Supervisor Dorsey proposes fee waivers for commercial to residential conversions

The San Francisco City Council meeting on July 4, 2025, focused on a significant legislative proposal aimed at addressing the city's housing crisis and revitalizing downtown areas. The meeting featured a presentation on an ordinance introduced by Supervisor Dorsey, which seeks to waive impact fees for commercial to residential adaptive reuse projects.

Madison Tam from Supervisor Dorsey's office outlined the key aspects of the legislation, emphasizing its dual goals of reducing barriers to housing development and revitalizing the downtown area. The proposal follows a report commissioned by Supervisor Gordon Maher, which recommended delaying, reducing, or eliminating impact fees for such conversions. This recommendation aligns with findings from various organizations, including Spur and Gensler, which have also advocated for easing financial burdens on developers to encourage office-to-residential conversions.

The proposed ordinance would waive all development impact fees for qualifying projects, with the exception of inclusionary housing requirements. This waiver would apply to projects located within designated commercial zones that do not seek to expand their building envelope by more than 20% or add more than one vertical story. The legislation aims to stimulate housing development in underutilized commercial spaces, thereby addressing both housing shortages and the need for downtown revitalization.

The meeting also included discussions about the collaborative efforts between the planning department and various stakeholders, including developers and housing advocates, to refine the legislation. The council expressed support for the initiative, highlighting its potential to facilitate much-needed housing solutions in San Francisco.

As the city grapples with ongoing housing challenges, this ordinance represents a proactive step towards creating more residential opportunities while revitalizing the urban landscape. The council plans to continue discussions and refine the proposal in the coming weeks.