The Long Road Home
What the Market and Octavia Neighborhood Plan taught us about community planningJuly 31, 2008
On April 15, 2008, the San Francisco Board of Supervisors adopted the Market and Octavia Neighborhood Plan, concluding eight years of planning and debate. Groundbreaking in many respects, the plan increased heights and densities along the Market Street transit spine while protecting what the planning department called the "fragile virtues" of the plan's fine-grained residential neighborhoods, replaced parking minimums with parking maximums, and proposed a series of transportation and pedestrian improvements. The plan also included a tiered fee structure in which fees for affordable housing were based loosely on a relationship to upzoning.
It's now time to explore this first Better Neighborhoods Plan's complicated legacy. What actually happened? Why did it take so long? And what can San Francisco learn from its first completed exercise in neighborhood planning?
BETTER NEIGHBORHOODS 2002
How should we plan for change in our city, given that people care about such different things and there is no way to make everyone happy? Some care most about stopping sprawl; some care most about affordable housing. Some care most about preserving the physical character of the city; some care most about preserving social and economic diversity.
Land use politics in San Francisco can be a blood sport. The traditional approach in San Francisco has been to fight development battles on a project-by-project basis – a conditional use authorization here, a rezoning allowance there. The dot-com boom of the 1990s created tremendous development pressures in San Francisco that, according to most accounts, were not well managed by the public sector. This provides the backdrop for the initiation of the Better Neighborhoods planning process.
In the late 1990s Mayor Willie Brown agreed to fund a set of neighborhood planning efforts, at the urging of SPUR, the Council of Community Housing Organizations and others. With funding in place for the 1999-2000 and 2000-2001 budgets, the Planning Department began working on a program ultimately called “Better Neighborhoods 2002.”1 The idea of the Better Neighborhoods program was to help manage change at the neighborhood level by creating a set of rules to guide both the type and location of growth that neighborhood residents and developers could agree upon. Through a community planning process, the Planning Department hoped to define a set of planning priorities that would then be formalized in an area plan. This area plan would constitute an amendment to the General Plan and be accompanied by planning code and zoning map changes, and projects consistent with the plan would not require additional discretionary approvals.
As part of the Better Neighborhoods pilot program, three planning areas were selected: Balboa Park, the Central Waterfront and Market and Octavia. These areas were chosen based on their proximity to existing or proposed rail transit lines and the significant opportunities within each area for adding jobs or housing. The hope in all of the areas was to plan proactively for balanced neighborhood change, rather than simply “letting it happen.”
Market and Octavia was an area in transition, a place where three city grids collided. The Central Freeway, an elevated structure damaged in the 1989 Loma Prieta earthquake, ran above Octavia Street fed by off-ramps in the Oak and Fell Street area. With the passage of Proposition I in 1999, the freeway was slated to be replaced with a surface boulevard, freeing up 22 parcels on approximately seven acres of developable land.
A plan was needed to make better use of the transit resources in the area — the Church Street and Van Ness Muni stations and the Civic Center BART station — and to help figure out the appropriate land use response to the transit, as well as necessary streetscape improvements to encourage the area’s walkability. This plan needed to be both transit-oriented and respect the fine-grained residential neighborhoods within the plan area.
Though optimistically named “Better Neighborhoods 2002,” the Market and Octavia Neighborhood Plan took approximately eight years to complete. In retrospect, the planning process fell into roughly four phases: the “Early Years” which comprise the neighborhood planning process up to the completion of the draft plan (1999 to 2002); the “Middle Years” which were dedicated almost overwhelmingly to completing the environmental planning documents (2002 to 2005); the Planning Commission phase (2006 to early 2007); and the Board of Supervisors phase (early 2007 to April of 2008).
THE EARLY YEARS: 1999 – 2002
In early 2000, the Planning Department launched the Better Neighborhoods planning process. In the Market and Octavia plan area, the department conducted a series of neighborhood meetings, walking tours of the neighborhood and bus tours to neighborhoods outside of the plan area. The idea was to understand which characteristics made the neighborhood special, and what people liked about the neighborhood and what they wanted to improve. The purpose of the walking and bus tours was also educational — to help people learn how to "read" a neighborhood, to be able to make sense of what was working well and what was breaking down. Some of the neighborhood groups, such as the Hayes Valley Neighborhood Association, also organized their own planning forums on planning topics that dovetailed with the Market and Octavia planning process. Many of these concepts would be further refined in the Market and Octavia 2002 Draft Plan.
While it carried out this initial planning work was being done, the Planning Department was also determining the scope of the Environmental Impact Report (EIR) for the plan area. The question of what would be included in the EIR and what would not was a question that would have major impact on the timeframe of the Market and Octavia planning process. Under State law, the California Environmental Quality Act (CEQA - the state law which requires environmental review for most projects and plans) allows program EIR’s to accompany specific area plans. The hope with the Better Neighborhoods program was that the environmental impacts of all the development in the plan area would be analyzed up front in an EIR for the overall plan area (called a “program EIR”), and that any conforming project (buildings, transit improvements, etc.) would essentially be pre-approved. The idea was to fight over the shape of the plan, rather than individual projects, and to then do all the environmental review at one time rather than on individual projects.
The Market and Octavia plan area occupies a unique place in the city and region. It sits at the nexus of city and regional transportation and is accessible from the entire Bay Area by BART and the regional freeway system. More than a dozen transit lines, including all of the city's core streetcar lines, cross the plan area to enter the downtown area.
2002 DRAFT MARKET AND OCTAVIA PLAN
In 2002, the Planning Department presented the draft Market and Octavia Plan back to the community. The plan included many strong elements, including:
- setting maximum amounts of parking allowed for new housing development instead of minimum parking requirements — in order to prevent an increase in traffic in the neighborhood
- regulating buildings by height, bulk, set-back and exposure requirements and not by the number of units in a building — thereby encouraging careful planning about what new buildings will look like rather than relying on the blunt tool of “density” limits
- encouraging high-density housing and mixed use development at the main transit node in the plan area (the intersection of Market Street and Van Ness Avenue)
- providing fairly prescriptive urban design and alley controls
At the time of its unveiling, those who had participated in the community planning process greeted the 2002 Draft Plan with widespread support. The Planning Department, satisfied that the community supported the concepts in the Draft Plan, moved into the next phase — completing the EIR, drafting the planning controls and zoning code language and preparing the initiation documents.
THE MIDDLE YEARS: 2002 – 2006
The middle years of the Market and Octavia planning process, from 2002 to 2006, were largely devoted to the completion of the technical documents needed to enact the plan. While all of these documents (finalization of the general plan amendments, drafting the planning controls and the zoning code changes) took an unduly long time to complete, the EIR timeframe was particularly problematic. In part the EIR took so long to complete because the project description — the description of the exact project being analyzed in the EIR — had shifted throughout the community planning process and in part because the EIR was attempting to make use of a new model (developed by the San Francisco County Transportation Authority) for how to analyze a project’s impacts on the city and in a broader geographic context.
The project also suffered from San Francisco's interpretation of transportation impact analysis requirements under CEQA, which perversely conclude that less density and wider roads are always better for the environment, and that auto-dependent sprawl at the exurban edge is better than urban infill near transit. While San Francisco's analysis requirements are not significantly better than those applied elsewhere in the state, they nevertheless continue to require planners to accommodate worst-case-scenario levels of auto trips and excluding the benefits of transit investments, such as the proposed Van Ness and Geary Bus Rapid Transit projects, that were undergoing separate planning processes. More importantly, the environmental review excludes consideration of the transportation factors of greatest concern to the neighborhood — walkability, personal safety and a variety of qualitative factors — focusing instead on greater accommodation of cars, something neighborhood residents wished to reverse. In the summer of 2005, a draft of the EIR was complete and made available for public comment.
By 2006, when the Planning Department presented revisions to the Market and Octavia plan based on information from the EIR as well as other sources, things in the neighborhood and the city had changed. For example, new parking legislation passed in the downtown district, which was less restrictive than the parking proposed in the draft plan, had implications for the parking requirements in Market and Octavia. In addition, there had been some demographic changes in the plan area. Rents and home values had increased as a result of the replacement of the Central Freeway off-ramp with the Octavia Boulevard. Some people who had been part of the planning process five years prior had moved out of the neighborhood. The leadership of the Duboce Triangle Neighborhood Association had changed. The Western SoMa planning process had been initiated for a neighborhood just east of the South Van Ness Avenue portion of Market and Octavia area. In short, while there was still a strong base of support for the plan from those who had participated in the planning process, there were also some new neighborhood stakeholders who did not feel the same sense of ownership over the plan.
The overall land use concept for the plan area recognizes and builds on the neighborhood's central location. Higher density mixed-use development is clustered around the intersection of Van Ness Avenue and Market Street, a major public transit transfer point, while smaller scale commercial districts are proposed along the Gough Street and Octavia Boulevard corridors. Residential uses located both north and south of Market Street are preserved.
THE PLANNING COMMISSION: 2006 – 2007
In the fall of 2006, the Planning Commission voted to initiate the adoption process for the Market and Octavia plan. Between initiation and plan adoption, the commission would hear the Market and Octavia plan no fewer than twelve times. Hearings were grouped by topic: For example, the first adoption hearing focused on plan overview, land use, height districts and design guidelines, while the second was centered on historic preservation, parking, and housing density controls. Staff presentation was structured around these topics, but public comments ranged far afield, tending to be focused on the speaker’s chief concern or point of support, regardless of the hearing’s scheduled topic.
Although many of the people who had participated in the planning process in the early years attended hearings to voice their support for the plan, others had concerns. Some had to do with specific issues, such as parking. Others were localized, such as upzoning on particular parcels that would block individual private views.
Two of the major concerns raised through the discussion at the Planning Commission had to do with historic preservation and the other with the “community improvements" program and housing affordability. In the intervening years since the 2002 Draft Plan had been published, the historic preservation community had come to believe that historic surveys of all plan areas should be completed prior to plan adoption, and advocated for planning to stop while survey work caught up. In response to these concerns, a number of historic preservation protections where added during the Planning Commission process, including the establishment of interim scrutiny areas that would be subject to increased permit review procedures until the historic preservation survey is complete, as well as a set of procedures for how the historic survey for the area would be integrated into the plan.
Thinking around the question of development exactions had also shifted in the four-year period since the draft plan had been adopted. In 2005, the Planning Department completed a rezoning in the Rincon Hill neighborhood. The Rincon Hill rezoning included a negotiation with the local Supervisor, Chris Daly, where a substantial sum of money was exacted from the proposed development projects for community benefits in exchange for the right to build towers twice as tall as previously allowed. In 2006, the inclusionary housing ordinance (in which developers are required to provide a certain percentage of their units at below-market rates) was also updated to cover more projects and require more affordable housing units during the adoption phase for Market and Octavia. The update to the inclusionary housing ordinance was based on a financial feasibility analysis that sought to understand how high the requirement could go.2 Between 2002 and 2006, both the public sector and community advocates had become much more sophisticated and aggressive in their thinking about how a public benefits package should be structured.
While the Planning Department’s proposal for community improvements rightly included both an analysis of how much library, childcare and recreational facility capacity were needed in the neighborhood on a wish list of new capital improvements, the question of how much new development should pay for these public benefits was a point of contention. Unlike the citywide inclusionary housing study, which relied on economics consultants and a broad-based community advisory board to come up with the right numbers, the planning process did not initially include a rigorous analysis of how high exactions could go before rendering development infeasible. As a result, some advocates simply asserted that more should be required from new development while others countered that more could not be paid. In response, at the end of the process, the Planning Commission directed staff to analyze whether additional fees could be levied in the area with the tallest proposed building heights, near the intersection of Market Street and Van Ness Avenue.
One other key point missing from the plan was one of the original pieces of the Better Neighborhoods Plan, namely that in exchange for stringent advance planning and public benefit exactions, developers would have certainty that their individual project, if in conformance with the plan, would not require extensive discretionary approvals. The 2006 draft planning code amendments actually substantially increased the number of projects requiring conditional use approval.
On April 5, 2007, the Planning Commission voted to adopt the Market and Octavia Neighborhood Plan, and to forward the entire package to the Board of Supervisors. This package included most of the central pieces of the original plan, as well as a slight increase in parking maximums from the initiation package, greater historic preservation protections and the addition of a “soft cap” on density in the plan's new Residential Transit Oriented (RTO) districts.
THE BOARD OF SUPERVISORS: 2007 - 2008
Although the Market and Octavia Plan crosses three political districts — District 8, represented by Supervisor Bevan Dufty, District 6, represented by Supervisor Chris Daly, and District 5, represented by Supervisor Ross Mirkarimi — both Dufty and Daly owned property in the plan area and were therefore recused from voting on the plan. Supervisor Mirkarimi therefore was the primary advocate for the plan on the Board of Supervisors and took on the role of carrying the legislation forward to implement the plan.
After the Planning Commission approved the plan in the spring of 2007, it was in the Board of Supervisors’ hands. Mirkarimi assembled people considered leaders in the area to weekly meetings to try to hammer out a compromise between the neighbors who supported the plan and those who were still dissatisfied. By all accounts this was an extremely labor intensive and time consuming effort. Chief among the outstanding concerns raised through this process were:
- that the affordable housing program was insufficient
- that while the plan included some of the best existing transit access in the city, the transit improvements proposed in the plan were not completely funded
- general concerns about the allowance of high-rises just west of downtown
Additionally, while some groups where satisfied with the increases in the allowed amount of off-street parking, as supported by the Planning Commission, others wanted to return to the lower parking ratios contemplated in the original 2002 Draft Plan.
Meanwhile, at the Planning Commission’s direction, Seifel Consulting had been hired to conduct a financial feasibility analysis and determine whether additional fees could be assessed based on the value created from the increase in allowed heights and the change of allowable use — from office to residential — in the special use district. The completed study recommended against adding fees beyond the proposed $10.00 per square foot public benefits fee and the already existing fees in this district, because they would dissuade new development. The results of this analysis were not what the activists wanted to hear.
In early 2007, Supervisor Mirkarimi put forward a series of amendments to the Market and Octavia Neighborhood Plan.3 These included a reduction of the parking ratios back to those close to what was proposed in the 2002 Draft Plan, the addition of language defining the role of the Citizens Advisory Committee (CAC) for the plan, and a proposal to double the community benefits fee from $10.00 a square foot to $20.00 a square foot.4 Those who wanted development in the plan area to occur opposed setting the fee above the level the Planning Department had determined to be feasible. Ultimately, through a negotiation that included Supervisor Mirkarimi, Supervisor Peskin and the Mayor’s Office, a compromise was reached that lead to a tiered fee for affordable housing based loosely on upzoning.
The final amendments to the Market and Octavia plan included the original parking ratios closer to those put forward in the 2002 draft plan, the tiered fee for affordable housing, the inclusion of the “soft cap” throughout the residential transit oriented districts (not just in the Duboce Triangle Neighborhood) and some additional requirements for reporting and monitoring. On April 15, 2008, the plan was passed by the Board of Supervisors and shortly thereafter signed into law.
The Market and Octavia Neighborhood Plan became effective in late May of this year. As of the writing of this article, some neighborhood groups based outside of the plan area are contemplating legal action against the City under CEQA because they fear that some of the planning ideas (density near transit, reduced parking, etc.) will spread to other parts of the city. One group, the Coalition for Adequate Review, that won a lawsuit challenging the CEQA exemption for the Bicycle Plan, has already sued the City alleging the plan’s EIR is inadequate that the approved plan is inconsistent with the City’s General Plan.
It is probably too early for us to really make sense of all that we have learned from the Market and Octavia planning process. Nevertheless, there are a few lessons that we can point to now, as well as a whole host of questions that require further exploration.
The Market and Octavia Neighborhood Plan aims to increase density in areas closest to transit while respecting the qualities of fine-grained neighborhoods, such as Duboce Triangle (shown here).
Lesson #1: More process does not necessarily equal greater democracy.
In San Francisco, we really value process. It is important to us that everyone have an opportunity to share his or her thoughts, experiences and opinions. However, in a process such as this, the length of the process and the number of opportunities for input mean that some voices count more than others because they are heard more than others. People who have more free time or who are paid to be part of the process can devote more time to attending public hearings. People with access to childcare can participate more easily than those without. People who are good at speaking in public do better than those who are nervous. People who are not comfortable with conflict and being attacked personally might as well not show up at all. Finally, in the case of the plan at hand, the endurance to stay involved for almost a decade may be the greatest determinant of all as to whose voice is heard.
The question of who represents the “community” is raised in any neighborhood planning process, but in a process as long as this one, many of the neighborhood residents have changed. New residents have moved in, and others have moved out. Is the community represented by the perspectives of established neighborhood groups? Does it matter how many people are members of such groups? Does it matter whether they are new to the neighborhood or have lived there for many years? Does it matter whether they have been making an effort to participate in the plan from the beginning of the process or whether they chose to participate only at the end when the plan is headed toward adoption?
Some people argue that self-selected neighborhood participation is inherently undemocratic and suggest that appointed boards — such as the City’s Rent Board — can do a much better job of ensuring that the major viewpoints are fairly represented. Others believe that actually having residents elect the members of a neighborhood planning body is a better solution.
All of these models — selected, appointed, or elected — assume that the “community” of affected people who should be involved in a neighborhood plan reside within the plan area boundaries. If this premise is not true, then the democratic problems grow even thornier.
Lesson #2: We have the capacity to do great neighborhood plans, but it will be nearly impossible to adopt them unless we find a way to complete technical documents within a shorter timeframe.
The Market and Octavia plan is, by and large, a step forward. And most people agree that the community process in the “early years” that led to the 2002 draft plan, was both productive and inclusive. Whatever else we take away from this process, we should not forget that we have demonstrated our capacity to do excellent neighborhood planning work.
While the blame for the “middle years” can be laid at many doorsteps, the fact remains that the lag between the completion of the draft plan and the initiation of the adoption hearings in 2006 meant that many of the people who had participated in the 2002 version had either moved away or had become disconnected from or discouraged by the planning process, leaving the plan open to attacks on multiple fronts.
The main lesson from the Market and Octavia planning process is clear: we have to learn how to do these plans faster. One option is to do plans at the same scale, but with much greater frequency. If we completed a planning process in one to two years, with the knowledge that we would revisit the same set of issues five to 10 years later, then not every issue would need to be addressed every time. The fact that these plans are taking eight to ten years to complete means that while we address many issues in our plans, we don’t end up doing very many plans.
The highest densities in the Market and Octavia plan area will be clustered around the intersection of Van Ness Avenue and Market Street, shown here. While the intersection is an important landmark and transportation hub, its current form does not express that importance.
Lesson #3: It is still not clear what the benefits are from doing a program level Environmental Impact Review, nor what the appropriate level of depth for a program level EIR is.
The Market and Octavia plan’s EIR originally sought to be specific enough to clear certain public projects and to allow development projects that conform to the plan to be exempt or do simpler CEQA documents. Yet the depth of the scope of the EIR was part of the reason why it took years to complete. Other program level EIR’s cover less detail and are meant to provide minimal coverage for the plan to move forward, but are completed in a much shorter time frame. It’s not clear if the investment in the environmental review was worth it, if it will actually serve the streamlining purpose that was intended.
Lesson #4: Development fees need to be based on a thorough feasibility analysis, not negotiated through a political process.
This means that the City must generate a robust feasibility analysis and decision-makers must set fees based on that analysis. When the Market and Octavia planning process began in 2000, there were fewer successful models about how to set fee levels. In the intervening eight years, the Rincon Hill exaction fight occurred, the inclusionary housing fees were raised and the “Better Neighborhoods Plus” legislation was drafted (though unfortunately not adopted). We now have a much better idea of how to structure a needs assessment to determine what the impacts (and benefits) of development will be. We also have a much better idea of how to do a financial feasibility analysis and how to structure a process to arrive at an appropriate level of fees.
Our perspective on development fees is somewhat different from both the developers and the activists. We do not think that this is a topic with a “progressive” vs. “moderate” spectrum; rather, we think it is a technical subject, where a correct answer can be found.
The Eastern Neighborhoods public benefits program holds much promise as a model for how fees should be set. Drawing on the basic structure of the financial feasibility analysis, the program seeks to understand the relationship between value conferred through upzoning and the value that can be extracted for public benefits. While nexus studies serve to provide some framework for thinking about the impacts of development (though not, it should be noted, its benefits) and, perhaps more importantly, to provide the legal justification for the fee levels, the understanding is that development fees need to be set based on the financial feasibility analysis.
Of course the rest of the public infrastructure needed to make a neighborhood great that can’t be paid through development fees requires additional sources of funding beyond development fees. The Market and Octavia plan recognized this reality and the Eastern Neighborhoods plan has continued to develop creative ideas for public infrastructure funding.5
While it remains to be seen whether the discussion around the setting of exactions in the Eastern Neighborhoods will be successfully rooted in the Planning Department’s financial feasibility analysis, the opportunity to have a rigorous, fact-based discussion exists.
Finally, a separate, but equally important issue has to do with certainty for development as well as for the residents within the plan. One of the original intentions of the Better Neighborhoods program was to exchange more stringent up-front planning requirements and development fees for greater certainty in the development process for projects that conform with the plan. While the stringent planning requirements and the development fees were a central part of the Market and Octavia Plan, the plan did not include a reduction in the discretionary approvals required. Future neighborhood plans should explicitly contain all of the pieces, not just the most politically palatable ones.
Lesson #5: We need to make sure that neighborhood planning takes on the hard questions.
States with effective growth management laws — for example, Washington and Oregon — do all of their neighborhood planning in a regional context. They start with a vision of a regional form, then allocate job and housing growth to counties and cities which, in turn, allocate these growth targets to neighborhoods based on their citywide planning efforts. Viewed in this regional context, a neighborhood plan always starts with the number of people and jobs that it will accommodate.
In San Francisco, we often make the mistake of asking, too simply, what people currently living in a neighborhood would “like” and seeing what the number adds up to. Because this is essentially what every neighborhood in Northern California does, we have ended up with the kind of development patterns that are destroying the land, air and water of our region. We do not ask neighborhood plans to help solve the problem of regional growth. This ends up skewing the process to focus only on the smaller issues particular to the neighborhood.
The Market and Octavia plan was fortunate to have some exceptional leaders living within the plan area. It had people who led the fight to bring down the Central Freeway. It had people who understood that they needed to reduce car trips in order to make their neighborhood more livable. The educational process at the beginning of the planning process helped to galvanize some residents who in turn began helping to educate their neighbors. Because of the good fortune of having this particular set of people involved in the first adopted neighborhood plan of this generation, this particular plan turned out pretty well. But it’s not because the process even attempted to address regional growth issues.
A lot of things would be easier if the federal government and the state government worked differently. If we had federal action on global warming, we wouldn’t have to be relying on the piecemeal, less effective action of cities— but we are trying our best at the local level because it is the ethical thing to do. The same should go for growth management: while we don’t have the state telling us how much growth we would need to accommodate in order to stop sprawl, we can pretty well figure it out ourselves and we can and should model sustainable regionalism on our own, even while encouraging other jurisdictions to do the same.
It is easy to look at the Market and Octavia planning process and point to the mistakes we can now see clearly and the things we want to do differently the next time. And yet we need to keep in mind that this was the first neighborhood planning effort to be completed and successfully adopted in the last twenty years. A tremendous amount of learning and experimenting was done on the back of this plan. The Planning Department, the Planning Commission, the Board of Supervisors and the general public all learned what an enormous effort it is to complete a plan of this magnitude and scale. Most importantly, while the process was lengthy and arduous, I would argue that the plan, on balance, is very good: its main success is that it strongly relates land use to transit infrastructure while preserving neighborhood character. It remains to be seen whether other neighborhood planning processes can build on its successes, while making the changes necessary to improve the process for everyone.
1. One of the early, but ultimately discarded, names for the program was Transit Community Urban Plans, or “TCUPS.”
2. Additionally, work on a piece of legislation called Better Neighborhoods Plus sought to put a finer point on how public benefits were determined, who should pay for them, and how the implementation of public benefits packages should occur.
3. Although the General Plan amendments were adopted in October of 2007, the Planning Code and Zoning Map amendments did not move forward until February of 2008.
4. Supervisor McGoldrick also proposed a series of amendments to the plan, some of which were ultimately accepted by Mirkarimi and included in the final legislation.
5. One option that the City should pursue aggressively is to seek state legislation to create tax increment finance districts (TIF), without establishing the redevelopment areas that typically accompany the use of this financing tool.