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Aug 22, 2023

Newsom steps into saga of stalled S.F. housing tower

The parking lot at 469 Stevenson St. has been the focus of a housing debate in

The parking lot at 469 Stevenson St. has been the focus of a housing debate in San Francisco, one that reached the governor's office.

The much-publicized saga of San Francisco's thwarted tower on a downtown parking lot continued this week, as Gov. Gavin Newsom approved using a recent state law to speed up the resolution of any future legal challenge to the proposal.

Newsom's move applies to 469 Stevenson St., a stretch of flat asphalt tucked between Market, Fifth, Mission and Sixth streets. The city's Planning Commission in June of 2021 approved a 27-story, 495-unit apartment tower on the site — only to have supervisors stall the project four months later by demanding new environmental studies.

Now, the governor has given 469 Stevenson the green light to become a state Environmental Leadership Development Project. This means that once the project's formal environmental impact report is approved, if a lawsuit challenging it is filed, the state appeals court must settle the matter within 270 days.

The state intervention could set a precedent across California that goes beyond 469 Stevenson. Any housing proposal with a price tag above $15 million can apply for a similarly streamlined appeal process. Certification is granted if a set number of the units in the building are priced at affordable levels and the project can show clear environmental benefits.

"This reduces the risk of a protracted litigation," said Steven Vettel, an attorney for 469 Stevenson's developer, an affiliate of Build Inc. "Without this certification, you can be stuck in a three-year cycle. And time is money."

To get the state OK for fast-tracking any environmental appeals, a project must be built with union labor. It needs to be developed to national standards of sustainability and operate in a way that limits greenhouse gas emissions.

The plans for 469 Stevenson meet both criteria, according to the state's Office of Planning and Research. As for housing, the high-rise would include about 65 units for lower-income residents.

"We don't have enough housing and we need to cut greenhouse gases," said Jason Elliott, Newsom's top housing advisor. "This doesn't just apply to San Francisco."

The program builds on a decade-old state initiative to apply similar time limits to large projects such as Chase Center. This limits the ability of litigious opponents to use the California Environmental Quality Act to send high-profile projects into legal or regulatory limbo.

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Newsom signaled his desire to broaden that initiative's impact during his State of the State address in 2019: "We’ve expedited judicial review on CEQA for professional sports. It's time we do the same thing for housing." A bill allowing that was introduced in the state Senate the next year, and became law in 2021.

The developers of 469 Stevenson, Build Inc., were the first in the state to apply to use the expanded bill after their project became a flash point showing how the political process in San Francisco can be used to derail housing projects with drawn-out reviews and appeals.

A handful of activist groups in the South of Market neighborhood appealed 469 Stevenson to the Board of Supervisors after the Planning Commission signed off, demanding that the environmental impact report be broadened to take in such topics as gentrification. The Board went along on an 8-3 vote, even though social issues aren't part of standard environmental reviews.

The successful delaying tactic galvanized advocates for the construction of new housing and led to the first-ever "housing policy and practice review" by the state Department of Housing and Community Development. That review is still underway.

As for 469 Stevenson, it is scheduled to go to the Planning Commission for certification on April 20. Opponents would have 30 days to appeal a re-certification to the Board of Supervisors. Given the high cost of construction — and the current low demand for small market-rate apartments in downtown San Francisco — it's unclear when or if the project will break ground.

Editor's note: An earlier version of this story misstated that the certification would take the Board of Supervisors out of the environmental review process. The expedited review period would begin after the board approved any review.

Reach John King: [email protected]; Twitter: @johnkingsfchron