Committee advances adaptive‑reuse package to encourage downtown conversions; votes to continue final action

The Land Use and Transportation Committee advanced a two‑part package intended to encourage commercial‑to‑residential conversions downtown, adopting planning‑staff amendments and voting to continue final action to the full Board on June 12, 2023.

Board President Aaron Peskin and Mayor’s Office collaborators framed the package as a response to large amounts of vacant office space downtown and as a way to diversify uses in the C3 core and Union Square. Planning Department staff described three policy goals: expand housing downtown, diversify commercial uses, and streamline entitlements. The program would create a new commercial‑to‑residential adaptive reuse section in the Planning Code that, among other provisions, defines eligible zones and allows selected zoning modifications to support conversions.

Planning staff said draft eligibility would apply to C districts east of Van Ness and north of Townsend and initially required an application filing by December 30, 2028. Staff outlined a list of potential incentives including waivers of certain requirements (for example, open‑space and bike‑parking waivers in specified cases), more flexible permitted uses in some commercial districts, and a streamlined entitlement path under Planning Code section 309. The Planning Commission recommended eight modifications, which sponsors moved to adopt; those changes include clarifying temporary formula retail rules, revising flexible‑workspace frontage requirements, increasing the allowable addition from 20% to 33% of existing gross floor area for eligible projects, clarifying geographic boundaries, and preserving privately owned public open spaces (POPOS) where commercial uses remain.

The committee discussed specific tradeoffs. Vice Chair Dean Preston asked why the Transportation Demand Management (TDM) and bike‑parking requirements would be waived for conversions; sponsors and planning staff said the waiver is intended to reduce conversion costs and remove barriers for existing buildings that often lack on‑site parking or room for bike storage, and that projects will still require an application, site inspection and monitoring. Preston raised concerns about potential shifts in travel patterns and increased deliveries and ride‑hail activity for residential uses; staff said monitoring and public‑process steps will be part of project review.

In a related item, the committee considered an ordinance to waive Article 4 development impact fees for eligible adaptive‑reuse projects, except that inclusionary housing requirements would remain in effect. Planning staff explained which Article 4 fees most commonly apply (Transit Service Fee, childcare, public art and bike parking) and when those fees are triggered; they noted, for example, that the Transit Service Fee often does not apply to conversions because office use is typically more intensive than residential for fee calculations, while public‑art fees apply only for additions exceeding 25,000 square feet.

After public testimony from neighborhood and policy groups supporting the package, the committee adopted the staff‑recommended amendments and voted to continue both the zoning amendment and the fee‑waiver ordinance to the June 12 Board meeting to allow final revisions to the legislative digest and any nonsubstantive sunset alignment.

The committee’s continuance means staff will finalize amendment language, confirm boundary and sunset consistency between the two ordinances, and prepare materials for full Board consideration on June 12.