Legislation to Incentivize Commercial to Residential Adaptive Reuse Projects Moves Forward

At the June 13, 2023 Board of Supervisors hearing, the “Commercial to Residential Adaptive Reuse and Downtown Economic Revitalization” legislation was introduced. The legislation would amend various Planning Code sections to facilitate office to residential conversions for qualifying “Adaptive Reuse Projects.” (See earlier post here.) The Board of Supervisors will subsequently consider the companion “Development Impact Fees for Commercial to Residential Adaptive Reuse Projects” legislation, which would waive all development impact fees for Adaptive Reuse projects, except for inclusionary housing requirements. As noted in SPUR’s office to residential conversion report, to which Coblentz provided input, Planning Code amendments and waivers of development impact fees will help make conversions more feasible, but tax abatements or incentives and reductions in inclusionary housing requirements will likely also be necessary.

The legislation incorporates the following key amendments that were recommended by the Planning Commission: a waiver of Transportation Demand Management Plan (TDM) requirements for Adaptive Reuse Projects and an increase in the amount of additional space that Adaptive Reuse Projects may include (up to 33% of the existing Gross Floor Area (GFA), instead of 20% GFA and maximum of one story as originally proposed). It also includes an  amendment recommended by the Land Use and Transportation Committee to exclude conversions of commercial use to hotel use from the definition of “Adaptive Reuse Projects.”

We will continue to monitor these pieces of legislation and the City’s other housing production plans and Downtown revitalization efforts.