New bill proposes converting downtown SF’s office spaces into housing – KRON4

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(KRON) — On Tuesday, San Francisco Assemblymember Phil Ting proposed a bill to convert Downtown San Francisco’s empty office spaces into housing. The way they would convert the spaces, Ting says, is through tax incentives.

“We can address two problems with one bill. AB 2488 empowers San Francisco to create vibrant, walkable, mixed-use communities that open the door to new economic, social and cultural opportunities. The prospect is exciting,” said Ting.

The legislation (AB2488) uses a tax incentive to attract developers who can turn vacant office buildings into much-needed residential units.

With the bill’s passing, half of the buildings would need to be zoned for commercial use, but at least 20% would be vacant for housing. Developers who convert office space into housing in downtown San Francisco would qualify for a portion of their property tax being returned to them every year for thirty years.

Having a portion of a property tax is, of course, financially relieving, but Ting says the incentive is needed because the process of converting commercial spaces into homes, such as complying with building codes and making seismic upgrades, is oftentimes unaffordable to most.

“The conversion of obsolete, vacant office buildings to residential use is a proven method of activating downtown districts. Cities across the country have identified property tax increments as a key tool to enable such conversions,” said Marc Babsin, President of Emerald Fund, a firm that successfully converted a 400-foot obsolete office tower in San Francisco into 418 homes back in 2015. 

Ting said remote work has boomed ever since the pandemic in 2020, leading offices in downtown San Francisco to have an all-time high occupancy rate of 36.6%. Transit ridership and consumer spending consequently declined, forcing some businesses to close.

“This legislation would not only bring life to our struggling downtown but also deliver much-needed housing. In San Francisco, 14,000 new homes in transit-rich, walkable areas could be built. With potential like that, it’s important to give communities a tool to make revitalizing investments in their futures, and the Bay Area Council thanks Assemblymember Ting for bringing this bill forward,” said Louis Mirante, Vice President of Public Policy – Housing, Bay Area Council.

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