As we alerted you on May 9, legislation to incentivize office and commercial building conversions to housing had begun working its way through the Board of Supervisors after approval by the San Francisco Planning Commission. The legislation, which is a critical piece of the City’s overall plan for revitalizing San Francisco, has now been approved by the Board of Supervisors and will go into effect on July 30, 2023.

Office-to-residential conversions and other downtown redevelopment plans were initially met with skepticism among developers and other stakeholders, who did not see how such projects could be financially (or practically) feasible. The goal of this legislation was to directly combat those concerns by modifying various Planning Code provisions for eligible projects (as described in our May 9 alert), including (but not limited to):

• Expanding principally permitted uses and allowing temporary use authorizations in the commercial zones of the Downtown, South of Market Street, and Union Square neighborhoods;
• Reducing or removing various dwelling unit regulations, including reducing the dwelling unit exposure requirements and removing dwelling unit mix requirements; and
• Relaxing open space and rear yard requirements.

With these changes taking effect on July 30, we expect a significant uptick in developers looking to test the adaptive reuse waters using these new provisions and the allegedly easier process for project approvals. While it remains to be seen what else the City may need to propose in order to truly reimagine Downtown San Francisco, this new conversion legislation will play an important role.