San Francisco weighs more incentives for office-to-housing conversions
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San Francisco downtown office buildings. Photo: Jason Henry/Bloomberg via Getty Images
San Francisco leaders are pushing ahead with a measure to incentivize office-to-housing conversions in downtown by making it cheaper for developers to build homes there.
Why it matters: San Francisco leads the nation with the highest office vacancy rate, a key indicator of how well a city has recovered from the pandemic.
- Office vacancies hovered around 34% as of last December, according to the most recent numbers from the Office of Economic Workforce and Development.
Driving the news: The San Francisco Board of Supervisors on Tuesday voted 9-2 to move forward with legislation to streamline the construction process.
- It would reduce costly fees for projects with a cap of 7 million square feet, which amounts to about 7,000 units.
- It would also extend the application deadline for a city program that streamlines approvals by waiving certain zoning and building requirements for such projects.
The big picture: The legislation is part of a broader effort to help revitalize a struggling downtown that has seen reduced foot traffic due to the shift to remote work and an exodus of big retailers and restaurant closings from the rise of petty theft and open-air drug use.
- City leaders also hope the proposal can help bolster housing development in a city with a severe housing shortage.
Yes, but: While numerous proposals meant to attract developers to take on these conversions have been proposed in recent years, little has come to show of it thus far as just one project has broken ground.
What they're saying: Supporters of the bill, which include Mayor Daniel Lurie, District 6 Supervisor Matt Dorsey and District 3 Supervisor Danny Sauter, say financial and bureaucratic hurdles are responsible for causing delays that make it difficult for projects to begin.
- More housing opportunities in downtown will help create a vibrant neighborhood akin to newer developments like in the East Cut and Mission Bay, Dorsey said during Tuesday's meeting.
Between the lines: The development impact fees that could be cut fund various public services and infrastructure projects that include parks, public transit and schools. The city's inclusionary housing fee, which is paid by developers to fund affordable housing, would also be cut.
The other side: District 9 Supervisor Jackie Fielder voted against the legislation because she said it prioritizes the construction of market-rate units and doesn't provide funding for public child care services or affordable housing.
The intrigue: The square-footage cap helped sway more support from supervisors who expressed similar concerns over equity and public funding cuts for services benefitting low-income residents.
- "This legislation asks our working class community to make a sacrifice in the service of our downtown recovery efforts," said District 11 Supervisor Chyanne Chen, who initially opposed the measure that was first introduced last year.
What's next: The board will make a final vote on the legislation in the coming weeks.