San Francisco’s measure of the available space to lease or sublease had by far the highest percentage jump in the nation during the pandemic. The office vacancy rate soared to a record high 29.4% this month, nearly eight times the 3.7% vacancy rate at the end of 2019, according to preliminary data from real estate brokerage CBRE. Now it is the emptiest market in the nation. Office work, concentrated downtown, accounted for more than 75% of the city’s GDP and the area generated 95% of the city’s business tax revenue in 2021. Here is a primer on the threats, how they might play out, and what the city might do to mitigate them: Remote workįueled by the tech boom, downtown San Francisco became the nation’s most expensive office market. And I think we need, rather than promoting a grand vision, we should … let nature take its course while not going off the rails.” “In San Francisco, there’s a tradition of grand ambitions. “We need an element of modesty here,” he said. Ideas such as office-to-housing conversions, for example, can’t be done quickly or at a big enough scale to make a difference, he has argued. ![]() Ted Egan, the city’s chief economist, believes that the likeliest scenario is that the forces of market capitalism will right the ship. To date, city leadership has yet to pass any major legislation to support significant changes to transform the city. “I think it’s important for us to start to articulate a really proactive vision for the identity of San Francisco.” Some believe current conditions present an opportunity to re-imagine the city.įor example, “rather than thinking about downtown San Francisco as simply the central business district for the region, I think we can be thinking about it as the central social district for the region,” said Alicia John-Baptiste, CEO of urban planning think tank SPUR. “There’s a little bit of desolation in the air, so it definitely seems a little bit apocalyptic to me.” Significant doom loops have caused fiscal crises in other cities in previous decades, such as New York and Detroit. ![]() “It’s sort of ground zero for remote work’s impacts,” Arpit Gupta, an associate professor of finance at New York University who co-authored a widely read doom loop paper last year, told The Chronicle during a recent San Francisco visit.
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