Commission OKs legislation legalizing Castro in-law units

San Francisco got a step closer Thursday to creating a new source of less-expensive housing in one neighborhood — or at least doing it legally.

The Planning Commission gave unanimous support to legislation by Supervisor Scott Wiener that would allow property owners in the city’s famed Castro district to build in-law units: the small apartments, typically built in converted garages, storage areas or attics, that have proliferated illegally in some neighborhoods for years.

The legislation, which still needs approval from the Board of Supervisors and Mayor Ed Lee’s signature before it can become law, is viewed as a pilot program that could be adopted elsewhere in the city as officials try to deal with soaring rents, out-of-sight home prices and tenant displacement amid a tech-led economic boom.

“This is just one piece of the

puzzle,” Wiener told the commissioners. “There are many things we have to do. But this is a step in the right direction.”

Allowing new in-law units would create housing that proponents say is “affordable by design.” The units are small, often on the ground floor and typically don’t have views, and thus can’t command a premium price.

A study by the Asian Law Caucus of existing in-law units in the Excelsior neighborhood found that a two-bedroom inlaw unit rented for about $1,200 a month, about the same price as a legal studio or one-bedroom apartment in the same neighborhood.

In a city where rents are considered the highest in the nation and rising at a pace triple the national average, creating cheaper housing quickly is key, say proponents like Wiener.

More flexibility

His legislation would

“This is just one piece of the puzzle. … But this is a step in the right direction.”

Supervisor Scott Wiener

waive some zoning requirements and provide more flexibility under the building code to allow most homes and apartment buildings in the Castro Street Neighborhood Commercial District to add one or two more units than currently allowed. The new units would have to be built within the “envelope,” or confines, of the current building and couldn’t, for example, be built into the backyard.

Legalizing in-law units, sometimes called granny flats, has been controversial in San Francisco for years, and previous efforts to OK the practice have failed amid concern about impacts on parking, property values and what opponents called “neighborhood character.”

While Wiener’s plan wouldn’t deal with the estimated 30,000 to 40,000 in-law units that have been built without permits throughout the city, a separate measure by Board President David Chiu would look at ways to legalize those units.

The unanimous support of the Planning Commission was not without concerns.

Those included worries about more pressure on street parking when homeowners convert garages to housing and whether the legislation would actually lead to more long-term rental units or mostly transient housing to be listed on vacation rental sites like Airbnb.

“I do have some concerns that there will be some consequences and side effects down the road,” Commissioner Rodney Fong said.

In-law units may be cheaper than others, but that doesn’t necessarily make them affordable for many people. Commission President Cindy Wu pointed to a report that found a household now would have to make $108,000 a year to afford a 750-square-foot onebedroom or studio apartment in the Castro.

“It really seems like this is going to be more of the middle-income housing strategy,” Wu said.

Rent control question

New units in buildings already covered by the city’s rent control would also be subject to that law, Wiener said, but it’s unclear whether adding an in-law unit to a building not covered by rent control, like a singlefamily home, would then make the entire building subject to the law.

“My legislation is silent on that and state law governs,” Wiener said. “There’s no state court appellate ruling that definitely addresses that issue.”