California Bill Aiming to Revitalize Downtown San Francisco Passes First Legislative Hurdle

California Bill Aiming to Revitalize Downtown San Francisco Passes First Legislative Hurdle

Pedestrians walk by an empty retail space in San Francisco on May 9, 2023. (Justin Sullivan/Getty Images)

Jill McLaughlin

Jill McLaughlin

4/21/2024

Updated: 4/21/2024

California legislation that aims to make downtown San Francisco less “office-focused” has passed its legislative first hurdle.
A bill proposed by San Francisco’s Sen. Scott Wiener aims to help transform the city’s beleaguered downtown by creating a “revitalization zone,” temporarily removing environmental reporting required by the California Environmental Quality Act (CEQA), and providing some developers with tax breaks.
“It’ll help SF make downtown less office-focused,” Mr. Wiener said about Senate Bill 1227 in a post on X April 17.
The legislation passed the Senate Environmental Quality Committee April 19 and is now waiting for a hearing in the Senate’s Revenue and Taxation Committee.
Crime, drug use, and homelessness have taken over some areas of the once-vibrant downtown. A multitude of tech companies, hotels, and retailers—large and small—have closed in the past few years, especially around the Union Square shopping district.
Businesses continued to vacate office buildings in the city’s core at a record rate last year, according to the international commercial real estate firm CBRE Group.
The city reached a record office vacancy rate of 36.7 percent in the first three months of 2024—up from 35.6 percent at the end of December, CBRE reported.
The business slowdown following COVID-19 pandemic restrictions and shutdowns has impacted San Francisco more than other larger cities, according to a legislative analysis of the bill. Between 2019 and 2023 tax revenue dropped by 25 percent in the city’s financial district, by 38 percent in its Tenderloin District, and by 29 percent in its South of Market district, the analysis revealed.
Downtown also recorded a 33 percent decrease in foot traffic in spring 2023 compared to spring 2019, according to the analysis.
While downtown is recovering, it’s still way behind where it was pre-COVID, according to Mr. Wiener.
“We need to reimagine downtown a more mixed-use place—with office but also housing, entertainment, education and so forth,” Mr. Wiener said. The bill “gives San Francisco one additional tool to do this work sooner rather than later.”
If passed, the bill would exempt projects in the downtown area from environmental study requirements until Jan. 1, 2035. The pause would save projects years of potential litigation and appeals while leaving local zoning and permitting authority intact, according to Mr. Wiener.
It would also expand eligibility for existing property tax “welfare exemptions” for those that provide rental housing up to 120 percent of the area median income if projects are rented 10 percent below market value.
To qualify, projects must be owned and operated by religious, hospital, scientific, or charitable funds, foundations, limited liability companies, corporations, or veterans’ organizations.
California state Sen. Scott Wiener hosts an event in San Francisco on Oct. 23, 2022. (John Fredricks/The Epoch Times)

California state Sen. Scott Wiener hosts an event in San Francisco on Oct. 23, 2022. (John Fredricks/The Epoch Times)

Mr. Wiener said he hoped the bill would speed new growth and allow for the conversion and remodeling of outdated buildings into new vibrant uses.
The bill is supported by several Bay Area groups and officials, including Mayor London Breed. The California Retailers Association, a statewide retailer advocacy organization, the San Francisco Chamber of Commerce, and the Union Square Alliance, which serves businesses in Union Square, are among the groups in favor of the bill.
A number of environmental justice and climate action groups, however, oppose it.
In a letter to the Legislature, a coalition of environmental stakeholders claimed the city’s struggles have “nothing to do with CEQA,” the environmental review requirements. Exempting environmental protections would have “serious environmental justice implications, including air pollution, traffic, noise, and pedestrian hazards,” the group wrote, according to a legislative analysis.
For downtown to recover, officials need to stabilize the Bay Area’s public transit systems and provide more flexibility around entertainment, Mr. Wiener additionally said in his X post.
In an aerial view, the Transamerica Pyramid building is seen in San Francisco, Calif., on May 11, 2023. San Francisco's downtown continues to struggle with keeping retail and commercial properties rented out following the COVID-19 pandemic. (Justin Sullivan/Getty Images)

In an aerial view, the Transamerica Pyramid building is seen in San Francisco, Calif., on May 11, 2023. San Francisco's downtown continues to struggle with keeping retail and commercial properties rented out following the COVID-19 pandemic. (Justin Sullivan/Getty Images)

The senator has proposed two other pieces of legislation to target the city’s transit system—Senate Bill 1031—and to legalize outdoor entertainment zones—Senate Bill 969.
SB 1031 would authorize a Bay Area ballot measure to provide transportation funding and require operational reforms and assessments, and SB 969 would allow cities to create “entertainment zones” in public spaces where local bars and restaurants are allowed to serve alcohol outdoors.
Such would give bars and restaurants and the surrounding businesses a “much-needed boost,” Mr. Wiener said.
“Getting people back out in the streets is key to the economic recovery of cities across California,” Mr. Wiener said in a news release published in January after introducing the entertainment zones bill.
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Jill McLaughlin

Jill McLaughlin

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Jill McLaughlin is an award-winning journalist covering politics, environment, and statewide issues. She has been a reporter and editor for newspapers in Oregon, Nevada, and New Mexico. Jill was born in Yosemite National Park and enjoys the majestic outdoors, traveling, golfing, and hiking.

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