The San Francisco Lottery

This is not an article about a actual lottery. Whether or not you participate in, marginally condone or consider lotteries as a form gambling, they are a relatively substantial source of income for states, completely based on discretionary participation and totally subject to chance. However, I remember when the term “Winning the San Francisco Lottery” meant you were getting evicted, legally or otherwise, either by someone who couldn’t afford to let you remain or someone who could, but could also afford to get you out. Either way, the solution was always a payout. Well, there’s a new game in town and the stakes are even crazier, and with the proliferation of construction projects right now, you may already be a winner.

As an architect I do lots of residential remodels, additions and even a new house here and there, but I didn’t realize until last week, sitting in a law firm office downtown, talking to a PR consultant, that the project shakedown thing was happening. It starts when you mail out one of the required notices about a residential project in the vicinity and ask if anyone has any concerns. Stage one notice is typically a meeting held prior to permit application, supposedly just between the project sponsor and the immediate neighbors on adjacent lots. Recently this has become the equivalent of inviting a ransom request. If you missed the aggressively unscrupulous neighbors in your first mailing, don’t worry. San Francisco Planning department has at least one and probably two more required notifications to an even larger audience, proclaiming your project as eligible for a mob style kidnapping.

Over the course of decades San Francisco has built a planning approval system predicated on the “common consent” rule for property development. This means that neighbors, whether living in the vicinity, owning real estate in the vicinity or just knowing about your project, have the ability to stifle or even thwart development. There are a number of mechanisms that enable this, and they apply to giant city-sector scale development (China Basin, Hunter’s Point, upcoming sports arenas) to individual single family homes, which is where our new lottery winners are gaining traction. Shaking down a multi-billion dollar developer for a ransom payout means you’d better be bringing some big guns. Shaking down your neighbor, who is trying to add a bedroom for their growing family, is so much easier. However, keep in mind that not every citizen-hijacker is both lucky enough to live in the proximity of a development project AND know their way around the criteria to characterize a project as “impactful”, which is the only way to effectively threaten the viability of a residential project. But like all organized crime, there are plenty of thugs out there for hire.

San Francisco has seen a proliferation of activist neighborhood groups in recent years. Often these are formed by a single person with the intention of objecting to a specific project in their immediate vicinity. With the sense of general discontent that currently prevails in San Francisco, the meetings held by these groups are attended by legions of disgruntled neighbors who are merely seeking an audience to hear their gripes about change in San Francisco. The overwhelming majority of these gripes start with the words “I’ve been here for 30 years, and….” as if through sheer persistence of location their opinions, values and preferences are elevated to a position of authority on determining “impact” in residential improvement projects. I’ve attended these meetings. I often ask three questions; Are you going to buy another house in San Francisco? Are you going to do a remodel on your current house? Do you plan on having children? Given that the mean age in almost all these meetings is somewhere around 65, all the above answers are “No” and thereby eliminates the threat of hypocrisy among the attendees ever doing their own elective improvement project or needing an expansion based on growing family needs. These meetings are more cathartic group therapy than goal oriented activism, but they do collect signatures on petitions lined up on the table. Some people even read the petition before signing.

Over the next few months, our opposition was enlightened to the fact that their concerns over views wouldn’t gain them any ground. They gleaned this through involvement with a new neighborhood activist group with the pearl clutching name “Protect Noe’s Charm”. At the same time, the conversation changed from “What can you do to address our concerns?” to “What can you do for us?” There was talk of installing skylights on the neighbors house, planting screening trees, and as the PR guys suggested, just flat out paying them to go away. In the background (they stopped calling me at least) their story soon changed to woes of mitigated access to natural light and fresh air. To my planner’s ears, this is a more legitimate platform for opposition that created the doubt necessary to consider seeking advice from senior staff and to analyze the project against the Residential Design Guidelines.

The primary enabler for neighbor or neighborhood opposition to a project was the official adoption of the Residential Design Guidelines as part of the criteria for determining appropriateness in residential projects. These first started in 1989, and as the name implies were meant to be “guidelines” for residents, developers and local authorities to understand their architectural environment. It was (and is) written accordingly in lay man’s terms for the intended lay man audience. Sometime in late 2003 these were adopted in their current iteration, not dramatically different from the original, but given new authority by being renamed “Residential Design Standards”.

At best the language is subjective and vague, leaving room for personal interpretation and latitude for the infinite variances one encounters in dense urban residential environments. It hardly ever creates the absolutes, definitions, or imperatives that one finds in proper regulatory code language. Ironically, perhaps its most useful quality is the atavistic tone of the 1989 language that implies a reliance on common sense to be one’s guide in assessing their own residential improvements. However, this latitude in language creates single sentence loopholes that can be exploited by discontent neighbors to create enough basis for a city planner to encumber a residential project with months or years of approval process. This is the world we’ve created, and this is how it’s being used.

And exploit it they do. As a recent example, I received a Notice of Planning Department Requirements (NOPDR) for a project that relies on a single bullet point from page 26 as justification for requiring a rear yard setback in excess of the Planning Code regulations under Section 134. You can see already how difficult it is to apply “guidelines” when you can not even cite the Section, paragraph or line as you would with a normal regulatory code. So, page 26, somewhere near the bottom, the first bullet point reads “Set back upper floors to provide larger rear yard setback.”How far? The whole floor or just a portion? What if it’s already set in from on the sides? There are no parameters here…because these are guidelines written for the masses and were never meant to be regulatory. There are not even interpretations recorded over the years on the Residential Design Guidelines. If you’ve ever asked a question about the application of a particular Planning Code section, you will almost always be referred to a written interpretation with a date of adoption AS the official interpretation. Professionally, I can use that to advise clients because I know the answer will always be the same. I don’t feel so confident when it comes to the RDGs.

The above NOPDR was received for the same project I was discussing with the lawyers and the high paid PR firm. We were strategizing our next steps in moving forward. My contention was that the project was wholly conforming with both Planning Code and RDGs, and had received verbal confirmation as such from my planner, her supervisor and our project review committee at our initial meeting. The adjacent neighbors, who have been in their tiny house for 30 years and can’t understand why anyone would want to destroy the neighborhood, had expressed to me that the proposed addition would obstruct their view of the Twin Peaks hills. I politely worked with them to address their concern knowing full well that the Planning Department wants nothing to do with protecting views in San Francisco. The surprising thing was that the NOPDR had completely adopted the neighbors list of demands, which we had already dismissed. In short, planning wanted us to preserve the view. By receiving the same list in an official Planning Department letter, it became clear that the neighbors had succeeded in enlisting one more thug. At this point our opposition shifted from neighbors, to our assigned planner who had formulated the requirements. Our path forward was forced into two choice: comply with the NOPDR (read: list of neighbor demands) or face the Planning Commission through a mandatory Discretionary Review hearing, without planning staff on our side. This is a very strong position for the neighbors shake down efforts. Planners make powerful thugs, especially when they’re anonymous senior staff.

I’ve been doing residential design work in San Francisco since 1997. I have a fair amount of experience with the Planning Code, RDGs, SF Building Code and the rather dry Zoning requirements…and I still get hung up on seemingly common things. I can’t imagine how difficult it is for a freshman planner recruited from the midland states to get up to speed and tackle their workload within a matter of weeks. And that’s what has been happening for almost 3 years now.

In my experience there are two types of planners (besides the wretched Preservation Planners…another blog). There are those that love the city they help develop, and those that love bureaucracy. You can’t fake passion, but  you can bury ineptitude with forms, supplemental reviews and added process. Planners by nature are reluctant to approve things, well not all planners, but most. If a neighbor can create enough doubt with the project’s assigned planner, they will often defer judgment to a higher internal authority. Why make a controversial decision when you can lob the responsibility up a level? In the case of residential projects that comply entirely with the planning code, but are still encumbered by nosy neighbors, planners invoke the RDGs and slide the project under the door marked Residential Design Team (RDT). No one knows who is on the other side of that door, which is intentional by the Planning department for the purposes of preventing project sponsors or detractors from lobbying RDT members directly and yet also to limit liability tracking on what is inherently a judgment call. Projects at this stage cease to be architectural in nature and become political. Though there are often architectural implications at stake, the legal framework governing development is completely absent and the issue boils down to a battle of interpretations, precedence, and advocacy (remember the petitions?). All this takes time and costs money, neither of which are commonly accounted for in the initial project scoping or budget estimates. On architectural projects you are constantly balancing 3 forces; time, cost and quality. Losing control of two of them is often a death sentence for a project. Neighbors know this. Neighbors exploit this. Neighbors who get a project twisted up at this level often succeed in their shakedown because the next stop is a hearing in front of the Planning Commissioners.

Until recently I always thought that determinations at a Planning Commission hearing were in two categories: Approve or Deny. But apparently there’s a third category where the PC can categorically disapprove the project entirely, sending you back your building permit application with a bid red “Denied” stamped across the drawings. Under SF law, you must wait a period of one year before resubmitting the project for consideration. Keep in mind that even on a modest residential project, owner may have spent well beyond $100k on a bevy professional services needed at a base level to submit a coherent permit application. It’s an investment many (if not all) are unwilling to walk away from, or jeopardize with the potential for an outright denial at the the Planning Commission hearing. This is the flip point for most owners to dole out payments to oppositional neighbors standing at their front door with palms up. What is the average payout? Who knows. It’s not like these things are claimed as tax deductions.

They are however mentally added to the cost of the project in the eyes of the owners. These same numbers also get passed on when it comes time to sell the house. I’ve never seen a house undergo a major remodel and list for sale at a figure that did not fully account for all fees associated with design, approvals, entitlements, cost of construction and the elusive newness factor of remodels that have not been lived in. I don’t pretend to understand the black magic of San Francisco’s real estate market, but I an intimately familiar with the factors that go into the costs associated with a major remodel or new construction home. The same neighbors that wring their hands over tech money destroying the affordable housing market, are many of the same faces you see at Protect Noe’s Charm meetings signing petitions to fight additions to 1000 square foot cottages.

San Francisco’s residential development history itself is a patchwork of overdeveloped neighborhoods (Telegraph Hill, Chinatown), areas that went through surges of development (Noe Valley, The Outers, and currently the Eastern Neighborhoods) and neighborhoods that may or may not ever gentrify (Bayshore? Visitacion?). The clear battle ground state right now centers on Noe Valley, and with good reason.

You can assemble the Sanborn maps for Noe Valley, which document existing buildings, and see more or less the same picture unfold on each block. The late 1800s had sparse settlement, mostly by intrepid DIY’rs with a little cash to buy land in what was the contemporary equivalent of Petaluma for us today if you compare commute times. After the 1906 earthquake, Noe Valley escaped the fires that razed large chunks of the city and vacant lots went through massive development. Blocks were mostly filled by 1914. Those intrepid homesteaders went from pastoral grassy fields with stone monuments vaguely referencing future streets, to full urban grid.

From that point through till today Noe remained largely static. It always commanded above average prices for homes, based on size, neighborhood amenities, urban location and climate, but something happened in this current boom cycle that is driving wedges into nearly every city block in Noe. Perhaps it’s the flipped commuter flow that drive desirability, living North, commuting South.Noe has great access to the Southern freeways. Whatever the contributing factors may be, the home values have increased faster, on a comparison basis, to any other neighborhood in the city, and with that comes the tension we typically see with other gentrifying neighborhoods. The only problem with that is that Noe never considered itself to be a neighborhood that wasn’t already gentrified. For the 30 year residents is must be a harsh dose of reality to see your socio-economic demotion compounded with the conspicuous effects of change right in your back yard. Based on the historical record, that same phenomena can be observed with the rapid development following the 1906 earthquake, the difference being that I doubt the early settlers in Noe held the neighboring developer’s projects hostage.

San Francisco, since being founded, has had a regular rhythm of going from economically challenging times to transition periods of relatively modest growth to legendary eras of holy-shit-BOOM-time. We name those times to correspond to the primary movers: Dot Com, Tech Boom, Gold Rush. It’s who we are, it’s the lifecycle of the city we built.

The lead indicator of where we are in the cycle is primarily measured through average real estate sales prices. This is convenient given that the local wealth rarely ever dissipates, but the consumption is never more conspicuous than in the public records of real estate sales. Without too much disagreement, we are currently in a recognized boom cycle, and one that seems to mirror all those that came before it in many ways. Wealth is not evenly distributed, though many wish it was. Priorities are often skewed to what’s perceived as legal, and not whats “right”.  And neighborhoods undergo change, despite the whining and moping of people who’ve been there longer. When it comes to proposing development on a privately owned, residential property, neighbor consent has always been a factor, but the tools used to determine how we go about discussing and defining appropriateness as part of the approval process is having a critical effect, especially in neighborhoods where the old gentry has found new means.

If we allow the current system to persist, the future of San Francisco may never be able to keep up with it’s past, although admittedly, shaking down a project for profit is, in many ways, a typical San Francisco thing. Historical accounts are full of stories about those who exploited an opportunity or resource for profit, and this method is really no different. But I don’t recall one so full of hypocrisy and antipathy as neighbors going after other neighbors enjoyment of their own property…for profit. The appalling fact is that the enablers for this sort of racketeering are sanctioned through current city planning approval processes and the misuse of the Residential Design Guidelines.. If we had the same impediments to development in place in 1915 as we do now, San Francisco might never have been the city it is today.

If we are to continue to use the RDGs we need to establish if they are regulatory or advisory. In their current form, the language precludes them from being regulatory, but their implementation and authority in the Planning approval process treats them as regulatory. Until that clarification is made, they will continue to be used as a means to delay, thwart or even extort residential development projects.

Ben Farrell