San Francisco’s Downtown is recovering slowly and in an uncertain environment due to new and evolving work from home policies. San Francisco is not alone in this position. Our office attendance is currently hovering just below 40% pre-pandemic levels, which is in the same range as cities like New York, Los Angeles, and San Jose. Even on of the best performing major cities, Austin, is only at 60% of return to office from pre-pandemic levels.
The reality is that while San Francisco has its own challenges, this is a shift that cities are experiencing and grappling with across the country. What’s unknown at this time is the permanence of work from home, and the extent of what will happen into the future. But even within this unknown, City Departments are working together to plan for the future of our Downtown.
We know San Francisco has significant advantages as an economic engine for the region and as a global center of innovation — and it has very real challenges. And while there are some factors beyond the City’s controls, there are strategies the city can implement to bolster its economic recovery, especially in the downtown and economic core. Some of this work has already started, but there is more to do.
My Administration has identified five areas of focus for long-term economic recovery strategy in the current and foreseeable environment. As I said before, no one has any perfect answers to what lies ahead with work from home, but we are preparing to adapt. By focusing attention to these five key areas, San Francisco can take our economic recovery forward beyond this immediate moment, and build towards a stronger post-pandemic future.
Those are focuses are:
- Filling Vacancies and Diversifying Industries
- Enhancing Downtown Vibrancy
- Maintaining a Clean and Safe City
- Increasing and Improving Access to Downtown
- Growing our Labor Force
Over the coming months, we will be working on research, programs, and policies to address each of these focuses with a goal not just of bringing workers back to San Francisco, but of adapting to what the future of work and industry in San Francisco looks like. This City has weathered changes and reinvented ourselves throughout our history, and I am confident that San Francisco will emerge from this pandemic stronger than ever.
Filling Vacancies and Diversifying Industries
San Francisco needs a diverse set of industries to support a resilient Downtown and economic core. We are the job center and economic engine for the entire Bay Area. Our investment and focus on recruiting tech companies to San Francisco has created significant economic benefits for our city over the last decade, but no one could have foreseen how a once in a generation pandemic would impact work habits. What we can see now is that diversifying our economy is a smart resilience strategy.
With our office vacancy rate at 22.4% right now, we have an opportunity to recruit new businesses, bring back priced out companies, and invest in industries that bring a range of opportunities to our residents. We have had success in this area previously — like the focus on recruiting Life Sciences to Mission Bay that has led to the neighborhood serving as an innovation hub of groundbreaking research and innovation.
To support these efforts, we have contracted with the Bay Area Council and KPMG to conduct research about the impact of the COVID-19 pandemic within San Francisco’s Downtown and economic core so we can better understand ongoing changes and the broader impacts of those changes to San Francisco. This research will lead to recommendations for actions San Francisco can take in order to support its economic health, including strategic sectors to recruit. We also need to continue our work to make our Downtown a healthy mix of housing and office.
Over the last 35 years, development in neighborhoods like Transbay, Rincon Hill, Central Soma, and Mission Bay have all added new homes as we’ve also added commercial space. In fact, over 2/3 of the housing built in San Francisco over the last three decades, has been in or within 1 mile of the Downtown. And that work continues. Right now, there is a proposal at 50 Main Street to rehab an office building that will include adding over 800 units of new housing, along with commercial space, right in the heart of Downtown.
Our Office of Economic and Workforce Development is working to identify strategic opportunities to add housing in and around Downtown, whether that’s through infill development or conversion of other types of space to housing. With regards to conversion, housing is already principally allowed in the Downtown area, and conversions are expensive. While no property owners have approached the City about conversion, we are open to any proposals that come forward. And conversion opportunities aren’t just about housing — there are also opportunities to convert spaces in office buildings into a life sciences or manufacturing spaces. But any conversions of office space are one piece of a larger Downtown revitalization effort.
Enhancing Downtown Vibrancy
Our Downtown Core needs to be a diverse and vibrant area with attractions that entice people to choose both to come into work and to visit it for reasons beyond work. While longer term strategies around diversification are critical, economic vibrancy initiatives can take root more quickly as an interim strategy.
The city has a lot of advantages, including developed regional transit systems, a strong restaurant and bar scene, a stunning waterfront of promenades, plazas and parks, and attractions like Oracle Park and Chase Center. San Francisco also has a robust and multifaceted Arts and Culture sector with world class institutions, cutting edge artists, and community based cultural groups. By opening our public spaces and empty storefronts to the talents of these creative institutions and groups, San Francisco can make our downtown a more exciting place to visit for workers and residents.
A lot of this work has already begun, and it’s the most immediate thing we can do to support recovery. Examples of ongoing work include our recently funded budget efforts to fund new festivals; beautify, make improvements and add local artists displays to our public spaces; fill vacant storefronts by partnering property owners with small businesses and artists; and launch campaigns aimed at attracting both residents and visitors to visit our downtown, as well as recruiting entrepreneurs looking to start a new business.
As these initiatives take hold and prove what works to draw people downtown, we need to make permitting easier to help creative and effective ideas move forward quickly. And we are working on policies and incentives to propel the entry of new business, events, and other tenants that transform our downtown.
Maintaining a Clean and Safe Downtown
Our Downtown should be a welcoming, clean, and safe environment for residents, office workers, convention visitors, tourists, and small businesses. This has been a big focus for us over the last year. Our city workforce took a hit during COVID, including our police staffing and street cleaning workers, but our budget fills 200 vacant positions at our Police Department and we’ve recently made significant progress in hiring new workers at Public Works, including for street cleaners.
We also have added ambassadors all across our Downtown and surrounding tourist areas, to provide a consistent and welcoming presence and to be the “eyes on the street” so issues around the cleanliness and safety of our streets are known and addressed by our City Departments. These Ambassadors and our efforts around Moscone Center have received significant positive feedback from visitors. We’ve received thank you notes, calls, and emails with stories about how our Welcome Ambassadors have added a personal touch that brightened someone’s day or offered them a unique experience as part of their visit. In addition to working with our Ambassador programs, our city departments are also coordinating with our Community Benefit Districts that have staff doing cleaning every day to ensure maximum coverage.
One of the significant concerns we hear around public safety include the proliferation of open-air drug dealing near Downtown. In 2022 so far, just in the Tenderloin, our police officers have made over 300 drug arrests, seizing nearly 50 kilos of narcotics, including 32 kilos of deadly fentanyl. Our new District Attorney has pledged to bring real accountability to these arrests, especially those dealers who are arrested multiple times or with significant amounts of drugs on them. This brazen drug dealing cannot be allowed and we have to keep pushing to deliver on these accountability measures.
We also know that there has to be support for those who are struggling on our streets. We are adding significant new resources for those struggling with mental illness, addiction, and homelessness. This includes ongoing plans to add:
- 400 new mental health treatment beds to the over 2,000 we already have
- 1,000 shelter beds to the roughly 1,500 adult and youth beds we had on July 1 to help more people transition off the street.
- 3,000 units of permanent supportive housing over the last two years so we have places for people to call home off the street.
Those resources are essential to bringing people indoors and getting them the help they need. But as we add these resources, we cannot continue to let the disruptive and dangerous activities to continue on our streets.
Our next steps here include quickly moving forward our recently funded Police Academy Classes, to fill those vacant positions. To be clear, law enforcement staffing is a national issue, not just a San Francisco one, which is why we are working to better compete with other jurisdictions. This includes recruitment and retention bonuses recently included in our recent budget for attracting recruits and keeping veteran police staff. We also need a longer-term staffing plan for our next budget cycle so that we aren’t just backfilling empty positions, but growing our staffing to meet the voter-mandated staffing levels.
Improving and Expanding Connections to Downtown
We need a safe and reliable transportation system that makes it easy for both local and regional travelers to access downtown and have a positive experience on transit and when traveling by vehicle to the office. When people have more flexibility around their schedules, knowing that their ride into work will be efficient, safe, and clean is more important than ever.
Our Downtown is fortunate to be at the center of local and regional connections — we have our SFMTA subway bringing people from throughout San Francisco, BART Stations up and down Market Street, and Caltrain in SoMA. We have Ferry services landing right at the Embarcadero. Taking advantage of these regional connections is essential for our recovery.
We’ve opened major projects opening with Van Ness BRT opening recently and the Central Subway scheduled to open soon. Regional ferry service has expanded during the pandemic. We also dramatically expanded the SOMA Bike Network during the pandemic so that now there is a connected network throughout the neighborhood, making it easy to get around, or ride north from Caltrain.
While Muni ridership recovery in our neighborhoods is going well, it hasn’t come back at the same level downtown. But there are options for people to get downtown efficiently — SFMTA is currently providing more downtown service than the current demand. And although the express routes aren’t back in service, Muni’s rapid routes are moving riders about as quickly as the express routes previously did.
Our focuses right now are on getting people comfortable to be back on transit, including when they arrive at our stations in San Francisco. I’ve asked SFMTA to work with BART on assessing and improving our stations for cleanliness and safety. We also have a staffing shortage at SFMTA with 1,200 vacant positions for transit operators, mechanics, and maintenance workers that will hamper our recovery. We are working aggressively to staff up and train more operators. We were able to hire 237 transit operators in the last fiscal year, and we have hired an additional 107 operators since then, and we are actively recruiting more.
Growing our Labor Force
We need to ensure that all business have access to workers. We are adding jobs and have strong growth, particularly in our professional sectors, but still have 30,000 hospitality industry jobs that have not yet come back on line. As our tourism industry recovers and other sectors in our city continue to grow, they need qualified candidates. However, our unemployment rate is at a record 1.9%, despite having 13,000 fewer workers employed than before the pandemic.
This is partly the result of a reduced labor force — another national phenomenon that San Francisco is also grappling with. We are seeing the effects of that reduced supply in our challenges around hiring government workers like police officers and transit operators, and I know our small businesses, retailers, and entertainment industries are all facing the same challenges.
The good news is we have strong existing workforce development programs through our Office of Economic and Workforce Development. We’re training much-needed emergency medical services personnel through our City EMT partnership with the Fire Department. CityDrive is preparing commercial drivers for SFMTA transit operator and Teamster shuttle driver positions. Our CityBuild partnership with the Building Trades and City College is helping construction workers get back to work while training the next generation of union apprentices. And our Hospitality Initiative is supporting men and women dislocated during the pandemic to return to work as we continue to advance our economic recovery.
But while we will continue to invest in programs like these to prepare candidates with the skills they need, we must also grow the size of the pool. We are suffering from a critical lack of housing, which is why our work to streamline and build more housing — not just in the Downtown core, but all over the city — is essential. Our plans to meet our state-mandated goals of adding 82,000 new homes in the next 8 years are absolutely essential to our recovery and making our city more resilient to future shocks that could impact our labor force.
These five areas of focus will serve as the foundation for the work we are doing over the coming months around supporting our Downtown and Economic Core. The City cannot — and will not — do this alone. We will be working with the private sector and leading civic organizations to continue this work. This is about everyone recognizing what needs to be done, and working together on solutions, whether they come from the City or any of our partners, to move our City forward.