With Zero Office Conversions in Four Years, San Francisco Pins Hopes on New Special Financing District

Over the last four years, San Francisco’s efforts to encourage the redevelopment of office buildings into housing through relaxed zoning regulations, reduced fees, and other incentives have yielded no results.

Now, as the city stares down 30 million square feet of vacant office space, Mayor Dan Lurie announced “one last big juicy incentive” that could turn things around: “On Thursday Lurie signed legislation that establishes a special financing district to support residential conversions,” reports J.K. Dineen in the San Francisco Chronicle. 

Eligible projects in the new district, which spans the Financial District, Union Square, parts of SoMa, and part of the Market Street corridor, will receive 30 years of annual incentive payments backed by future increases in property tax revenue. The program could save developers between 10 and 20 percent on building and development costs.

According to Dineen, “City Planners think there are about 48 buildings ripe to take advantage of the incentive program — mostly historic Class B and C structures with operable windows and small enough floorplates to give the units ample natural light.” If all 48 buildings were to convert to apartments or condos, it could create roughly 4,400 new units of housing.