Converting Empty Offices Into Much-Needed Housing
THE PROBLEM
Downtown San Francisco Has Been Slow to Rebound
San Francisco’s post-COVID downtown recovery has lagged behind that of most major North American cities. About one-third of office space is vacant. Two reasons: many of San Francisco’s jobs can be done remotely, and many workers can’t find afford- able housing options near their jobs, dampening their desire to commute to the office.
THE OPPORTUNITY
Reinvent the Business District as a Social District
San Francisco faces a huge opportunity to reimagine its urban center as a 24-hour, mixed-use hub. Adding housing in the urban center could dramatically shorten commutes for many downtown workers and support small businesses.
THE POLICY SOLUTION
Turn Unused Offices Into Apartments
This one tactic could both reanimate the city’s core and provide housing in an area rich in transit, jobs, culture, and entertainment. SPUR research found that office conversions could create as many as 14,000 housing units in downtown San Francisco if the city addresses legal and economic barriers. We recommended changing planning and building codes, relaxing inclusionary housing requirements, reducing city fees, and creating property tax incentives to transform obsolete offices into apartments.
BIG WINS
City and State Leaders Mobilize
Through briefings with city and state leaders, SPUR and its partners influenced the mayor and Board of Supervisors to adopt legislation to relax planning and building codes to increase flexibility for conversion projects. Our recommendations inspired the mayor to introduce a successful ballot measure to exempt conversion projects from real estate transfer taxes and led state legislators Wiener, Haney, and Ting to pursue state bills that would make it easier to revitalize downtown and convert office buildings.
PROJECTED IMPACT
More Housing, More Life Downtown
Other cities provide a model for what’s possible: New York created some 13,000 homes over 15 years with partial property tax exemptions and abatements for office-to-residential conversions. Calgary created nearly 1,200 homes in just two years through financial incentives to property owners who undertake conversions. By enabling such projects, San Francisco can simultaneously increase housing and build a resilient downtown.
