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  • Laura Waxmann - San Francisco Business Times

S.F. proposals seek new office restrictions and scrutiny of demolitions

Two San Francisco supervisors introduced separate pieces of legislation Tuesday aimed at preserving housing in the city.

Supervisor Hillary Ronen, D-District 9, proposed an ordinance that would ban new office space on the upper floors of some developments zoned as “urban mixed use” in eastern neighborhoods — generally portions of the Mission District, Potrero Hill and the Dogpatch. The UMU zoning designation, created more than a decade ago as redevelopment of the neighborhoods was just beginning, allows office space on upper floors.

Also on Tuesday, Supervisor Rafael Mandelman, D-District 8, introduced legislation seeking to close what he called a “loophole” in the city’s permit review process regarding the demolition of existing homes.

Both pieces of legislation will be taken up by the San Francisco Planning Commission before moving to the Board of Supervisors’ Land Use and Transportation Committee. Dates for the hearings have not yet been scheduled.

Here's a closer look at the two proposals.

The Ronen ordinance

Ronen said some developers are capitalizing on the UMU zoning designation by using density bonus programs to expand office uses in projects that could otherwise provide much-needed housing.

When the zoning designation was established in 2009, it was not “foreseen that today’s real estate market would make it impossible for other uses to compete” with office space, Ronen said.

She said UMU zoning was intended to "buffer a transitional period as new residential development spread into industrial areas” and its "crucial goal was to protect arts and light manufacturing spaces in these areas while opening an opportunity for new housing."

“Today office, not housing, is the investment of choice,” Ronen said. “I do think it's time for us to re-examine the controls we put in place more than a decade ago to see if all of these still make sense for our current needs.”

Her legislation would allow office space on the ground floor of new developments. Arts, light manufacturing and housing uses would still be allowed throughout the buildings.

The legislation was sparked by contention over a Mission District project approved by the San Francisco Planning Commission late last year that calls for a six-story expansion of the former Lyft offices at 2300 Harrison St. that would bring close to 100,000 square feet of office space to the heavily gentrifying neighborhood. The project would add a mixed-use building with ground-floor retail and arts spaces, as well as 24 new residential units and more than 27,000 square feet of office space to the existing three-story building on the site.

Property owner 526 Mission Street LLC invoked the state density bonus, a law that permits up to 35 percent greater density in exchange for designating 11 percent of the units as affordable to very-low-income households, to build a taller project.

The development drew opposition from community groups, who have appealed the project to the Board of Supervisors, citing concerns that it could have said the project could have accommodated more housing and that it would accelerate displacement and gentrification in the neighborhood.

Ronen’s office said the legislation would not work retroactively and would not impact the 2300 Harrison St. development.

Evette Davis, a spokesperson for 526 Mission Street LLC, declined to comment on the proposed legislation, but said that of the new homes proposed, “six are below market rate, which is double the required amount.”

She added that the project would deliver more than $3.2 million in impact fees.

“We’ve also worked with the community to modify our design, provide low cost space to local artists on our ground floor, and set aside space for local muralists,” Davis said. “Given the modest nature of our project, we feel we have pushed ourselves to be as responsive as we can.”

The Mandelman ordinance

Mandelman wants to change a city law that allows owners of more expensive homes in the city who want to demolish or change the use to do so without a public hearing.

San Francisco currently exempts existing single-family homes slated for demolition, conversion or change of use from a hearing before the Planning Commission if they are valued at a certain threshold, currently $2.2 million or above.

This exception “makes no sense at all,” Mandelman said on Tuesday.

His ordinance, which is co-sponsored by Supervisor Aaron Peskin, would amend the Planning Code to require pricier homes, called “demonstrably unaffordable” in the code, that are proposed for demolition to undergo a conditional use authorization and a public hearing.

Mandelman said the “original logic” of the exemption was that the loss of “exceptionally expensive homes was of lesser concern to the city in terms of preserving existing housing, which tends to be relatively more affordable.”

But he said the spike in home prices changes that.

"Many investors are willing to pay top dollar for an older home that they plan on demolishing, redeveloping and selling as a new, larger and sometimes much larger and more expensive single-family home, only worsening the affordability crisis," Mandelman said. "As a result, this provision has become a loophole whereby many single-family homes that may have previously housed middle-class families can be demolished with only limited public review."

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