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Planning Commission adopts policy guidance to implement Proposition E linking office allocations to housing
Summary
After a staff briefing on Prop M history and voter‑approved Proposition E, the Planning Commission adopted policy guidance to help implement the new rule that ties large‑scale office allocations to affordable‑housing production and RHNA performance.
SAN FRANCISCO — The Planning Commission adopted policy guidance Thursday to help the department implement Proposition E, a voter‑approved change that ties large‑cap office allocations to the city’s affordable‑housing production and RHNA performance.
Corey Teague, the zoning administrator, summarized the long history of the Office Development Annual Limit (Prop M) and explained how Proposition E changes the mechanics. Under the program, the city issues annual allotments for “large‑cap” office projects (50,000 square feet and above) and “small‑cap” projects (25,000–50,000 sq ft). Teague said Proposition E reduces the large‑cap annual allotment proportionally based on the prior year’s share of RHNA affordable‑housing targets achieved and adds two reserve mechanisms that can allow office allocations when the city lacks cap space if developers provide affordable housing tied to their project.
Teague described two reserves: a citywide housing balance reserve, where developers can qualify by producing affordable housing (up to 120% AMI) using a Nexus ratio (809 housing units per 1,000,000 sq ft of office), and a capped Central Soma reserve for key sites that must also provide community‑benefit uses or land for affordable housing. The measure prohibits the use of city capital funding to develop required affordable housing.
To make the code operable, staff proposed four clarifying planning‑code policies: adopt a consistent "housing unit" definition (matching the inclusionary program); address undefined terms (community arts, PDR, neighborhood‑serving retail) on a case‑by‑case basis; require the required affordable housing to be completed prior to or concurrent with the office certificate of occupancy (with an exception for development agreements where phasing is evaluated in the DA); and adopt a simple fee‑credit methodology so a developer that pays inclusionary fees receives a 50 percent fee credit that converts to unit‑equivalents.
Several development‑law firms called for fast, clear definitions — especially of "communities of concern" — and predictable fee and financing rules so prospective housing‑production projects tied to office allocations are financially feasible.
The commission voted to adopt the staff guidance unanimously.
