A great news for San Francisco residents is that starting with November 27th, 2022, the 4 Unit Density Exception ordinance took effect.  If before, you were allowed to have only 1-3 units plus ADU on lots located in residential RH Districts in San Francisco, this ordinance allows for up to 6 units.

At CityStructure, our vision is a world where every homeowner has a clear understanding of the development potential of their property. This is why we give you free access to the Untapped Development Potential for any property.

Why this ordinance is good for homeowners?

Because the new units could become market rate condos! Through an amendment, homeowners that utilize the density exception program to add one or more units to an existing single-family home may apply to form condos through a new construction pathway if the owner signs an affidavit stating their intent to reside in one of the dwelling units for at least three years after the issuance of the Certificate of Final Completion and Occupancy. In this way you can recuperate the investment and make a profit. Considering that you could build at approx. $500 and sell at ~$1,000 or more in some neighborhoods in San Francisco, the profit is substantial.

Exciting! Now let's get into details.

In all RH districts (RH-1, RH-1D, RH-2, RH-3), you are allowed to have up to 4 units (not including any allowed ADU’s) on a regular lot, and up to 6 units (not including ADU’s) on corner lots, as long as you and your project meet certain conditions.

Conditions for homeowners to benefit from 4 Unit Density Exception

  1. Projects may not seek or receive a density bonus via State Residential Density Bonus Program, Analyzed or State Density Bonus Program: Individually Requested
  2. Projects must demonstrate that they will not cause a substantial adverse change to the significance of a historic resource;
  3. Any demolished Residential Units must be replaced, including protected units. Projects must also offer relocation benefits and right of first refusal to protected units with lower income households;
  4. Any units created due to the density exception (aka over the base allowable zoning), will be subject to rent control;
  5. At least one dwelling unit created under the density exception must contain 3 or more bedrooms, or shall be no less than 1/3 the size of the largest unit (measured as floor area);
  6. The lot for the proposed project must have been owned by the same property owner for at least one year prior to the time of their application submittal. Property owners who have inherited the property from an “Eligible Predecessor” may add the time the predecessor owned the property towards this requirement. Eligible Predecessor is inheriting through a trust, from a blood, adoptive, or stepfamily relationship, specifically from a grandparent, parent, sibling, child, grandchild, spouse or registered domestic partner of such relations, or the property owner’s spouse or registered domestic partner.

No streamlined permitting or ministerial review process

Unfortunately, this ordinance did not introduce any streamlining. Processing these types of projects will likely take the same amount of time that a regular project of a similar scope of work would take currently. So, if a project proposes demolition, it will still require a CUA process, which can take 6-12 months to reach a hearing (depending on department backlog and completeness of application).

The maximum building size stays the same

Projects that provide at least four dwelling units are subject to a 30% rear yard or 15ft, whichever is greater. All other projects will be subject to the buildings standards of their underlying zoning district. Here is large a building may be allowed on your property.

Historic buildings could be altered

Historic Resource Assessment fees shall be waived for projects seeking to utilize the density exception if the applicant signs an affidavit stating their intent to reside at the property for at least three years post construction (issuance of the Certificate of Final Completion and Occupancy). Permit fees for Historic Resource Determinations (HRE’s) will not be waived.

How much could you build on your property?

First, you need to understand the size of the existing building, if any, and then to see if there is any untapped potential for your property based on the city zoning and state regulations. So, you start by searching your address to check its zoning district.