Monday, September 8, 2014

BOMA San Francisco's Op-Ed in the San Francisco Examiner - Why Restrict the Benefits of Real Economic Growth?

Marc Intermaggio

Why Restrict the Benefits of Real Economic Growth? 

By Marc Intermaggio, Executive Vice President of the Building Owners and Managers Association (BOMA) of San Francisco.  Published in the San Francisco Examiner on September 8, 2014

Twenty eight years ago when Proposition M imposed strict development limits on San Francisco, would you have envisioned the extraordinary transformation of Mission Bay? For that matter, would you have imagined the remarkable conversion of South Beach from rotting warehouses, abandoned factories and unused rail spurs into the thriving work-live environment that it is today, complete with AT&T Park and the many other amenities we enjoy? Who could predict the removal of the ugly, old Embarcadero Freeway, and subsequent redevelopment of our world-class waterfront, with the popular Ferry Building complex as the centerpiece?

Are current building limits appropriate? NIMBYs surely think so and, to some extent, they may be correct. Residents of many of San Francisco’s historic residential neighborhoods have every right to oppose new soaring towers and their accompanying congestion on Nob Hill, Russian Hill, the Marina and many other pristine established areas.

But San Francisco is much bigger than most people think — with enough area to sustainably accommodate new residential and commercial development. In fact, alleviating The City’s housing crisis will require building multifamily dwellings near transit in underutilized areas. Look at a map of the vast region of southeast San Francisco below Mission Bay. It could be the next South of Market.

How could continued development in San Francisco be beneficial to current residents? We could enjoy: 1) more affordable housing; 2) more abundant tax revenues for a wide range of badly needed municipal improvements, such as decaying infrastructure, transportation, cultural institutions, social services, parks, etc.; 3) additional jobs; 4) new business opportunities for smaller companies; 5) improved educational funding at all levels; and 6) shorter commutes for residents of transit-friendly housing complexes.

On the other hand, halting or severely restricting development could harm San Franciscans. We would see fewer jobs, soaring housing costs, deferred maintenance of vital infrastructure, less funding for social services in our city.

Economic growth necessarily requires commercial space to house companies and employees. Imposing severe restrictions on development is the same thing as imposing severe restrictions on economic growth — and all the benefits to San Franciscans that flow from it.

Real-estate taxes are the largest single source of The City’s revenue, more than $1.4 billion in fiscal year 2013-14. Plus, in 2013 alone, The City collected almost $10 million in transit-impact development fees from commercial developers. Total 2013 business taxes, including payroll tax, business registration fees, gross-receipts taxes, and administrative office fees and taxes, were $534.7 million.

Commercial offices contribute mightily to the economic strength of our entire Bay Area. With more than 238 million square feet of rentable space regionally, the office building industry generated $5.3 billion in building operations in San Francisco, San Mateo, Sonoma, Contra Costa, Alameda, Napa, Marin and Santa Clara counties — supporting more than 40,000 jobs. This data comes from a study called “Where America Goes to Work,” a recent report of the Building Owners and Managers Association International.

So the next time you hear a developer is planning to erect a new building, take heart. It’s probably going to benefit you directly in many ways, more than it would damage the unique charm and character of San Francisco.

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