New law requires San Francisco to reduce housing permitting timelines by 75%

(The Center Square) - San Francisco, where it takes over two years to get a housing permit, could see a reduction to permitting times to just six months under a new declaration from California Department of Housing and Community Development.

With HCD’s declaration, San Francisco is the first city in California to be subject to SB 423, a bill signed into law last year that streamlines building approvals for mixed-income and market rate housing. A UC Berkeley study found it takes 26.3 months to receive approval for multifamily housing in San Francisco, the slowest in the nation. Under SB 423, housing would need to be approved within six months.

“A confusing and overgrown permitting process has been throttling housing construction in San Francisco for decades,” said State Sen. Scott Wiener, who wrote the bill, in a statement. “Cutting that process short by years is a massive step forward to building the homes we need to tackle our housing crisis.

SB 423 allows HCD to order cities that do not meet their Regional Housing Needs Allocation to approve projects with ministerial approval. A wider rollout of SB 423 will start in January 2025, but San Francisco — whose mayor, London Breed, supports the law, and has one of the worst housing shortages in the state — is pioneering adoption of the law.

“Thanks to Senator Wiener’s SB 423, we are getting rid of barriers that slow housing approvals down so we can build more homes faster in neighborhoods all across the city,” said Breed in a statement. “I’m proud to have supported SB 423 and excited that it’s going into effect so we can see the change we need to make San Francisco a leader on housing.

Because developers borrow most of the money for building housing, interest costs from permitting delays produce significant cost increases. By reducing permitting times and providing exemptions to the California Environmental Quality Act — a 1970 law allowing for nearly indefinite legal challenges to building projects by almost anyone — SB 423 could significantly reduce the costs and risks of building housing in the state.

California has a 4.5 million home housing shortage, which makes housing a significant driver of living costs in the state. Should the state significantly increase housing production, declining rents would result in a lower cost of living, and a lower cost of labor, as Californians spend more on housing than residents of any other state except for Hawaii.