How is large project office allocation affected with the ratification of Proposition E in San Francisco?
Passing with an ≈ 10% margin, Proposition E now links the approval of new large office development projects over 50,000 square feet to meeting delivery goals of affordable housing units established by the Regional Housing Needs Assessment
- The current goals require the annual delivery of 2,042 new Very Low, Low, and Moderate income housing units.
- If the City falls short in meeting its affordable housing goals, the amount of office allocation available to large projects (875,000 square feet) would go down by the same percentage as the shortfall for the year. Any deducted office space allocation is permanently removed and can never carry over.
- Current Prop M large project office allocation stands at 81,319 square feet. For the one year period beginning October 17, 2020, large project allocation is contingent on the number of affordable housing units produced from 2015-2019. If the figures were based on deliveries from 2015-2018, only 470,750 square feet of new allocation will be made available for the year, bringing the running total to 552,069 square feet.
- Projects that meet the affordable housing requirements of 809 units per one million square feet of office can borrow from future office allocations. However, the cost of building affordable housing is already subsidized by new office development. By curtailing new office development, Proposition E will create additional barriers to entry and accentuate an already unaffordable market.
Source: JLL Research