Bob Tillman has spent nearly five years and $1.4 million on a legal battle to turn his coin-operated laundromat into an apartment building. His saga perfectly encapsulates the political dysfunction that's turning San Francisco—once a beacon for immigrants and home of the counterculture—into an exclusive playground for the ultra-wealthy.
The median cost of a single-family home in San Francisco is already five times the U.S. average, and the city now has the highest rent per square foot of any municipality in the nation. The explanation for the crisis is simple: As the city's population has surged, developers have found it nearly impossible to construct more housing. About 80 percent of San Francisco's existing buildings were already standing in 1980.
Tillman has owned his small laundromat in the Mission District for 20 years. In 2013, with the housing market hitting record highs, he decided to tear it down and build an eight-story, 75-unit apartment building. (Christian Britschgi first covered Tillman's project for Reason back in February.)
At first, it didn't seem like a controversial project: Nobody lives above the laundry, the building wouldn't displace anyone, it qualified for a density bonus and streamlined approval process under state law, and the site was already zoned for housing. While San Francisco passed a comprehensive zoning code in 1978 that restricted the construction of new housing to certain areas, mandated design elements, and limited the height of new structures in some parts of the city to just 40 feet, none of those regulations stood in the way of Tillman's plans.
"If you can't build here, you can't build anywhere," he told Reason.
But San Francisco developers are still required to get permission from city officials for any new construction, so, in early 2014, Tillman began submitting paperwork to the City Planning Department. He went through an environmental review, an application for a conditional use permit, and multiple public hearings.
In late 2017, the Planning Commission was ready to vote on Tillman's project, three and a half years after he first applied to build. That's when the real fight started.
The first hurdle came when the Planning Commission ordered a detailed historical review, based on a claim that various community groups had offices on the property in the 1970s and 80s, so the site might qualify for preservation. The resulting 137-page study cost Tillman $23,000 and delayed him an additional four months. It found that the laundry didn't merit landmark status.
But Tillman's project was still far from being approved. City law says that any individual or group, no matter where they live, can pay a $617 fee to appeal a decision by the Planning Commission. In this case, the challenge came from an organization called Calle 24, which declined Reason's interview request.
Calle 24 is one of several neighborhood groups determined to stop gentrification in the Mission, a neighborhood that's home to a working-class, Latino community. In the late 1990s, wealthier white residents starting moved in, driving up housing prices faster than in the rest of San Francisco. The group opposes market-rate housing on the grounds that it displaces low-income residents, and it set out to extract major concessions from Tillman.
Todd David, the executive director of the non-profit San Francisco Housing Action Coalition, attributes displacement in the Mission to the failure to build new housing. "When you have people with resources competing with people with fewer resources for a limited commodity, who's going to end up with that commodity?" David told Reason.
San Francisco's stringent rent control laws can slow that process. In buildings that were constructed prior to June of 1979, which describes about three-quarters of the city's existing rental properties, landlords can't increase rent by more than the rate of inflation. One year, owners of controlled units were allowed to boost rents by just 0.1 percent. In the Mission, this has allowed some long-term tenants to stay put, but rent control discourages new housing construction and merely delays the inevitable. When a tenant dies or moves out, landlords can raise the rent to market levels.
The city has tried to slow gentrification by requiring that all new buildings set aside a portion of their apartments for subsidized housing. In the case of Tillman's project, 11 percent of the units would be available only to families that earn less than 55 percent of the area's median income.
Organizers with Calle 24 said this wasn't nearly enough. At Tillman's first hearing before the Planning Commission, advocates asked for another delay to work out a deal for him to sell the laundry to a nonprofit that would use donations and government subsidies to build 100 percent affordable housing.
In November of 2017, the Planning Commission approved Tillman's project over the fierce objections of anti-development activists. After the Commissioners rejected another delay tactic, Calle 24 appealed the ruling to the San Francisco Board of Supervisors, the city's primary legislative body. That process would take another seven months.
Tillman feared his project was dead. The laudromat is in an area of the city represented by Supervisor Hillary Ronen, who's closely allied with the community groups fighting to stop the project. (Ronen didn't respond to Reason's interview request.) When the 11 members of the legislative body consider a local project, they generally defer to the supervisor who has home jurisdiction.
The Supervisors held a public hearing on the project on June 19, 2018. Four and a half years into the process, Ronen and the other Supervisors raised a new issue: Citing the California Environmental Quality Act (CEQA), an environmental law, they expressed concern that the building would cast a partial shadow on a playground next door. The Supervisors voted to delay the project.
Tillman says such shadows are not a legitimate grounds for appeal under CEQA, and that the Supervisors manufactured the issue to delay his plans further. So he sued San Francisco for $17 million in damages, or what he says his building would have generated thus far if not for the city's illegal delays. Litigation is rare tactic by San Francisco developers, who fear political retaliation on future developments. With only one project, Tillman had less to lose.
But in October of 2018, just two months after Tillman filed his lawsuit, the Planning Commission delivered a surprise. It had independently studied the shadow issue and found that it wouldn't have a significant negative impact on the playground next door. The Commission quickly reapproved the project, and Calle 24 declined to appeal.
Tillman finally has the green light to move forward, but he hasn't yet withdrawn his lawsuit out of concern that the Board of Supervisors is devising new ways to try to derail his project.
"We're in a hole," says Tillman. "And the first rule of holes is when you're in a hole, stop digging."
Produced, written, and edited by Justin Monticello. Camera by Monticello and Zach Weissmueller. Additional sound by Ian Keyser. Music by Spazz Cardigan, Silent Partner, The 126ers, Topher Mohr and Alex Elena, Gioachino Rossini, StrangeZero, and Riot.
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