Related Companies apparently sees corporate rentals as a strategy to get through the plateaued San Francisco rental market. In an upcoming Planning Commission hearing, the company will ask the city to allow it to turn 40 units throughout its 40-story luxury apartment tower at 1550 Mission into intermediate length occupancy (ILO) dwelling units — and more conversions may be on the way.
Erik Starr, Related’s director of corporate housing, is the point person on the Planning Commission application, but deferred questions to Related’s New York press office, which did not reply to a request for comment.
The company has asked for approval to put ILO units, which can be rented for between 31 days and a year, in all four of its San Francisco apartment buildings, according to the city’s Senior Planner Matthew Dito. Two of those requests were already denied as ineligible for the program, but 1550 Mission and 680 Mission are still moving through the approval process.
The city has a 1,000-unit cap on ILOs, but it is far below that limit, according to Dito. Only 87 units have been approved since the program began in April 2020 as a way to keep short-term vacation rentals on services like Airbnb from turning into longer-term corporate rentals in a bid to keep more apartments available for traditional tenants.
The city put a two-year freeze on new applications in order to give existing ILOs a chance to apply first and there was a “huge rush” of activity when that moratorium was lifted last June, Dito said via email. While most of the first applications to be approved were for a smaller number of units, the great majority of the nearly 240 units remaining in the queue, including those from Related, are for applications with 25-plus-unit chunks.
New applications have been limited since last summer, but with just three people at the city dedicating only part of their work day to ILOs “it has been slow to process them all,” Dito said.
The legislation authorizing the program states that only one-third of ILOs can be outside the downtown core with the “policy goal of keeping such uses near corresponding hotel and tourism districts, and job centers.” Almost all of the units approved thus far have been outside of downtown, Dito said. Related’s location at 1550 Mission lies in the downtown core.
The 550-unit luxury building with a rooftop pool, onsite Equinox fitness club and sports lounge with a pool table and kegerator has apartments ranging from studios asking $3,300 a month to the two-bedroom penthouse with an asking price of $11,500 a month, according to the building’s website. The building is currently offering a one-month free rent promotion on all floor plans, plus a $2,500 gift card when prospective renters submit an application within 24 hours of touring.
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