• SF’s Proposition E Links Office Allocation to Housing Production

    On March 3, San Francisco voters will consider Proposition E (“San Francisco Balanced Development Act”)[1], which links the City’s “Proposition M” office allocation scheme, originally approved by voters in 1986, to affordable housing production. Proposition M currently limits the amount of office space that the City may approve annually, with 875,000 square feet added to the allocation for large office projects (50,000 square feet or more) each year in October. When a large office project is approved, its square footage is deducted from the available allocation. The Planning Department’s most recent Proposition M report identifies 786,993 square feet of large project office allocation available, as compared to a large office entitlements pipeline of over 6 million square feet, plus additional demand from other projects that were approved with allocation priority. Proposition E would change both the method for calculating how much annual office square footage is available and how that space is allocated.

    California state law requires that cities and counties plan for housing needs at varying income levels through a Regional Housing Needs Allocation (RHNA) process. As part of the RHNA, the State determines the total amount of new housing that is needed by income level and assigns a share of that need to each local entity. Proposition E would tie Proposition M’s annual limit on large office projects to the City’s affordable housing production—if the City falls short in meeting its combined affordable housing goals for the very low, low and moderate income categories, then the available annual allocation would go down by the same percentage as the RHNA shortfall. The 2015-2023 RHNA eight-year need allocation in the specified categories is 16,333 units, or 2,042 units per year. If the City produced, for example, about 1,021 qualifying units in a given year, then the Proposition M allocation for the coming year would be reduced by 50% to 437,500 square feet. The October 2020 allocation would be reduced to reflect the entire 2015-2019 RHNA shortfall (total qualifying units produced during the period calculated against a need of 10,210 units), and thereafter the allocation would be adjusted annually.

    The Planning Commission would have the authority to grant two new exceptions from the large office limit. The first is for projects subject to a development agreement that includes affordable housing, either on-site or off-site within a designated economically disadvantaged community, at a ratio of at least 809 units per 1 million square feet of new office space. The second is for large office projects in Central SoMa (defined as the boundaries of the Central SoMa Special Use District in Planning Code Section 249.78) for which a Preliminary Project Application was submitted before September 11, 2019, where the project includes qualifying space as follows: SoMa property to be conveyed to the City for affordable housing, a space of at least 10,000 square feet for community arts or neighborhood-serving retail at reduced rents, or a public safety facility. The Central SoMa exception would be limited to a total of 1.7 million square feet, and until 15,000 new housing units are produced (approved and first construction document issued) in the broader SoMa neighborhood, it could only be granted if the project would not cause the total amount of large office projects approved in Central SoMa after January 1, 2019 to exceed 6 million square feet. Office space approved using these exceptions could cause the allocation to effectively “go negative” and would be deducted from any available allocation evenly over the 10-year period following approval of each exempted project.

    Finally, Proposition E would revise the criteria for evaluating office development projects to delete references to General Plan objectives, policies, and design quality, and add provisions regarding affordable housing (for projects subject to a development agreement) and other specified community improvements.

    On January 27, the City’s Chief Economist published a report concluding that if past economic trends continue, Proposition E will put upward pressure on office rents, reduce employment, and result in less funding for affordable housing through the Jobs-Housing Linkage Fee.

    Proposition E’s proponents dispute the Chief Economist’s report. They assert that creating a link between office development and affordable housing may incentivize affordable housing production, and that in any event, slowing the pace of office development will help to reduce pressure on housing supply and home prices. Proposition E’s critics believe that the measure will adversely impact job creation and business retention and that the City’s path to reducing housing costs must focus on dramatically increasing housing production.

    [1] In December, Mayor Breed withdrew a competing ballot proposal that would have added converted office space back to annual space allocations, prioritized office space that also provides sites for affordable housing or other specified community benefits, and increased the square footage threshold for small office projects.

  • SB 50 Defeated in State Senate

    SB 50, Senator Scott Wiener’s bill to boost housing production near transit and job centers, has been defeated. The bill fell three votes short on Wednesday, and Wiener was unsuccessful in his reconsideration request today.

    The bill was stalled in the Senate last May when the Chair of the Appropriations Committee deferred action on the bill until 2020. On January 24, Senate President Pro Tempore Toni Atkins moved it to the Rules Committee, which she chairs, and Senator Wiener introduced amendments designed to address certain concerns regarding local control and potential impacts on low-income residents. The amendments included a “local flexibility plan” that would allow local agencies to create alternative housing plans that are designed to produce the same number of units as SB 50 compliance would. The amendments also added a neighborhood preference for 40% of new low, very low and extremely low income units developed under SB 50.

    Both Governor Newsom and Senator Atkins have indicated that regardless of the fate of SB 50, some form of legislation to increase housing production will be passed this year.

  • GP Bullhound Technology Predictions 2020

    On January 22, 2020, Coblentz hosted GP Bullhound’s Technology Predictions 2020 Research Roundtable. Peter Wang provided opening remarks, and GP Bullhound’s Alec Dafferner and Brandon Overmyer presented the key findings of the report — ten trends they believe will define tech in 2020. For a copy of GP Bullhound’s Technology Trends 2020 report, please click here.

    Categories: Events
  • Privacy Law in 2020

    On February 5, 2020, Coblentz partner Scott Hall will speak on the panel “Privacy Law in 2020, California CCPA, Federal, and European” during the Bar Association of San Francisco’s 2020 Business Law & Cannabis Law Symposium. Scott’s presentation will cover the background and regulatory framework changes for the new decade that every business should know, from the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) to the many other privacy laws currently in effect or anticipated, as well as the ongoing debate over a comprehensive federal privacy law.

    Registration is required. Click here for full event information and registration. MCLE credit is available.

    Categories: Events