commission for january 16, 2020. we do not tolerate disruption or outbursts. please silence mobile devices. please state your name for the record. i would like to take roll at this time. (roll call). >> we expect commissioner richards absent. first is consideration of items for continue you once. first is 2018-002124 c.u.a. at 54 fourth street. item two. is 2019-001455 c.u.a. 1750

wawona. proposed to continue to februar. next is 1769 lombard street to february -- lombard street. 65 ocean avenue fee waiver and in kind agreement for continuance to february 13, 2020. item 5. 2017-012887. 26 5:00 street. review proposed for continuance to february 27, 2020. further commissioners, on the regular calendar, item 16 for case 2017-005154 at 1300 columbus avenue, conditional use authorization we received a request from the supervisors officer to continue. there is no date but i suggest february 13 or february 20. >> the later the better.

they have a lot of stuff to work out. >> i will leave that up to you. >> commissioner koppel. >> move to continue items, one, twoone,two, three, four, five te dates specified and 16 to february 20th. >> second. >> thank you. on the motion to continue you the items proposed to february 20th. (roll call). >> so moved that passes unanimously 6-0. to the consent calendar. they are routine and may be acted upon by a single roll call vote. no separate discussion unless a member of the public, staff or commission requests. it shall then be removed and considered as separate item at this or future item.

6:00 a.m. through c for 2009 d.m.x.--2 and var for downtown authorization conditional use authorization and height exemption waiver respectively. i have no other items on your concept calendar and i have no speaker cards. >> anyone want to take any items on the consent calendar off to discuss? >> i think it should be discussed. sorry. >> we can take it off and put it first on the agenda. >> there are no other items on the consent calendar. that is items 7. commission comments and questions. >> .

>> commissioners it is in the paper i am resigning from the commission. i just want to say -- i will no longer be president. i want to thank each and every one of you for the time i spent here, for your support and for the great discussion that we have had about the issues, you know, that pertain to our city and our environment. i have learned something valuable from each and every one of you. i consider you friends. as well as colleagues. also to the staff, i think we have amazing staffanticly jonas and the director. i am fond of you both and appreciate your professionalism and the care you bring to the work. i have been so honored to be here, and i look forward to seeing where this commission

goes. >> commissioner moore. >> good on ward journey. it was quite a shock when you called me because i hadn't read the paper, but the challenges and the road to success is ahead of us. we will miss you. we will remain colleagues. thank you for everything. >> commissioner johnson. >> i want to thank you for your leadership as director -- sorry. as president. president of the planning commission. i think your passion, your desire to work with all of the stakeholders in the city and to work together for the better meant of our city and looking at the big picture has set an example and helped this

commission. i feel grateful for the leadership and excited for the city that, you know, about your next steps, and your leadership will continue to light the way and set the tone for how business should be done here. >> commissioner koppel. >> sad to see you go. we wish you the best of luck, and since we came on together, i have had the last three and a half years to get to know you and learn about everything you do know. i appreciate your breadth of knowledge and hopefully will continue to bring to the city. >> commissioner diamond. >> i want to thank you for assistance in guiding me through the confirmation hearings and transition to being a commissioner. i wish it were longer. i wish you the best of success. >> commissioner fong. >> thank you.

if there is nothing further we can move to election of officers. in accordance with the rulings the president and vice president shall be elected on the first regular meeting of the commission held on or after the 15th day of january or a subsequent meeting if you choose to continue this matter. >> commissioner johnson. >> do we take the officers separately? >> they can be nomination for both with one motion or nomination of each separately. >> i proudly and excitedly nominate commissioner koppel to the position of president and commissioner moore to vice president. >> second. >> if there are no other

nominations i will call the question. on the nomination to vote commissioner koppel to president and commissioner moore to vice president. commissioner diamond. >> do we need public comment or no? >> you are right. you should. >> we are going to take public comment on this item. public comment is closed. >> on that motion then. (roll call). >> the motion passes unanimously. >> congratulations. [applause]

that places us under department matters, item 9, director's announcements. >> i will start with congratulating president koppel and vice president moore. i look forward to working with you. i want to thank commissioner

melgar for her great work on the commission. what i really appreciate about your work, commissioner, is the balance and the thinking that you brought. that was helpful to me and to the staff. i really appreciate your taking on the task, not a small task of finding my replacement which was not easy. thank you for all of your work on that and we look forward to working with you in the future. thank you. >> as soon as i was done wishing you luck, i wanted to thank you for the last year of your leadership and especially leading the charge with the search for the new director. i appreciate all of the direction you gave us. >> item 10. review of the past events of the board of supervisors, board of appeals and historic preservation. >> we established re-zoning for the new names.

we heard this last week and voted to recommend approval with modifications. after some brief discussion the community voted to send it with technical amendments to full board as committee report. the small business commission heard this on monday. they expressed support and cautioned any future proposals that would restrict uses in these districts versus relaxing zoning controls on use type. the commissioners warn those are facing issues with vacancy and restricting would serve to limit the issues. we requested neighborhoods be consulted before changes to the zoning controls of the new district. in the end the commission voted to recommend the ordinance to the full period. at the full board this week the aau ordinance passed the second read establishing the 12 commercial districts passed first read.

december supervisor peskin introduced board file 191257 to allow a limited restaurant use in jackson square special use district not complying with the current requirements if the application is filed by july 19, 2018. this is essentially grandfathering for an ordinance that restricted restaurants and limited restaurants in jackson square. it would only apply to one application and have minimal impact. we believe this does not need to come before you for a hearing unless i hear that you would like to hear it. that concludes my report. >> thank you. >> good afternoon. planning department staff. the board of appeals met last night and considered one item of interest to this commission. they heard the appeal of the planning commission approval of

home-sf project 65 ocean avenue. they argued it did not provide enough units affordable to the community, negative impacts on the existing housing and proposed units were substandard. they noted the project complied with affordability of the planning code and home-sf program including they be marketed at least 20% less than the current market rate and they shall reduce the income levels to maintain the pricing. they noted the units were devsigned in a manter to provide adequate open space and co-complying. the vote unanimously to uphold the planning commission decision on this item. thank you. >> historic preservation commission did meet and had election of officers. they voted to stay the course with commission president highland and vice president.

they heard the proposed department budget and work program which is on the agenda for next week. they heard the sb-330 informational presentation from mr. bit that you have heard. they considered several legacy business edg registrations most notely the new restaurant. >> we can move to general public comment. members of the public may address on matters of interest except agenda items. the commission will be afforded when the item is reached in the meeting. each member may address for up to three minutes. i have one speaker card from georgia. >> congratulations. last week i started to talk about the project across the street from me. i want to follow up on that. as you know, after you approve a

project, it goes back to the building department for further review to make sure the site permit complies with the building code. after you approve the project at 463 duncan a revision was required for the second three bedroom unit located with in the 11-foot deep full lot excavation. between february and april this was signed off on by all stations including planning. what is that revision? i will show it on the overhead, if i may, please. this is the subterranean unit. these were bedrooms that had been to be changed. they didn't have proper exposure. at the hearing i raised that issue of live ability. you don't deal with excavation. no one knows the building code or not everyone knows the

building code. i certainly don't know it. if i had known it i would have raised the issue. this is the subterranean unit there. two of the three bedrooms did not meet the legal egress. they changed the designation there and made one a library and one media room. the architect did the handwriting on the plan. that was a bedroom and that was a bedroom apthey became a media and library. there is one bedroom left and that was a study. so it was signed off on. i reviewed the plans. the site permit was issued and filed an appeal as did the neighbor to preserve the unique mediterranean revival take saw. i didn't -- take saw.

faux saw. i did not understand why the rooms were changed. after the hearing they said when the project was approved by the planning commission the building the bedrooms were not legal on the building code. that is why the revision. i wish we would have known that at the dr hearing. at the board they made a motion to make a memo to legal bedrooms and a few other things. the staff mentioned we could reconfigure or add accord or something. they wanted to continue it. it was just sent on special conditions permit. my point is in my 17 seconds left if i or my neighbor had not filed the appeal this would have been one bedroom with three rooms not to used legally for sleeping. i thank the da for highlighting the problems with excavations to

the upstairs unit. >> thank you. >> thank you for the three minutes plus. i will tell you next time. >> thank you. i am kevin. i would like to talk about illegal unit mergers. i spoke about this in may 2019, nine months ago. violations are undetected. there is miss representations on plans not conforming, outright fraud. documents passed out are a sampling of the illegal unit mergers that have not been brought to the board's attention. many go unattended. they are mission represented.

many go undetected well after completion. even after sale. the code enforcement would render any complaint as building according to plans. the planning code enforcement will say no violations existed. often time two or more properties are renovated to be sold as single family. single family residents with no unit separation. one kitchen only, open stairway connections, one elevator to all floors. what is the outcome? often times no penalties. planning department knows of enforcement. no hearing held. they are not brought to your attention. no unit count verification. no change to maximize density. no notice of special restrictions recorded after the fact. what is done then?

mainly, the sponsor is required to obtain a new building permit to correct back to what should have been done if not caught. let me repeat. mainly require new building permit to correct back what should have been done if not caught. back to two unit but no further penalties. this program is catch and release. what it does is de facto unit merger exists. down zoning, removing entire class of middle class housing in the city, which is very difficult to replace. often times the affordable housing does not meet the middle class market. is this situation just? even with code enforcement, this cannot be considered just. the planning commission should further investigate. of all of the projects there

will be one presented to the commission. thank you. >> seeing nothing further we will move to the regular calendar. item 6 was pulled off consent and will be considered now. for 2009-0159 d.m.x.-02 for 1540 market street for conditional use authorization and zoning administrator will consider the height exemption waiver. >> thank you. good afternoon. before usa request to modify the conditions of approval for approved project at 1540 market street also known as one oak

approved by the commission on june 15, 2017. standard conditions of approval that entitlement is valid for three years when a site permit needs to be pulled. they are requesting two years to extend that entitlement to june 15, 2022. the decision made could not be extended that is why it is heard today as new variance. however, the exact variance and height exemption requested at the time of the original project. i am happy to answer any other questions you may have. thank you. >> project sponsor. >> i had to change my notes. congratulations on your elevation. commissioner melgar good luck on your leap to the void.

i am partner and principal at build. we are a local developer, our office is four blocks from where we are. we produce housing in san francisco, all levels of affordability. we do that by a lot of outreach to the neighbors, community and the city. over the past 20 years we have entitled 13 projects totaling 3500 units. these projects will help with the severe under supply of housing in san francisco as well as contribute to the urban fabric through fought full -- thoughtful design. one oak was approved by the commission two and a half years ago. the conditions provide the entitlements expire in june. we are here to ask for a two year extension so the project

can be built. since the original entitlement of one oak in june of 2017, we have made three separate attempts to raise capital for the project. formal offerings, going out to hundreds of potential investors. all of these did not -- none of these attracted a capital partner. one major problem is the increase in construction costs, which are making projects very difficult to pencil. we now have an investor in contract. one condition of closing is that we extend entitlements since we would not be able to pull the site permit prior to the june 2020 expiration of the existing entitlements. we ask for two years to complete design, complete site permitting and start construction. part of the original entitlements we conducted over

160 meetings with community groups, cultural groups and the city. this project has been thoroughly vetted and approved. we are not asking for any changes to the original entitlements. we are asking for an exception of the orange -- extension of the original entitlements. the design elements. the project is 319 unit residential building with ground floor retail, basic form of the building and alternating difficulties were conceived through wind tunnel tests to apply with 148 of the planning code. it references white masonry and residential vernacular that respects the great neighboring buildings at 25 vanness. the subtle details present a

changing aura as the sun moves across the sky. the tower steps back to create 16,000 square foot public plaza space to the cultural arts district. the ground level addresses the street and truly public and transparent way. it will have high-quality pavers with a shared public way to accommodate pedestrians, bicycles and cars. with landscape planners and street trees, performing arts uses and retail kiosks to activate if street, provide opportunities for coffee pa cofd doughnut vendors. this is the third plaza. eagle plaza is being constructed now. the plaza will have wind sculptures designed by two nasa artists.

these mitigate ground level winds and embody the wind energy. the proportioned improvement and commitment to double the tdm rates is a platinum green trip rating. first condo project to obtain this rating. the existing muni elevator will be prominent wrapped in a new enclosure. the project will pay substantial impact fees and in kind improvements of $45 million, $30 million for affordable housing and $15 million for new infrastructure. with that i conclude. i am here to answer any questions. thanks for your time. >> any members of the public to comment on this item?

>> good afternoon, commissioners. corey smith san francisco housing action coalition. congratulations president koppel and vice president moore and commissioner melgar. i appreciate your hard work and best of luck on the next chaos to ensue. you know, as i was looking through my e-mail to see and remind myself about the timing of this stuff. i found a press release from samantha who was the legislative aid for supervisor london breed. i remember the board of supervisors hearings and the negotiations and conversations. there was a real question mark as to whether this project would get built. when we got through, it was that thought of goodness, this

christmas tree has a lot of ornaments and bells and whistles. we hope it doesn't fall over. there is a lot to this project. the idea that we can now see the finish line and go, wait, this can be a reality. i put in my formal request to get all-star doughnuts back. it is a great project and we have a fantastic team that is looking to try to make this reality, folks that you know well and the city knows very, very well. to get this thing built we are requesting that you grant the extension. i look forward to new housing right around the corner. thank you. >> next speaker, please. >>t i talked to sue hester. she wanted this off the calendar. it is good you understand and

the public understands what is going on. the information in the press about it is that there has been looking to sell the entitlements. i don't know if that is the same as getting an investor to build it. i think from my experience looking to sell entitlements what i have seen has done nothing but raise the value of the projects. i can think of 10 to 12 homes resold before the construction has begun. i hope it gets built. i hope there are all of the units there, as they say. that is really i appreciate you indulging me in taking it off the calendar. thank you very much. >> next speaker, please. >> good evening. i am daniel greg, lead field representatives for carters 22.

i represent 40,000 carpenters in northern california, thousands live and work in the city of san francisco. we support the extension of entitlements this afternoon. bill has been a great partner with the carter's union. it is the union and developers that support the union and general contractors that is all that stands between the carpenter and less than minimum wage. we ask you extend the entitlements. we are fully in support of the project. thank you. >> i am kevin stall. my family and i have gone to all-star doughnuts for quite a few years and have made a strong relationships with the owners and workers who work there. when i first heard about this item i was concerned because i know the project has been approved three years ago. i want to make sure that if

all-star doughnuts is going to be there when the new building gets built or any small business who will occupy the ground floor retail, whoever is working there that establishes relationships with people working with relationships with the neighborhood. that is the huge part of having a business thrive is connections. small business owners don't always survive. the economy doesn't always allow them to. by building a communications and relationships with clients that it helps them become established and a institution. all-star doughnuts is an amazing place to go and eat and enjoy the community and seeing various people from s.f.m.t.a. or muni

drivers and other people just being able to come to a safe place to enjoy their food and enjoy each other's company. i hope that all-star doughnuts does get to occupy the business retail space. if not, whichever business does occupy it that they continue to be part of the community and, you know, enjoy the clientele that they have, enjoy their businesses there. thank you. >> anyone else from the public? seeing none public comment is closed. commissioners. >> commissioner moore. >> one oak was a project that was approved in 2017. i fully supported it. i continue to support it. we need this project, includes everything which comes with it. emphasis on everything that

comes with it. a lot of attention has been paid to a level of detail we normally do not know as much about as we know on this one. i hope that it will be built. i see mr. vascass nod. i am in full support of granting the extension. >> commissioner melgar. >> i support the project. we spent a lot of time and energy on the project, the design, you know the transportation management issues. i am fully supportive. i really want you to build it and go forward. i want affordable housing to get built. i am wondering about all-star doughnuts. what is going to happen to all-star doughnuts? has there been negotiations? aside from the member of the public. i have to say i am nostalgic about them. when i worked for the city, all

of the city workers goes to all-star doughnuts and the neighbors who are without homes. they get coffee at all-star doughnuts. it is where all of san francisco congregates, rich, poor, in between. >> our director ram has suggested historic donut hole. they are our tent and have been our tent for almost four years now. they are a great tenant. obviously, the space will no longer be there. we are a small business in his alley. we have incu have the first blue coffee. there are several small businesses, other architectural

firms and firms at 315 lyndon. we like to do that. we like to bring in spaces. we think the commercial spaces that are hard to fill usually are part of our development. it is important those be spaces that welcome the community and neighborhood. 615 vienna which we completed two years ago noon cafe was brought in and is now a center of the neighborhood. when we built the spree 15 years ago, pachino restaurant was part of that. it was off site but part of our family that developed that and that is now a center of and growing center which includes a wine and clothing store and artist space. that is part of our dna. that is what we do. whatever goes into that ground

nurwill ac -- ground floor will activate the neighborhood. >> i was asking about all-star doughnuts. they are not like blue bottle coffee. there is a difference in that, you know, corner that is where all of the different worlds meet. i am worried about, of course, displacement and there is a fantastic building. i love the plaza. i support your project. i was asking specifically if you were going to do something for this business. >> they have never asked for anything beyond being there now. they will be there at least another year. if they ask, we will certainly talk to them. >> i hope you do. >> we will. thank you. >> thank you. >> commissioner johnson. >> thanks.

the last thing that i will say is you have considerations around the business. i hope you do talk to them. i think the larger comments are simply that this corner is a meeting place, and it would benefit the folks who are going to move in, the businesses around this could be a meeting place for all in san francisco where they have a opportunity to patronize and be part of the space. i hope you take that however it ends up. with that, i move to approve. >> second. >> thank you. on that motion to approve with commissions. (roll call). >> so moved. that motion passes unanimously 6-0. >> that places us .

>> i apologize. >> close the public hearing on the variance grant with standard conditions. i will have a performance period to match the extension of the planning commission approvals. that is item 11. the residential occupancy planning code amendment. >> good afternoon. i will present an ordinance to one create immediate length occupancy or ilo use as well as a to prohibit leasing for nontent uses to define to a nonnatural person. before i provide the staff recommendation i would like to give time to supervisor peskin's office right now. >> yo i am available for questi.

cucan you tell me off or whatevr works best. i want to say i guess congratulations to commissioner melgar. thank you for your service on this body. all of you really. it is an unpaid, under appreciated whole lot of work and time. your service has been very valuable. congratulations to our new president and vice president of the commission. i am going to start. i wanted to give you some context for the legislation and explain why we chose to keep both the administrative code provisions as well as planning code provisions together, knowing that would slowdown the legislative process. >> we need to recuse a commissioner. >> we should do that right now.

>> i make a motion we recuse commissioner diamond. >> second. >> do you want to explain? >> i have an adult child who works for one of the companies that does ilo and in conversations with the city attorney's office, the thought was it was best if i just recuse myself from the deliberations on this item. >> on that motion to recuse. commissioner. (roll call). >> so moved that passes unanimously 6-0. >> so i was basically saying i want to explain why we opted to try to keep both code sections together for your consideration

and deliberations today knowing it would slow the process down. i felt the context and policy rationales and clarifications to the existing law are important for you all to understand but also, you know, it is something that i think is part of a larger polediscussion for the city while we talk about preserving affordable housing stock. this legislation is really culmination of many years of the city's efforts to try to regulate and effectively prohibit what are commonly referred to as corporate rentals in rental units. our office took up this issue a couple years ago and has had meetings with operators as well as our tenant advocate communities and senior advocate communities. as far back as 1981, the board

of supervisors passed chapter 41 a to minimize the adverse impacts on the housing supply and persons in households resulting from the loss of apartment units due to the tourists or transient uses. those findings are relevant to the conversation today. some highlights from that, you know, there is a severe shortage of decent safe sanitary and affordable rental housing in the city and county of san francisco. this is from 1981. many of the city and county's elderly and low income persons and households reside in apartment units. that is in my district three we have the highest concentration of low income senior in the city and it is protected under the rent ordinance.

the board of supervisors and the mayor of the city and county recognized this as housing emergency, 1981 and enacted an ordinance with a moratorium on the transient uses to protect the resident tenants and conserve limited housing reserves. not a lot changed. in 1998, the supervisor offered amendments to define the transient use in apartment buildings to address the rise of corporate rentals which we were seeing at that time. there was separate legislation for the single resident occupancy hotels. they serve different protections but are a important part of the affordable housing stock. the board of supervisors passed legislation in 2016 on short term rentals which were popular by air bnb.

after years of litigation we were able to reach settlement which including permitting for the uses while seeking to protect the tenants. i know the history because i want to reiterate it is the city's official policy to protect and preserve rental units where prohibitions have already long existing. it is the san francisco law a landlord cannot assume possession of the unit without just cause. these are critical to the stabilization of the communities throughout san francisco. by being price controlled they are affordable by design and only price controlled for the duration of time the tenant is there. it ask obvious -- it is obvious with the constant rotation it allows the landlord to reset the rent to market rate. that has proven to have an

impact on the communities that are struggling to find housing at all income levels in the city right now. in fact, i think we are talking about market rate. really what we are seeing do a google search online and you will see that the prevailing rents for a lot of the corporate rentals are well above market rate. i have stories from not just constituents but a reporter that came to interview the supervisor who said we were in the corporate rental paid for by google. we didn't know how much rent they were paying. it was rent controlled apartment not well maintained. it turns out we found out later after four months they had been paying 5 $500 per month for a one bedroom.

there are some definite price control issues with this. our rent ordinance specifically speaks to the illegality of rent gouging. we see the corporate rent model to where the appropriate role is. we are seeing it in the rent controlled housing as a work around the law. particularly after the short term legislation was passed. we through the office of short term rentals saw the uptick in 30 plus day rentals was pro liver rating across the different platforms. they are not regulated by the office of short term rentals. they only regulate what is permitted. they are helpful with getting us finite snapshots. leasing units. the new provision that we are

putting -- illegal to put fixed term tenancies on rent controlled units. we are adding another provision relative to corporate leasing. we have seen in many of the large multi unit apartment buildings there is a problem for tenants that might not have access to the listings. they are specifically targeted to short term clients. it is variation of the property management model. we have seen entire wings of models that carve out units for short term stays. part of the problem is if you are making over the market rate rent for a couple months you have less incentive to occupy the units for the rest of the year, for the fiscal year. in a lot of buildings and you

might hear from tenants today that they don't know anyone in their buildings any more. they are either short term guests, you know, or they are vacant. you saw widespread press coverage on the survey in december which stated what you somewhere heard despite the housing shortage there are 12,000 vacant units in san francisco currently. when we started studying this years ago we enlisted the aid of a graduate student doing a survey of residential vacancies and piecing together information from even interviews with property owners and people inside of buildings and found there was a very high vacancy rate, particularly in districts three and six. it was largely in the larger buildings. this is context for today's

discussion and relative to the substitute legislation we introduced on tuesday. i wanted to restate for the pre-1979 units that are already covered by the rent stabilization ordinance we are purely putting in a new requirement for disclosures so that what we have seen in the lease agreements we have come into contact with is tenants are being asked or potential tenants are asked to sign away rights to continue to be protected and to continue to stay on beyond a fixed term obligation. that is not the spirit and intent of our rent ordinance. we want that to be without overly micromanaging what they are advertising and marketing they should tell people you are

in a rent controlled unit with rights. we are putting in th the corpore prohibition for nontent uses. now there is also legislation passed at the board of supervisors authored by supervisor haney that extends to post-1979 buildings. that is purely the just cause eviction protection, not price controls. that was one of the things we wanted to take into consideration and think a little more about relative to what i am thinking of a middle bucket of corporate rentals in existence. in the case of those units, what the supervisor intends with the legislation and i would love to hear feedback is to create a permitting conditional use

permitting scheme where operators would come to the planning commission to seek approval for a certain percentage of units to be eligible as what we are now calling intermediate length occupancy dwelling units, ilo, which would be a new residential use category that would apply to dwelling units. right now we have based on the data that we have been able to collect from either operators or different departments, we have selected a 20% of your units if you triggered by whether or not you are 10 units or above. then for smaller buildings up to 25% of your units that are not, you know, protected otherwise. for example 10 units or more triggers the ordinance.

out of those remaining market rate units you can have 20% legalized as i los. one of the things that we are considering and i think interested this is allowing this body some administrative power goes to raise that maybe to tinker with that as more data comes in as planning takes the time over the next two years. there is a two year amortization period for operators to comply with the designation for existing ilos. you know, the cap that we had set right now is at 1,000. i think that is something the planning commission over as you work through the process and develop the process can undertake and for further consideration to raise the cap

as your conditions that you have developed in partnership in consultation with staff change and evolve. the supervisor is in agreement there is probably a role for corporate rentals to play for a certain sub set of demographics in the city but not at the cost of housing affordable housing for folks that desperately need it. we have heard a lot of stories about the ballerina here for three months, opera singer here for four months. i don't think there is probably thousands of them that need that, but there are essential people that benefit from this type of housing, particularly if they have an employer willing to pay for it. that is one of our other concerns. i was talking with an affordable houser this morning that looked

at corporate rentals to temporarily relocate up to a year residents during public housing rebuild. they could not find places to put these folks because it was so expensive. corporate rentals were so expensive. they were vacant but it was cost probative for the kinds of temporary housing that are important to try to encourage. relative to planning staff's recommendation which i know we will talk about for new construction, we are the supervisor is open and amenable to some kind of interim control or moratorium on future construction of ilos until we get the data to inform whether or not this, you know, deserves

a certain new consideration and the approval and entitlement process when developers come to say i want a residential project and part of it is that some of these residential units are ilos. if we are part of the legislation is directing the controller t to conduct a study, there is merit to the fact if you are charging well over rent and operating it as a hotel maybe there should be some separate impact fee or regulations or restrictions or

>> commissioners, staff supports the ordinance in as much it could have an adverse effect on the housing supply, however, there is a lack of evidence on the scale and location of the i.l.o. community. there should be adopted an interim control on new i.l.o. activity and that would provide us time to collect data on the scale, the location, all the

details that are missing at this current point. an interim control could be anything from a neighborhood notice to a commission hearing under d.r. or conditional use or even a moratorium. but we would think that -- we think it's a much more reasonable action to take is to get an idea of what the scale of this activity is. one last item before i conclude, and it was mentioned earlier, that there was a substitute ordinance introduced on tuesday which didn't make your packets because those went out on the previous thursday and i have those here for your consideration. that concludes my comments and we're here to answer any questions. >> thank you. let's now open this up to the public also for comment. i'm going to call some names. please line up on the screen side of the room. br brewster kelly, josephine

radville, brian thompson. >> can i just go? >> yes. >> i am paula alard with synergy global housing. this is a wonderful opportunity. thank you so much for allowing us this platform. it's so interesting to hear that amazing presentation because it is all true, but there is a piece of that that's missing and that's not all corporate housing. i've been in the industry for going on 23 years now. i've seen just about every single entity, every single part of it, every type of employee company, hospital, industry that could possibly need temporary housing. it's not the one-off ballerina. it's not the google tech companies and the facebooks. it's an entire world of people

that need temporary housing. i didn't plan on coming up here and starting with that, but i feel so passionate about it. people in this industry that do it do it because we love serving the people with housing. it is blood, sweat, and tears. you can't do it unless you love it. i know i have three minutes, i have to hurry. we work with theater groups and in house is hamilton. we just released cirque du soleil. these are three months to a year. we have harry potter going for three years of housing. women in tech groups, student housing, interns, colleges, we have construction, contractors, government agencies, military staff, very sick patients needing long-term housing for their treatment for their bone marrow transplants.

disaster recovery, families in crisis, et cetera. we personally manage many, many families in the santa rosa fires that housed all the way down into san francisco because there was no housing and such demand. these are families in crisis, not tech groups. another entity that we served that i don't think anyone knows is the sectors of section 8, seniors and disabled. we have a liaison that handles the logistics for those housing projects that are currently renovated. i've been working with this company for 12 years now. we've housed multiple housing projects under mid-pin, h.i.p. -- [ indiscernible ] -- again, seniors disabled section 8. if we didn't have corporate housing for these families, where would they go? some can stay in unfurnished

units on site and others need to go into corporate housing. we do serve them and there is a platform to make that happen i don't know how much -- i have 20 seconds. we need to watch out for the unintended consequences of making changes to the industry. it is already difficult to do business in san francisco because of the limited housing and the 30-day minimum. if we continue to add layers of difficulty, it does impact all of these companies and the people that do come here temporarily, they do need housing and they embed themselves into the communities and spend money -- >> thank you, ma'am, your time is up. >> -- and i think it's something that we need. >> thank you. your time is up. >> thank you. >> next speaker, please. >> good afternoon, honorable members of the commission. thank you for allowing me to be here today. i represent churchill living.

we offer flats in the bay area. we have around 350. we help families transition into a new place and one of the most important factors of moving having a homeaway from home even for a few months, it can make-or-break a successful assignment for families or individuals. i am newer to the market. i relocated here four years ago for churchill living. when we came here, we took over large properties that were coming over, they weren't existing properties. they were properties in mission bay that are under new construction and in our terms they're called lease ups. our clients is the tech companies, but they are the hospitals and they are families that are displaced. the hospital business is a huge business. when families are coming and need a comfortable home for

their families while their loved ones are having -- are in the hospital or having treatment. i actually grew up in the hotel business. the hotel business -- having people stay in hotels -- i mean, just this week you look at the hotel rates, thousands of dollars for an average hotel room, and the comfort, we want to work together to come up with a collaborative solution so it is all win-win. these people here are also not just coming on assignment, they're relocating. they're bringing economical help to san francisco because they're permanently relocating here. so they're helping with the transportation. they're helping with the restaurants, everything, when they relocate here. and again, myself relocating here, i went through it. i've relocated with children and it makes a big difference when you're taking children and individuals away from their home

and making a home away from home. so we appreciate the time and hope we can work together. >> thank you. next speaker, please. >> my name is ryan thompson. i represent express corporate housing. i thank you for your time today. i will be commenting on this proposed i.l.o. ordinance and any potential interim or long-term legislation. i think what's been said has been a fair representation of i.l.o. market as it has been in san francisco, however, i do want to state outright that we condemn any company using rent-controlled housing for i.l.o.s. i think that is plainly unethical. we personally do not do that. however, we are concerned with any potential permitting process because our business model works differently than many of the

i.l.o. providers you are familiar with. we run i.l.o.s only for the am of time that one client will need it. if someone needs an apartment for three months in the financial district, we will find an apartment in the financial district specifically for that time, furnish it, set up utilities, do all of that. then once that three months is up and that person moves out, that unit returns to the market as a standard, unfurnished unit. this business model solves what are a lot of the issues with the i.l.o. market in san francisco. this prevents there being units earmarked for i.l.o. sitting vacant that become less affordable because of the furniture and everything else with that. this makes accommodation for this type of business model. moving on from that, the total number of i.l.o.s in san

francisco. this would flat out unfairly advantage very large companies at the expense of small and growing businesses. we are firm believers in fair and ethical business practice and government policy. by restricting the supply in that way, companies are going to give it to the highest bidder. non-profits, cultural businesses, anyone who needs this service will not have access to it. any hard number limit would cause an issue if there is an emergency that displaces san franciscans, these are earthquakes or fires. these are climate change, not ifs, but whens. nobody wants their insurance company to tell them they have to move a couple towns away because san francisco has reached their limit. so hopefully any type of legislation that comes out of this will make accommodation for displaced families and things

like that. lastly, we wanted to applaud the city of san francisco for your efforts to increase the total amount of new apartments coming online through using zoning and regulatory restrictions. we would strongly encourage you all to look at what was done in minneapolis in their 2040 plan. san francisco's needs would need to go much farther than that. >> thank you, sir. your time is up. >> thank you. >> next speaker, please. >> good afternoon. cynthia gomez local 2 and i wanted to wish our best wishes to the outgoing commission president. congratulations to your new president and vice president. so i work with the union that represents hospitality workers. we have a strong interest in supporting this legislation. we are all of us familiar already with the short-term rental story where our city's

precious housing stock, including often entire buildings got turned into unlicensed hotels that ended up on airbnb or similar sites, a process that was often fueled by displacement. when the city sought to protect this housing stock by creating a registration requirement, you would see the end of these ghost hotels, not so much. we are dealing with this monster that sprouts two heads every time one gets lopped off. now you have entire floors or buildings existing as corporate rental companies operated by blue ground, zeus, and urban door that is owned by airbnb. these rentals are not so very different from extended stay hotels. the company often furnishes the apartments, paints the walls, paints the utilities, guests can book housekeepers and

maintenance through the app. scrolling through the app you see the same furniture. one website advertises hotel comforts that prices cheaper than hotels and another compares its value through a similar-length stay in a housing. but it is claiming to be housing. this ambiguity needs to be clarified. when you're approving housing, you need to make sure it's not the bait and switch. i also wanted to test assertions. in your packet you will see a reference to the corporate providers organization says its users don't use the i.l.o. rentals. i investigated and found the site is a c.h.b. member. there are multi-unit buildings

built before 1979, subject to the city's rental ordinance and offered as corporate rentals. another assertion was, oh, we don't offer these i.l.o. in nine-unit or smaller buildings. again, five minutes i found quite a number of them. clearly we need more attention and controls to regulate this issue and a whole lot more information and data to discover what's the scope of this problem and we urge you to support this legislation. thank you. >> thank you. next speaker, please. >> hi, good afternoon. i'm josephine radville and i'm a research analyst at local 2. i'm here today in support of the inner lanes occupancy ordinance. corporate rentals treat people who stay in these apartments as transient hotel guests, even though they are tenants with full rights and protections under the rent ordinance. whether they reside in the unit for a month or ten years,

tenants are tenants, period. the legislation requires corporate rental companies to inform their tenants of this fact. corporate rental companies benefit from renting out housing units as extended-stay hotels, but this comes at a real cost to san francisco's long-term workers and residents. this kind of extended stay hotel operating as a corporate rental is often marketed to highly professionalized tenants, capable of paying high rents in a furnished unit. these limit the tenancy under a lease. many of our members are struggling to reside in the city where they work. i know dozens opposite local 2 members who commute long distances to work in san francisco from far away. without this ordinance we risk

continuing to lose existing housing units as corporations convert housing units into corporate rentals. as we saw at 2100 market street, these sites are perfect for development. they offer boutique living service rather than apartments. they minimize risk by signing with a company like sander as the master tenant, property manager, who in turn maximizes profits by inflating temporary rents. and equally important to housing considerations are the jobs created. the cleaner, the 24-hour concierges for these hotels. unfortunately, with these types of jobs, the work is low-paying, temporary, and lacking benefits. can a person working this type of job be involved in her daughter's school, take part in her community, and work only one

job to pay the bills? our members are paid living wages, receive healthcare, and have dignity and respect on the job. who benefits from corporate rentals? it's not the housekeeper who has worked at the convention center hotel for 20 years or the teacher who is new to the city and can't afford the $6,500 per month rent. this closes a loophole that has benefitted wealthy corporations and landlords over years. thank you. >> thank you. next speaker, please. >> thank you, commissioners. i'm from the san francisco tenants' union. i'd like to reiterate the points made about the many-headed hydra that happens when we try to regulate land use speculation. we saw a proliferation of these companies as soon as we finally got a handle on airbnb in the

city. we as advocates and regulators and folks fighting for affordable housing have to keep running to keep up just to preserve the housing we have because there's so much profit to be made. thank you, supervisor peskin, for this legislation. we support the regulation of interim length housing because we have come to see that this kind of land use is so profitable that it's becoming more and more attractive an option for land owners than providing housing. we've been hearing of rents at the level of $10,000 a month for a two-bedroom apartment. people at the regular income or even high income can't afford. we're seeing a loophole between rent control and short-term rentals that we just need to solve right now. and in these situations right

now, these are -- the folks moving in are not tenants who have rights, they're folks who have a relationship with that company. we need to remove these incentives and we need to make sure that whole buildings or individual units, whether it's new construction or rent control, don't convert to these useses. you're going to hear from some other advocates on this front on the things they see, particularly with large corporate landlords, but we've also seen it in neighborhoods with smaller buildings as well. so we really need to regulate this. thank you for your time. >> thank you. next speaker, please. i'm going to call a couple more names, peter cowan, maya chepkoff. >> good afternoon. i'm with senior disability action. i am in huge support of this. as f.d.a. advocating for seniors

and people with disabilities, we know of so many who are losing their housing, and i have seen them in north beach, those buildings that are rent controlled, where an eight-unit building, for example, 567 to 579, where seniors had lived there for many, many years. a new owner came in and told them that he needed to do major renovation and they needed to leave, never told them they had the ability to return. the units were renovated to more modern, not luxury style like we see today. at the time those tenants never returned. those units became corporate rentals. people were moving in and out every two to three months. very few stayed six months. these were no longer neighbors in this close-knit neighborhood.

that meant thomas kara who brought over the very first espresso machine after world war ii lost his home and his community and we lost our neighbors. that's why i'm supporting the fact that rent-controlled buildings should never be used for corporate rentals, vacation rentals, period. as well we need to get a handle on this. i would prefer only 10% being allowed in new developments, just like we had 10% for homeless people in buildings now. 10% should be adequate without it removing permanent residents from our city. thank you very much. i am so appreciative of supervisor peskin. >> thank you. next speaker, please. >> hi.

my name is brad hern with housing rights committee of san francisco. we strongly support this legislation. i want to highlight a particular example that we came across in our work with tenants. i want to make sure that you saw back in october 2019 an article that ran on tv and is on the internet as well. the reporter in that article profiled a rent-controlled building owned by s.f.'s largest landlord. that building was on 634 pal street. this is one of the many rent-controlled buildings that has short-term rentals. part of that piece was a disclosure of a memo written by the company from around when they bought the building in september of 2016. i have the memo here.

the memo discusses their intentions for the building and remodeling it to attract new tenants. it also lists ten rent-controlled apartments by number and i'll read from the memo. it says, the goal is small, cheap, and quick improvements to convert to temporary, furnished rentals. so here we have straight from s.f.'s largest landlord their intention to convert rent-controlled apartments to short-term rentals, particularly at 634 pal, the sheer number of d.b.i. notices of violation on occupied rent-controlled apartments by long-term tenants. so i just wanted to make sure you all had seen that article as you deliberate over this legislation. thank you. >> thank you. next speaker, please. >> hello, i'm a volunteer

researcher with housing rights committee honor students through san francisco state. i've been student teaching for political science basically on rents. so i live at 634 pal and i want to say first of all when did housing become available only to those that are fluent -- affluent, excuse me, and those that are basically -- housing's been designed not for our average working person, but our institution investor and the corporations. so i wanted to say that my building is a rent-controlled tenant building. i've been living there for approximately 22 years with short-term corporate rentals. i support supervisor peskin's legislation and i urge the

planning commission to move forward. basically those that are renting out corporate rentals are those that work in the tech industry. the tech is focused like a las vegas strip in downtown san francisco, all of their companies, and 634 pal is close to that area. they also have more amenities available to them. i want to say that this legislation again helps to driveways the problem and aligns with san francisco's general policy housing element in particular to the policy 3.1 under the preservation rental units, especially rent-controlled units that meet the city's affordable housing needs. i also want to say this is an environmental issue with climate control, where tenants are having to -- tenants having been displaced from their housing are now having to commute to san francisco and the gas they're using lets off emissions. the short-term corporate rentals

in my living are advertised on zeus living and go for upwards of $200 a night, if not more during peak seasons. i urge the commission to move this legislation forward for our future generations and our current. thank you. >> thank you. next speaker, please. >> good afternoon, commissioners. i'm with the neighborhood council and san francisco land use coalition. a congratulations to the president and vice president. thank you, commissioner melgar, for your service. we are appreciative of all those cases you cited on justice, particularly housing justice. those tenants saved by your vote will be for ever grateful to you. good luck may the force be with

you. on your next endeavor. so i just want to also add my voice and -- in support of this ordinance because i live not too far from that project, 2100 market street, where they came to you and they asked for approval of housing under the guise of, we need more housing, we're desperate, we are -- this is a crisis. and then as soon as the building was done, guess what? they turned it around and turned it into corporate housing. we need to put the kibosh on this. in addition to all that has been said. i'm not going to repeat what my activist colleagues have brought to your attention, yes, rent-controlled homes should be saved for real tenants, not the transient folks whose companies are well off enough to pay for their hotels.

also one other thing i'm not going to take too much of your time. i'm grateful for this and supervisor peskin for bringing this ordinance. i just wanted to bring up a response to the gentleman who talked about minneapolis. any time i speak, i do not miss the opportunity to bring this up. minneapolis has nothing on us folks. if they changed single-family homes to triplexes, guess what, our single-family homes have been changed to rh4 and in the case of current rh3s, they've become rh6. minneapolis has nothing on us because i'm sure as you're all aware an assembly member who passed 280 use per lot. right now we do not have any single-family home zones.

let's not pat ourselves on the back. we're much better than minneapolis. let's not get lost in that narrative. thank you very much. >> thank you. next speaker, please. >> my name is scott weaver. i'm from the san francisco's tenants' union. it's been illegal, these corporate rentals -- that the first three speakers talked about have been illegal for 40 years. and so now you are presented with a hand-ringing question of whether or not you want to create laws that will stop this illegal conduct. and that should be an easy one for you. there's policy reasons set forth in the legislation that ms. angulu went through for you. don't we want to preserve

housing for san franciscans? sure there is a demand for these other uses. but what takes precedence? i think we should have the answer for san franciscans first. somebody in the earlier presentation mentioned unintended consequences. there are unintended consequences from not enforcing the ordinance, which is what we see here. we see units and rent-controlled housing that are no longer homes, they're investment units. you want to get the highest investment out of that unit, and that would be corporate housing. that's the unintended consequence, that sitting on our hands and not dealing with this problem for 40 years has given us. there was some talk about a

numerical limit. don't do a numerical limit. yes, do a numerical limit, absolutely do a numerical limit. how are you going to stop this influx of unaffordable corporate housing? and in terms of affordability, that housing is at least 20% above market, 20 to 40% above market. as long as companies can do it, they will do it. a numerical limit is absolutely imperative, otherwise we're going to be in the same position we are now, with no enforcement, anybody can do it. and finally -- well, no, there's two financials. interim controls are not a good idea. there is a 40-year negligence on the part of the city. we can't kick the can down the road any further and allow

illegal activity to continue. and then finally, i want to mention just in terms of conditional use approval of those 20%s. we know what conditional use is, it's a fairly non thing. i would suggest a ban on the rentals in specified, sensitive neighborhoods as set forth by u.c. berkeley. thank you. >> thank you. next speaker, please. >> good afternoon, commissioners. peter cowen with the council of committee housing organizations. commissioner melgar, congratulations. we're going to miss you. i think over the last several years we've seen innovative uses of our housing supply. i know "innovation" is a cool word, but it has down sides. live/work. we remember that. business services on commercial property.

time shares, short-term rentals. so this is sort of the way it works. we have a very hot real estate market and it lends itself to these innovative ways to use our limited housing supply, but the request is for who and for what benefit. i think this is a no-brainer. this is the kind of thing when an innovation comes up, it's a trend, has some perverse results. it's time for intentional, regulated allowances. there is nothing intentional about that, it is regulated allowances, versus speculative activity to drive what happens. i think with short-term rentals which the city has complex regulations and enforcement and staffing for that, arguably, we waited too long. that became a bigger problem than it should have before we caught it. it's a perfect example of how we have to intervene with regulations appropriately. we can't let markets drive these

issues. this was a mention of affordable housing developers doing this. our coalition has all the affordable housing members in it. when we have to do relocations for tenants when we're doing rebuilds, particularly in the raed projects. the pricing was outrageous. the cost to the city to pay for those corporate rentals to relocate those rants while building their affordable homes was outrageous because they were competing with corporate rentals. i also find it in the business reps that came up here are using the terms interim medium occupancy. they've already defined this for you, so you should codify this

behavior and the business will regulate accordingly. that calls for how the city manages how its housing stock is used for this use at all, whether brand new construction, rental housing, or some of the housing built in the last several years, it's time to do it. so we fully support moving forward with this legislation and so far it looks good. >> thank you. next speaker, please. >> hello, good afternoon, commissioners. my name is maya toothkobb and i work at the association of community housing organizations. i'm here in support of supervisor peskin's legislation around corporate rentals. we are losing hundreds of affordable homes every year according to the housing balance report. that means san francisco is losing educators, nurses, teachers, and non-profit workers like me who every day i worry

that i won't be able to live here any more. so a question i ask myself is who are the people these units are serving and at what expense? from what we understand, some of these units can cost up to $5,000 a month. if you do the math and are paying a third of your income on rent, you need to be making $180,000 a year to afford these units. so this comes at the expense of people like myself who may be looking for housing, non-profits, workers, restaurant workers, students even who are graduating from college and want to move back to the city where they grew up and love. so san francisco can't afford to continue to lose affordable housing. this kind of legislation will open up more housing access to

san francisco community members. i really thank supervisor peskin and his aide for their leadership here. this is a no-brainer, and i urge the commission to support. thank you so much. >> thank you. next speaker, please. >> good afternoon again, commissioners. cory smith on behalf of the san francisco housing action coalition. we do not have a position on this piece of legislation. and honestly there is a good amount of consensus from a lot of the folks involved in this, where there are bad actors that are out there that are not doing the things they should be doing. and as a city collectively, we should try to figure out the scale of that problem and try to ensure that does not happen. i think everybody across the board said there absolutely are examples where a shorter-term

lease, an intermediate length occupancy, whether three or six months, does make sense for people in certain situations. those following the rules and doing it in the right way, we want to make sure we're not throwing the baby out with the bathwater. one ask that we would have is trying to do everything we can to collect as much information and data to understand the scale of the problem, which again everyone is looking to do. and then with that we were looking to make calculated, thoughtful, and fact-based recommendations and solutions to the problem that we have. then just a little bit independent aside because it does keep coming up in this conversation. as i understand it, and i would be curious if there are other examples, every single home that

we're talking about that gets wrapped up in this conversation, whether it is a home that is rent controlled or not, these are all market-rate housing. every single one of these. when they are empty, the price of it will be set at market prices. so i also think that it is important to understand that the more market rate housing we can put out there, and that is by no means the only piece of the solution, it is a part of the solution. as many homes we can get out there, as many possible solutions we can provide to people, those are really positive. i look forward to continuing the conversation with all parties involved. >> thank you. next speaker, please. >> i'm from the neighborhood council. it's a good thing that we heard we need more market-rate housing since we're over 200% of production and we have a great

amount of it that's vacant because it's being held by investors for some future sale. so how about neighborhoods? how about san franciscans? you know, when we first started with the airbnb short-term rental legislation, i thought why isn't there something between 30 days and the zoo. as soon as we start talking 30 days, these companies, vacation rentals, et cetera, started saying minimum 30 days. they're making their -- they have found a niche that they can exploit and great business opportunity. but our neighborhoods are suffering. people are being kicked out of rent-controlled housing. yes, some housing does get to market when it is vacated voluntarily. the condos can be offered for rent too. but this legislation that

supervisor peskin's office has put forward is an excellent thing to do now. yes, we can do more research, but let's put the finger in the dike now. do the research. we can always modify this later if we find there are appropriate circumstances. don't wait. thank you. >> thank you. next speaker, please. >> good afternoon, commissioners. i was not even going to speak today, but really i would just like to underscore that we are in the middle of an affordability, displacement, and general housing crisis. part of this is the removal -- one major contributing factor is of course the removal of rent-controlled units for all sorts of other uses, including this one. i would urge the commission to

approve this as written in light of that, in light of the urgency, and not delay further. thank you. >> thank you. any more public speakers? >> is it three minutes? >> it is. >> thank you. i'll try not to use it all. i was really surprised. i don't know if you guys were too, when i heard about mission bay being a big source of this type of housing because i think when you approve the eastern neighborhood plan, which i assume mission bay is part of, that was not your intent. your intent was to provide a lot of housing in mission bay. so that kind of shocked me. the other thing is 2100 market street, i don't think they came to you and told you that they were going to do that. that was the neighbor from belcher that had another project nearby because i was at this hearing when he talked about that. so i think that's an important

point to know. and i think it also raises the following question, is the market oversaturated in condos? are there too many condos being approved? condos don't have an occupancy requirement. they can sit there and the money can be parked. it's not like a co-operative. maybe there's too many condos. maybe the market is oversaturated. i don't know what you do about that, but it's something to think about when you think about tenure and the approval of projects in the future. i think this legislation is really good and i thank the supervisor and his aide for doing it and i hope you pass it today. thank you very much. >> thank you. anyone else from the public? >> good afternoon, commissioners. i'm richard frisbee from laurel heights. the one thing i would say is if you don't legislate it, it will get out of control. an analogy i will draw is uber

and lyft and the t.n.c. if we're not prepared or don't have the courage to step in and decide what we want housing to san franciscans be, then the market is going to take it over and it will be taken over by companies, whose sole purpose is to make a profit, not to protect housing or care for the homeless, but to make a profit. this is an uber/lyft moment. thank you. >> thank you. anyone else from the public wish to comment on this item? okay, seeing none, public comment is closed. before i go to the other commissioners, i think it's safe to say we were all surprised to find out that the 2100 market street on church after our approval was known to be for corporate housing. it is definitely an issue we should talk about. after receiving these extra 18 pages of information, it's worth taking some more time that we're

all clear what we're talking about here. commissioner moore. commissioner melgar. >> i get to go first now. i love it. i want to start by saying i support regulating interim rentals. i support disallowing rent-controlled units to be used for this. i have a lot of questions about this legislation. let me go down the list. my specific worry is what this does for industries. the arts industry is important to san francisco. so i'm wondering what it would

do -- like, a corporate rental being built new in the civic center arts district is very different than being built in the valley or in richmond. so i am wondering about whether you're going in terms of this legislation in terms of geography. so the arts, you know, is a thing in san francisco. you know, it tends to not have very big profit margins. artists don't make a lot of money usually. when they come from other places, usually it's because they've risen to this level and make more money. i'm worried about the economics of that. the second industry i'm worried about specifically is healthcare. what would this do to ronald mcdonald house or any of the

institutions that need to house families of patients that are here maybe for an extended period of time because we are a place where ucsf is and people come for treatments and have to stay. so there may be others that i'm not thinking about. i on the other side want to study what corporate rentals do to commercial corridors. so you may have read that article that was written about the market octavia corridor and what the specific project that the president was talking about. here we have -- one of the arguments that we've used about adding density to commercial

corridors is that it brings more people and neighborhoods serving retail in the age of amazon and grub hub is suffering. so intuitively this is a good thing. we've seen sparky's and chow, and all of these long-term, established commercial neighborhood businesses that have gone under. why is that? why is it that we've done that? it seems to me that intermediate-term corporate rentals is not what we want. people come and they don't have the relationships with the businesses, they're more transient. this is completely without data. this is why we're studying things, right, but it seems like we need to look at that relationship between intermediate rentals and the health of the commercial corridor.

the other thing that i'm worried about is the effect that this may have on financing for new projects because i think it is a thing that people kind of count on like the little space, you know, before things can be sold or rented for long term to pay the mortgage until they can get out from under that construction loan. i'm not saying it's good or bad, it just is. we should look at it and see if it has an effect or if things pan out otherwise. and also would we not want to consider it be -- i'm just throwing this out, having it be attached to a use in planning.

if it can be a time-limited thing for new constructions, that people can do it only for the first six months or year after construction and after that it's disallowed. i don't know. i'm just throwing it out there. and the last thing i will say is i'm wondering if we can consider price controls on intermediate rentals because i hear the folks in the competitions with hotels. i do think it's a thing. and i'm wondering if we should think about a price-control mechanism for intermediate rentals. and last, but not least, i'm worried about the regulations. once we implement the framework, once we decide the where, the when, the how, how we're going to keep track of it and who is going to keep track of it. if it's the planning department,

if we're going to get extra funding first off to do this. i'm doing your job there. thank you. >> thank you for those very thoughtful remarks, commissioner melgar. relative to enforcement, so right now there are some additional -- i mean, all of this is -- john's smiling because he knows this is the bane of his existence, as it is with many of our departments that are trying -- i mean, i'll give you an example. i had a piece of legislation that we ended up splitting into two pieces to try to help tenants that are kind of left in limbo during the process of a

legal capital construction eviction. maybe they get a little money to relocate, but there's no certainty in terms of when they get to come back. one of the ideas that we had was to put them into -- to use that relocation funding and put them into o.c.d., 100% affordable units that were available. and m.o.e. did not like that. i had this lovely conversation with dan adams about why they didn't want to be in charge of it. they're like, oh man, don't put that on us. and i think -- i totally get it. and supervisor peskin said, hey, like, i understand why this is not something you want to take on, but at some point we got to figure this out. and at some point somebody's got to be responsible for our peeps, for our tenants, and for -- you

know, i mean -- and so to that we said, yes, dan, we'll give you money to have someone beside maria benjamin tracking these inclusionary units and b.m.r. units. i think along with that additional responsibility, certainly that is something that should be baked into our budget, our policy budget in terms of what our priorities are because this is a priority. taking care of these people is a priority. we -- again, complaint driven. i know that we did put a city attorney and non-profit right of action into the admin code provisions and i know that some of the advocates have asked that we do the same thing for the planning code provisions. and given the fact that we do not have those -- given the fact the planning code already has administrative enforcement and penalties baked in and that we

don't do that anywhere else in the planning code, we have not included that, but that is something the supervisor is open to amending into the code. this would be the first time that we would do that in the planning code, but maybe that's what's needed, to help augment and supplement the work that you guys are doing, that cory would be tasked with doing. relative to planning code use, my understanding is we cannot regulate the user, only the use. i also wanted to do something similar. so to that extent, you know, as much as possible, at least in this newer construction that historically has not been presented by rent control, we're going to give a little bit of space to have this use and have it be studied. we consider it to be an intensification of a residential use. so to that end, that is where

the study comes in, where we can really look at what are the things ways that we can mitigate, what are the controls we can use to offset some of the impacts that you've already talked about relative to commercial corridors. i think there was also an article in this morning's "s.f. gate" or at least i read it today about the closure of businesses from mission bay all the way to noee valley. again, i don't want to make it about old and new people because that is a flexible thing, but certainly the existing people that are moving in, they're not interested in engaging in the neighborhood. they don't shop here or patron our restaurants. they're here and then they're

gone. this is something that absolutely our budget and legislative analyst is looking at and certainly something the controller should look at in terms of the nexus study. relative to arts and healthcare industry uses, we've tried to be careful around making sure that this is not -- i.l.o.s are not a use that could be in affordable housing. 100% affordable housing i believe because it utilizes tax credits and council can correct me if i'm wrong. so they're already not allowed to have fixed-term leases and corporate rentals in their units. and our inclusionary units as a subset of section 415 of the planning code, they go through a lottery process, you have to be income eligible. again to one of the earlier comments, i mean, that's protected. so i'm not aware of any

corporate rentals that are operating in our affordable housing bid. we would be open to trying to -- i don't know what that would look like in terms of additional carve-outs or being explicit with the types of uses. right now housing that is affordable, that is operated by non-profits, because of course non-profits are corporations, but if it's a non-profit who's in the fulfillment of their mission to provide affordable housing. mr. tieg, zoning administrator, would have to make some calls and interpretations of that. but my interpretation of that is is that that includes our non-profit workers, if you have housing where you're trying to house your employees, that's different. you own the land, you own the property. so, for example, our tech companies right now, we've got google pledging money to build

20,000 units on land that they own for -- some of it is hotel and not all of it is going to be affordable, a very small amount will be affordable. at least they're building housing for their workforce or pledging to. facebook is the same way. if there are other ways we can get at specifically what you're talking about, arts employment or healthcare employment -- >> i'm sorry, that wasn't -- so ronald mcdonald house, which is the house that is used for families coming to have their children have pediatric treatments at the children's hospital stay there. that's not affordable housing. it's not a low income tax credit. it was privately built. is that a non-conforming use now? that's what i was trying to wrap my head around -- >> the director is shaking his

head. >> if a family is staying for three or four months, is that going to be considered an intermediate length?

>> at the same time, i think it really calls us into really important conversation about the ecosystem of housing stock that a vibrant city needs, be able to support everyone who is here and wants to come here and wants to be part of our city fabric. in my own life, i have friends who have come here and stayed in corporate rental housing. they're nurses, they are folks who worked for pg&e and folks who worked for the state. they're folks who worked for tech companies. one family in particular, it was so great for them to be able to come here with their child and be able to know that for three months they could come here, get to snow the neighborhoods and decide where to live long-term term. i want to make sure, this is a side note but often, i want to

make sure we're talking about people and families that want to be part of the fabric of our city and our city is with i have a lot of questions. one, i do think it's great to move to formalize a classification and to regulate it because we need to understand this usage type, which i think is useful. i am concerned we don't have enough data in getting the letter from the association that operates talking about how many units, just their association has in play. i feel uncomfortable about the cap right now and formally setting that cap. in particular, i have questions about what would happen to people who are actively in agreement in these types testify

i.l.o. agreements, should this cap come into play. i also love that you included the next us study and attention how we'll implement. i did have a question about i.l.o. units being principally permitted in buildings under nine units. then being 20% in buildings over. actually, i think, if we're trying to really protect rent-controlled units and rent-controlled buildings, i think building projects that are smaller in nature tend to be in the neighborhoods, they tend to be in communities of concern and actually letting those units be permitted means that the public and the community wouldn't have any say in whether or not that is the right case for those neighborhoods. i would actually prefer to see them be i don't know if prince

plea permitted construction and larger processes would be right but i would prefer them to go there and you get at two problems, which is discouraging smaller housing stock from becoming corporate rental units. the other thing that i would say that i think that benefit of knowing how much -- how many of these units are out there by regulating is that we have an opportunity to look at value capture and also potentially regulating the prices and just really right-sizing this use for the benefits from the city and i love the idea of really looking at neighborhoods of concern and whether the interim control sure should exclude neighborhoods of concern from the uses. there's so much to say. but i think that's