San Francisco is once again poised to be a pioneer in urban agriculture policy. In June, Supervisor David Chiu introduced an ordinance that would allow property owners who contract their land into urban agricultural use for at least five years to receive a property tax reduction. If passed, San Francisco would become the first jurisdiction in California to create an urban agriculture incentive zone as permitted by state Assembly Bill 551.
The legislation has a number of key features:
- The entirety of San Francisco would be considered an urban agriculture incentive zone, which means any parcel in the city that met the eligibility requirements set out in state and local law could receive a reduced property tax assessment.
- The Planning Department would be responsible for certifying a parcel’s eligibility based on its size, existing structures and access to water.
- If a parcel is eligible, the property owner would submit an application to the county agricultural commissioner explaining the plans for agricultural use of the site. The proposal goes above and beyond the state’s minimum requirements by requiring property owners to demonstrate through their plans that the farming or gardening on the property would have some interface with the public through either distribution or sales of food; educational activities such as classes and workshops; or use of the site as a community garden with members other than the property owners' family.
- The agricultural commissioner would be responsible for both reviewing the plans in the application and conducting annual site inspections after a contract is signed to ensure that the site is used solely for agricultural purposes.
- The city assessor-recorder would be responsible for calculating the change in property taxes and providing that information to the agricultural commissioner and property owner.
- If an application is approved, the property owner would sign a contract with specific terms, to be enforced by the agricultural commissioner.
- The legislation explicitly allows the agencies involved to establish fees to process the initial application (no more than $250) and defray the costs of annual inspections (also no more than $250).
The legislation also has a number of safeguards to prevent abuse:
- Any proposed contract that would reduce property tax revenue to the city by $25,000 or more each year would automatically be sent to the Board of Supervisors for review.
- If a contract is canceled by either the property owner or the city because the property owner is found to be in breach of contract prior to the expiration of the five-year term, the landowner would be required to pay the city all back taxes, with interest (as determined by the assessor-recorder).
SPUR strongly supported the state legislation, has been involved in providing feedback on early drafts of the legislation and is in conversations with the various agencies that would administer the program. A few issues remain outstanding, including whether there should be additional oversight of the application process; additional revenue thresholds that would require Board of Supervisors review; and the timing of the application cycles. We expect that, as with most legislation, amendments will be added as it moves toward its first votes in the Board of Supervisors’ Land Use and Economic Development Committee, tentatively scheduled for July 21.
While some program details remain to be worked out, we are optimistic that they will be resolved in a way that is manageable for property owners interested in applying, as well as for the city agencies involved in administering the program. We hope it will encourage greater land access and land tenure for urban farmers and gardeners so that more people in the city can benefit from urban agriculture.