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SAN FRANCISCO – 100 Van Ness is a little different than your average luxury condo here. Greeted by an automatic revolving door, residents of this downtown apartment building relax or work in common areas with coffee machines, meeting rooms, and conference rooms. With its glass cubicles, snack station and desks, it has something office-like about it.
This is probably because it used to be an office building.
No inner city in America has lost more jobs to the pandemic than San Francisco. And no one has more to capitalize on a new vision for recovery: converting unused office space into living space.
It’s been done before, but it’s not easy. According to architects and developers, converting an office building into apartments can be more expensive and difficult than building a completely new residential building from scratch. Of the dozens of vacant or underutilized office buildings out there – and there are plenty of them in San Francisco – only a fraction are actually viable candidates for conversion to housing.
But in San Francisco, the situation is urgent — and it comes on top of a housing crisis that’s crippling California as high prices and a lack of affordable options squeeze lower-income residents. The City by the Bay has gone from having one of the highest occupancy rates for downtown office buildings before the pandemic to one of the lowest today. And city and state leaders believe using some of these vacant buildings as housing is a strategy to address the housing shortage while helping San Francisco come to life with a revitalized downtown.
“We have buildings that are reaching a stage where their useful life as offices has expired,” said Lourdes Castro Ramírez, secretary of the California Agency for Business, Consumer Services and Housing. “So the potential to unlock this building and make housing available depends a lot on the priority this administration has to increase the supply of housing units.”
San Francisco’s office vacancy rate rose from 4.5 percent before the pandemic to around 22 percent today, according to Colliers, a real estate services and investment management firm. Colliers says this is by far the most dramatic change of any city in America, as San Francisco became ground zero for the work-from-home trend and the high-tech downturn that has cost tens of thousands of workers their jobs.
Many of the once powerful tech companies that occupied lush downtown real estate will not be coming back. So unless something changes quickly, there is a risk that the city will become a shadow of itself.
“I’m very concerned about the future of downtown San Francisco,” said Assemblyman Matt Haney (D-San Francisco), who introduced a bill into the state legislature aimed at facilitating the conversion of office buildings into residential buildings.
“Downtown San Francisco was built for a type of work on a scale that isn’t coming back,” Haney said. “Downtown San Francisco needs to be diversified. That means more living space, that also means other uses.”
Haney’s legislation would relax or eliminate permit requirements, which he and others view as onerous. It would include a requirement that 10 percent of housing be affordable — less than the roughly 20 percent typically required for new structures in San Francisco, but intended as an incentive for developers to get involved in potentially difficult projects.
For some housing association organizations, Haney’s proposed percentage requirement is understandable in the context of economics. The Council of Community Housing Organizations (CCHO), a non-profit coalition of developers and tenants, is based in San Francisco and aims to support affordable housing for low-income earners.
“Because the economy was faltering, we were actually considering a cut [the percentage requirement for affordable units]said CCHO CEO John Avalos.
For CCHO, the priority is to support each city’s efforts to create affordable housing — even if that means accepting a lower rate than Haney’s proposed 10 percent.
Haney’s legislation joins several other state and local efforts aimed at encouraging office-to-residence conversions. Gov. Gavin Newsom has included $400 million in his budget proposal to help cities identify office space that can be converted into apartments and begin efforts to do so. San Francisco Mayor London Breed released an executive policy in February titled “Housing for All,” which includes a section on downtown revitalization, including conducting an analysis to be released later this spring to determine which properties would be good candidates for conversion.
“Our mayor and my office are 100 percent confident that the home remodeling is a part of this,” said Kate Sofis, executive director of the San Francisco Office of Economic and Human Development.
The city is working with a global architecture firm called Gensler, which conducted a study of downtown San Francisco that focused on 36 different building types and identified 12 as likely candidates for conversion. Many features of office buildings, particularly newer ones with open floor plans, do not readily lend themselves to conversion into individual apartments with exterior windows, kitchens and their own heating and cooling systems. Additionally, office buildings may not meet housing codes or requirements for things like parking and landscaping, and may require costly seismic upgrades and new landscaping, which could discourage developers.
Holly Arnold, a project manager at Gensler who worked on the San Francisco study, said she’s heard a lot of interest from commercial building owners in converting their lots into apartments, but “less so from developers at the moment.”
“I think the conversation about making these conversions possible is difficult,” Arnold said. “It’s a combination of factors that have to be right for these conversions to make sense.”
But as San Francisco aims to meet the state goal of adding more than 80,000 housing units over the next eight years, converting offices into apartments could add about 2,500 of those, Arnold said — enough to help.
And for some residents of 100 Van Ness, a lasting corporate feel isn’t necessarily a bad thing.
Tanner Guastella, a 27-year-old technician, said one odd thing about his apartment is that it has air conditioning — an unusual convenience in San Francisco. As a hybrid worker, he enjoys the fact that the building resembles an office a bit when he’s working from home.
The shared lounge, he said, “has something like a real conference room where you can walk in and make a call or work.”
100 Van Ness opened in 2015 and offers numerous amenities and 418 apartments. Studios rent for around $3,000 a month, according to the building’s website.
“The Transformation of an Icon” says a manual on the rooftop, which includes historic photos of the skyscraper that once housed the California State Automobile Association. Remnants of corporate life are sparse but hard to miss: a coffee machine station parked next to two glass-separated meeting rooms, high-rise overlooking the Civic Center and downtown.
The project was developed by the Emerald Fund, whose president Marc Babsin said he was struggling with the city’s restrictions on housing, restructuring the layout and overhauling mechanical, plumbing and electrical systems. It took seven months to get permits and three years to complete the project at $325 per square foot.
“We’ve asked policymakers at the state and local levels to provide incentives for converting offices into apartments,” Babsin said, “particularly in downtown areas.”
