process the projects, not the building department. i think it would help us all to have a better understanding of how this fits in the student housing and i agree it's more than student housing, supervisor wiener. i don't dispute you at all on that. the density issue will be a factor in the south of market on both western plan and central corridor study because that's where exactly these units will go. i don't think the planning department has it on their radar. and so it would be appropriate to put this in when they continued hearing on the student housing comes because i think it would be valuable for the public and commission and planning department staff as well as supervisors. thank you. >> good afternoon, commissioners. i don't think i'm too opposed to

the size reduction for certain cases. a number of questions. first of all, as speaker mentioned about student housing, this fits right into it. the concern i have is that the student housing ordinance, proposed ordinance, has prohibitions of converting residential housing to student housing, which is i think really one of the most important things about that. i'm afraid that this might possibly encourage or provide incentives for universities to own a house and not convert it too student housing but to convert the units within the housing of residential units to much smaller residential units. and that would take away family housing or more -- housing that

many people might be able to use . and as far as shortage of beds, 40,000-bed shortage by the students. well, i wonder how many thousands of bed shortages for regular residents? workers, young adults, whatever. i'm sure that their needs are equally as important, if not more. and at the d.p.i. hearing there was a person who had a drawing of these units. can it be possible to have -- be provided copies or access to those just so see what it looks like? and anyway, my concern is that this might encourage people to convert the residential units to smaller residential units and it would take away from the normal

resident housing, to favor student housing. supervisor mar: any additional public comment? >> good afternoon, supervisors. peter cohen with council community housing organizations. i have to admit we know very little about the specifics of this legislation. so i'm just kind of coming up to speed. but i guess my question would be understanding all of the policy implications supervisor wiener. i'm curious about other than the student housing, which i have heard there are plenty. this has a very direct relevance to, are there other kinds of situations where this is going to become a major factor? and what -- has that's been thought all the way through as the staff that's put this together? this didn't come to the planning commission so i don't know what kind of larger policy context this may have been discussed in

at the building inspection commission. but two quick things come to my mind. if you have answers for this, it would be helpful. i was just maybe digesting this more. one is how would this apply potentially to inclusionarry units if there's a situation where a project trip inclusionarry units. are we also then applying this very small size efficiency standard to the d.m.r.'s themselves and maybe that's an easy answer or maybe it's something we need to think through. the other is it makes me feel of the market ray s.r.o. movement that happened some years ago. and it raised a lot of questions about the target markets for s.r.o.'s if they were really very low income residents or whether they were market rate and whether the kind of standards built into the planning code were adequate or really relevant in both of those cases. it kind of led to something that seemed to be fairly minor to kind of a ripple of conversation. so again, i ask these as

questions. i they we want to just know how this fits and type of housing we work on but just general in-housing policy. i bring that to you. with, again, a sense of i would like to get an idea of how this fits into the bigger conversation about student housing otherwise. thanks. supervisor mar: are there any additional members of the public who would like to comment? >> good afternoon, tesswell bourne again. not having studied this, i have a question f. we have a number of smaller units, do we have then have a requirement that the facility, larger buildings, have larger common areas? it seems if we want to have the quality of life, we have to stay that building that has x number of these efficiency units should have x amount of common area, maybe per unit or something like that. but that's a first reaction. thank you.

supervisor mar: are there any other members of the public who would like to comment? seeing none, mr. chairman, we close public comment. supervisor mar: yes. supvervisor wiener: public comment is closed. thank you and thank you to everyone who came out. i understand that there are some people who in the city who are not necessarily in favor of production of housing and have concerns about density. and, of course, one of the major factors in san francisco in terms of why it is so expensive to live here is we don't really produce much housing. when we produce it, we produce housing that is extremely expensive. francisco in san francisco about affordability by design, about designing housing in a way to make it more affordable. be but we also need to actually follow through on those housing

policies and this is one of those things. if this were a situation where we were -- san francisco were blazing the trail and doing something that had never been tried before, maybe this would be one thing but this is -- this is the minimum in the state of california code, including the vast swaths of the state that are much less dense and urban and expensive than san francisco. this is a standard in, as i mentioned, in san jose, in numerous other cities. it's a standard in seattle. it's a standard in new york city. other cities that are coping with very expensive housing. so this is not some sort of brand-new kind of idea that's never been tried anywhere before. this is something that is actually quite present in our state and in our country. i do want to just offer the amendment that i mentioned

before in terms of which had been requested by the building inspection, department of building inspection code advisory committee to stipulate that in addition to the 150 square foot minimum for the living area, that the minimum total including cooking area, kitchen, bathroom, closet, would be 220. so that would be number five. and it would read, the total area of the unit shall be no less than 220 square feet. which area shall be measured from the inside perimeter of the expeer yor walls of the unit and shall include closets, bathroom, kitchen, living and sleeping areas. so i would offer that amendment and it's not a substantive amendment. it doesn't require a continuance. but given -- given i am making the amendment, i would ask we

continue it two weeks to june 4th, which is our next meeting. so it's a motion to amend and then to continue to two weeks to the juge 4th land use meeting. do we have cpmc that day or is that 8 washington? >> supervisor mar: we don't have cpmc -- supvervisor wiener: we do have 8 washington that day. supervisor mar: that's going to be a big one. let me try to work with my staff. sps i would like to continue it to -- supvervisor wiener: i would like to continue it to a date certain. supervisor mar: some people in the office said there are some that are similar to student housing. i wonder if we can continue this to the 23rd -- supvervisor wiener: the chair scheduled student housing for july 23rd. supervisor mar: ok. so we will do our best to schedule this to the soon as possible date but it still would allow people some time to have more input as withle. two weeks was your request? let me make sure. supvervisor wiener: my motion is

to make that amendment, and then to continue it two weeks to june 4th. supervisor mar: i'm not sure yet with have an ability to schedule it on that day because i don't have the -- the -- what else besides 8 washington. but my hope is we can schedule it. i'm wondering if we can continue this toe call of chair with the assumption i'm going to schedule this as quickly as possible on that day if possible or the next possible date if possible. supvervisor wiener: ok. why don't we do this, i will continue it to june 4th and then if the chair thinks it's going to be a problem, perhaps we can address it at that time. i just -- this is this legislation has actually been around for quite some time. it's actually a surprising to me some of the people who monitor all agendas and introduce legislation in this building like a hawk would come in and here and say they were somehow unaware of it.

so i -- i think that -- i think a two-week continuance would be appropriate. supervisor mar: let me think about it. today is the 21. so two weeks would be monday, june 4. so i think i'm ok with the motion. and if for some reason it can't be scheduled on that date, we will work out the next possible date. supervisor cohen: i want to communicate to the chair and public i'm actually prepared to vote on it and willing to take up the issue now. a lot of my questions have been answered and i'm feeling comfortable. so i don't know if that would necessarily make a difference in the conversation about continuing it, but that's where i stand. supvervisor wiener: why don't we first do the amendment. supervisor mar: let's take the amendment and have more discussion. so it we take the amendment without objection, colleagues? thanks. i think it's a good compromise to have two weeks to get a

little more input, especially on the policy implications as people raised. i think the infrastructure around kind of where some of these units would be built is really important. i really appreciate this because i know supervisor wiener and i worked through long meetings with the regional housing needs assessment kind of on the regional level and building more housing and having more flexibility to do it and this way makes a lot of sense in meeting our goals like san jose and other cities are grappling with as well. so i'm supportive of continuing this to give a little more community input and to allow the different housing groups to at least have some ability to look at it and to give some input as well. so i'm support of continuing for two weeks to june 4th. supervisor wiener, would you like it state the motion. supvervisor wiener: the motion is to continue this to june 4th. supervisor mar: can we do this without objection? supvervisor wiener: i will revise the motion, to continue it to june 4th as the first item on the agenda. and if that will prove to be a

problem, then we can talk about readjusting that. supervisor mar: i don't have the agenda in front of me but you're saying that 8 washington is on that agenda so, yes, it sounds like this would be a good to have as first item on the agenda so it doesn't get buried by a much larger item. can we take that without objection, colleagues? great. thank you. miss miller, thank you, everyone. miss miller, could you please call the next item? >> tim number three, hearing considering the office of economic and workforce develop nment controller's office of economic strategy update phase one findings. supervisor mar: thank you. at the urging of todd rufo and jennifer metz from the office economic development and chief economist ted eakin and controller ben rosenfield, we're holding this hearing on the san francisco economic strategy i know they're going to give us the update of several more pieces as we engage the community and promote san francisco's kind of economic future. >> thank you so much, supervisors. todd rufo in the office of

economic and workforce development. we're here today in what we hope will be a series of briefings on the update of the economic strategy and before this committee. as you know proposition i requires the office of economic workforce development and office of economic analysis to prepare a long-term economic strategy for the city. as well as provide periodic updates to the economic strategy. today we're here to brief you on our progress and completion of the first phase of our work as well as get thoughts, feedback, answer questions and thought to you a little bit about what next steps are following this hearing. so it's a two-phase process which we teamed up with o.e.a. on. today ted egan will walk you through phase one, which we just recently completed. phase one is data driven analysis formed by o.e.a. that looks at workforce, key competitiveness factor as well as compared to other cities in the region. phase two, which we will talk about a little bit later

following ted's presentation, we will use the data and findings of the first phase as a foundation to update strategies and recommend into action as part of the economic strategy. i will let ted go and walk through the presentation and i will be back up to discuss phase two and next steps after your questions on phase one findings. ted egan. >> good of why noon, supervisors, ted egan, controller's office of economic analysis. i have a presentation to share with you. if we can bring it up. thank you. todd's gone with you the background around the economic development plan. and our assistance with o.e.d. on it. i'm going to start by reviewing how the san francisco economy performed, sort of taking long view backwards over several decades. then we will take a look at the detailed analysis of the composition of the san francisco economy and how different segments of the economy are performing. the different level of

performance of growth of different segments of the economy has implications for the types of jobs that are hosted here and this has implications for ultimately demographics of the city itself. now i will be covering that in a later section. finally i think one of the key things of the work we have done is there's a significant difference between the economic outcomes we have seen in other areas of the bay area or in the bay area as a whole and what we have seen in the city of san francisco. for that reason it makes sense to look at factor that's affect business izz and business -- businesses and business investment and growth decisions that are different in san francisco versus the rest of the region. in many ways a business in san francisco and business in say the city of oakland face many of the same issues. pretty much the same labor market. pretty much the same state regulatory system. many other similarities but there are also several local policy factors that i think go to some way to explain some of the difference in economic performance that we have seen across places.

this is a chart that shows very simply total employment in san francisco. and also san francisco share of bay area employment over the past 40 years, going forward to 2009. i apologize, it's doifl read on the television. i think the story is fairly clear. the blue line is employment. what it really shows is we had a pique of employment of the last business cycle 20608 and that was actually fewer jobs than we had in our pique of the business cycle in 19891. for nearly 30 years the city essentially grew but for the dotcom boom, which was an an anonymous amount of job growth for the city has seen relatively little job growth of all. in the context of the bay area, which is a rapidly growing economic region for most of that time, san francisco has lost its share of the bay area job market. which was formally upwards of --

25% and is now less than 20%. though it started to track up during the recession when we did better than some other places. so that's one example of a fairly stark contrast between a growing outer ring if you like of the bay area and fairly stagnant core of san francisco. you may think the main reason for this is so much housing and population outside the rest san francisco and other areas over the past 40 years. naturally there will be jobs to support that population. and that's certainly true. suppt population. that is true. there has been a whole new neighborhoods with a retail- supporting areas and health-care and those things. but it is not only those industries where san francisco has lost its area of the regional total. in just about every other area, financial services, corporate headquarters, manufacturing, san

francisco's share of the region has declined. it's not simply about customers moving away, these could be anywhere in the world. it's about san francisco's competitiveness as a job location relative to other places in the bay area that is changing. that a high-level but important finding. i'm going to go in to a deeper look at the structure of the economy and the story is not as straightforward. some industries have done well and others have done less well and that has implications for many aspects of life in the city. it's helpful to think about how the private sector in san francisco works because different industries have different economic roles in this city. an industry like tourism, what that does is attracts people

from outside the city to come to san francisco and spend money. the net effect of that is a net injection of in come into the city. there are other industries that we call creative industries that are high level services that sell media products in which creativity plays a strong role. those industries sell their products and information outside of san francisco and export their services and effectively bring in come into the city. third, financial and professional services, although they work somewhat differently, it also has the effect of bringing in come into san francisco because may be headquarters is your and its supported by eight operations in other parts of the city. all three of these industries are competing for a consumer dollar outside of san francisco.

their competitors are located outside of san francisco and part of how they compete is the trade-off of the benefits they get by being in san francisco vs. the cost of being in san francisco just as their competitors in texas or wherever are facing the same sorts of trade offs. the industry's at the bottom predominately sell to customers and san francisco. they are circulating the and come to top levels of fraud and and their customers are local. they have a different set of competitive challenges. the key point is the city's economy as a whole and the local serving industries in particular are highly dependent on the success of these industries on the top level. they are bringing in come into the city. in the interest of making a

readable and black and white i may not have made a readable in color. the average annual growth in the creative sector -- supervisor cohen: those three top bubbles up there -- that represents the big top of the city jobs and the rest -- >> yes. if you look back 10 years, when we have had recessions in san francisco, it's the growth in the creative industry and visitor industries that pulled us out of the recession. they grew first and they are pulling the local sector of the economy forward. when that upswing went down in 2008 and we had the start of the

recession we are currently in, those industries went down first and local industries or more successful. when we went into recession, the local industries suffered the most. in 2010, the creative industries and disaster industries were showing growth while local industries were showing a decline. these industries are seen together in one the city economy but the ones driving the change are competing in markets outside of san francisco and bringing the income in or not selling it in as they're doing badly. i want to talk now about how these different sectors of the economy have been doing competitively. these charts offs are a device to simply see how different industries are performing

competitively. each type represents a bubble and each sizes the number of jobs. the board to the right they are is how fast they have been growing in the past business cycle. toch where they are on the vertical access is san francisco's concentration in those industries or do we have a lot of those jobs for a city our size. the best place and industry can be is in the upper right where we have a lot of them and they have been growing. that is where creative industries this, industries like design, consulting, at internet- based industries and architecture, media industries. those have been doing very well in san francisco from the bottom of the last recession to the bottom of this recession. the visitor industry is the same way. we have a lot of concentration

and a decent amount of growth there. for a financial and professional, the corporate service industries, it is a strength but we have seen a slight decline during the last business cycle and its growth has not kept up. supervisor cohen: is there any indication of what the constraints are for the financial-services? for what reason are not going -- not growing? >> i don't know if there is a simple story for that. it is banking and financial services that have not been growing in san francisco, that have been shedding jobs for a couple decades. the parts of the business closer to technology seem to be doing better. supervisor mar: san francisco used to be one of the key financial centers of the west coast. where would they be going?

>> there has been a lot of concentration in financial services globally and to a few key global centers. you have seen over the last tender 20 years the emergence of london, new york city, a tokyo, emerging centers in asia and the middle east that are both consolidating existing businesses into a gigantic conglomerations and tapping into new sources of wealth and growth. supervisor mar: for manufacturing, is it also china? >> i cannot speak to have much financial services is growing and china. there is certainly a lot of financial services taking place in china. by andrew standing of the west coast is that lars angela -- my understanding of the west coast is that los angeles has surpassed san francisco but is

not the size of new york or london in terms of financial services. i apologize for not knowing more about that specific industry but it is my understanding that san francisco is not quite big enough to be a major global financial center and got caught in a process in which the leaders surged ahead. a very important part of this story is how the local serving sector has performed relative to the others. i showed you the chart that says that they move in sync but they don't move at the same rate overtime. we have seen absolute job losses from the last recession to this recession in this group of industries and we have relatively little employment for a city of our size. supervisor cohen: can you give

an example of what local industries we're talking about? >> the biggest is a trade and i will have a breakdown in a moment. there are a range of industries -- let's go back to this one. health-care, personal services, retail trade, wholesale trade, construction, manufacturing, communications services. there is relatively little variation in that overall story and it is a troubling one for a lot of reasons. here is how the creative industries and the different industries within creative breakout in terms of the conference we were looking at before. by march, all of these industries are doing well. it's only the traditional media and architecture that have lost jobs during the last business cycle. traditional media is having well

known trouble everywhere. architecture is tied to construction which has had a very bad recession. high-tech manufacturing is an emerging industry in san francisco. we don't have much but it is growing rapidly and that another creative industry. when we look at financial and professional services, this is telling the story i was alluding to. banking and insurance have lost jobs in the past five or so years, but industries like law and industry and professional services like accounting and corporate headquarters are showing decent growth. his putting his cluster in two things.