San Francisco “Prop M” Construction Allocation Update

San Francisco “Prop M” Construction Allocation Update

In San Francisco, only so much new office space can be built as per Proposition M, which was created to control growth. There is annual cap on new construction, and the total allowable square footages grows in times of non-construction.

What is available today for approval?

• There are 3,805,989 gsf of pending projects filed and only 1,228,767 gsf left for allocation leaving a net -2,577,222 gsf.

• There are 4,669,870 gsf pre-application projects, defined as a project with an environmental review application, preliminary assessment application but no office allocation application submitted.

• With the pending and pre-application projects, there is a total deficit of 7,247,092 gsf in pipeline availability. San Francisco has experienced five consecutive years of positive net absorption greater than demonstrating a strong demand for office space. The constraint on office supply is at least partly responsible for rapidly rising rents.

What does this mean for future projects?

  • If nothing new is added to the pre-application queue, it will take eight years to accumulate enough gsf for allocation to develop each project.
  • However, many of these projects still require years-long review and planning before they can be presented to the Planning Commission for approval, and it’s possible that others are not pursued to the final stage at all thus reserving some of the office allotment in the pool.
  • In August of 2016 the Planning Commission completed the draft Central SOMA plan, which will need to be approved by the planning commission and Board of Supervisors and undergo an environmental review prior to adoption.

If you have any questions please feel free to reach out and say hello.

Tom Poser, EVP at JLL

415–509–0596/ tom.poser (@) am.jll.com


San Francisco “Prop M” Construction Allocation Update was originally published in Tom Poser on Medium, where people are continuing the conversation by highlighting and responding to this story.