SEC. 1396.5. SUSPENSION OF THE LOTTERY PENDING PRODUCTION OF REPLACEMENT UNITS FOR EXPEDITED CONVERSION UNITS.
§ 1396.5
The lottery for residential unit conversions under Section 1396 is suspended until the City produces enough replacement affordable housing units to offset conversions approved under the Expedited Conversion program, or until a maximum suspension period expires, whichever comes first. The Mayor's Office of Housing and the Department must publish annual reports tracking conversions and replacement units produced.
San Francisco paused its lottery system for converting apartments (a process that removes rental protections) starting January 1, 2024. The pause will lift when the City builds enough new affordable housing to make up for the apartments being converted—specifically, when replacement units exceed the number of conversions. The Mayor's Office and the Department must report every year on how many new affordable apartments were created and how many were converted. If the replacement housing doesn't catch up fast enough, the pause will automatically end after a set maximum period (calculated based on how many conversions were approved).
- Complex:The suspension trigger in subsection (c) depends on a complex calculation in subsection (d) that starts counting from 2014 and subtracts a fixed number, and the maximum period in subsection (e) involves a formula that is hard to verify without access to the underlying conversion data.
- Controversial:This section suspends a housing conversion program contingent on production of replacement affordable units, which reflects an active policy choice to slow conversions pending affordability goals—a matter reasonable San Franciscans publicly debate.
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Official text
(a) Within twelve months after issuing tentative or tentative parcel map approval for the last conversion under Section 1396.4 or December 29, 2023, whichever is earlier, the Department shall publish a report stating the total number of units converted under the Expedited Conversion program and every twelve months thereafter until the Expedited Conversion program is completed.
(b) No later than April 15 of each year until the termination of the suspension period, the Mayor's Office of Housing shall publish a report stating the total number of permanently affordable rental housing produced in San Francisco and the "Conversion Replacement Units" produced in the previous calendar year and a cumulative total of such housing produced in preceding years during the tracking period. For purposes of this Subsection, the Mayor's Office of Housing shall have the authority to determine what type and form of housing constitutes permanently affordable rental housing that has been produced.
(c) Except as otherwise authorized under Section 1396.6 or Section 1396.7, the Department shall not accept an application for the conversion of residential units under Section 1396 nor conduct a lottery under this Article prior to January 1, 2024. Thereafter, the lottery shall resume upon the earlier of the following: (1) the first February following the Mayor’s Office of Housing and Community Development report pursuant to subsection (b) showing that the total number of Conversion Replacement Units produced in the City of San Francisco exceeded the total number of units converted as identified in the Department’s report prepared pursuant to Subsection (a); or (2) completion of the “Maximum Suspension Period” as defined below.
(d) "Conversion Replacement Units" in any year shall be determined by subtracting 300 from the total number of permanently affordable rental units that the City produced in that year starting on January 1, 2014.
(e) The "Maximum Suspension Period" shall be the number of years calculated by dividing the total number of units approved for conversion under Section 1396.4(b)(1)-(7) (the Expedited Conversion program) divided by 200 and rounded to the nearest whole number with the year 2014 as the starting point. For example, if 2400 units have been converted under Section 1396.4(b)(1)-(7), then the maximum suspension period would be 12 years and expire on December 31, 2025.
(Added by Ord. 117-13 , File No. 120669, Pass. 6/18/2013; amended by Ord. 210-22, File No. 210866, App. 10/28/2022, Eff. 11/28/2022; Ord. 195-23, File No. 230026, App. 9/15/2023, Eff. 10/16/2023)