Planning for Job Growth

In the midst of the ever consuming housing crisis, it may be a good idea to take a step back and consider projections of future job creation in the City, and critically important, where those jobs should be located.  There is no question that job growth in the bay area has outpaced housing production.  That is hardly surprising when you think about it:  businesses don’t need a permit from your local government to create a job; a developer needs a permit, time, money, skill, and some luck these days to create housing.  But that doesn’t mean we should not be looking at where the next job centers are going to be located.

The Planning Department is nearing the end of the Central SOMA planning process. Started in 2010, it was and continues to be a “jobs plan.”  San Francisco needs this type of jobs zoning in order to stay competitive in the decades ahead.  Unfortunately, some in the community are now raising San Francisco and the Bay Area’s jobs-housing imbalance as a reason to reconsider the basic premise of the Central SOMA plan.  We do not agree with these voices.   On October 5, 2017, the Planning Department staff presented an excellent response to these concerns.  The full presentation can be found here:

Jobs-Housing Capacity and Growth

Planning staff makes well reasoned arguments for why Central SOMA is an obvious choice for this growth, even with the existing housing shortage:

  • City-based jobs are transit accessible and therefore accessible to a greater range of workers, regardless of income or car ownership. They are denser, greener, cleaner and more energy efficient than jobs located outside of the urban core.
  • Regardless of the jobs-housing balance between various cities, there is a huge San Francisco intercity commute (i.e. many more residents work in the City than commute to the City);
  • Without locating a significant share of future job growth in key San Francisco locations, it will be impossible for the Bay Area to meet its greenhouse gas reduction targets;
  • The bottom line for Central SOMA is this: whether San Francisco zones for this type of job growth or not, the jobs are going to come and they’re going to have to be located somewhere.

So we have to plan for the next area to accommodate significant job growth.  We believe the City’s planning for Central SOMA is spot on.  There are fewer and fewer such areas close to transit, so we need to plan them carefully.

The City’s downtown financial district is nearing complete buildout. There are virtually no soft sites North of Market, and the new office building at 350 Bush is likely to be the last major project in the area for a very long time.  And the South of Market financial district also appears to be nearing full buildout. Many of the remaining sites along Folsom Street are under post-redevelopment control and set aside for housing already.

Most of the City’s planning in the last couple of decades has been housing focused.  The Rincon Hill Area plan was pure housing.  The Market-Octavia plan allowed for the creation of high-density residential at the intersection of Market and Van Ness – which is now transitioning into the HUB plan – again a primarily housing plan.

The Eastern Neighborhoods plan adopted in 2008 was a bit of a mixed bag, but certainly opened up as much land for housing as it did for commercial uses. And the significant downzoning of many industrial parcels essentially kept the status quo in that part of town: no housing or office is permitted.

The Transit Center District Plan, approved by the Board of Supervisors a few years ago, arguably includes significant up-zoning for job creation.  This was the plan that allowed the Salesforce Tower at 1000 feet high to go forward, as well as several other tall buildings coming out of the ground right now.  But the plan doesn’t preclude significant residential development, and several high-rise housing projects have moved forward under the plan.

Rezoning a small portion of SOMA to allow for and encourage job creation is the right way to go.  The Central SOMA Plan area generally goes from Second Street to Sixth Street and Townsend to Folsom Street.  This also happens to be where the new Central Subway (under Fourth Street) is rapidly nearing completion.  This seems like an obvious area to zone for job creation.  This portion of SOMA has languished for decades under zoning that simply didn’t work.  Not permitting either housing or office, the area has essentially been undeveloped since the 1980s.

So it seems a bit odd that as the City tries to bring the Central SOMA plan in for a safe landing after years of work, several critics have emerged attacking the plan for not being housing friendly enough.  The Planning Department has done an excellent job in addressing these concerns.  Despite the ongoing housing crisis, good planning requires that a diverse array of uses be encouraged towards building a complete city.  Forcing every planning effort to combat the housing crisis will inevitably lose sight of our other priorities, such as providing for new job space and promoting the fast-growing PDR sector.

What seems to have been forgotten in this entire dialogue is that San Francisco is a regional job hub and the Bay Area’s transit infrastructure – BART, CalTrain – was specifically designed to bring workers into the City.  Muni also acts like a giant funnel, bringing workers from the far corners of the City to our job center downtown.  The critics of the current jobs plan are conveniently forgetting that San Francisco has been and will continue to be a big part of the Bay Area’s economic job-creating engine for the foreseeable future…and it is very good for the City to anticipate that and, well, plan for it.

Authored by Reuben, Junius & Rose, LLP  Attorney, Andrew Junius

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.