 square feet, or larger than the average size of existing residential units within 300 feet of the proposed project — whichever is smaller.
3. There can be no garage parking in the new structure.
4. Any construction of a new single family home would be prohibited where the zoning allows for a larger number of units.

Up until now, no Planning Commission hearing has been required within RH-1 and RH-1D zoning districts if one is demolishing a non-historic building that is demonstrably not affordable. Under the new law, this would no longer be the case.

Alteration of Structures

A hearing would be necessary (even when one is not needed today) in a circumstance where one is seeking to increase the square footage of a residential building by 10% or more if one is creating a taller building, or 20% or more if one is creating a horizontal addition. There will be exceptions for some additions at the rear of certain structures. There will also be stricter standards for what residential renovation projects constitute a "demolition". For example, removal of only 25% of the surface of all external walls facing a public street, or removal of only 25% of the building' s internal structural framework, floor plates and/or interior bearing elements, would be a demolition. All work permitted for the property within the prior five years would be counted toward those percentages.

New Penalties

The new law would make demolitions (or partial demolitions that exceed a low threshold of structural changes) much riskier, due to new penalties. For example, a property owner would be required to restore a unit that was illegally removed to its "original state," including its size, location, and original plans. The legislation would also increase penalties to $1,000 per day and would allow the City to impose a fine of $500,000 for the illegal demolition or removal of the significant architectural features of an historic building.

Projects that receive final Planning Commission or Planning Staff approval prior to the effective date of the law would be grandfathered from the requirement for a Planning Commission hearing for the removal of a residential unit or major alteration, unless the scope of work increases from the work stated in an already-submitted application.

The legislation is expected to be heard by the Planning Commission on March 7th. If passed, the Planning Department staff may need to be increased a great deal to handle the increased number of Planning Commission hearings.