More incentives planned for SF commercial-to-housing conversions, but there are still challenges

San Francisco's Mayor Daniel Lurie has unveiled new incentives to boost the conversion of commercial spaces into residential units, building on a strategy initiated by former Mayor London Breed. The city has expedited permitting processes and reduced planning fees to facilitate these conversions, while also exempting developers from affordable housing requirements. Developers who convert properties will receive tax rebates, potentially totaling $1. 4 million in the first year for a building valued at $209 million. Despite these incentives, many developers face challenges due to rising construction costs, which have surged 70% since 2013.

Supervisor Rafael Mandelman emphasized the uncertainty surrounding economic conditions, which could affect future projects. The Board of Supervisors passed the legislation unanimously, with expectations that around 50 buildings could provide over 10,000 new housing units. Historical conversions in the city have included notable structures like the Royal Insurance Building and the old Chronicle Building. The city's efforts aim to revitalize downtown and address the ongoing housing crisis.