In policy making, but i think the more consistent we can be i think it makes sense to maintain that threshold while also considering a lower fee for the set of projects that i hear theres a lot of concern about. Im going to reverse here. I would move that we continue until there is more data. Commissioners, today, obviously, we are hearing this on the eve of the full Board Hearing this item. Ways you can take a look at it is, you can provide direction in terms of recommendations specifically to the board of supervisors for tomorrow. The next thing is to make some recommendations on the record for the future. Again, as i think courtney has said, there has been some consideration. There has been some conversation about looking at the smallcap. I recommend not using the term smallcap because it would be confusing. You should just call a 50,000 or whatever. I would also prop m tells us how much office space we can build every year. It is very easy to now come over of Office Projects will be smallcap. That is good to know. All right. The first suggestion would be raising the 25,000 squarefoot limit up to 50,000 avoiding that term which shall not further be uttered, smallcap. Its always good to check and see what consequences you have intended or otherwise. You had a suggestion, commissioner zouzounis to assure the fees actually go to a horrible housing. No, i was reiterating the legislation, earmarked. Good to know. I think the other strong recommendation from this group is that the proposed hike is too high. More consideration should be given to the Economic Analysis that was done by the organization that we have in our employee that does Economic Analysis area they has suggested that something in the range of 10 is where their analysis puts it. Between the ten on the 40 that is being proposed. It is sort of disrespectful of the analysis that has been done to just sort of disregard it. I would like to see our recommendations, on the record, just saying, with due respect to the Economic Analysis that was done by smallcap that the proposed rate hike is too high. Would like to see that across the board . Yeah. I mean, we are suggesting you are suggesting no increase up to 50, a tier increased from 50 up to 100, a full increase, whatever that might be for 100 plus, is that correct . Right. One element of the proposal is that there be a tier of 50100 is at a different rate, a lower rate. And then a separate, but related recommendation is that each of those fees, both of those fees, the tier rate and the full rate be moore one line with what the Economic Analysis by oewd is recommending. A point of clarification. I was not looking for an exemption for 50, but a middle tier for a reduced rate. For the 2550. S. Yes. The modification of the tier is that there is a tear at 25, 50 and 100. How about 25, 50 at oewd recommended rate of five is not agreeable to you . The nexus, according to what mcdonald said, that nexus is based on a 25 year study, or n not . Yeah. We have experience in this body knowing the controller is not accounting for the full view of things. We have dealt with before. I would say we need to find a middle ground. Especially regarding the point that this is reassessed annual annually. Maybe we should understand the equation that it came to this a little more so we understand that it is an incremental increase, we are expecting to see growth, or can we reverted to a rate where it is an incremental increase as opposed to a one time increase. Let me suggest this to you. Between 25 and 50, somewhere between 110 of all new development 110 of all new development. The differences that we are talking about, uh, it is going to be one of two things. Its either going to be material to these smaller developments, and lead to them not being bui built, or it is going to be a marginal increase in the number of units being built. We have not yet heard any testimony regarding what the actual cost is. In terms of decreased tax revenue, decreased construction jobs. Decreased what i would suggest, uh, or urge you to give consideration to is by just backing off the hair. I am amenable to signing off on fees from 2550. I am not amenable to them being one on Small Projects like tha that being a 140 increase on Small Projects like that. It is written here that thi this in the Planning Department record it says the jhlf rate is updated yearly. Then updated at the end of the year. If it looks like theres room to increase at 100 plus then go ahead and increase it then. I think there is good reason i may be misinterpreting that. It is based on a set index. No one goes every year and says lets change it. It goes up by something related to inflation or something. It is updated automatically. I wanted to make sure you understood the difference. Theres not going to be major changes. Where im going with this, commissioner zouzounis, is that we should go slower on the Small Projects which are more likely to affect Small Business. We can afford to let up on that accelerator a little bit. It will not have a Material Impact on the number of affordable houses that are being built. We have heard today from somebody, the only person actually representing the beneficiaries with that. They were concerned about asking for too much. At a reasonable starting point because it is still an increase. It would be the oewd position for that 2550 if you could agree to that, i would probably agree to having some rate on 2550. And then if we could take it, a tier approach, you know, from 50 up to 100, i think that would be wise. You know i mean, it is amended, it is said here in the Land Use Committee it was amended that it is going to raise 59 per square foot by 2022. Can you just clarify. I think in terms of the feasibility study, the 10dollar increase is for the class a . We did a more general study just looked at what office space whether it be small, or large, could afford and came down around 10. At that point because, we didnt distinguish, you know, could one be seven and the other 12, we did not get to that level. Without tells me, at 40 it shuts off the spigot. It doesnt matter if not. What you are talking about, right now, is really not going to have a material effect on the outcome either way. If this goes up to 40 immediately, on just the big projects, are all the projects, its going to shut down if it has the effect that is predicted by the oewd study trade that will affect negatively the large projects in a way that is not going to matter what happens. That is the whole thing. I think, you know, parsing the details sub 100 is not going to have a material effect. Parsing the big detail, is 40 across the board. I think now we are just talking about general policy for the city. We do not want to see the city shoot its tail off. And then lose out on benefits for Affordable Housing that we would get, even at the current rate if those projects move forward. I think, you know, we keep our eyes on the prize there. It is really about the overarching effect that a large increase could have on the entire development landscape. Surely there is a compromise here. I mean, the 10 is from 25 years ago. Am not requesting a number. Im requesting oewd, their study is that hes seen suggests it is 10, with the caveat they have presented, okay . And that the Supervisors Office is recommending effectively a 40dollar increase by their study were not will not curtail job growth in a material way. There is greater upside for Affordable Housing in their proposal than the downside of the proposal that oewd is presenting. Maybe its 20. Has me more than it was 25 years ago. Things have changed. Just remember. This is one of the fees. Other fees have gone up. Where we have extracted things from developers and other ways. This is one component of that. To say that this one has lagged and therefore should catch up in a big way, does not take in account that we have squeezed this turnup really hard and other places. We just want to be careful that we are not putting that last straw on the camels back and what name it is in the spirit. Whether it is affordable housi housing, or whatever good cause. It really is getting down to not the cause, but with the effect might be. The Collateral Damage will be in an area we dont want to damage, that is Affordable Housing construction. There is the other issue which is, in this town now, people are not able to hire anyone anymore. Cant we have a compromise here and say not the 69 but somewhere in the middle for the 1 million . Yes. I heard from the commission about data. I think a direction instead of a solid number. Im hearing from the commission that there definitely needs to be a consideration for a tier and a tear housing get fee for properties that are 2550, or 50100. You can give a very generalized direction that the 40dollar increase fee is beyond what you think, the impact of that increase of if you will have on our small office. It needs to be reassessed and follow some of the guidance of the study has suggested. Jhlf we have heard that the supervisor is amenable to a rate adjustment, some kind. And that the supervisor is not amenable to changing the 25,000 squarefoot number up to 50. I think if we want to make a recommendation that is fine. To go on the record of doing so. I think we also ought to make a recommendation that reflects the reality that tomorrow they are going to move forward with the limits which they have suggested them at a rate of some kind. So, i think we should be on the record recommending that that rate be somewhere between what they are recommending and what oewd is recommending. I dont think we have to peg it out a number because we do not have any analysis who are we triple the the number out of the air . What we are trying to emphasize is that we believe that the Economic Analysis that is done by the City Department tasked with doing so should be given more consideration than it should be here. The tier approach would be better than a non tier approach. That is right. I dont have any objection to that. Just taking your lead, right . We should, you know, refrain from being overly specific about our recommendations. I think what i have heard from most of us is a tier approach. That would be more prudent. We are still building consensus here. Hold on. Let me finish here. A tier approach, most of us can get behind a tier approach. Most of us feel within the context of that tier approach more middle ground can be found between the oewd recommendation and the proposed increase . Are those two things do we have consensus around those two sort of admittedly . Can i make a motion . I moved to approve the motion trent ansari, can i make the motion . I put a lot of work into that one. I move that our recommendation is that the supervisors take a tier approach to the jobs housing linkage fee, and they make adjustments within those what is the right terminology . That the fee increases in between the controllers report and. Closer to the oewd recommendations. That they fall somewhere between the oewd recommendation, and the proposed recommendations. Further tier category that we are asking for, the fee increase is between the controllers report recommendations and the sponsors proposal. Think the recommendation is that the increase across the board be somewhere between those two numbers. As we have noted the fee increase, it is the 8020 rule. In this case the 9010 rule. The fee increase affects 90 of the development above 100,000 squarefoot threshold. If it throttles development, that is where it is going to be felt. Not below that. If youre making a recommendation to moderate the fee proposal to better include the 90 or its not going to have any effect . What are we proposing . That at any level that you tier it. The level be somewhere between that number proposed, the number that comes out of the study that oew, and the number being proposed currently by the sponsor. That is all you need to say. We dont have any data that suggests it should be 39, 25, or ten, you know, other than what we had presented to us today. The final fee be somewhere between the oewd and the current proposal . Right. Fine. Wait, wait, i thought we were going to propose a tier. We did. Lower fee . Yes. We are not specifying the tier. The motion, as i understand it is a more prudent approach would be that there would be a tier, and those tier fall between the two numbers that have been printed presented today. May i read about . Support amended with tier approach that the fee increases across the tier fall in between the sponsors proposal and the oewd proposal. Motion by commissioner. Four to support the legislation as amended to the jobs housing linkage fee. Do we have a second . Sure, i will second it. The fee increases across the tier fall between the sponsor proposal and the oewd proposal. Roll call vote. [roll call] motion passes 60 with 1 absent. Item four, board of supervisors file 190 191005. Initiate a ordinance. Business and tax regulations administered of codes excise tax on keeping commercial property vacant. Motion ordering submitted to the voters come at an election to be held on march 3, 2020, an ordinance amending the business and tax regular asian code and administrative code to tax on persons keeping ground floor commercial space and neighborhood commercial districts or neighborhood amount collected of the tax for four years from march 3, 2020 and affirming the Planning Departments determination under the california environmental. Discussion and action item. The presenter is, lee hepner , legislative aide good afternoon. I have another doozy for you. I would try to keep it brief. I am from supervisor peskins office. I have a powerpoint here. Im going to use this microphone. The retail storefront vacancy tax propose for the march 2020 ballot, by way of describing what the problem is i want to really root it in a budget and Analyst Report that came out about a year ago. This is the list of the contributing factors to vacancies. I think there are a lot, they did a pretty good job of describing them. Normal turnover of course, Building Code compliance issues, speculation, absentee landlords, neighborhood conditions, making property unattractive to a new tenant, city regulations and zoning, among partnerships, or family ownership. Landlords not willing to improve the property. Landlords are waiting for a particular type of tenant. I think you can think of multiple. This is designed, i think to go after these. This is not suggested to be a Silver Bullet for the Retail Vacancy issue. Certainly, i think the intent here is to address things like Property Owners offering spaces for higher rents than exist. Absentee landlords, as we have multiple in north beach neighborhood district which have Left Properties vacant and not even offered to freely use it for years upon years. Commissioner dooley, i think has some experience in that. And, you know, disputes among partnerships, hopefully Something Like what they are talking about today, some of those folks being kicked into action as well. Landlords not willing to improve the property. Landlords waiting for a particular type of tenant. Lets be realistic about what we are offering spaces for in terms of rent and to the extent work needs to be done. Lets find ways to encourage that work to be done. Existing tools to address vacancy very briefly, we have been thinking about this for a long time in San Francisco in 2,009 for the board of supervisors passed a vacant or abandoned building registration ordinance. Attached to that is a 711 Registration Fee for businesses who are on that register. Interestingly, while the United StatesPostal Service reported almost 3500 commercial vacant addresses based on businesses not receiving mail for 90 plus days. Certainly an implementation and problem there. Which brings us to the 2019 vacant storefront ordinance that the board of supervisors passed in march introduced at the end of last year. I believe it was unanimously passed by the board of supervisors. The intent here is to strengthen the veracity of that register so we are capturing a more accurate picture of vacant commercial spaces. Still leaves the annual Registration Fee of 700 we are as with all fees bound by cost recovery. In this instance distinguishable from a lot of fees which we would like to see assessed differently against Small Businesses and reduce. This is one where i think inasmuch as it is designed to be effective to actual lease spaces. 711 does not changing anyones behavior. We can talk about the strategy behind this tax which i think it ultimately about changing the behavior of Property Owners we are sitting on extremely valuable properties in our commercial corridors. Into the details, three principal goals here and we can talk about whether the proposal matches this intent preventing speculative rent increases on existing Small Businesses. We are talking about bob hill market in north beach that saw an enormous rent increase shortly after supervisor peskin came to office and in 2016. It has been vacant ever since. Unclear what is happening with our property. We have another cafe which is also confronting a very large rent increase. Those rent increases are eviction notices. They are trying to get that business out. Our theory here is that if we impose commercial vacancy tax. Some of the incentive to try to find that higher paying tenant that may not exist, may prevent these speculative rent increases on existing businesses. As for prospective businesses is to the extent that some landlords are offering commercial vacancies at unrealistically high rates. This might actually have the impact of bringing some of those rates back into a realistic area. Lastly, incentivizing bringing longterm vacancies to market. This again is about the clusters of propert