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Board approves downtown revitalization financing district after heated debate over transparency and affordable housing
Summary
The Board of Supervisors voted to establish a downtown revitalization financing district that uses tax-increment financing to encourage office-to-residential conversions. Opponents said the plan risks diverting up to $610 million to private development and criticized a lack of transparency about the consultants "48" property estimate.
The San Francisco Board of Supervisors on Feb. 3 approved a plan to create a Downtown Revitalization Financing District that would use tax-increment financing to encourage conversions of underused office space into housing.
Supporters said the tool is needed to revive downtown and fund conversions that otherwise wouldnt pencil out. "As an adaptive reuse plan, this is also a once-in-a-lifetime opportunity for us to correct twentieth-century land-use decisions," Supervisor Dorsey said, adding the program "will enable us to preserve and repurpose buildings that are part of our city's rich cultural heritage."
Opponents urged caution. Supervisor Fielder called the plan “privatizing profits,” saying the legislative analyst projected the district could divert roughly $610,000,000 in tax revenue over several decades to private developments and that the plan would exempt the first 1.5 million square feet of conversions from the citys affordability requirements. "Given the city's budget and housing and affordability crises, it is high time we stop privatizing profits and socializing costs," Fielder said.
Several supervisors said they had questions about how the consultant arrived at an estimate of roughly 48 properties that might participate in the program. "If we know a specific number, why can't we identify the properties that were used for the exercise?" Supervisor Walton asked. Jacob Dimitliff of the Office of Economic and Workforce Development said consultants performed a high-level analysis using building age, vacancy rates and floorplate sizes and that the projection was intended as an estimate rather than a site-specific inventory.
Supporters pointed to guardrails in the district plan: projects must be approved by the district board, the program sunsets in 2032 and the Board will receive annual reports to monitor fiscal impacts. "All projects seeking this benefit will come before the district board for approval and the Board is required to publish an annual report," Dorsey said.
The board voted 7to4 to adopt the resolution. Supervisors Walton, Chan and Fielder recorded no votes.
What happens next: the district can begin considering applications from property owners seeking tax-increment support for office-to-residential conversions; the Board and district board will oversee annual reporting and project approvals.
