From Cubicles to Condominiums

AB 1532 Aims to Transform More Empty Offices Into Homes Using Skilled-and-Trained Labor

By Robert Fulton | Contributing Writer

Assembly Bill 1532, a.k.a. the Office-to-Housing Conversion Act, might be just the thing San Francisco needs to start making a dent in its lack of housing and depressed economic outlook. Taking aim at the City’s glut of vacant office space, most of it concentrated in hard-hit downtown SF, AB 1532 could help spur more office-to-residential (O2R) remodel projects.

The legislation, penned by SF Assemblymember Matt Haney (D-Assembly District 17), would allow O2R conversion “by right,” forgoing local zoning rules that would restrict or hinder the development of residential units. AB 1532 would also streamline the application process, leading to a quicker turnaround from empty boardrooms to domestic dwellings.

According to a post from Haney on social media last year, his bill would “set strict timelines, limit bureaucratic red tape, and help convert millions of square feet of underutilized vacant office space to housing.”

Crucially, AB 1532 also includes skilled-and-trained requirements, ensuring O2R projects are completed by union trades workers.

“This is entirely doable and necessary, and we are already seeing it start helping to bring more people, life, and retail to our downtowns and build much-needed housing that can bring down rent,” Haney wrote in his post. He claimed that office space in San Francisco could be converted to housing for as many as 15,000 people.

Haney was unavailable for comment by press time.

In addition to the obvious anticipation of projected work-hours, the building trades are excited by the language explicitly requiring the use of a skilled-and-trained workforce, including union apprentices. The bill explicitly promises that for any given O2R project, “an enforceable commitment that all contractors and subcontractors performing work on the project will use a skilled-and-trained workforce for any proposed rehabilitation, construction, or major alterations.”

Greg Hardeman, a business representative with IUEC Local 8, applauded the skilled-and-trained language in Haney’s bill. Hardeman foresees a great deal of elevator modernization work coming to his local with O2R conversions. He said that skilled-and-trained language helps guard against bad contractors and any issues with enforcing prevailing wages.

“Having the skilled-and-trained language ensures that the workers will be paid properly,” Hardeman said. “We are a proud workforce full of skilled-and-trained elevator mechanics and apprentices, and not having that language really could hurt some of the crafts.”

Excessive office space sitting empty and idle has created a ghost-town atmosphere in downtown SF. According to the San Francisco Chronicle, vacant office space in the City recently hit a historic high of 35.9%. It certainly would be something to discuss around the water cooler — if there were anyone left standing around the water cooler.

According to the Chronicle, the City experienced a total occupancy loss of 6.7 million square feet in 2023, the highest level since the Covid pandemic struck in early 2020.

As it turns out, for as much empty office space as San Francisco now plays host to, it needs at least as much new housing. The SF Housing Element, which Organized Labor has covered extensively, calls for the City to approve 82,000 new residential units by 2031.

Things aren’t looking too good for hitting that number, though. Last year, SF built the least new housing in a decade, according to the Chronicle. Perhaps easing and encouraging O2R conversions could help to make a dent.

“If we have empty buildings downtown that we can use to add to our housing stock, that’s going to help us get towards [the Housing Element’s] goals,” said San Francisco Building and Construction Trades Council Secretary-Treasurer Rudy Gonzalez. “It’s not going to do it alone, but it’s going to be a part of the solution.”

While other parts of the country have clawed their way out of the depths of the pandemic and enjoyed an economic renaissance, downtown SF remains woefully slow. Some media outlets have called the City’s economic recovery the “worst in the nation.”

Gonzalez doesn’t disagree.

“San Francisco’s economic recovery in our downtown is lagging behind the entire nation,” he said. “While it’s not going to be a panacea, I think it’s an important opportunity to think about repurposing our downtown to some extent.”

Oz Erickson, principal, chairman, and founder of SF-based residential developer Emerald Fund, is also bullish on AB 1532.

“It’s a good step in the right direction, particularly in that it opens the possibility of abating real estate taxes to facilitate the conversion of vacant offices to vibrant residential use,” Erickson said in a statement to Organized Labor. “Measures like AB 1532 that bring residents downtown help the retailers and the restaurants. Assemblymember Haney should be commended for his efforts.”

Erickson’s Emerald Fund has some experience in successful O2R conversion. The fund partnered in converting the 28-story, 500,000-square-foot 100 Van Ness Avenue into 418 residential apartments in 2015.

Haney’s proposed legislation is in its second year. With some effort, it’ll be voted into law this legislative session. Should that happen, plentiful jobs like 100 Van Ness should begin to materialize in the not-too-distant future.

“We’re talking about bringing people back to work, plain and simple,” Gonzalez said. “So, I think that’s why the building trades are excited by the opportunity.”