San Francisco faces intimidating state-mandated housing goals that call for some 82,000 new units over the next eight years — more new housing than we’ve created during pretty much any point since 1849.
The city delivered a new Housing Element just a few weeks ago. It’s an ambitious blueprint for homes, especially in the city’s low-rise neighborhoods to the west, south, and north. While ambitious, it’s only a set of recommendations — nothing happens unless there’s a real policy push.
That push has begun, but not where the Housing Element anticipated. A few parties have floated ideas that knock off several birds at once by turning disused downtown buildings into new housing.
Yet once again, it seems that state-level lawmakers are a league ahead of us on this issue, putting forth actionable policy now while the mayor’s office is still in the analysis phase of the game.
More than 24 percent of greater downtown office space was vacant in the third quarter of 2022, according to the analysis firm JLL Global, compared with just 5.6 percent in 2019. The city could have started putting various heads together on this a couple years ago.
Better late than never. State Assemblymember Matt Haney, who represents SF’s eastern half, including downtown, released two bills he wants to push through Sacramento, Mayor Breed has her “road map” — just an outline for now — and there’s even one that went largely unnoticed, because the person who ordered it was out of a job just a couple days after it was delivered to his desk.
Plans A through C
On Feb. 9, Mayor London Breed gave the State of the City address and rolled out a road map for downtown’s future, which among other things suggests “flexible zoning” that would facilitate “a housing conversion analysis to identify the feasibility of office-to-residential conversions.”
One could argue that Breed is years behind in calling for such a breakdown, as this idea bubbled up early in 2020 — pretty much as soon as it became clear that the pandemic was not just a blip, and that once-vital office space could sit fallow for years, if not forever.
The Frisc’s own survey of the subject back in 2020 showed that most major SF office buildings (Salesforce towers and such) are not built to facilitate housing uses, and radically remodeling them is usually more trouble and expense than just putting up a new building.
However, architects and city planners advised that lower-profile buildings — many now reaching the tail end of their practicable lives as office stock — could be more easily switched to housing, yielding hundreds, even thousands of new homes when every few units count. Architecture firm Gensler has already marked a dozen likely candidates downtown.
It’s good that the mayor’s office is taking this seriously, but they’re behind the curve. Assemblymember Haney, who represented South of Market and the Tenderloin for three years as District 6 supervisor, came out of the gate hot on this topic this week with a new bill to fast-track “adaptive reuse” of office buildings.
Under AB 1532, “city councils, county boards of supervisors, planning commissions, or other planning oversight boards” would be barred from blocking office-to-housing conversions in any manner. In other words, erase local control for this one sort of reuse. “If the developer wants this conversion to happen, it’ll happen,” Haney spokesperson Nate Albee tells The Frisc.
Normally, that sort of thing comes as nothing short of a nuclear option in SF housing politics. But in this case, Haney argues that the building stock exists already, and what anyone does with it should be of minimal concern to City Hall types.
Tax cuts and lowering [affordable housing requirements] are seen as radical measures in SF. Nevertheless, radical measures will be considered.
Michael Farrah, interim chief of staff to Sup. Myrna Melgar
On top of that, the proposal would push aside SF’s affordable housing requirements, setting a cap at 10 percent. For comparison, many new buildings in SF must allow up to 25 percent below-market-rate units.
Even more dramatically, Haney’s bill would let office-to-housing redevelopment skirt CEQA, California’s omnipresent environmental law that adds months or years to new housing development when used as ammunition for appeals.
“We’re never going to change the entire downtown to housing,” Albee adds. But “the idea that the social networks are coming back, it just doesn’t make sense, and those buildings can’t just sit there.”
What might have been
Haney’s proposal will face its trials in the state legislature, but give him credit that he’s pitching detailed policy at a time when, on a municipal level, the mayor’s team is just talking about studying the issue.
The mayor’s spokesperson for economic recovery, Kia Kolderup-Lane, says the Planning Department is developing legislation to eliminate zoning and process barriers for office-to-housing conversions, incorporating analysis from SPUR and Gensler. The proposal could be released in “the coming weeks,” according to Kolderup-Lane. (Planning director Rich Hillis did not respond to requests for comment.)
At least one City Hall official was thinking farther ahead: In January, the city’s Budget & Legislative Analyst released a 29-page report for Sup. Gordon Mar that included a list of recommendations to encourage redevelopment of moribund office properties into new homes. (Several of the ideas overlap with Haney’s legislation.)
Bold ideas that run contrary to many supervisors’ housing proclivities, offered by the supervisors’ own analyst, would usually spark lively debate.
A set of bold ideas that run contrary to many supervisors’ housing proclivities, offered by the supervisors’ own analyst, would usually spark lively debate. So why the crickets on this? Probably because it was published two days before Mar cleaned out his office after losing his reelection bid to Joel Engardio.
Mar transitioned back to private life, and the BLA findings he requested seem to have retired as well. He made the request because “our Planning Department didn’t seem to be focused on” adaptive reuse, Mar tells The Frisc. “They were coming up with bold new strategies for the [Housing Element] goal,” but when Mar pressed planners about office conversion, he perceived little enthusiasm. “So that led me to request our BLA to do some research on it.”
Engardio tells The Frisc he has reviewed the analysis and is entertaining some of its ideas, like relaxing inclusionary housing requirements for conversions. “Downtown is dying; it should be resurrected. It might be seen as controversial to diminish [affordable housing] requirements, but if we have a percentage that’s too high, nothing will ever get built,” he adds.
Via email, Sup. Myrna Melgar, who chairs the city’s Land Use Committee and has a big say over the housing legislation allowed up for debate, said she will “support any practical but innovative ideas to revitalize downtown,” but did not cite any specific policy recommendations.
In a more detailed conversation, Melgar’s interim chief of staff Michael Farrah said Melgar has seen the BLA analysis. “Tax cuts and lowering [below market-rate requirements] are seen as radical measures in SF,” he says. Nevertheless, “radical measures will be considered.”
While the BLA breakdown, like our own reporting two years ago, cautions that disused office space “does not offer a panacea for solving the state’s housing problem,” it points out other cities have made headway with similar conversions. It also makes recommendations that bear consideration in the weeks to come, including the following:
Affordable, faster: Both propositions D and E, competing measures to streamline affordable housing development, failed last November. The BLA says variations could be tailored for downtown conversions and potentially reduce project costs.
Of course, it’s politically risky to revive anything that voters rejected, even as a variation on a theme. Plus, these proposals ended up before voters because SF lawmakers couldn’t come together to craft legislation. But with a new board configuration — Engardio instead of Mar — perhaps comes a chance to avoid the fights that stifled the process last time.
Give some breaks: Cities like Chicago and Washington, D.C. are offering tax breaks to developers who repurpose old buildings instead of developing new ones. Particularly enticing is New York City, which created nearly 13,000 new homes in Lower Manhattan between 1990 and 2020, mostly out of the same older building stock (pre-1945) recommended in SF for these same purposes.
Again, such a proposal is not without political risk, specifically the charge of promoting “giveaways” to developers. Also note those tax breaks cost the Big Apple an estimated $92,000 per unit. But to hit these housing goals, someone might have to take some hits along the way.
Speed it all up: In January, most of the new units certified for habitability by the Department of Building Inspection sprang from applications back in 2018, and those applications are themselves often the result of years of work.
The BLA breakdown suggests that in addition to general reform, the city can make conversion an enticing option for development by giving some specific breaks on the process, namely “exemptions from discretionary review hearings by the Planning Commission, and possible elimination or reduction of conditional use requirements” — some of the most onerous and time-consuming parts of the process.
See ya, CEQA: This is the big one, and also the trickiest. CEQA is a state law, and all California cities must yield to it — but not, it turns out, in all matters. Local lawmakers can change the city charter and designate new kinds of housing — in this case, office-to-residential projects, but theoretically other types as well — as “ministerial,” or exempt from CEQA — and chop one to two years of lead time off potentially thousands of new homes.
“Ministerial projects are identified in state law as not being subject to CEQA,” the BLA analysts write, “but determination of which projects are ministerial projects can be made at the local level.”
City charter amendments require a ballot measure, however, and public votes on housing matters are a wild card, as we learned with the aforementioned props D and E.
Haney’s state-level legislation would also knock CEQA out of action using this same process, but a local attempt could serve as backup in case Haney’s bill doesn’t fly or the CEQA provisions are cut.
Indeed, all of these ideas are worth a shot, and if some of them draw heat, that’s why this occasion calls for strong leadership at City Hall.
If a halfway decent plan to create downtown housing can end up stuck to the bottom of Gordon Mar’s shoe on his way out of office, there’s no reason we can’t get viable plans — and bills — from every person in office right now. The question is, who’s going to step up.
Correction: In an editing error, an earlier version of this story misspelled Kia Kolderup-Lane’s name.