A proposed initiative ordinance aimed at transforming San Francisco's vacant office spaces into residential units is set to go before voters in March. The measure, introduced by Mayor London Breed, seeks to exempt the first transfer of properties converted from non-residential to residential use from the real property transfer tax. This initiative is part of a broader strategy to address the city's significant office vacancy rates exacerbated by the pandemic and to meet urgent housing needs.

Andres Powers, the mayor's policy director, emphasized that the ordinance is designed to stimulate downtown economic recovery while diversifying the city's housing stock. The initiative would allow the Board of Supervisors to amend or repeal aspects of the transfer tax without voter approval, a point that has raised concerns among some supervisors about potential long-term implications for city revenue.

Supervisor Dean Preston voiced strong opposition, arguing that the measure could undermine funding for affordable housing established by previous voter-approved initiatives. He criticized the lack of consultation with stakeholders and warned that the ordinance could lead to a significant loss in tax revenue, benefiting wealthy real estate investors at the expense of everyday homeowners.

The proposed measure aims to incentivize the conversion of up to 5 million square feet of office space into residential units, potentially adding thousands of new households to the downtown area. However, concerns remain about the financial impact of waiving the transfer tax and the broader implications for the city's budget, especially as it faces a deficit.

As the city grapples with the balance between economic recovery and housing needs, the outcome of this initiative could shape San Francisco's urban landscape for years to come. The Board of Supervisors will continue discussions on the measure, with a focus on ensuring that any changes align with the city's long-term goals for housing and economic stability.