As we wait for the dust to settle from the elections and for the official results to be published, what we do know is that City Hall in San Francisco will welcome three new Supervisors in January for Districts 1, 9 and 11, with current Supervisors Peskin, Breed and Yee expected to retain their seats for Districts 3, 5 and 7, respectively. Pending the final and official results for the State Senate race for District 11, one other San Francisco supervisorial district will get a new supervisor after the Mayor appoints an interim supervisor to serve the remaining term for either Supervisor Wiener or Supervisor Kim. The ballot in San Francisco contained a number of land use measures, including Measure E that appears to have passed overwhelmingly and will result in the transfer of the responsibility for street tree maintenance to the City instead of the abutting property owners. Pending confirmation via the official results, few other land use measures appear to be heading for passage including those discussed below.
Measure O – Candlestick/Hunters Point Exemption from Prop. M Office Allocation Requirements
Since the approval of Prop. M in 1986, new office developments in excess of 25,000 sf have required an allocation of office space to be granted as part of their project approvals. The Prop. M office allocation pool is divided into a large pool (for projects with more than 49,999 sf of office space) and a small pool (for projects with 25,000-49,999 sf of office space), with an additional 875,000 sf and 75,000 sf of new allocation added to the large and small pool, respectively, every year on October 17th. As of today, both office allocation pools have an existing amount of square footage available for future allocation. However, if the pending and pipeline projects (i.e. those projects that have submitted an entitlement, environmental or other application to the Planning Department) were deducted from the current amounts (i.e. if all of them were approved), the large office allocation pool would be almost 7 million square feet in the negative based on today’s figures. Measure O proposed to exclude any office development in the Candlestick and Hunters Point project areas, which per previously approved redevelopment plans include approx. 5 million sf of office development, of which 800,000 sf was approved with a priority status over most other office developments that require Prop. M office allocation. Pending final results, Measure O appears to be passing with approx. 5-point margin, which means that the Planning Code will be amended to include an exemption from Prop. M requirements for office development in the Candlestick and Hunters Point project areas. None of the approx. 5 million sf of office development for the Candlestick and Hunters Point areas has been included in the pending or pipeline calculations that already add up to a deficit of approx. 7 million sf, and thus while Measure O impacts directly only a certain area of the City, the passage of Measure O means that Candlestick and Hunters Point office development will not be competing with other pending, pipeline or future office developments for the Prop. M allocation.
Measure X – PDR Preservation and Replacement Requirements
Measure X was placed on the ballot by Supervisors Avalos, Breed, Campos, Kim, Mar, Peskin and Yee, and proposed certain preservation and replacement requirements for PDR uses in the Mission, Eastern SoMa, Western SoMa and the future Central SoMa plan areas. Pending the final results, the measure appears to be passing with an approx. 19-point margin. The measure will result in an amendment to the Planning Code whereby conversion of existing uses that contain either ≥ 5,000 sf of PDR use, ≥ 2,500 sf of Institutional Community use, or any amount of Arts Activities use, will be required to include replacement of the said uses up to a ratio of 1 for 1 depending on the zoning designation. Several grandfathering provisions are included in the measure, including exemptions for projects approved by the Planning Department prior to June 14, 2016, and projects proposing conversion of less than 15,000 sf of PDR, Institutional Community or Arts Activities use for which an environmental evaluation application was submitted prior to June 14, 2016. Measure X authorizes (but does not require) the Board of Supervisors to enact an in lieu fee and/or off-site replacement options as alternative methods for compliance.
Proposed Reduction to Short-Term Residential Rental Limits
Beyond the election into currently pending legislation, the short-term rental of a residential unit for less than a 30-day period is currently governed by the Residential Unit Conversion Ordinance and such rentals are allowed only for units that are registered with the City’s Office of Short Term Rentals. As of today, unhosted rentals (i.e. those without the presence of the permanent resident) are subject to an annual limit of 90 days and hosted rentals (i.e those during the presence of the permanent resident) are unlimited in terms of the annual rental dates. Pending legislation would change these time limits for new rental units (i.e. those that were not registered prior to October 11, 2016) so that both unhosted and hosted rentals would be subject to an annual limit of 90 days. The legislation is currently pending at the BOS’ Land Use and Transportation Committee and could be heard in mid-November or anytime thereafter.
Proposed TDM Program – Legislation Update
The proposal to adopt a Transportation Demand Management (TDM) program is anticipated to be heard by the BOS’ Land Use and Transportation Committee in the near future. The TDM program, as currently drafted, would apply to most new construction projects with more than 10 dwelling units or more than 10,000 sf of non-residential area, and to change of use projects with more than 25,000 sf of existing area. The current version of the legislation does not include any grandfathering provisions for pending projects that have not yet been approved. Projects that will be subject to the TDM program are assigned a certain “point” value based primarily on the amount of parking provided by the project. The project must then adopt a corresponding amount of TDM measures. The requirements under the TDM program as currently drafted do not differ based on project characteristics such as location and residential bedroom mix, so that e.g. a residential project in Downtown proposing predominantly studio or one-bedroom units will be subject to the same “point” value and TDM measure requirement as a project with an identical amount of parking anywhere else the City regardless of the number of bedrooms provided by the project. As currently drafted, the TDM legislation and program will require many development projects to reduce the amount of proposed parking, potentially quite significantly and in some instances even below the parking requirement for the project as dictated by the Planning Code, and in other amendments in order to incorporate the required TDM measures. The next stage for the TDM legislation is a public hearing before the Land Use and Transportation Committee, which will likely occur on a Monday afternoon in the near future.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.