Supervisor Aaron Peskin is calling for a ban on office space on the lower floors of Union Square buildings and a fee for larger offices on some upper floors. (Jessica Christian/S.F. Examiner)

New limits proposed on office space at Union Square

In an era of high demand for San Francisco’s office space by tech companies, a proposal was introduced Tuesday to prohibit office space on the lower floors of Union Square buildings and allow office space in higher floors for a fee that would fund improvements in public areas.

Supervisor Aaron Peskin, who introduced the legislation at the Board of Supervisors, said that Union Square is being impacted by changes to the retail market, necessitating these new regulations.

“Office space is in high demand and frankly outcompetes retail in many instances and threatens those spaces that are currently occupied by traditional retailers as well as less traditional retailer uses like tailors, design professionals, life sciences,” Peskin said.

The legislation “would protect the lower floors in the Union Square area … from office space encroachment” while allowing “certain office space uses as of right on higher floors — all of this subject to a modest impact fee” of $4 per square foot, he said

The proposal was developed in consultation with the Planning Department, Office of Economic and Workforce Development and the Union Square Business Improvement District following “a slew of proposals to convert retail to office,” according to Peskin.

OEWD spokesperson Gloria Chan said that “We have not seen his legislation so don’t have comment.”

Gina Simi, a spokesperson for the Planning Department, said that legislation is not reviewed until after it is introduced and could not comment. “We look forward to working with the supervisor’s office as it progresses through the legislative process,” Simi said. The Planning Commission will take an advisory vote on the proposal before the board hears it.

The funding from the fee is expected to go toward such projects as improving Hallidie Plaza, Powell Street Promenade and alleyways.

While office space is currently permitted on all floors, it does require a special conditional use permit for space larger than 5,000 square feet. And there is currently no fee.

Peskin’s proposal assesses the fee on all new office space and prohibits office space on the first three floors. The proposal permits office space of under 5,000 square feet without a special permit on floors four through six, while office space of 5,000 square feet or more would need a conditional use permit that could be appealed to the board. On the 7th floor or higher, office space is permitted “as-of-right.”

Also Tuesday, Supervisor Rafael Mandelman introduced legislation that could help board and care homes, or residential care facilities, open up easier by removing one “hurdle.” The proposal removes the requirement that board and care homes, which provide care for residents with history of mental illness and homelessness, need to obtain conditional use permits if they are serving seven or more residents “in a number of zoning districts,” but not those zoned for single-family or two-family homes.

“Over the last five years we have lost 19 such board and care facilities in San Francisco and with them hundreds of beds,” Mandelman said. “As our population ages and as we redouble our efforts to move the most vulnerable homeless folks off the streets and into care the loss of these represents an urgent challenge.”

The proposal is supported by Supervisor Norman Yee. Mayor London Breed announced earlier this year spending $1 million to help the support of 37 residential care facilities that house more than 350 residents, many of whom have a history of homelessness.

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