Planning Commission approves settlement-driven code change to allow Hotel d'Arts conversion

The San Francisco Planning Commission on March 6 unanimously adopted a Planning Department recommendation to amend the planning code so that a tourist hotel would be a principally permitted use for all 51 units at 447 Bush Street, known as Hotel d'Arts, and to waive conditional-use and certain fees tied to converting 38 residential hotel units at that address.

Planning staff said the ordinance and fee waivers are part of a settlement resolving federal litigation that challenged a 2023 Board of Supervisors amendment to the hotel conversion ordinance. Aaron Star, manager of legislative affairs for the Planning Department, told commissioners the settlement would make tourist-hotel use principally permitted for the Hotel d'Arts site and waive otherwise applicable impact fees and permit review fees for the converting units.

Under the settlement terms described by staff, the owner of Hotel d'Arts will accept additional restrictions on two other properties: the buildings at 412 Hayes Street and 319 Ivy Street would be brought under the hotel's conversion ordinance, creating 34 residential units and subjecting those units to a minimum tenancy period of 30 days and other operating conditions meant to encourage long-term residential rentals.

Neighbors and advocates urged the commission to treat the matter narrowly and to note the settlement's limited reach. A member of the public told commissioners the city should not encourage eliminating affordable temporary housing and asked the commission to record concern that the settlement could be used elsewhere as a precedent. Commissioner Williams said she wanted to emphasize the importance of single-room-occupancy hotels and the affordability they provide.

Commissioners discussed the narrow scope of the ordinance and whether it would set precedent. Commissioner Veron said the changes appeared narrowly tailored to the specific settlement and the affected properties. On a motion to adopt the Planning Department's recommendation, the commission voted 7-0 to approve.

The Planning Department record and staff presentation said the settlement also requires the plaintiff to record a notice of special restriction memorializing obligations tied to the traded units and requires the operator of the traded units to adopt operating terms intended to promote residential rental use.

The ordinance will now proceed to the Board of Supervisors for further legislative action consistent with the settlement terms described by staff.