San Francisco has approved a major zoning code modification that waives development impact fees, including the Inclusionary Housing fee, for non-residential buildings converted into residential units within designated downtown areas. The ordinance applies to projects located in C-2 and C-3 districts that either repurpose existing buildings or demolish and rebuild for residential use. This policy is intended to stimulate downtown revitalization amid declining office occupancy rates and increase the housing supply by removing financial barriers. Previously approved projects that have not yet commenced construction may also apply for fee waivers. The legislation also eliminates the application deadline for the Commercial to Residential Adaptive Reuse Program, providing ongoing incentives for future conversions. Periodic reporting to the Inclusionary Housing Technical Advisory Committee is now required to assess the program’s impact.
This ordinance is a crucial step toward addressing San Francisco’s housing crisis and revitalizing its struggling downtown core. By reducing financial barriers, the city aims to accelerate the conversion of underutilized office spaces into much-needed housing, fostering economic growth and urban vibrancy.