Two San Francisco lawmakers want the city to consider suing California over a state law they see as an unfair, discriminatory mandate to build more market-rate housing. 

It’s the latest development in a long, drawn-out policy battle over how the city should solve its affordability problems. 

In a Dec. 26 letter, Board President Aaron Peskin and Supervisor Connie Chan asked City Attorney David Chiu to advise the Board of Supervisors on defending the city against the “unfair legislative mandates that are diminishing our City’s ability to build the affordable housing our residents desperately need.” 

The letter refers to SB 423, a state law sponsored by state Sen. Scott Wiener, a Democrat who represents San Francisco and is a former supervisor himself. The law forces cities to cut red tape, especially discretionary reviews, from the approval process for new housing. After much legislative foot-dragging, San Francisco recently approved a law that changed most of the city’s approval processes to comply with SB 423. Peskin and Chan were the only votes against the law. 

“The anti-housing forces in San Francisco are terrified because SB 423 will actually help San Francisco address its housing shortage,” Wiener said in a statement. “This bogus (talk of a) lawsuit further exposes how badly San Francisco needs to be held accountable for its intransigence on housing. These supervisors would do well to spend more time on solutions instead of continuing to create more obstacles.”

Wiener is not the only member of San Francisco’s delegation to Sacramento to be disdainful of Peskin and Chan’s letter. In a series of tweets, Assemblymember Matt Haney remarked, “Can’t make this stuff up.”

A spokesperson for the City Attorney’s Office told The Standard that they could not publicly comment on the letter. 

Peskin and Chan’s letter also argues that San Francisco has kept up its end of the bargain by leading in investments in subsidized housing and that “nearly three-fourths” of the city’s housing quota is already in the city’s planning pipeline, but those units are “awaiting a more favorable economic environment to be constructed.” 

The Planning Department has estimated that a little over 1,800 new housing units were cleared for building in 2023, making it one of the worst years for home building in recent memory, as high-interest rates and construction costs and an overall depressed market have made new projects hard to finance. Many in the industry say the situation could change this year. 

Peskin and Chan’s letter cited a report from the city’s budget analyst that identifies 60,000 existing vacant housing units. That report is widely disputed by housing policy professionals who argue that almost all the units in the report are in fact in some sort of transition to occupancy. 

Chan also cited the report in a Dec. 18 newsletter sent to constituents urging them to participate in an online survey for a draft zoning proposal from the Planning Department that would densify some corridors in “high resources neighborhoods” on the west side of the city, including Chan’s district. She described the plan in antagonistic terms as a product of “Mayor London Breed and her Planning Department.”

The letter further argues that San Francisco is being “set up to fail” under SB 423, forcing the city to “approve unaffordable market-rate housing developments across the City without any public input, well ahead of any other jurisdiction in the State. Instead, what we need from the State is a major investment in affordable housing.”

John Avalos, Executive Director of the Council of Community Housing Organizations, a coalition of affordable housing developers and tenant advocates, concurs with Peskin and Chan, called the letter “bold and neccessary” to protect San Francisco from state policies which “have been written by the real estate lobby.”

Meanwhile advocates for greater housing supply take serious issue with the letter. 

Jake Price, San Francisco organizer for the Housing Action Coalition, called the letter “a cheap political stunt— This is just another example of how far certain supervisors are willing to go to obstruct desperately needed housing policy reform,” he told The Standard in an email.

“If these supervisors spent a fraction of the amount of time they do wasting city resources on trying to fight new housing instead of allowing more to be built, we could’ve addressed our housing shortage years ago,” added Jane Natoli, San Francisco organizing director at YIMBY Action.