San Francisco city officials are considering new measures to incentivize the conversion of vacant office buildings into residential housing. Faced with a declining downtown economy due to remote work, they aim to address financial obstacles through exemptions from development fees and inclusionary housing requirements, as well as leveraging a new state law allowing property tax benefits for such projects.
San Francisco elected officials are poised this year to consider two more steps aimed at removing financial obstacles to office-to-housing conversion projects — one to exempt them from development fees and affordable- housing requirements, the other to take advantage of a new state law allowing property taxes to go back to such projects.
The mass adoption of remote work in the wake of the COVID-19 pandemic had a devastating impact on downtown San Francisco’s economy, with an estimated 147,303 fewer office workers visiting the area than they once did, according to a 2023 city report. With many office buildings still standing largely empty — particularly older ones lacking amenities — city and state officials have been trying through various means, such as waiving planning-code and tax requirements, to make it easier to convert underutilized office buildings into housing. The goal is not only to house more people but also to diversify the economic life of downtown. San Francisco voters responded in March by approving Proposition C, a measure to incentivize conversion of up to 5 million square feet of commercial buildings to residential use by waiving real-estate transfer taxes. There was no resulting rush of development, however, with development costs typically still cited as prohibitive amid increased pricing for construction and financing. Proposed city legislation now pending at the Board of Supervisors, which would waive development impact fees and inclusionary housing requirements, was introduced last September by former Mayor London Breed and Supervisor Matt Dorsey, whose District 6 includes much of The City’s downtown. Inclusionary housing requirements are designed to help fund below-market-rate housing, but developers say they can make projects infeasible. The San Francisco Planning Commission in December recommended approval of Dorsey’s proposed ordinance with some modifications, with five members voting in support and two opposed. Breed and Dorsey said in introducing the measure that it would eliminate the largest source of city-imposed costs on commercial-to-residential projects, estimated to typically amount to between $70,000 to $90,000 per unit. Dorsey said in an interview he was hesitant to talk about the ordinance in detail because he wanted to consult with stakeholders and Mayor Daniel Lurie’s new administration “to make sure that we’re all on the same page before scheduling a hearing.” Dorsey said he was expecting soon to meet with Ned Segal, Lurie’s newly appointed chief of housing and economic development. Dorsey emphasized that he supports The City’s goals for developing affordable housing. “So we’re not giving up on that — but if getting something unstuck means making modifications to the inclusionary housing requirement, I’m all for it,” he said. “Let’s get housing production going so we can keep the comeback going.” Dorsey echoed a city document providing background on the proposed ordinance that reported developers and urban-planning advocates had identified three financial barriers to adaptive reuse projects for turning office buildings to residential use — transfer taxes, property taxes and inclusionary housing requirements. In mid-2023, The City launched a commercial-to-residential adaptive-reuse program that waived certain planning requirements for specific areas lining Market Street and near the northern waterfront up to Fort Mason. Under that program, The City has approved only two conversion projects — one to create 124 dwelling units in the historic Humboldt Bank building at 785 Market St., and another to create 45 dwelling units in the historic Warfield Building at 988 Market St. Mark Shkolnikov, a principal with Group I, the company behind the proposed Warfield conversion, told planning commissioners that currently the project “does not pencil,” but waiving development and inclusionary housing fees would represent “a massive step in making our conversion feasible.”
OFFICE-TO-HOUSING CONVERSION SAN FRANCISCO REAL ESTATE DEVELOPMENT FEES INCLUSIONARY HOUSING REMOTE WORK ECONOMIC DEVELOPMENT
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Multi-year TxDOT project seeks to remove traffic signals, ease congestion on Loop 360Since 2022, the Texas Department of Transportation has been working to address what it's called one of the top 100 most congested roads in the state.
Read more »
Venezuelan Opposition Leader Calls for Protests, Seeks to Remove MaduroMaría Corina Machado urges Venezuelans to take to the streets and protest against President Nicolás Maduro, claiming he will not leave power willingly. The call to action comes ahead of the next presidential term and amidst the government's pursuit of retired diplomat Edmundo González, who claims to have won last year's election.
Read more »
San Jose will create temporary tow-away zones to remove RV encampmentsSan Jose residents said parked RVs people live in have packed certain streets, and now, a new program aims to remove the RVs by creating temporary tow-away zones.
Read more »
OpenAI Whistleblower Found Dead in San Francisco ApartmentA former OpenAI researcher who blew the whistle on the company’s data scraping practices has been found dead in his San Francisco apartment.
Read more »
Lyft gains as CEO says San Francisco share losses could be overblownLyft gains as CEO says San Francisco share losses could be overblown
Read more »
Brown leads Arizona State against San Francisco after 21-point gameArizona State plays the San Francisco Dons after Jalyn Brown scored 21 points in the Sun Devils' 57-50 loss to the UC Davis Aggies. The teams meet Tuesday for the first time this season. San Francisco is 2-0 at home, and Arizona State is 0-2 on the road.
Read more »