State Density Bonus Comes to North Beach
by Nancy Shanahan and Stan Hayes
THD Planning & Zoning Committee
You may be surprised what may be coming to a neighborhood near you. Take a look at these drawings (they’re the developers’ own renderings).
A 63-foot, 6-story, 34-unit residential/commercial building at 535 Green on the site of the National Register listed Buon Gusto Sausage Factory Building and the vacant parking lot to the east, and will reach up to 79 feet at the highest point of its roof-top features, about twice the 40-foot height limit of nearly all buildings in North Beach.
Proposed State Density Bonus project at 535 Green Street from plans by Kerman Morris Architects.
Can you find the historic Buon Gusto Sausage Factory Building?
Proposed State Density Bonus project at 425 Broadway and Montgomery Street, from plans by Ian Birchall and Associates.
A 65-foot, 7-story, 41-unit residential/office complex (two buildings) at 425 Broadway to replace the existing parking garage on Broadway and vacant parking lot on Montgomery Street in the Jackson Square Historic District Extension.
A 75-foot, 7-story, 63-unit residential/commercial building on the site of the fire-damaged Verdi Building at 659 Union on Washington Square.
Proposed State Density Bonus project at 659 Union (former Verdi Apartment Building). from plans by Gouldevans Architects.
1196 Columbus Avenue (site of former Tower Record Annex), from plans by ELEVATION architects.
A 65-foot, 6-story, 57-unit residential building at 1196 Columbus on the corner of Columbus, Jones and Bay.
What Do These Projects Have In Common?
They would exceed our neighborhood’s time-honored 40-foot height limits by a wide margin, tower over nearby buildings, clash with neighborhood character and scale, impact registered historic buildings, pile on more floors, and add more building size and mass than currently allowed. They would override or sidestep City planning and zoning requirements, avoid or discard neighborhood design guidelines, and bypass the San Francisco General Plan.
All because of one thing they have in common. They all seek to use the State Density Bonus Program, which encourages developers to waive City planning standards, add extra floors, exceed height limits, and avoid the City’s zoning controls on such things as building mass, minimum rear yard size, and required dwelling unit exposure.
Welcome to the State Density Bonus Program. This program is authorized by the State Density Bonus Law in Section 65915 et seq. of the California Government Code, which requires cities to provide developers with a density bonus and other incentives, waivers, and concessions for agreeing to produce a few units of below market rate (BMR) housing in their projects.
What Is The State Density Program?
San Francisco has implemented the state law by providing developers several different options, one of which is the Individually Requested Density Bonus Program. That program, which was used for each of the above four projects, is available in all zoning districts that allow residential uses, except for RH-1 (one unit per lot) and RH-2 (two units per lot), unless located on a site or sites in those districts that permit the construction of 5 or more units.
What Does The State Density Bonus Program Offer?
The State Density Program offers:
Up to 35% additional density (now increased to 50% as of January 1st), which allows extra floors above the established height limit, with the amount of extra density dependent on the number of units and their lower-income level (very low, low, moderate, and middle), and
Waivers, Concessions and Incentives as identified by the project sponsor.
Waivers are modifications of volumetric requirements that are regulated by the Planning Code. Project sponsors may seek any waivers necessary to physically accommodate increased density in the bonus project.
Concessions and Incentives are reductions of site development standards or architectural design requirements, which result in financially sufficient and actual cost reductions. Project sponsors may seek up to four concessions and incentives, depending on amount of affordable housing provided and the level of affordability of those units.
How Many Below-Market Units Does This Program Provide?
The State Density Bonus Program, and its San Francisco version, is intended to produce more below market rate (BMR) housing. But, does it?
Let’s look at the four projects listed above that are proposed in North Beach. It’s helpful to compare the number of BMR units under the State Density Bonus Program to the number that would be required under the City’s long-standing Inclusionary Housing Program. The Inclusionary Housing Program determines the total allowed number of units by dividing the area of the parcel on which the project is located by the maximum density allowed by the Planning Code (e.g., 400 sq ft/unit). Of this total number of units, 20% would have to be BMR units.
535 Green. Under the State Density Bonus Program, the developer proposes a total of 34 units, 5 of which would be BMR units, providing the developer with 29 market-rate units. Under the Inclusionary Housing Program, the developer could have a total of 27 units, 5 of which would be BMR units, providing the developer with 22 market-rate units.
Application of the State Density Bonus Program to this project would give the developer 7 more market-rate units to sell, but would produce no more BMR units than the Inclusionary Housing Program.
And, for this, the developer is asking for multiple incentives that, among other things, would allow waiver of the 40-foot height limit and two extra added floors up to a height of 63 feet and up to 79 feet for rooftop structures. Plus, the proposed project would envelop and demolish most of the historic Buon Gusto Sausage Factory Building, which was recently listed on the National Register of Historic Places. (See the sidebar to learn about the historic significance of this building to the history of North Beach.)
425 Broadway. According to the developer’s plans, just 3 BMR units are proposed. This equals the minimum BMR percentage for low-income BMR units under the State Density Bonus Program, and thus the developer requests a full 20% density bonus plus waivers and concessions. This results in a total of 41 units, only 3 of which are BMR units. On the other hand, under the Inclusionary Housing Program, the developer would have a total of 34 units, 7 of which would be BMR units.
That’s right… Application of the State Density Bonus Program to this project, as proposed by the developer, would actually result in 4 fewer BMR units than the Inclusionary Housing Program, but would give the developer 7 extra market-rate units to sell.
Remarkably, the State Density Bonus Program would also allow this developer to include two floors of office use. And, the state program would allow the developer to ask for four different concessions and waivers of Planning Code standards.
659 Union. Note that the developer of this project is still in the process of considering alternatives to the State Density Bonus Program, a process that we hope will result in a much reduced-scale project. If that process does not work, though, the developer has said he will proceed with his previously proposed State Density Bonus Program project. If the developer does so, that program would result in a total of 63 units, 10 of which would be BMR units. Under the Inclusionary Housing Program, the developer would have 47 units, 9 of which would be BMR units.
The developer would get 16 more market-rate units to sell, but would produce just 1 more BMR units than the Inclusionary Housing Program.
And, it would allow the developer to ask for concessions and waivers that would allow the project to substantially exceed the 40-foot height limit, up to as high as 75 feet, nearly twice the 40-foot height limit.
1196 Columbus. Under the State Density Bonus Program, the developer would have a total of 56 units, 10 of which would be BMR units. Under the Inclusionary Housing Program, the developer would have 46 units, 9 of which would be BMR units.
A similar result… The developer would get 10 more market-rate units, but would produce just 1 more BMR unit than the Inclusionary Housing Program.
Also, the developer would be entitled to waivers and concessions that would allow, among other things, building up to 65 feet and 6 stories, exceeding the 40-foot height limit, and having twice the number of stories of neighboring buildings.
What's the Bottom Line Here?
Bottom line, THD has always supported affordable housing, and we always will. But, as you can see from the above examples, the State Density Bonus Program would produce more market-rate units, not more affordable ones. Contrary to what its supporters promote, the program is much more about producing more market-rate units (and developer profits) than it is about producing more affordable housing.
It’s not surprising that the program enjoys strong support in many developer quarters, but not so much for those who hope and need more affordable housing for our workers and displaced tenants, for those who want to preserve and protect neighborhood character and scale, and for those who believe that neighborhoods should be able to have a say in how their community evolves.
THD has been following all of this for some time. We’ll keep it up. And, we’ll keep you posted.
You can see THD’s official correspondence at https://thd.org/pz.