Strategy

Economies are dynamic and the needs of businesses and institutions change over time. The COVID-19 pandemic triggered a dramatic change in the way office-based businesses operate and how they use office space. Prior to the pandemic, San Francisco’s office vacancy rate was minimal and new businesses struggled to gain access. Now, different office configurations and commercial occupancy models are emerging as businesses adapt to post-pandemic norms. New industries and business types may have vastly different space requirements and configurations. Other underutilized commercial buildings may be able to convert to entirely new uses, such as hotels, institutions, museums and cultural venues, research and design spaces, or housing. By reducing unnecessary zoning and process impediments and actively facilitating the ability of companies and building owners to update and adapt office buildings to emerging uses, we can support new job offerings, economic growth, and a renewed vibrancy in our Downtown. 

The City has begun to advance a series of initiatives and will launch additional programs that support this strategy: 

• Amend the Planning Code to ensure flexible zoning Downtown to accommodate the widest possible range of activities and uses.
• Prepare a housing conversion analysis to identify the feasibility of office-to-residential conversions and recommend supporting policy changes.
• Develop a recovery entitlement program that would allow time and flexibility for previously entitled development projects to adjust to market conditions.

 

Initiatives
 

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Flexible zoning Downtown

Downtown’s historically office-centric environment should be a welcoming place for the widest possible variety of commercial, cultural and residential uses and activities.  

• As part of its Future of Downtown effort, the Planning Department is exploring adjustments that would simplify Downtown’s zoning and building controls in order to support the establishment of new commercial, institutional, and residential uses and flexible spaces through a clear and predictable process.
• Zoning and process changes will support an active and dynamic experience for residents, workers and visitors to the area, and will be informed by the findings of the Competitive Industries Assessment being conducted by the Office of Economic Workforce Development to consider the use and space needs of growing and high-potential industries that will be key to San Francisco’s economic future.
• Planning aims to develop legislation for introduction by summer of 2023. 

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Housing conversion analysis

As the City’s economic core, Downtown has developed as a place for offices and businesses that support offices and office workers - leaving a scarcity of housing options. In recent decades significant amounts of housing have been added in and around Downtown, particularly in Rincon Hill, the East Cut and SoMa. The shift in office demand brought on by the pandemic could present a unique opportunity to weave more housing into the City’s office core, creating the potential to support a greater variety of businesses and institutions in the area while also allowing workers to live closer to their jobs.

• To explore this potential further, the City is exploring the viability of converting underutilized Downtown commercial buildings to residential uses. As part of its Future of Downtown effort, the Planning Department, in partnership with SPUR and Gensler, is conducting an analysis to better understand the key elements that may make certain buildings good candidates for conversion, how many existing office buildings might be suitable for conversion, and what would make residential conversions financially feasible.
• The results of this analysis will be released in Spring 2023 and include a set of recommendations for how the City might facilitate such projects, including any zoning or building code changes necessary to support the conversion of existing office or commercial spaces into residential uses Downtown.

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Recovery entitlement program

The economic disruption and market uncertainty brought on by the pandemic has prevented many developments that were entitled in the years leading up to and during the pandemic from moving forward to construction. In some cases, the market has changed and the originally proposed development program needs to be reevaluated.

• While project sponsors are reconfirming the viability of their project, the planning entitlements for some may expire or require discretionary approval from the Planning Commission to be extended or modified - adding cost and uncertainty that could risk the feasibility of these projects.
• The Planning Department is assessing the inventory of development projects in the pipeline that may seek to extend their entitlements or propose modifications in response to changed market conditions and is exploring options to expedite such extensions or revisions.
• Such a program would allow already entitled projects a chance to quickly regroup and pivot to a mix of uses and designs that will be most successful in our new context without having to restart the development process.

 

See other economic recovery strategies

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