A view of downtown San Francisco. Photo: David Paul Morris/Bloomberg via Getty Images
An attempt to convert Office buildings in downtown San Francisco to apartments continued to advance Week, with the introduction of two actions by the Board of Directors aimed at reducing costs and streamlining the process.
Why it matters: Office vacancy rates in San Francisco reached 29.5% in the first quarter of this year. That beats the previous 2003 dot-com bust record of 19.1%, according to commercial real estate services and investment firm CBRE. The loss of commercial tenants is costing the city significant tax revenue.
supporters of Office conversions also say it’s time for a new downtown that’s vibrant 24/7.
- One of the measures introduced on Tuesday would eliminate some fees normally charged for residential development, for things like transit and public art.
- The other would streamline the process by changing a number of current housing planning law requirements, such as: B. Details of exposure to natural light and parking of bicycles.
- “We’re going to step out of the way and see what the market does,” supervisor Aaron Peskin, who co-sponsored the proposal, told Axios.
The Intrigue: You’re unlikely to end up in a corner bedroom with sweeping views. That’s because the enormous footprint of many high-rise office buildings means that if remodeled, the bedrooms may need to be interior and therefore windowless.
- An assessment of downtown buildings indicated that conversions could create more than 11,000 new housing units.
- But architect Mark Hogan of OpenScope Studio — who helped design the code rationalization proposal — says the best candidates for conversions, particularly affordable ones, are the older, shorter downtown buildings.
What you say: “We should start getting those qualities. We should start building, we should find people who want to do some of these to prove it works,” Hogan told Axios.
- “To say that we will focus on 50-story buildings that will require hundreds of millions of dollars feels a little hopeless to me.”
Between the lines: Officials are also examining broad stimuli for downtown development like a property tax freeze and rollback of SF’s property transfer tax, which voters raised in 2020 from a maximum of 3% — depending on sale price — to a maximum of 6%.
- “I think freezing the property tax increase was a significant idea,” Supervisor Ahsha Safaí told Axios. “We can’t fully control that here at the local level without government intervention.”
Zoom in: San Francisco’s proposals focus on downtown and Union Square.
Zoom out: Other US cities are also exploring office-to-apartment conversions.
Flashback: Ten years ago, the former AAA headquarters at 100 Van Ness Ave. converted into 400 apartments. Rentals now start at $3,212 for a studio.
Remarkable: Office futures are not all craters. Cisco just signed a multi-year lease near the Chase Center, and according to The San Francisco Chronicle, Donald Trump’s share of SF’s office space is 95% leased.
What we observe: Proposed state legislation could pave the way for ‘ex of rights’ conversions, skipping reclassification processes. MP Matt Haney – a former SF overseer who supports the bill – says he wants to speed things up.
- “Honestly, I’m worried about whether San Francisco will go far enough or move fast enough,” Haney told Axios.
