RECENT REZONING OF LOTS IN EASTERN NEIGHOBORHOODS HAS
MADE ILLEGAL AT LEAST A THOUSAND RESIDENTIAL OR OFFICE OR
RETAIL SPACES WITHOUT PROPER PERMITS

How do you legalize office or residential or retail uses of your building before you may have to shut them down, now that your property is in an Industrial Use only zoning district?

Under new zoning (called the “Eastern Neighborhoods Rezoning”) effective January 19, 2009, the Board of Supervisors has created a number of new areas in the eastern side of the City which can now be used only for activities called “production, distribution, and repair” (“PDR”). Formerly, these districts (East SOMA, the Mission, Showplace Square/Potrero Hill, and the Central Waterfront districts (mostly “M” zoning districts), contained the most permissive zoning, allowing a mixture of PDR, housing, office, and retail.

More than 1,000 of lots zoned M-1, which allowed a wide assortment of uses including residential, office and retail, have been rezoned to industrial only (PDR). You may wish to call the Planning Department at 558-6377 to find out if your lot has been rezoned to allow only industrial uses.

How do You Know if You Have Proper Permits? Those with property permits are grandfathered in and the new zoning does not prohibit continuation of the use (unless you change your use or terminate the use). Many owners do not know if they have correct permits for their use because most owners and tenants left the submittal of alteration permits to contractors, who may have filled in the “proposed use” box in an alteration permit in a wrong way. Also, in the dot-com boom, the immediate needs for office space were so intense that owners may have placed tenants in spaces without going through the lengthy San Francisco permit approval processes.

WHAT ARE DEEMED ILLEGAL USES THAT HAVE TO TERMINATE?
The rezoning has made existing office uses in PDR districts into either “legal” nonconforming ones or “illegal” non-conforming ones. Illegal ones are those without Building Department permits which explicitly call out the use as office. Notices have gone out to most of you from the Planning Department to notify you of this change. If the uses are illegal, enforcement by the Planning Department will commence January 19, 2012. Those that are legal may continue indefinitely as long as (1) the alteration permits by which they moved in indicate on them that the proposed use is “office” (2) there is no physical expansion or intensity of use, (3) there is no period of office vacancy for three or more years, and (4) there is no change of office use to a PDR use at any future time.

WHAT IS THE GRACE PERIOD FOR COMING INTO COMPLIANCE BEFORE BEING SUBJECT TO TERMINATION?
If an occupant of a space has moved in without benefit of permits and has been in the space for more than two years as of January 19, 2009, the occupant or owner will have three years (starting January 19, 2009) to legalize by paying a fee of $10.50 per square foot.

The legitimization procedure can be used to legalize office, retail or residential space in areas that no longer allow such uses. The only thing you cannot legalize is live work space without benefit of permits.

WHAT IF LEGALIZATION IS IMPOSSIBLE?
If for certain reasons a particular space cannot be legalized (for example, the user of the space has moved in within the past two years), or if one is moving into a space for the first time and has a combination of PDR space and office space (even where the office space is as much as 2/3 of the space), one can seek approval as an Integrated PDR Space (“IPDR Space”). The City has decided to allow this for only a limited number of building types, and may extend it to other buildings once the City determines the success of this. The creation of IPDR space will trigger a fee, which may be partly forgiven under certain circumstances.

M. Brett Gladstone
www.gladstoneassociates.com