Starboard Commercial Real Estate

Hans Hansson | July 31, 2012

Two years ago San Francisco implemented the largest zoning change in the history of the city and one of the largest changes to zoning in California – The Eastern Neighborhood Zoning Program. Areas included in this zoning change are: East SOMA, Potrero Hill, Dog Patch and the Mission district. Former supervisor, Chris Daly, spearheaded the program in order to downzone said districts, protect and promote industrial users and create more opportunity for high-density, low-cost housing.

Chris Daly and others believed that San Francisco was losing its blue-collar base and that if a zoning ordinance did not take effect, large blocks of space would be converted to office, retail and other uses. Further eroding the job base while also taking away valuable high-density housing projects. The reality is that this ordinance has caused major confusion, created serious roadblocks and delays and is not yet enforced by law – creating a major stumbling block when attempting to address the needs for expansion space for emerging technology companies.

Today, buildings such as 444 Deharo (former headquarters to Zynga) and 200 Kansas sit vacant – waiting for decisions on zoning changes that could take months, even years to process. In the meantime, office vacancies are dropping dramatically and rents are rising, meaning larger tenants are facing difficulties when trying to find office space to accommodate their businesses. Sometimes the only option for these tenants is to leave San Francisco, resulting in a loss of jobs for our city.

Conventional businesses are now forced to compete with technology firms for the limited amount of office space available. Unlike tech firms with financial backing, most conventional businesses have at best stabilized in this current economy and are in no position to pay upwards of double the rent agreed to when signing their last leases. The majority of landlords today, most of them mom and pop owners, are totally confused about what their zoning now means to them. Often times ignoring it all together – leaving them exposed to legal problems later if the city begins enforcing this zoning measure.

With the majority of our American economy still in trouble, San Francisco cannot afford to blow our own economy up because it failed to provide our current technology and conventional business tenants a place to do business. The Mayor and the Board of Supervisors needs to amend this zoning change now before it is too late.
Posted 6 years, 10 months ago on July 31, 2012
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