UPDATE: Stricter Vacant Storefront Registry Requirements Passes

UPDATE - March 27, 2019

Recently, the Board of Supervisors voted unanimously to amend this law. Important changes were made, which include the following:

• Registration of vacant storefront is required: 1) within 30-days of the commercial storefront becoming vacant or 2) even if it is actively being offered for rent or lease;
• Annual registration fee payment of $711 required at the time of registration; 
• Property owner is required to pay a penalty of four times (4x) the annual registration fee ($711) for failure to register a vacant storefront within 30 days of the property being noticed by DBI; and 
• Annual report required from a licensed professional, which is engaged and paid for by the property owner, confirming the storefront's interior and exterior are maintained up to code. This annual report is due when the owner renews and pays the storefront's annual registration. 

The San Francisco Department of Building Inspection plans to offer a workshop on Vacant Storefronts at this year's Earthquake Safety Fair in June. To be notified of workshop details and how to register, sign up here.

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UPDATE - May 8, 2014


BOMA San Francisco Members:

Supervisor Katy Tang has introduced amendments to the 2009 San Francisco Vacant or Abandoned Buildings (VABO) law, summarized below.

If you are a BOMA member that owns or manages a portfolio of smaller buildings in San Francisco's commercial corridors, or if you feel that the new amendments may impact your downtown high-rise commercial/mixed-use properties, please email johnb@boma.com with your comments.

Existing Law (2009) 

Building Code Section 103A.4 et. seq., the VABO, requires that owners of vacant or abandoned buildings in San Francisco register their properties as such, pay registration fees, secure their properties to deny access to would-be trespassers, and provide proof of liability insurance coverage for the properties. VABO, as it currently reads, applies to some vacant commercial storefronts in San Francisco.

However, a building containing a vacant commercial storefront but an occupied second floor unit is technically not a vacant or abandoned building, as defined by VABO. As such, the City and County of San Francisco feels that many vacant commercial storefronts in San Francisco evade VABO regulations via this loophole.

Proposed Amendments to Current Law (2014) - Click Here to Review the Ordinance

By amending the Building Code to apply requirements similar to those specified in VABO to properties containing vacant or abandoned commercial storefronts, owners of properties in commercial corridors will have extra incentive to seek suitable tenants to fill their vacant or abandoned commercial storefronts. To provide owners of vacant or abandoned commercial storefronts with ample time to find suitable tenants, the proposed amendment to the Building Code would mandate owners of vacant or abandoned commercial storefronts to do the following within 30 days of issuance of a Notice of Violation:

• Register their commercial storefronts with the Department of Building Inspection (DBI);
• Secure their commercial storefronts to prevent trespassers from gaining access to the premises;
• Remove graffiti, refuse, and debris from in and around their commercial storefronts; and 
• Maintain fire and/or liability insurance coverage for their commercial storefronts as DBI determines necessary. 

Additionally, owners of vacant or abandoned commercial storefronts would be required to do either of the following within 270 days of their commercial storefronts becoming vacant or abandoned:

• Rent their commercial storefronts to tenants who occupy the premises in a manner that complies with all state and local laws; or 
• Pay a fee of $765.00 to include their commercial storefronts in the Registry of Vacant or Abandoned Commercial Storefronts. This fee shall be assessed on an annual basis for each year that a commercial storefront remains vacant or abandoned. 

Finally, the proposed amendment carves out an exemption for owners of commercial storefronts who demonstrate a good faith effort to rent, lease, or sell their commercial storefronts, or obtain permits to bring their commercial storefronts into compliance with the law.

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Original Post - June 15, 2009

Your BOMA Advocacy Team attended the special meeting of the Building Inspection Commission (BIC) and the Department of Building Inspection (DBI) recently where the Registration of Vacant/Abandoned Buildings Ordinance was discussed (you can view a copy of the Ordinance, here). The discussion surrounding the measure was an interesting one; here are the highlights:

What's the origin/intent of the Ordinance?

• The measure was introduced on May 5, 2009 by Board of Supervisors President David Chiu and Supervisor Bevan Dufty.
• Many cities have this type of ordinance (under the 'public nuisance' ordinance of the code).
• At its core, the measure attempts to mitigate the deterioration of a building.

What's the status of the Ordinance?

• On June 3, 2009, the San Francisco Planning Department: Historic Preservation Commissionconducted a public hearing to consider the measure. The Commission approved the Ordinance, with modifications. You can view the Commission's recommendation and documents related to their action, here.
• On June 10, 2009, the measure was heard before the Code Advisory Committee (CAC) where they recommended "non-support of [the] ordinance as written, and in lieu recommen[ed] that the Department of Building Inspection develop administrative procedures to enforce existing requirements." You can read the CAC's letter to the BIC, here.
• On June 12, 2009, DBI Director Vivian Day responded to the Planning Department's recommendation of the Ordinance that can be viewed here. In short, the measure is not enforceable by DBI.
• On June 12, 2009, the BIC approved a motion to notify the Board of Supervisors that it does not support the Ordinance.

The need for the Ordinance warrants further discussion:

• Do we need another ordinance? There are already City ordinances that cover blight.
• What about buildings slated for demolition, or those waiting for rehabilitation? There needs to be a consensus review of this issue.
• Finding insurance on a vacant building can be difficult. How can this be addressed?
• What is the definition of a blighted building?
• The City doesn't know how many blighted buildings it has.
• This is a big brother issue: The City should help building owners improve their buildings, NOT impose another City mandate.

A full transcript/video of the meeting can be found here.

Your BOMA Advocacy Team will continue to monitor the Registration of Vacant/Abandoned Buildings Ordinance and report any new developments on this blog.

Notice of San Francisco Tax Collector Hearing On Proposed Regulations Regarding the Gross Receipts Tax and Early Care and Education Commercial Rents Tax - April 5th

April 5, 2019 – 10:00 a.m. City Hall, Room 400 

1 Dr. Carlton B. Goodlett Place San Francisco, CA 94102 

Pursuant to authority granted under Section 6.16-1 of the San Francisco Business and Tax Regulations Code, the San Francisco Tax Collector invites the public to comment on the following proposed regulations:

• 2019-1: GROSS RECEIPTS TAX – TREATMENT OF REIMBURSED TAXES
• 2019-2: EARLY CARE AND EDUCATION COMMERCIAL RENTS TAX – COSTS PASSED ON TO TENANTS UNDER A LEASE

The hearing will be on April 5, 2019 at 10:00 a.m. in Room 400 of City Hall.

The proposed regulations are available at www.sftreasurer.org. You may comment at the hearing and/or submit written comments. If you would like to submit written comments, it is requested that they be received at the Tax Collector’s Office no later than 5:00 p.m. on April 3, 2019 so that they may be reviewed prior to the hearing. Written comments may also be submitted at the hearing. You will be able to address the Tax Collector during the public comments period at the hearing.

To submit written comments, or for any questions, please contact: David Augustine, Tax Collector Email: david.augustine@sfgov.org 

FEEDBACK REQUESTED: Acceptance of Cash by Brick-and Mortar Businesses

Supervisor Vallie Brown has introduced an ordinance that would require brick-and-mortar businesses to accept payment in cash, if offered, for any transaction involving the purchase of any tangible good or service - other than Professional Services - and that transaction is physically present at the place of business.

The objective of the measure is to ensure that the San Francisco economy is accessible to everyone by requiring cash as a payment method in brick-and-mortar establishments.

A Professional Service is defined in the proposal as:

...services that require extended analysis, the exercise of discretion and independent judgment in their performance, and/or the application of an advanced, specialized type of knowledge, expertise, or training customarily acquired either by a prolonged course of study or equivalent experience in the field. 

Examples of Professional Services include, but are not limited to, services provided by accountants; architects; attorneys; engineers; financial advisers; insurance agents; interior designers; management and other consultants; and software developers.

Notwithstanding the previous sentence, Professional Services does not include services provided by licensed medical and allied health care professionals, such as, but not limited to, doctors, dentists, and nurses. But licensure by the State or City does not in itself mean that an individual provides Professional Services; for example, a cosmetologist is not considered to provide Professional Services as defined. Trade or craft work, such as, but not limited to, shoe repair, tailoring of clothes, and dry cleaning, are not considered Professional Services for purposes of this Article 55.

This measure may have impact on BOMA San Francisco member operations. Please email johnb@boma.com with your thoughts on the definition of Professional Service, above, and other comments you may have about the language in the ordinance.

BOMA International Advocacy Update: Progress Made on Qualified Improvement Property Tax

BOMA San Francisco Members,

On, March 14, the U.S. Senate introduced a bill to correct the qualified improvement property (QIP) tax error that occurred in 2017’s historic tax legislation. Fixing QIP is one of BOMA International’s top legislative priorities, and this new legislation came just days after dozens of BOMA members met with 64 lawmakers or their staffs to advocate for this and other issues as part of the 2019 New Congress Fly-In.

Senators Patrick Toomey (R-Pa.) and Doug Jones (D-Ala.) introduced S. 803, the Restoring Investments in Improvements Act, a bipartisan bill cosponsored by Angus King (I-Maine), Joe Manchin (D-W.Va.), Rob Portman (R-Ohio), Pat Roberts (R-Kan.), Jeanne Shaheen (D-N.H.), Kyrsten Sinema (D-Ariz.), Martha McSally (R-Ariz.) and John Thune (R-S.D.), to correct the QIP issue.

In the hope of simplifying the tax code, the Tax Cuts and Jobs Act of 2017 combined the definitions of leasehold, restaurant and retail improvement property into “qualified improvement property,” but the language granting those property types a permanent 15-year depreciation period, as intended by Congress, was accidentally left out of the final bill. This resulted in two problems. First, the depreciation for interior improvements was reverted to 39 years, up from 15 years. Second, the tax bill also allowed for temporary 100 percent depreciation of property until 2022 with a class life of 20 years or less, but this error prevents QIP from being included.

This issue has resulted in cost-prohibitive renovation projects and stalled investments. As building owners negotiate leases with tenants, QIP is considered while determining tenant improvement dollars. Those dollars bring in building trades such as painters, carpenters, plumbers and electricians. With less money for tenant improvements, these local jobs also will suffer.

The new bill would ensure that the full cost of store, office or building improvements can be immediately expensed until 2022 and at a 15-year depreciation period thereafter, as was originally intended under the 2017 tax reform. The U.S. Congress Joint Committee on Taxation has concluded that this new legislation would have no impact on the federal budget deficit.

BOMA International has been urging Congress to correct the property life of QIP to 15 years and include QIP as eligible property for 100 percent bonus depreciation since the error was discovered in early 2018. For this new bill to become law, similar legislation will need to be introduced in the House of Representatives—which is expected to happen sometime in late March or early April.

100-Year Storm Flood Risk Map - San Francisco Law Requires Property Owners to Disclose Risk to Buyers or Tenants

Click on the image to utilize the interactive 100 Year Storm Flood Risk Map

The City and County of San Francisco recently passed an ordinance that will require sellers or landlords of property in San Francisco to disclose to buyers or tenants that the property is located within the flood risk zone delineated on the San Francisco Public Utilities Commission's 100-Year Storm Flood Risk Map. 

The purpose of this new law is to inform those affected property owners - commercial, residential and including the City and County of San Francisco properties, of their respective risk of flooding. The ordinance was signed by the Mayor on March 8, 2019. A copy of the ordinance is available online at: www.sfwater.org/floodmaps.

You may utilize the interactive map to identify if your property is affected by clicking here. You can also search by neighborhood as well. 

Please take a moment to review the information below from the SFPUC. Reach out to johnb@boma.com for any questions you may have. 

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As San Francisco has developed over time, its hilly topography has been largely paved over. During extreme storms, storm runoff flows still follow the naturally-formed historical waterways. When this occurs, we can experience flooding that sometimes results in property damage.

The SFPUC has developed a 100-Year Storm Flood Risk Map (Flood Map) that shows areas of San Francisco where significant flooding from storm runoff is highly likely to occur during a 100-year storm. A “100-year storm” means a storm with a 1% chance of occurring in a given year. The SFPUC used computer modeling that simulates flooding occurring Citywide under a 100-year storm to identify these parcels.

The purpose of the Flood Map is to inform existing and future property owners about flood risk on their properties and promote resilience. Please find more info on flood resilience efforts below.

The Flood Map shows parcels that are highly likely to experience “deep and contiguous” flooding during a 100-year storm. “Deep and contiguous flooding” means flooding that is at least 6-inches deep spanning an area at least the size of half an average City block.

The City passed legislation that will require sellers or landlords of property in San Francisco to disclose to buyers or tenants that the property is located within the flood risk zone delineated on the San Francisco Public Utilities Commission's 100-Year Storm Flood Risk Map.

This Flood Map shows flood risk from storm runoff only. It does not consider flood risk in San Francisco from other causes such as inundation from the San Francisco Bay or Pacific Ocean. Read our full Flood Map Disclaimer.

If you have questions, want to learn more about the Flood Map, or understand what the SFPUC is doing to promote Citywide flood resilience, please review our Information Sheet or contact us at rainready@sfwater.org. Is your property on the Flood Map? Please click on the map below to utilize a searchable Flood Map where you can enter in your address to find out.