Good Afternoon sf.citi members,
I’m writing to you today to provide you with a legislative update on the Mayor’s pending EV legislation and a readout from yesterday’s hearing on the Current State of Commercial Office Space and Economic Recovery.
EV Legislation
On January 11th, Mayor London Breed introduced an ordinance amending the SF Planning Code to include “Electric Vehicle Charging Location” and “Fleet Charging” as Automotive Uses, allow conversion of Automotive Service Stations to Electric Vehicle Charging Locations without Conditional Use authorization, and amend the zoning control tables for several nonresidential districts across the City to allow Electric Vehicle Charging Locations by right.
According to the legislation, the current SF Planning Code does not contain definitions or zoning controls for electric vehicle charging locations, stations, or fleet charging. As a result, applications to install EV charging projects require an EV service provider (EVSP) and the Planning Department or Commission to work out a permitting pathway, on a case-by-case basis, using Planning Code provisions designed for gas stations and auto service centers. The introduced legislation creates a pathway for EV Charging Station installation and supports San Francisco’s climate action targets, Mayor London Breed’s “Electric Vehicle Roadmap” released in 2019, as well as California’s targets to increase EV adoption and access to EV charging.
According to insight we’ve received from SF Planning, the legislation is expected to be heard at the SF Planning Commission in early March 2022. While the hearing date has yet to be calendared, we will receive an update once the SF Planning Commission and Mayor’s Office agree on a date. Once heard at the SF Planning Commission, the legislation will return to the Land Use and Transportation Committee before being sent to the full Board of Supervisors. As always, we will keep you informed of any final hearing dates and opportunities for engagement.
Hearing: Current State of Commercial Office Space and Economic Recovery (slide decks attached)
Yesterday’s hearing, sponsored by Supervisor Safai, on the Current State of Commercial Office Space and Economic Recovery included updates from SF Chief Economist, Ted Egan, Director of OEWD, Laurel Arvanitidis, and CEO of BOMA San Francisco, John R. Bryant. While not in attendance, please find additional slide decks from the SF Chamber and Office of Small Business on this topic.
Ted Egan (Chief Economist)
Chief Economist, Ted Egan provided a high level overview of the status of San Francisco’s real estate and sublease markets, and his predictions for recovery. The largest factor impacting downtown recovery is the continued uncertainty surrounding when workers will return to the office and at what capacity. Many large office tenants are rethinking their work-from-home policies, and in some cases reducing the amount of office space they lease in the city. This reduction in office demand seems to be more pronounced in San Francisco than in most other cities. It will contribute to a higher office vacancy rate, fewer employees returning to the office after the pandemic, and perhaps a slower economic recovery for the city. However, Ted expressed that it’s highly unlikely that this will be a permanent change.
Based on past experience, office rents are likely to decline until new tenants are secured, although this adjustment process may take some time. Signs of rising tenant interest, and office touring, are part of this market adjustment process. It may result in San Francisco becoming affordable to office tenants that have been priced out of the city in the past. Additionally, there are macroeconomic factors that should favor the city, including low interest rates, a strong national recovery, and a favorable environment for venture capital funding.
John R. Bryant (BOMA)
John R. Bryant, the CEO of the Building Owners and Managers Association, provided an update on recovery through the lens of building owners, focusing on the organization’s efforts to ensure safe and welcoming office spaces, high vacancy rates, and improvements that can be made to support recovery. Overarching factors influencing office vacancies are crime and safety concerns and shifting work culture. He hopes to see larger employers set new dates for returning to the office and would like to see investment in beautification projects, increased flexibility in the use of space, and additional covid testing. He also emphasized that the City should focus on creating a friendlier business environment to combat competition from other markets that are drawing companies and workers away from the City,
Laurel Arvanitidis (OEWD)
Laurel Arvanitidis, Director of the Office of Economic and Workforce Development provided an overview of the initiatives, events, and activations her office is focusing on to draw people back to the downtown core. For instance, investments to improve Hallidie Plaza, Welcome Ambassadors, SFPD Community Ambassadors, and SF Wednesday events. OEWD is working closely and collaboratively with CBD’s and organizations such as BOMA to continue to provide programming that supports recovery.
Questions from committee members focused on what can be done to support workers returning to the office, specifics on office conversions to retail and residential, and office rents. The hearing was continued to the call of the Chair and we can expect a forthcoming hearing in the next few months.
As always, please let me know if you have any questions.
Thank you for your continued membership.
Jen
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