Curbed SF election guide: SF’s Proposition E office building cap, explained

Like clockwork, it’s almost Election Day in San Francisco; in fact, early voting has already started for the upcoming California primary election on March 3, 2020.

In additional to the hotly contested Democratic presidential primary, the March vote places a handful of crucial housing and infrastructure propositions on the ballot. We have everything you need to know about every vote you’re being asked to cast, starting with Proposition E.

What’s the proposal?

Proposition E, dubbed Limits on Office Development, says that the city will have to either meets it affordable housing goals or reduce the amount of new office space it permits each year.

Who’s behind it?

Affordable housing developer and frequent market-rate housing skeptic John Elberling of Tenants and Owners Development Corporation (TODCO) originally proposed the proposition. Elberling alleges that the city has a binary choice: build more housing or fewer offices, framing Proposition E as a tool to enforce that balance.

What’s the backstory?

San Francisco already has a cap on the amount of new office space the city permits each year—in fact that cap is critical to the way Proposition E works.

Under a voter-approved law from 1986 (Proposition M), San Francisco can only approve 875,000 square feet of new office space annually. If passed, Proposition E would potentially lower that cap each year depending on whether the city hits its affordable housing goals; failure to build ten percent of required housing in a year, for example, would then lower the office space cap by ten percent the following year, and so forth.

The city gets its affordable housing goals from the Regional Housing Needs Allocation (RHNA), a regular assessment by the state. Notably, SF very rarely hits these benchmarks.

Arguments for Proposition E

Elberling and other backers argue that SF suffers from a jobs-housing imbalance, as the city continues to attract new businesses and new employees to fill those jobs, but then has nowhere to put them. Either accelerate the latter or put the brakes on the former, the Todco crowd suggests. Allowing business to continue creating housing demand that the city can’t satisfy is a recipe for disaster.

Backers also say that Proposition E is a way to finally incentivize meeting SF’s RHNA goals, which have no penalties attached to them, making them at best guidelines.

Arguments against Proposition E

Opponents of the plan point out that the major source of funding for affordable housing is office development; driving down one would reduce rather than encourage development of the other. City Hall’s own economist, Ted Egan, buttressed this argument with his own projection of the proposition’s possible effects if passed.

Another common complaint is that Proposition E punishes the city for building more, but doesn’t make it easier to create new affordable housing—a combination of the “We’re working as hard as we can” and “You’re not helping” arguments.

Further, reducing office development will likely restrict SF’s economy and possibly drive up prices on current spaces, which opponents suggest will harm small businesses and nonprofits.

Supported by

• Todco
• Council of Community Housing Organizations
• SF Tenants Union
• AIDS Housing Alliance
• Most of the Board of Supervisors, most vocally Aaron Peskin.

Opposed by

• SF Chamber of Commerce
• Small Business Commission
• YIMBY Action, SFHAC
• Three SF Supervisors, most notably Catherine Stefani
• Mayor London Breed previously favored a different, competing plan