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Report on and acceptance of the Anti-Displacement Roadmap (Tony Rozzi, Deputy Economic and Community Development Director)
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RECOMMENDATION
Recommendation
Staff recommends that the City Council accept the Anti-Displacement Roadmap and provide feedback on action priorities.
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EXECUTIVE SUMMARY
In early 2024, City Council launched a formal study on residential and commercial displacement, responding directly to recent concerns raised by advocates during the General Plan and Housing Element updates. To lead this effort, the City hired HR&A, a nationally recognized firm specializing in displacement issues. Since then, HR&A and partner firm Kearns & West have engaged the community: forming a Community Advisory Committee, interviewing key stakeholders, and attending citywide events to gather lived experience narratives and strategies to combat displacement.
This effort was layered on the City’s existing anti-displacement strategies that have already helped stabilize residents, including:
• the substandard housing displacement ordinance;
• emergency rental assistance program;
• live work preferences for affordable units; and
• recently adopted Single Room Occupancy and Mobile Home conversion ordinances.
And for business owners, the City economic development strategies include:
• Initiating a Business Improvement District study group;
• Negotiating community benefit agreements that include commercial space for local or displaced business tenants;
• An Arts and Makers Overlay requiring creative users on the ground floor of redeveloped properties in Lindenville to preserve industrial space; and
• Launch Local! to provide below market rents for new brick and mortar businesses in City owned spaces
The confluence of Bay Area economic forces, real estate development, and rising wage inequality makes displacement feel nearly inevitable, but the local transformation is particularly dramatic. The East of US-101 area has converted from heavy industry into a world-leading biotech cluster. This growth has supercharged rents and created high-skill jobs that are largely inaccessible to or mis-matched with resident skillsets, disproportionately going to non-residents.
This local pressure is compounded by a regional housing crisis. New construction has failed to keep pace with massive job growth, driving housing prices up across the Bay Area. The local consequence is clear: higher-income earners are flowing into South San Francisco, while lower-income households are pushed out to less expensive communities. Though residential displacement is region-wide, the impact on our Downtown is acute, marked by a 38% decrease in Latino households since 2012.
The City has a path forward, however - the Anti-Displacement Roadmap (Attachment 1) offers a comprehensive collection of strategies designed to mitigate the risk of residential and commercial displacement, provided they are appropriately funded and implemented.
To stem the loss of lower-income residents, the Roadmap prioritizes strategies like:
• Targeted legal education for renters and landlords;
• Introduction of a rental inspection program to ensure habitability; and
• Dedication of City-owned sites for new affordable housing development.
To preserve small businesses struggling to remain in South San Francisco, recommendations include:
• Expanded technical assistance and professional business coaching;
• New storefront opportunities via the Launch Local program;
• Creation of a Business Improvement District for dedicated reinvestment; and
• A Small Business Anti-Displacement Emergency Fund.
Funding and staff persistence will be required to activate these strategies. The remaining report will provide detail on the findings and proposed policies for City Council consideration.
EXISTING EFFORTS ALREADY UNDERWAY
Residential
The City has not been complacent, particularly regarding renters - several policies and programs are already in place to manage displacement. In 2019, the Housing Division brought forward a substandard housing displacement ordinance mandating tenant relocation assistance when a building or unit is deemed uninhabitable due to code enforcement activity.
In February 2020, the Council authorized seed funding for an emergency rental assistance program. When the COVID pandemic was declared in March 2020, the City was positioned to increase the program’s budget with Federal assistance, utilize YMCA as the administrator, and prevent evictions when Bay Area employment spiked to 13% in April 2020.
More recently, the Council has adopted a live work preference for each affordable unit lottery that gives preference to current and formerly displaced residents. Single Room Occupancy and Mobile Home Park conversion ordinances ensure notice and relocation assistance for those particularly vulnerable residents.
Commercial
The Economic Development Division has led the way with requirements for commercial space in new life science community benefit agreements for displaced businesses, below market rents for Launch Local! businesses in City owned spaces; and a formation group to study a Business Improvement District for downtown that could provide dedicated funding for events, branding, and maintenance.
ROADMAP COMMUNITY ENGAGEMENT
Input for the Roadmap was driven by three key 18-month engagement components, summarized below.
Community Advisory Committee (CAC)
Comprised of diverse members of the public, the Community Advisory Committee (CAC) met nine times over the course of the year to provide feedback and guide recommendations. The CAC was chaired by Mayor Eddie and includes representatives selected through an application and interview process, ensuring diverse perspectives from:
• Residents: Lifelong residents, recent arrivals, and non-residents with local connections.
• Housing: A mix of homeowners and tenants, and people at different stages of life.
• Economic: Real estate specialists, small business owners, individuals who work with small businesses, and commercial landlord experience.
• Language: Spanish and English speakers.
The CAC served as the core source of community input. Members were educated on displacement data and anti-displacement strategies, and their guidance formed the basis of the Roadmap’s final recommendations, even though unanimous support for all proposed interventions was not always reached.
The CAC identified several major challenges currently impacting the ability of households and businesses to remain in South San Francisco:
• Residential and Household Stability:
o Incomes have not kept pace with rising housing and rental costs.
o Many older and naturally affordable housing units have unresolved health and safety issues, limiting the supply of quality housing.
o There is a lack of education for both tenants and landlords on rights and responsibilities.
o New high-paying jobs are often held by commuters, while many residents face low wages and limited opportunities.
• Commercial and Economic Shift:
o Closures and displacement of mom-and-pop retail businesses is due to rising rents, redevelopment of commercial properties for housing, or retiring legacy business owners without a succession plan.
o The shift from a historically blue-collar, industrial economy to a more white-collar, R&D-focused economy has not matched resident skillsets.
o Rising rents, the high cost of doing business, and opportunities to sell properties for redevelopment have encouraged industrial businesses to relocate to more affordable areas in the East Bay.
Targeted Stakeholder Interviews
The consultant team conducted 15 in-depth interviews with a diverse group of key stakeholders, including staff, economic development professionals, community leaders, small business owners (retail, service, and industrial), real estate entities, and regional organizations.
Pop-up Community Events
Staff, consultants, and CAC members hosted three community pop-up events (including the Lunar New Year Night Market, Martin Elementary Fall Open House, and the Senior Health Fair) to solicit broad community feedback. The primary goals were to engage residents, introduce the study, and gather reactions to potential solutions, ensuring impacted voices were heard. The valuable insights gathered are reflected in the Roadmap’s final recommendations and summarized in the Appendix.
DISPLACEMENT IN SOUTH SAN FRANCISCO
Displacement is defined as the involuntary relocation and/or exclusion of residents or businesses from an area. It may be forced, pressured, or fear driven displacement. Because South San Francisco has changed substantially over the last decade with new commercial growth and spiking residential property values, these changes place pressure on existing small businesses and residents.
Residential Household Displacement
Home prices and rents have climbed over the decade. Higher income Asian households are moving into South San Francisco, Latino and Black households are leaving the City and specifically District 5, and the residents most vulnerable to displacement are renters, seniors, and single parent households with limited income growth. This data is corroborated by the CAC and the General Plan community outreach.
The Roadmap identifies the following major existing conditions driving the displacement of households:
• There is an insufficient number of affordable units for households making less than $150,000 per year who have not participated in the decade’s economic renaissance.
o Since 2012, there was a 67.5% increase in median income in South San Francisco (to $127,000 for a family of four);
o From 2012 - 2022, for-sale home values and rents increased by over 80% in South San Francisco (to $1.1 million); and
o The number of households earning $150,000 or more has tripled in South San Francisco (but only doubled in San Mateo County, an indicator that South San Francisco has seen more income disparity growth).
• Renters, seniors, single parent households, and Hispanic/Latino families are the highest cost burdened populations in South San Francisco.
o A household is considered cost burdened when it spends more than 30% of its gross income on housing costs; and
o A household in South San Francisco needs to earn more than $106,000 annually to afford the median gross rent of $2,650.
• From 2012-2022, there has been a decrease in Hispanic/Latino and Black populations and in households earning below <$150,000.
o Downtown Latino households in District 5 decreased 38% since 2012.
Commercial Business Displacement
The Roadmap cites R&D growth, rising rents, redevelopment of existing businesses, and a changing customer base as critical pressures on industrial and retail businesses.
• Since 2017, industrial jobs have decreased 16% and life science jobs have climbed 115%;
• Between 2014 and 2024, R&D and office grew by nearly 6.7 million square feet citywide. The total amount of industrial space in South San Francisco declined by 1.2 million square feet;
• Industrial rents across the City have more than doubled over the last decade, pricing out legacy businesses who have opted for the East Bay where rents are lower and a larger workforce is available;
• Jobs in the R&D sector pay more than industrial jobs but require a 4-year degree or higher. In SSF, however, only 39% of residents have at least a 4-year degree;
• Almost 85% of new R&D jobs are held by non-SSF residents; and
• Several legacy commercial businesses have shuttered due not to displacement but rather to retirement or no succession planning.
In totality, new commercial development has heavily focused on R&D job growth, displacing industrial businesses, driving up rents as available space is reduced, and creating high wage jobs for mostly non-SSF residents.
ROADMAP AND IMPLEMENTATION
The Roadmap presents a collection of strategies and tools, categorized as Short-Term (Low Cost), Medium-Term (Medium Cost), and Long-Term (High Cost), for the City to consider. Many already exist in the City or have been studied. The Roadmap provides a matrix of potential interventions and includes case studies and details on successful implementation.
Residential Strategies
These recommendations focus on protecting, preserving, and producing affordable housing units. Key strategies and high-priority tools include:
1. Assist At-Risk Families: Provide Legal Education to help residents and property managers understand their rights and resolve disputes before legal action.
2. Protect Existing Affordable Homes: Implement a Rental Inspection Program to proactively address deferred maintenance and health/safety issues in older housing stock that is deemed naturally occurring affordable housing. This definition is used for homes that are not rented at current market value, often because of age and maintenance.
3. Increase Housing Supply and Funding: Prioritize City-Owned Sites for Housing and pursue a South San Francisco Unified School District (SSFUSD) / SSF Teacher Housing Joint Project to build new affordable homes that will fill the immense demand.
4. Improve Operations: Consolidate existing regulations into a unified Tenant Protections Ordinance for easier public reference and administration.
*Tools in bold indicate high priority areas for the CAC.
Commercial Strategies
These key recommendations focus on financial, technical, and real estate support for businesses:
1. Grow and Sustain Customer Base: Expand the "Launch Local" Program with additional public or private sites and invest in a Downtown Improvement District to increase foot traffic and economic stability.
2. Partner on Commercial Real Estate Development: Negotiate space for small businesses within Community Benefit Agreements (CBAs) and utilize the Lindenville Overlay Zone to help creative maker space flourish.
3. Provide Financial Support and Technical Assistance: Implement a Small Business Anti-Displacement Emergency Fund and expand EAC Technical Assistance and Business Coaching.
4. Identify a Dedicated Funding Source: Establish a sustainable, standalone revenue stream for commercial support programs.
*Tools in bold indicate high priority areas for the CAC.
The full suite of recommendations and details start on Page 74 of the Roadmap included as Attachment 1.
FISCAL IMPACT
The anticipated fiscal impact of the Anti-Displacement Roadmap is undetermined. Some strategies to stem displacement only require staff time and effort. Others require substantial investment of time and funds to be effective. Affordable housing can’t be built without dedicated subsidy at the local level, County funds, and Federal tax credits. The Economic Advancement Center can’t continue indefinitely without stable funding and regional support. The Roadmap prioritizes additional revenue to implement certain measures, and this will have long term financial implications.
But many of these programs are already underway in some form and thus built into the City’s operating budget. Only annual budgeting discussion will be necessary. Many of these strategies could be funded with Federal, State, and sequestered housing funds that would limit impact on the City’s General Fund. While adoption of the Anti-Displacement Roadmap as a guided document tonight does not have immediate fiscal impact on the City’s general budget, the City will face related economic decisions soon.
RELATIONSHIP TO STRATEGIC PLAN
The Anti-Displacement Roadmap delivers on the commitment made in both the General Plan Update (ShapeSSF) and the Housing Element to study displacement and propose solutions. Additionally, this has been a City Council goal identified at the 2024 priority planning retreat.
CONCLUSION AND NEXT STEPS
Collectively, existing City and State law, civic engagement, and CAC guidance have provided a consensus document for beginning to manage our community’s displacement.
Staff request that the City Council accept the report and the Anti-Displacement Roadmap and provide directions to staff on any specific strategies they would like to accelerate or otherwise re-prioritize.
Attachments
1. Anti-Displacement Roadmap
2. Presentation