SF Business Times: New CA Bill to Ease Office-to-Housing Conversions

Many California downtowns have yet to see empty office buildings converted into homes, at least at any large scale. Assemblymember Matt Haney has introduced a new proposal to change that.

Assembly Bill 1532, dubbed the Office to Housing Conversion Act, would allow by-right office-to-residential conversions statewide. If the bill passes and is signed by the governor, office owners could receive over-the-counter approval for residential conversions, regardless of whether existing zoning codes allow housing at the project site.

In a news release Monday, Haney’s office described residential conversions as difficult to execute in California in part because of “extensive permitting barriers, bureaucratic hurdles and unaffordable fees” imposed by local governments.

Haney’s bill, introduced Feb. 17, would limit the fees and design requirements local governments can impose on conversions as well as establish a grant fund to help finance such projects. The release did not disclose the proposed amount of the fund or provide details on how the assistance would be distributed.

“My staff has been speaking to developers for the last few months, and they gave us a lot of feedback on what would need to change,” Haney, D-San Francisco, said in an interview Monday of the environment to make conversions feasible. “We need to act on this now. We’re at risk of further deterioration of our downtown — all of the studies we’ve seen have shown that housing will help.”

It’s not clear how much of an impact AB 1532 might have in California; developers in the state’s major urban areas have historically balked at office-to-residential conversions largely because of their relative complexity and cost, as the San Francisco Business Times, a sibling publication, reported last year.

Meanwhile, California allotted $400 million from the $308 billion budget passed last summer to incentivize residential conversions over the next two fiscal years.