SEC. 210.5. COMMERCIAL TO RESIDENTIAL ADAPTIVE REUSE PROGRAM.
* * * *
(f) Applications. Any application to establish a residential use pursuant to t.½is Section 210. 5
must be filed on or before December 31, 2028.
Ordinance No. 0020-25
Ord. No. 0020-25
in effectFILE NO. 240927
AMENDED IN BOARD
2/25/2025
ORDINANCE NO. 20-25
[Planning Code - Development Impact Fees and Requirements for Non-Residential to
Residential Conversion Projects]
Ordinance amending the Planning Code to: 4} exempt certain types of projects in the
downtown area that replace non-residential uses with residential uses from
development impact fees and requirements, including the lnclusionary Housing fee±f 2}
create a process for previously approved projects to request modification to conditions
of approval related to de•1elopment impact fees, subject to delegation by the Planning
Commission; and 3) remove the application deadline from the Commercial to
Residential Adaptive Reuse Program, and require periodic reporting to the lnclusionary
Housing Technical Advisory Committee; affirming the Planning Department's
determination under the California Environmental Quality Act; making findings of
consistency with the General Plan and the eight priority policies of Planning Code,
Section 101.1; and making findings of public necessity, convenience, and welfare
pursuant to Planning Code, Section 302.
NOTE:
Unchanged Code text and uncodified text are in plain Arial font.
Additions to Codes are in single-underline italics Times New Roman font.
Deletions to Codes are in strikethrough it€11ics Times I"lew Roman font.
Board amendment additions are in double-underlined Arial font.
Board amendment deletions are in strikethrough /\rial font.
Asterisks (* * * *) indicate the omission of unchanged Code
subsections or parts of tables.
Be it ordained by the People of the City and County of San Francisco:
Section 1. Land Use and Environmental Findings.
(a) The Planning Department has determined that the actions contemplated in this
ordinance comply with the California Environmental Quality Act (California Public Resources
Code Sections 21000 et seq.). Said determination is on file with the Clerk of the Board of
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Supervisors in File No. 240927 and is incorporated herein by reference. The Board affirms
this determination.
(b) On December 12, 2024, the Planning Commission, in Resolution No. 21663,
adopted findings that the actions contemplated in this ordinance are consistent, on balance,
with the City's General Plan and eight priority policies of Planning Code Section 101.1. The
Board adopts these findings as its own. A copy of said Resolution is on file with the Clerk of
the Board of Supervisors in File No. 240927, and is incorporated herein by reference.
{c) Pursuant to Planning Code Section 302, this Board finds that these Planning Code
amendments will serve the public necessity, convenience, and welfare for the reasons set
forth in Planning Commission Resolution No. 21663, and the Board adopts such reasons as
its own. A copy of said resolution is on file with the Clerk of the Board of Supervisors in File
No. 240927 and is incorporated herein by reference.
Section 2. Legislative Findings.
(a) San Francisco's Regional Housing Needs Allocation in the current 2023-2031
Housing Element cycle is 82,069 units over eight years, which is more than 2.5 times the
allocation of the previous eight-year cycle.
(b) The City's Chief Economist has estimated that approximately 5,000 new market-
rate housing units per year would be required to keep housing prices in San Francisco
consistent with the general rate of inflation.
(c) At the same time, demand for office space has declined and commercial vacancy
rates have increased. The impacts to office space demands wrought by the COVID-19
pandemic - most notably the shift toward remote work - persist even as public health threats
have waned. These changes have been particularly prominent in the Greater Downtown Area,
defined as the North Financial District, South Financial District, Mid-Market, Union Square,
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Jackson Square, Mission Bay/China Basin, North Waterfront, Showplace Square, South of
Market, and the Van Ness Corridor (collectively, "Downtown"). In the Greater Downtown Area,
the office sector has experienced a fivefold increase in total vacancy rate between the first
quarter of 2019 and the first quarter of 2024.
(d) To address the twin problems of under-utilized office space and lack of affordable
and available housing in San Francisco, a recent report from the Board of Supervisors'
Budget and Legislative Analyst, dated January 6, 2023, urges City policymakers to consider
programs to incentivize the conversion of office space into residential units ("BLA Report").
The BLA Report identifies various policy options to incentivize the conversion of office
buildings, including reducing regulatory hurdles, such as protracted approval timeframes;
exempting projects from or relaxing various standards in the Planning Code; and offering
financial incentives to offset the costly architectural and engineering challenges of these
conversions.
(e) San Francisco is also the economic hub for the Bay Area. Prior to the COVID-19
pandemic, two-thirds of the City's total jobs were located Downtown, representing more than
three-quarters of the City's gross domestic product ("GDP"). With a $250 billion annual GDP
in 2022, San Francisco accounted for more than one-quarter of the nine-county Bay Area
economy- and 79% of the City's share of the Bay Area economy stems from office-based
industries concentrated Downtown. Downtown-based businesses have historically generated
nearly half of the City's sales tax revenue and almost all (95%) of the City's business tax
revenue. This revenue funds many key services such as public safety, cleaning, open space,
and transportation.
(f) The shift to hybrid work, with its consequent reduction in office workers and foot
traffic, has adversely impacted the City's Downtown and other sectors of the City's economy,
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including retail and small business, and more broadly has impacted use and activation of
public space, transportation, and public safety.
(g) On February 9, 2023, Mayor Breed issued a Roadmap to San Francisco's Future.
Several of the plan's key policies include: (1) the economic diversification of Downtown and
repurposing underutilized office space there; (2) expanding Downtown housing; (3) activating
Downtown and enacting zoning controls that draw people Downtown; and (4) maximizing
flexibility for uses and economic activity in the Union Square area, which has historically
played a unique role citywide, regionally, and internationally as a center for shopping,
entertainment, and services.
(h) On July 5, 2023, the City approved Ordinance 122-23 which established the
Commercial to Residential Adaptive Reuse Program to facilitate residential uses Downtown
by exempting eligible projects from certain Planning Code standards and requirements,
including those concerning rear yard, open space, streetscape improvements, dwelling unit
exposure, bike parking, transportation demand management, dwelling unit mix, and
Intermediate Length Occupancy controls.
(i) On December 14, 2023, consistent with Housing Element Implementing
Action 8.5.2, and following the Board of Supervisors' approval of the Housing Production
Ordinance, enacted as Ordinance No. 248-23, the Planning Commission passed Resolution
No. 21473, which delegated authority to the Planning Director to make findings necessary for
waivers and concessions under the State Density Bonus law, pursuant to Planning Code
Section 206.6.
U) In March 2024, San Francisco voters approved Proposition C, which amended the
Business and Tax Regulations Code by waiving the real estate transfer tax for first time
transfers on non-residential properties converted to residential use, as long as the property
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owner receives permission to convert the property before January 1, 2030. The exemption is
available for up to 5 million square feet of converted properties.
(k) Despite these efforts, increased costs of construction and financing continue to
present obstacles to the conversion of under-utilized non-residential spaces. Permit
applications for new projects have declined and many previously approved projects have
stalled.
(I) It is reasonable to further incent the conversion of non-residential space into
residential units by exempting eligible projects from local inclusionary housing requirements
and development impact fees in Article 4 of the Planning Code.
(m) On December 12, 2024, the Planning Commission heard and considered this
proposed ordinance. In Resolution No. 21663, the Commission recommended that the
lnclusionary Housing Technical Advisory Committee periodically review the feasibility of the
proposed inclusionary fee waiver.
Section 3. Articles 2 and 4 of the Planning Code are hereby amended by revising
Sections 210.5 and 406, to read as follows:
SEC. 406. WAIVER, REDUCTION, OR ADJUSTMENT OF DEVELOPMENT
PROJECT REQUIREMENTS.
* * * *
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(i) Waiver for Certain Non-Residential to Residential Conversion Projects. This subsection
4060) provides eligible Non-Residential to Residential conversion pro;ects with a waiver of any
Development fee or Development impact requirement imposed by this Article 4, as specified in this
subsection.
(]) Eligible Projects. To be eligible for the waiver, a pro;ect must replace Gross Floor
Area of existing Non-Residential uses, other than a Hotel use, with Gross Floor Area established as
Residential use, whether as part o{a change of use of existing Gross Floor Area, or through the
demolition of Non-Residential Gross Floor Area and construction of new Gross Floor Area for
Residential use. For purposes of this subsection 4060), any Gross Floor Area established as
Live/Work use shall be considered as Residential use. Pro;ects must be located in a C-3 district, or a
C-2 district east of or fronting Franklin Street/13th Street and north of Townsend Street.
(2) Waiver Amount. Eligible pro;ects shall be entitled to a waiver from any applicable
Development fee or Development impact requirement imposed by this Article 4 on any net new Gross
Floor Area of Residential use in an amount up to 110% of the Gross Floor Area of Non-Residential use
converted to Residential use. Converted Non-Residential Gross Floor Area shall be calculated as the
net reduction of Non-Residential Gross Floor Area resulting from the pro;ect.
(3) Calculation of Space. In a mixed-use pro;ect with Residential and Non-Residential
uses, the Gross Floor Area o{Residential use shall be calculated based on the definition of Gross
Floor Area in Planning Code Section 102include mechanical space and common areas such
as spaces for circulation, lobbies, storage rooms, balconies, roof terraces, laundry rooms, and
other resident amenity spaces, including parking spaces or garages, in the proportion that such
areas serve the Residential use to the total square feet of Gross Floor Area served by such areas.
(4) Limitation of Waiver. Any portion ofa pro;ect's Gross Floor Area that is not
entitled to this waiver shall be sub;ect to the otherwise applicable Development fees and Development
impact requirements of this Article 4, including the Inclusionary Housing Program. Applicable
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Development fees and Development impact requirements shall be calculated based solely on the
proportion of the proiect that is not entitled to this waiver, and not on the proiect as a whole. In the
event the proiect provides On-site or Off-site Affordable Units to satisfy the requirements o{Section
415.1 et seq., the equivalency, minimum size, and distribution of any such A[[ordable Units shall be
based on consideration of the proiect as a whole, and the requirements of the Inclusionary Housing
Program shall apply.
(5) Modification of Previously Approved Proiects. Noti.vithstanding the definitions
in Section 4 01 and 415A.2, a project shall be considered Finally Approved for purposes of this
subsection 406U), if prior to January 1, 2025, it received: (1) approval of its first Development
Application; or (2) planning approval of its first site or building permit, if a project only requires
a building permit; or (3) if either of the Development Application or building permit were
appealed, the final decision upholding the Development Application, or first site or building
permit, on the appeal by the relevant City Board or Commission. Proiects that have been
Finally Approved received a Final Approval prior to January 1, 2025, and have not been issued a
First Construction Document shall be entitled to request a modification to the project's Development
fees and Development impact requirements under this subsection 4060) to that project's
conditions of approval, conditions on a project permit, notice of special restrictions, or other
requirements necessary to: (1) 1.vaive any Development fee, and/or Development impact
requirement of this Article 4, as specified in this subsection 406U); and (2) modify conditions
that require a project sponsor to obtain a site permit or building permit within a certain
timeframe after project approval. The project shall comply with all other conditions of approval,
conditions on a project permit, or notice of special restrictions and any applicable
requirements of the Planning Code~
(A) Planning Commission Revie1N. l\ny modification of the conditions of
approval, conditions on a project permit, or notice of special restrictions consistent i.vith this
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subsection 406U) that would result in the significant modification of approved plans shall
require review and approval by the Planning Commission under the modification process
other.vise applicable to the project, including but not limited to Planning Code Sections 303(e),
309U), or 329(f)(7). A significant modification shall include:
(i) a change in the number of Residential or Group Housing units
by more than 20%, or a change of more than 10% in Gross Floor Area; or,
(ii) a change of use from Dv.ielling Units to Group Housing.
(B) Administrative Modifications. If the Planning Commission has
delegated its authority to the Planning Director to reviev.i and approve requests for
modifications consistent with this subsection 406U), the following modifications shall be
reviewed and approved by the Director of the Planning Department, and the Planning
Commission shall not hold a public hearing for discretionary review. Modifications under this
subsection 406U) shall not be subject to review under Planning Code Sections 303(e), 309(f),
309U), or 329(f)(7). If so delegated, the Planning Director shall be authorized to modify one or
more of the following:
(i) The applicable Development fee or Development impact
requirement, including the applicable lnclusionary Housing fee.
(ii) The applicable percentage of On site or Off site units.
(iii) For projects that elected to develop using the State Density
Bonus Law, Government Code Section 65915, or State Density Bonus Program: Individually
Requested, under Planning Code Section 206.6, the number of on site Affordable Units, and
the affordability levels of those on site Affordable Units if such levels require modification for
the project to continue to qualify for the same amount of density bonus previously approved,
and findings required by Section 206.6(e) related to eligibility for a density bonus,
concessions, and incentives and/or 1..vaivers of development standards. Notwithstanding the
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previous sentence, modifications to a density bonus project that are significant as set forth in
subsection 4060)(5)(/\), shall be revievved by the Planning Commission.
(6) Relationship to Other Planning Code Sections. The waiver in this subsection
4060) may be combined with any other reduction or waiver o{fees or development impact
requirements applicable to the proiect, as provided in this Article 4.
(7) Reporting. The Department shall provide a written report of projects that
receive a waiver of Development fees and Development impact requirements under this
subsection 406(j) to the lnclusionary Housing Technical Advisory Committee established by
Administrative Code Chapter 5 Article XXIX in conjunction with the triennial economic
feasibility analysis of the City's inclusionary affordable housing obligations pursuant to
Planning Code Section 415.10.
(8) Cap on the Total Square Footage Subject to a Development Fee
Waiver. The waiver in this subsection 406(j) shall apply only to the first 7,000,000 square feet
of Gross Floor Area that replaces Gross Floor Area of existing Non-Residential uses, other
than a Hotel use, with Gross Floor Area established as Residential use associated with
Eligible Projects in the order that the projects receive a Final Approval. If an Eligible Project
does not receive a building or site permit within five years of the Final Approval, the project
shall forfeit any rights to the approved waiver, and any Gross Floor Area associated with such
project shall no longer be counted against the 7,000,000 square foot limit set forth in this
subsection 406(j)(8).
Section 4. Effective Date. This ordinance shall become effective 30 days after
enactment. Enactment occurs when the Mayor signs the ordinance, the Mayor returns the
ordinance unsigned or does not sign the ordinance within ten days of receiving it, or the Board
of Supervisors overrides the Mayor's veto of the ordinance.
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Section 5. Scope of Ordinance. In enacting this ordinance, the Board of Supervisors
intends to amend only those words, phrases, paragraphs, subsections, sections, articles,
numbers, punctuation marks, charts, diagrams, or any other constituent parts of the Municipal
Code that are explicitly shown in this ordinance as additions, deletions, Board amendment
additions, and Board amendment deletions in accordance with the "Note" that appears under
the official title of the ordinance.
APPROVED AS TO FORM:
DAVID CHIU, City Attorney
By:
/s/
AUSTIN M. YANG
Deputy City Attorney
n:\legana\as2025\2500036\01822324. docx
Mayor Lurie; Supervisors Dorsey, Sauter
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City and County of San Francisco
Tails
Ordinance
City Hall
I Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4689
File Number:
240927
Date Passed: March 04, 2025
Ordinance amending the Planning Code to: exempt certain types of projects in the downtown area that
replace non-residential uses with residential uses from development impact fees and requirements,
including the lnclusionary Housing fee, remove the application deadline from the Commercial to
Residential Adaptive Reuse Program, and require periodic reporting to the lnclusionary Housing
Technical Advisory Committee; affirming the Planning Department's determination under the California
Environmental Quality Act; making findings of consistency with the General Plan and the eight priority
policies of Planning Code, Section 101.1; and making findings of public necessity, convenience, and
welfare pursuant to Planning Code, Section 302.
February 10, 2025 Land Use and Transportation Committee - NOT CONTINUED
February 10, 2025 Land Use and Transportation Committee - AMENDED, AN AMENDMENT
OF THE WHOLE BEARING NEW TITLE
February 10, 2025 Land Use and Transportation Committee - RECOMMENDED AS
AMENDED
February 25, 2025 Board of Supervisors - AMENDED, AN AMENDMENT OF THE WHOLE
BEARING SAME TITLE
Ayes: 11 - Chan, Chen, Dorsey, Engardio, Fielder, Mahmood, Mandelman, Melgar,
Sauter, Sherrill and Walton
February 25, 2025 Board of Supervisors - PASSED ON FIRST READING AS AMENDED
Ayes: 9 - Chan, Chen, Dorsey, Engardio, Mahmood, Mandelman, Melgar, Sauter
and Sherrill
Noes: 2 - Fielder and Walton
March 04, 2025 Board of Supervisors - Fl NALLY PASSED
City and County of San Francisco
Ayes: 9 - Chan, Chen, Dorsey, Engardio, Mahmood, Mandelman, Melgar, Sauter
and Sherrill
Noes: 1 - Walton
Excused: 1 - Fielder
Page I
Printed at 10:51 am on 3/5/25
File No. 240927
City mu/ County of San Francisco
Daniel Lurie
Mayor
Page2
I hereby certify that the foregoing
Ordinance was Fl NALLY PASSED on
3/4/2025 by the Board of Supervisors of the
City and County of San Francisco.
Angela Calvillo
Clerk of the Board
Date Approved
Printed at 10:51 mn on 315125
References
amendsSec. 210.10
amendsSec. 210.11
amendsSec. 210.5
amendsSec. 210.6
amendsSec. 210.7
amendsSec. 210.8
amendsSec. 210.9
amendsSec. 211
amendsSec. 211.1
amendsSec. 406
amendsSec. 407
Source: sf_ordinance_pdfURL: https://sfbos.archive.sf.gov/sites/default/files/o0020-25.pdfFetched: 7/4/2026