Skyscraper office buildings, still being built at a rapid pace in many United States cities, bring tens of thousands of jobs to downtown districts. But too often there is no place for the office workers to live.
In the past several decades, San Francisco has become another "headquarters city," with glass towers looming over the gingerbread Victorian homes so much a part of this city's traditional image. Locally, it's called "the Manhattanization of San Francisco."
The city has found a novel way to force downtown developers to help house those thousands of workers they're drawing to the city by requiring that they put up a specified number of housing units per square foot of new office space.
The housing shortage in San Francisco is particularly acute. Each year, 10,000 new jobs are created in the city. But only some 1,000 new housing units are produced annually. Last year, there was a net increase of 820 new housing units; the vacancy rate last year was a negligible 1.1 percent.
The housing scarcity has sent rents to astounding levels by the standards of most urban office workers. For those who choose to live outside the city -- and often there's little choice involved -- the costs of housing and commuting are rising to unprecedented levels. Automobile congestion and the squeeze on urban transit districts grow ever more severe.
In San Francisco, as elsewhere, the era when the city subsidized, in various ways, construction of desperately needed housing has ended. Thus, city planners have developed a technique which involves the creative use of the environmental impact reports (EIRs), mandated by state law. The new approach was first applied to two downtown office towers approved in March.
Under the procedure, the city planning commission requires that EIRs for office developments recognize and "quantify" the detrimental impact on housing. They must include information on how many workers are likely to be imployed at each new building and how many of those are likely to become city residents, not commuters. Using a figure of two residents per housing unit, the report thus yields an approximation of the city's added housing burden for each new office building.
Finally, the planning commission determines that the EIR statement of impact on housing is a "significant finding," a legal term that under the law obligates mitigating measures -- in this case the construction of the specified number of housing units. These measures become part of the conditional use permit given the developers, and they carry the force of law. Provision is made for review of compliance at six-month intervals.
Five Fremont Center, a planned 43-story office tower, was calculated to produce a need for 550 housing units. As a result, developers of the $115 million to $120 million building also must build 550 units of housijg in the next 5 1/2 years. The commission also stipulated that half of those units are to be for low- and moderate-income tenants.
The office-housing trade-off policy never has been incorporated in city law. But city planning director Dean Macris intends within the next few weeks to ask the Board of Supervisors for an ordinance embodying this approach to assure that all buildings are treated equally and fairly.
Mayor Dianne Feinstein recently included the planning commission's policy in her own new "all-out program for improved housing" in the city.
Substantial opposition to the mayor's plan is expected because it requires office developers to build market-rate housing (or contribute to a city fund for housing), with no provision for low- or moderate-income housing as part of the trade-off. The mayor defended her stand by saying, "You can't push people to build if they can't do it profitably."
Meanwhile, Macris' department is experimenting with similar approaches to other problems associated with development. Recently the planning commission required that several hotels planned for a run-down red-light district downtown make contributions toward low-income housing based on expected occupancy levels.
At the same time, the planning department and the mayor's office, along with the supervisors and downtown business men, are debating a building fee formula for getting downtown interests to contribute toward the maintenance of the city's financially pressed transit agency, the Municipal Railway. Macris calls transit "the other major impact" of downtown development.
He foresees a continuation of the "boom in office space needs" as this country shifts from a manufacturing to a service economy. Government no longer has the funds to cope with the effects of that boom, he said. But "the money is in the private sector, and they have a corporate responsibility" to "offset some of the problems [development] causes."
According to the planning director, San Francisco has had good cooperation from developers in forging this municipal-developer "partnership" because downtown builders recognize that the future growth of the area is dependent on construction of new housing.
But Gary Craft, a spokesman for Milton Meyer & Co., developer of the Five Fremont project, protested, "I don't think that is fair . . . We're not in the business of building housing." Craft said his company specializes in office development and is being required to build housing because "the planning commission isn't performing their responsibility to provide land [for housing] at affordable levels" and has "no comprehensive strategy" on housing.
Craft said his company had identified several possible sites for compensatory housing. But he added that other developers, and his company in the future, might not be so fortunate.
He acknowledged that in complying with the housing mandate his firm "expects to get a reasonable return for our money."