Ground zero
During his successful mayoral campaign, Daniel Lurie announced his plan to set up 1,500 emergency shelter beds within six months of taking office, and the creation of 2,500 interim housing units within two years. He said he would “exercise my emergency powers to their fullest extent and deploy at least 1,500 emergency housing placements in the first 6 months. Importantly, unlike today’s shelter beds these will be open 24/7 with services and supervision.”
Now, we can go back and forth endlessly over whether that’s the proper use of the word “importantly,” but a better use of our time for at least the next six months will be to keep watch on how many of those 1,500 emergency shelter beds actually get set up. Perhaps The Voice could do a public service by presenting a running tabulation of the number of new beds produced. City residents are notoriously reticent about having homeless shelters set up in their neighborhoods.
Anyway, Lurie became mayor of San Francisco in the first full week of January. His new shelter bed count starts at zero. Let’s watch.
New housing laws for 2025
Gov. Gavin Newsom’s office highlighted some new laws taking effect in 2025 that it claims “will create more housing for all Californians.” One of them, SB 1395, sponsored by Menlo Park Democrat Senator Josh Becker, eases the development and operating of “interim housing, including emergency shelters and navigation centers.” Mayor Lurie might find that useful.
Other laws include Senator Scott Wiener’s SB 1027, which could impose penalties up to $50,000 a month on communities that block or delay approved housing. Assemblywoman Gail Pellerin’s AB 3035 is an effort to boost new farmworker housing in Santa Clara and Santa Cruz counties.
‘Ministerial review’ is a process in which a project has to be judged strictly by whether it meets explicitly defined legal criteria.
Newsom said “California’s new laws tackle today’s biggest emerging challenges head-on. … These practical reforms protect what matters most while creating more opportunities for all Californians.”
Rent increases for rent-controlled units
Landlords and renters alike should know that the annual allowable increase in rent for rent-controlled housing units in San Francisco is 1.4 percent. The rate, as of March 1, 2025, is calculated using 60 percent of the increase in the Consumer Price Index for the Bay Area (which the Bureau of Labor Statistics calculated in November to be 2.4 percent). Take the base rent and multiple it by .014, and that’s the increase. So a unit renting for $2,000 before the increase will rent for $2,028 after the increase. Or if the rent is $25,000 a month, the most it could increase is $350 per month, though if you were paying $25,000 a month for rent, it clearly isn’t rent-controlled, and you also wouldn’t care about the increase.
San Francisco’s Housing Element update
Last year, after San Francisco achieved the dubious distinction of being the first city in California to fail to meet its housing goals as mandated by the state, “many mixed-income housing development projects in San Francisco will now be subject to a streamlined, ministerial approval process,” in the words of Daniel Gershwin and Miles H. Imwalle of Coblentz Patch Duffy & Bass LLP. “Ministerial review” doesn’t mean it’ll be reviewed by Joel Osteen; it refers to a process in which a project has to be judged strictly by whether it meets explicitly defined legal criteria, removing personal judgment from the effort. (If that isn’t clear enough, the state has a 32-page document explaining it.)
In the Housing Development Pipeline for the third quarter of 2024 (the most recent available report), the city claims to have 72,659 new units in the pipeline, with 18,499 — or about 25 percent — affordable units. Which, if true, would mean the city is well on its way to getting to its mandated 82,000 unit count by 2031, right? The word “pipeline” is doing a lot of work, here, for it includes projects that are under construction (6,410), with building permits issued for the site (1,951), building permits approved (2,271), building permits filed (8,848), building permits not yet filed (4,808), major multiphased projects (34,531), and applications filed and under review (13,840).
The interesting thing about interest rates
Remember that expectation that rates would be dropping continually, if gradually? The Federal Reserve did begin reducing rates in 2024, but that’s not the whole story. “The inflation rate dropped from 3.1 percent to 2.7 percent, a welcome decline, but not as large and consistent as hoped,” Compass noted in its December San Francisco market report. “In September, the Fed reduced its benchmark rate for the first time in 4 years, followed by 2 more cuts in November and December, but, confounding expectations, interest rates rose, ending the year higher than when it began.” The Fed is also signaling that it is scaling back the expected reductions in 2025. An unexpectedly strong employment report in early January likely firmed up the Fed’s reticence toward dramatic reductions. And don’t even get me started on the inflationary impact of higher tariffs.
Welcome to 2025.
