San Francisco will see a drastic reduction in the amount of space available to large-scale office projects next year.
Under Proposition E, which passed a voter referendum last year, the city will be allowed to approve just under 183,000 square feet for new office projects exceeding 50,000 square feet in 2022, the San Francisco Business Times reported. The new cap represents a drop of nearly 80 percent from the more than 527,000 square feet allocated for office projects this year.
Office development approvals have historically been limited to 875,000 square feet annually, but under Prop. E, that limit is reduced if the city fails to meet state-mandated affordable housing goals. Any shortfalls in affordable housing developments are in turn deducted, on a percentage basis, from the amount of office space that can be approved.
That amount could be reduced even more depending on the outcome of an ongoing audit of the city’s affordable housing production from 2015 to 2019 under parameters established by Prop. E, according to the publication.
Most of last year’s allocation was claimed by just two projects. Associate Capital’s mixed-use redevelopment of the Potrero Power Station on the Central Waterfront was granted more than 403,000 square feet, while Parcel G of Tishman Speyer’s Mission Rock redevelopment project — an office building that will become Visa’s new global headquarters — was granted just over 283,000 square feet.
Prop. E does offer a workaround. The Housing Balance Reserve, established by the proposition, attempts to tie office development to affordable housing by removing allocation limits for large projects that make room for 809 affordable units for every 1 million square feet of office space. Once allocated, however, those allowances must be accounted for by reducing allocations in future years.
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Commercial
San Francisco
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