Planning Commission reviews Central SoMa housing and Prop M office-allocation strategy as staff outlines $211 million in linkage revenue

Planning Department staff and the mayor’s housing and economic offices told the San Francisco Planning Commission on June 6 that Central SoMa’s redevelopment and office boom could generate hundreds of millions of dollars for affordable housing — if projects move forward and fees are collected as assumed.

Ken Rich, director of development at the mayor’s Office of Economic and Workforce Development, said the Central SoMa plan anticipates nearly 9,000 new homes and aims for 33 percent of them to be affordable through a mix of on‑site inclusionary units and 100 percent affordable developments. He identified a set of “key sites” (including 801 Brannon, Fifth & Howard, 160 Freelon, 725 Harrison and a Flower Mart off‑site parcel) that will yield much of the early funding and land dedication for affordable housing.

Rich told commissioners the city currently projects about $211,000,000 in jobs‑housing linkage fee revenue from the large office projects tied to Central SoMa, in today’s fee rates. He said about $170 million is expected to be available in 2020, another $23 million in 2022 and remaining amounts thereafter, but stressed the estimates depend on projects pulling building permits and paying fees when required. “As a rule of thumb,” Rich said, the city receives fees roughly a year after project approvals when developers pull permits.

Planning staff also briefed the commission on adjustments to the office allocation procedures under Proposition M, the voter‑adopted cap on annual office floor area. John Grama (planning staff) said the city has approximately 2.9 million square feet available for the large‑cap allocation this year while about 6.6 million has been requested by applicants. Staff proposed prioritizing Central SoMa projects, reviewing projects on a case‑by‑case basis, and allowing phased allocations rather than a single competitive “beauty‑contest” process. Grama said the commission has historically allowed flexibility in defining “commencement of construction” and that allocations can be revoked only after an affirmative public hearing if projects stop moving forward.

Commissioners and community speakers pressed staff on timing and certainty. Commissioner Moore asked what happens if a project is entitled but never pulls permits; staff said the city considered collecting fees at entitlement but has historically required payment at building permit to avoid holding fees for projects that later fall apart. Several commissioners asked staff to pursue stronger “use it or lose it” expirations or penalties for projects that do not proceed in a timely way. Community representatives reiterated concerns that concentrating Prop M allocations in Central SoMa will delay other city neighborhoods and could postpone the affordable housing and community benefits tied to later phases of projects.

Why it matters: The allocation choices under Prop M determine which office projects can build now and which will wait — a sequence that affects the timing of linkage fees, land dedications and the city’s ability to deliver affordable housing and community benefits tied to those projects. The commission asked staff to bring additional materials and analysis in upcoming meetings so commissioners can weigh phasing, expiration terms and how to accelerate housing dollars to meet immediate needs.

Next steps: Staff said the linkage fee update and consultant analysis underpinning the 240 sq. ft. per‑employee assumption for the updated nexus will be released imminently, and that the commission can expect additional informational sessions on SB 330 and the office allocation approach.