San Francisco Officers Transfer To Determine Potential Websites for Changing Places of work to Residences
San Francisco officials believe the office-to-home conversion could help the struggling local economy as the city known for its pre-pandemic tech growth is now facing record-high office vacancy rates.
The Planning Department and Office of Economic and Manpower Development have issued a request for information to scout out potential redevelopment sites and assess how viable these projects would be and what is needed to remove any regulatory hurdles.
The move coincides with recent regulations passed by the San Francisco Board of Supervisors to help the city’s economic revival after years of weak leasing activity, lack of sales momentum and office and retail tenant migration.
With the request, officials hope to not only simplify the redevelopment process for developers and property owners, but also figure out how to focus the city’s efforts to make it a reality. To qualify, the request states that respondents must “either be in control of the site, be in discussions with the property owner about a possible purchase, lease or other investment in the property, or be a design professional or a other authorized representative of a property owner.” or developer.”
City leaders across the country have opened up to the idea of converting one property use to another to adapt to the changes brought about by the pandemic in recent years. As demand for office space in particular has waned, the idea of converting vacant buildings into alternative uses such as housing, research and development space, or even hotel rooms has been mooted in markets like New York, Chicago, Los Angeles, and more in Washington, DC
However, the situation in San Francisco is relatively dire compared to other cities in the United States, with the office vacancy rate rising to over 17%, according to CoStar data, compared to about 7% in 2019. In some parts of downtown, the vacancy rate is around almost 30%, and with rental activity largely subdued, there are no signs of a turnaround imminent.
The combination of remote work, record-breaking sublease availability and office vacancy rates, and deteriorating socioeconomic conditions has resulted in a budget deficit of nearly $800 million since the pandemic began. Additionally, office leasing and investment activity is now a small fraction of what it was before 2020, meaning this key source of tax revenue is unlikely to return any time soon.
As city officials debate how to encourage alternative uses for office space, it takes a while for the talk to translate into action. For example, some office buildings are less suited to residential use than others, and such a move away from office buildings can represent a big bet for an owner that remote working will continue to be as common as it is today.
Only a limited number of existing office buildings are really suitable candidates for possible conversions. according to CoStar analysis, and are unlikely to have a major impact on office or apartment building market fundamentals.
Nevertheless, while the city office market Although the demand for housing in the city is still increasing, although it is only a shell of what it used to be.
According to data from CoStar, asking rents average nearly $3,050 per month, making San Francisco the most expensive multi-family market in the United States. By comparison, the city has lost its reputation as the country’s most expensive office market — it was overtaken by Silicon Valley and pushed to second place — and with its tech-heavy workforce boasts the lowest return-to-office metrics of any major market in the nation .
The motion and recently passed legislative package are likely to provide more flexibility in transforming traditional office properties into potential residential or retail properties and are the latest in a series of strategies San Francisco has adopted to reposition the city as it moves ever further from Removed from its original location pre-pandemic focus on the technology industry.
San Francisco officials say it’s worth the effort.
When it comes to the potential for converting office towers into apartments, demolishing buildings for new construction and attracting startups to settle in the city, “we need to re-imagine what downtown can look like,” said Mayor London Breed recently. “We open the door to do more. San Francisco has never had to work hard for tourists, visitors or people who want to shop here, so many restrictions have been imposed on people in certain parts of the city. The policies we implemented have changed that, so you can now convert an office into living space much more easily.”