San Francisco's SoMa District May Transform Office Towers into Residential Homes

San Francisco is considering a major shift in its zoning policies for parts of the South of Market (SoMa) area, which could transform sites previously earmarked for office buildings into residential spaces. This change is being championed by Mayor London Breed, who has introduced an ordinance to eliminate the current requirement for six sites in the Central SoMa Plan to be used for office towers.

Challenges of the Central SoMa Plan

The Central SoMa Plan, introduced in 2018, aimed to develop 8 million square feet of office space to accommodate 32,000 workers. However, the plan has not materialized as expected, with six out of eight large development sites remaining unused. This has resulted in abandoned lots, closed businesses, and empty streets, adversely affecting local shopkeepers.

Addressing San Francisco's Housing Needs

Mayor Breed's proposal focuses on removing barriers to housing development in Downtown San Francisco to create more affordable living options. The city is grappling with a record office vacancy rate of 37 percent, with SoMa experiencing an even higher rate of 38.5 percent. Since 2020, office tenants in Central SoMa have vacated 1.8 million square feet more than they have leased, equating to space for 8,000 workers.

Potential Office-to-Home Conversions

City planners suggest that sites at 88 Bluxome Street and 725 Harrison Street may be ideal for converting office spaces into residential units. BXP, a Boston-based company that owns the Harrison Street site, is open to considering new zoning options. Although the site currently houses a parking lot and a commercial building, preliminary studies indicate it could support more than 1,000 homes. While market conditions currently deter any immediate revisions to their plans, BXP remains open to exploring residential development in the future.

A Shift in Development Strategy

The Central SoMa Plan took eight years to gain approval and was designed to extend the Downtown skyline toward South of Market, allowing developers to build taller office towers in return for $2 billion in fees for infrastructure improvements. However, changing market dynamics and high vacancy rates have prompted a reevaluation of this strategy.

Successful Housing Initiatives

Strada Investment Group, a local developer, is leading the way with an active Central SoMa project—a 501-unit residential complex at 555 Bryant Street. The success of this project could inspire other developers to consider housing projects, potentially revitalizing the area and addressing San Francisco's pressing need for affordable housing.