Daniel Lurie’s New Planning Director Has Her Eyes On A Housing ‘Long Game’

San Francisco is in the midst of its biggest housing upheaval in 50 years. This fall will bring a scrum of hearings and votes about taller buildings and more density across the Sunset, Haight, Glen Park, Cow Hollow, and other neighborhoods often allergic to new development. 

The city is also simplifying (and in some cases throwing out) years of tricky and difficult design standards, all while Mayor Daniel Lurie and lawmakers aim to speed up the city’s sluggish permitting process.

The Planning Department, with fewer than 200 people working within a set of laws too large to physically print, is in the middle of all of this. Stepping into the stormy fray is new director Sarah Dennis Phillips, nominated by Lurie via a controversial maneuver a month ago. 

Dennis Phillips previously ran the city’s Office of Economic and Workforce Development. She first worked in Planning back in 2005, then during a break from City Hall spent a few years at bigtime developer Tishman-Speyer, the residential and commercial firm behind the rippling Mira building. 

Her prime directive is now to push for the 82,000 or so new homes SF has pledged to create in coming years. That’s no surprise. She’ll get at it with connections to a who’s-who of local pro-density and business groups, including the urban think tank SPUR and the Housing Action Coalition. 

She’s open in her praise of the YIMBY movement — part social, part political — that has elevated housing into local, state, and national discussions. 

“When I left planning over a decade ago there was no YIMBY movement,” says Dennis Phillips says, noting that the balance of politics has changed. “We’ve gone somewhere really fabulous the last decade.”

The Frisc sat down with Dennis Phillips to ask about the gap between SF’s housing aspirations and the realities of the economy, limited space, and public opinion.

This conversation has been edited and condensed. 

The Frisc: The city’s housing goals say SF must create capacity for more than 82,000 new homes. But how does SF actually build them? 

SDP: One thing is we’re not just regulating projects but trying to proactively move them forward. I am super excited to see the change in the service mindset planners have from when I left in 2013. It’s an enormous shift. 

There are obstacles embedded in our code, so tranches of legislation — one was signed by the mayor last week — are a step in that direction. We’re going to keep looking at what obstacles exist, so that we’re not overly burdening development. We are looking at removing additional fees in the Market-Octavia area, where development is stalled like everywhere else.

We’ve [also] got to figure out how to proactively support new kinds of development. As I look at our rezoning map, the type of project that can be built in our highly resourced neighborhoods is a four-story, six-story, under 20-unit development. 

We don’t have a lot of developers that build that. How do we bring them here? That’s going to be a new thing for us. 

Which tools not on the table now SF should consider?

A thing we hear from constituents in the development industry is, in addition to fees and sometimes inclusionary being a bit of a burden, the transfer tax is very high, more than double most neighboring cities in the Bay Area.

Another issue that we hear [about] is enabling the use of single stairs in smaller buildings so that you don’t have to build two ingress-egress units in a very small project. 

We’re not doing this rezoning to usher in a boom of construction out of the gate. That might be nice, but that’s not on the table. The real goal behind rezoning of this scale — beyond the state asking us to, of course — is that by creating this much capacity, you’re creating flexibility for the market to work when it can work.

What we have done in San Francisco is hold the reins really tight on construction, then loosen up in one area, or for one period of time with lower inclusionary rates. Ideally, we won’t see one construction boom, we’ll see a regular, moderated pace of development.

You mention inclusionary rates, which dictate how many affordable units a market-rate building must include. They won’t get us to the 57 percent of the next housing wave that’s supposed to be affordable. Short of a miracle, what would get us anywhere close to that?

Here’s a great statistic: Just in the last two years, we’ve completed over 30 percent affordable compared to market rates. So we did 1,450 units in 2023 of 4,800 units total across the city, we did 1,600 affordable units in 2024 of 5,300 units across the city. Those are great numbers that we completed at a time when inclusionary wasn’t coming in. 

That said, you’re absolutely right, 57 percent is really, really high. Constructing that level of affordability of deed-restricted, city-subsidized affordable housing is going to be really hard. The thesis behind this rezoning is trying to create, in smaller and well-resourced neighborhoods, more naturally affordable units. 

Non-traditional, non-typical affordable housing [will] have to count. There are conversations right now about other tools beyond inclusionary we can add. We’ve been issuing bonds, and Supervisor Melgar just introduced a resolution to look at tax increment financing, so I think that conversation will evolve now. 

Back in 2022, Planning estimated it would take $2 billion a year to finance the level of affordable housing SF would need in the current building cycle.

Part of the reason our affordability goals are so high is decades of under-building. We’re looking at the long game here. Hopefully with this kind of capacity and a more sustained, level-headed pace of construction, inequality among housing prices isn’t so bad because supply isn’t so bad. That’s a long-term goal. 

There’s a ‘circuit breaker’ built into the Housing Element — opponents call it a ‘dirty bomb’ — which will force a greater acceleration of development if the city doesn’t issue enough building permits by 2027. Looking at the numbers, I believe SF is going to trip the breaker. What will that look like? The same streamlining and rezoning as now? Is it bigger or smaller? Do we know? 

We don’t. You’re right, things don’t look great. We’d need to do additional rezoning outside of the areas that we’ve been trying to protect, the priority equity geographies and the areas vulnerable to displacement. 

We’re going to be working on reducing constraints this entire time until we get to the circuit breaker. So there will be work that hopefully will count towards that. But it’s hard. I’m hopeful the development community will be our partners here, and that we’ll see some changes that will help. 

Another thing: there was a whole bunch of terribleness in the recent federal [“big beautiful”] bill, but one upside was a dramatic increase in tax credit allocation. We are planning on taking advantage of that, and hopefully that will help us between now and the circuit breaker. 

One thing planners do is meet the public to talk about new housing. How do you get people engaged in planning more generally — not just when they’re provoked by a project on their block? 

It’s a question we grapple with all the time. One thing we’re looking at is not just outreach through neighborhood groups [but also] major companies, small businesses, and workplaces, through our economic development counterparts, to employees coming in [to the office] four days a week, so they understand their options if they live here as San Franciscans. 

We want to encourage small business. Outside of displacement fears, what most want more than anything is more customers, and nothing brings steady customers like residential housing. 

When I left Planning over a decade ago, there was no YIMBY movement, there really was only neighborhood groups. There were no forums for folks who wanted to be San Franciscans but weren’t yet, or who had a more broad-minded view about San Francisco than just their neighborhood. We’ve gone somewhere really fabulous the last decade.

YIMBYs say we’ve limited development for 50 years. Density skeptics say we’ve been giving the city away to developers for 50 years. Each side believes in a totally different status quo. Is it Planning’s job to get these people communicating?

It’s certainly our job to talk to both of them. A lot of our education seems to happen in single channel forums. It would be great if we could find more forums that at least had [everyone] in the same room. 

The us-versus-them mentality harkens back to urban renewal. No matter how many protections are in place, it’s hard to tell people, ‘Don’t worry, this time is different.’ How do we turn the page on that? 

This Housing Element started with exactly that danger in mind. If you look at the rezoning, avoiding priority equity geographies, avoiding areas where we’ve previously made mistakes —

But then you see the response to the circuit breaker — ‘Ah, the dirty bomb, they snuck it in at the last minute, we knew it all along!’ 

I hear you. In addition to eminent domain, which was horrible and which will never be used again in San Francisco — at least, I can’t imagine it in my lifetime — the other issues were displacement and loss of cultural heritage. 

I think San Francisco more than anywhere has put tenant protections in place, which we’re going to strengthen by the way, that have prevented displacement through our designation of cultural districts and just our recognition of what exists in those neighborhoods. Just two days ago we had our monthly Community Equity Council meeting. I don’t know what we can do, other than show we’re not going to make the mistakes they’re worried we’re going to make. 

You mention that the family zoning program is going to include new tenant protections and protections for small businesses. But not many have been presented yet. When are we going to see more? 

On tenant protections, demolitions have been tiny, under 4 percent of no-fault evictions overall. We think we can do even better, with our new tenant protections we’re doing with Supervisor Chan. When you partner with others, as this mayor is finding out, the timeline is not yours to control. But collaboration is important. 

On the small business side, Supervisor Melgar introduced her Small Business Fund, which builds on work that [the city] has been doing over years, providing small businesses grants to enter vacant storefronts.

The good news is we have plenty of places for businesses to go. If a small business needs to relocate, permits will be fee-free for the first year. We will be providing relocation assistance. We can expand that even further, maybe make it so they don’t even need a permit to move in.

What is the city’s most promising horizon for development, both physical places and good design? 

Ideally, we’re going to see development happen across the city in a pretty balanced way. We’re going to see our big-capacity projects along the waterfront and downtown, but we’re going to see small-scale development through highly resourced neighborhoods. 

That future, if it develops, will have new neighborhoods like Mission Rock and big, new 2000-unit things. [But] people [won’t think] too much about the infill in highly resourced neighborhoods, because [it will be] just part of their fabric, and it won’t impact them except for bringing new neighbors.

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