Housing Crisis

Small Business Commission: Affordable Housing Bonus Program A Concern for Gas Station and Parking Lot Operators

Small Business Commissioner Paul Tour-Sarkissian poses a question.

Photograph by Neil Ballard for the Ingleside-Excelsior Light

At first, the Affordable Housing Density Bonus Program seemed it would receive preliminary approval from the Small Business Commission. But after discussing it amongst themselves and hearing mostly critical public comment, the commissioners decided to prolong the discussion.

Kearstin Dischenger of the Planning Department and Diana Ponce De Leon of the Office of Economic and Workforce Development gave a presentation at the commission’s Feb. 8 meeting to detail what the AHBP will mean for small businesses.

As currently proposed, AHBP allows for private developers to build projects two stories higher than existing 40’ height limits in almost all commercial corridors of the city. In order to achieve those two extra stories, developers must reserve 18 percent of units for moderate-income residents, and 12 percent for low-income residents, for a total of 30 percent of units reserved for affordable housing. (Here’s how the city defines income levels for AHBP.)

Of the 30,000 eligible sites in the program, Dischenger said, 240 have been identified by the Planning Department as eligible “soft sites,” or sites that currently have no housing units built on them.

“Of those 240 sites,” Dischenger said, “27 are gas stations, 98 are parking lots or vacant, 26 have formula retail uses and 11 sites have restaurants.”

Commissioner Mark Dwight pointed out that “soft sites,” rather than being prime empty areas awaiting activation, currently feature small businesses in many cases, such as parking lot operators and gas stations. “I think it would be interesting to know, very specifically, the 90 sites that are potentially affecting small businesses,” Dwight said.

The city is prepared to offer assistance to small businesses facing relocation including lease negotiation services.

“What we’re really trying to do here is make sure that we’re building a really solid network of technical support and interagency communication,” Dischenger said.

Ponce De Leon spoke about the programs that the Office of Economic and Workforce Development offers for business retention and relocation. Those programs include small business consulting, lease negotiation assistance, permitting assistance and small business loans. Those programs are not specific to AHBP, but collectively comprise the city’s bulwark against small business displacement in general.

“Our concern here is the displacement of existing businesses and the hardship that that entails,” Dwight said, discussing the efficacy of OEWD retention programs. “Some of the remedies are nice, but frankly won’t be of any use to a small business” eviction or long-term displacement.

Commissioners commented in favor of stipulating a size requirement for new retail spaces under AHBP, noting that smaller spaces are better for small businesses.

“I’d like to see smaller spaces in a lot of these new developments,” commissioner Stephen Adams said. “From what I’ve seen in development in Upper Market, smaller spaces seem to get rented out first and businesses then thrive, and it seems like we’re seeing a lot more of the larger spaces sitting vacant.”

Seven individuals spoke out against the program during the public comment portion of the presentation. Their complaints included that small businesses and communities did not have the proper opportunity to make input into the program while it was being developed.

Dennis Antenore, president of Friends of City Planning, expressed his concerned about what he feels is a lack of public input in how the program was developed.

“The program was not subject to enough criticism before settling on what it would provide for,” Antenore said.

Antenore also disputed the number of eligible soft sites identified, speculating that “hundreds and thousands” of one-story small business locations would be subject to demolition under AHBP, not the 240 identified by the Planning Department.

After public comment ended, commissioners voted in favor of continuing discussion to the Feb. 22 meeting.

Meeting Recap

  • Proposal for the Affordable Housing Bonus Program presented to commissioners. It will allow developers to build two extra stories if units are 30 percent affordable.
  • Commissioners would like to see a maximum square footage stipulation for construction of new retail spaces.
  • Commissioners continued AHBP to their next regular meeting.

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