Beyond the 9-to-5: How San Francisco Is Turning Offices Into Homes

At a Glance

* Downtown San Francisco is opening up to residents. With nearly a third of the city’s office space still vacant, office-to-housing conversion has become central to the downtown recovery plan.

* New laws made the numbers work. Proposition C waived transfer taxes on converted buildings, a 2025 ordinance waived certain fees, and the Downtown Revitalization Financing District, signed in February 2026, offers projects up to 30 years of property tax incentives.

* The first projects are moving forward. Hudson Pacific’s 136 apartments at the historic 901 Market Street were approved in October 2026, and 150 Hayes Street plans 104 homes with construction possible as early as June 2027.

* The AI boom is driving demand. San Francisco’s median home sales price reached a record $2.15 million in early 2026, and the city aims to bring 30,000 new residents and students downtown by 2030.

* The nine-to-five is evolving. Districts built for business, like the Financial District, qualify for the new incentives and could become neighborhoods where people live, dine, and stay after hours.

For more than a century, downtown San Francisco has kept business hours. The Financial District fills by eight in the morning, empties by seven at night, and spends its evenings in a quiet that feels almost architectural.That rhythm is about to change.San Francisco is now actively turning its office buildings into homes. A sequence of voter measures, state laws, and a new financing district signed by Mayor Daniel Lurie in February 2026 has given developers a workable path to convert underused towers into residences. The first projects are approved. More are in the pipeline. For the first time in a generation, the question is no longer whether people will live downtown, but how soon.

Why Now

Two pressures have defined post-pandemic San Francisco: too much empty office space and not enough housing. Even with artificial intelligence companies fueling an office rebound, nearly a third of the city's office space remained vacant as of mid-2026. Supervisor Stephen Sherrill put the scale in local terms: roughly 20 Salesforce Towers' worth of vacant office space.At the same time, the housing market has turned decisively. Compass reported in April 2026 that San Francisco's median home sales price reached a record $2.15 million, up 18 percent from the prior year, with the AI boom as the primary driver. Demand has returned. Supply has not. Converting obsolete offices into residences answers both problems at once.The city has also set a clear benchmark. In March 2024, then-Mayor London Breed launched a goal of bringing at least 30,000 new residents and students downtown by 2030. Part of that plan calls for converting at least five million square feet of office space into approximately 5,000 homes, welcoming some 10,000 new residents to the historic office core. Every conversion now in the pipeline moves the city closer to that number.

The Laws That Made It Possible

For years, the math did not work. In early 2024, the City Controller's Office concluded that office conversions did not appear financially feasible. What followed was a deliberate series of policy changes, each one narrowing the gap.Proposition C (March 2024). San Francisco voters approved a waiver of the city's real estate transfer tax on the first sale of a property after it is converted from commercial to residential use. The waiver applies to the first five million square feet converted citywide, and projects must secure a qualifying certificate before January 1, 2030. On properties valued above $10 million, that tax runs between 5.5 and 6 percent, so the savings are meaningful.State legislation. AB 2011, effective July 2023, allows by-right approval of qualifying commercial-to-residential conversions. AB 2488, authored by former Assemblymember Phil Ting and signed in 2024, gave San Francisco the authority to create a dedicated financing district for conversion projects.Fee and affordability waivers (February 2025). An ordinance sponsored by Mayor Lurie with Supervisors Matt Dorsey and Danny Sauter waived certain city impact fees and inclusionary housing requirements for conversions, and extended the Commercial to Residential Adaptive Reuse Program, which streamlines approvals.The Downtown Revitalization Financing District (February 2026). This is the centerpiece. Effective February 12, 2026, the district returns the new property tax revenue a conversion generates to that project as annual payments for up to 30 years. Projects can enroll through 2032. The district covers the Market Street corridor from the waterfront to Civic Center, the Financial District, Union Square, the East Cut, Rincon Hill, and Yerba Buena. The city's financing plan projects that approximately 50 properties could be suitable candidates, creating up to 4,400 apartments. City leaders modeled it on a New York tax incentive that led to the conversion of more than 12,000 housing units in lower Manhattan.The effect on timelines is already visible. Hudson Pacific's application at 901 Market Street moved from submission to approval in about four months.

Which Building Comes First

The race to be first has had false starts, and they are worth understanding.The Warfield Building at 988 Market Street was slated to become the city's first post-pandemic conversion before its developer defaulted on its loan; the building was sold to two nonprofits in 2025.The Humboldt Bank Building at 785 Market Street tells a more hopeful story. The 19-story Beaux-Arts landmark, begun before the 1906 earthquake and completed in 1908, is planned for 124 apartments. After a ceremonial kickoff in October 2024, the project paused amid financing challenges, and the ownership group signed short-term office leases while waiting for the new financing district to take shape. Forge Development Partners now hopes to begin construction in 2027.The city's most successful precedent remains 100 Van Ness Avenue, where Emerald Fund converted a 29-story office tower into 418 apartments in 2015.Under the new framework, a fresh set of projects has moved to the front:901 Market Street (Hudson Pacific Properties). The former Hale Brothers department store, designed by the Reid Brothers and built in 1912, received Planning Department approval in October 2026 for 136 apartments above retained ground-floor retail. Ankrom Moisan Architects' plan includes 29 studios, 73 one-bedrooms, and 34 two-bedrooms organized around a central atrium. With entitlements in hand, it is positioned as the leading candidate to become the first major conversion of this new era.150 Hayes Street (Emerald Fund and SDG). A vacant six-story building one block from City Hall, once part of the same California State Automobile Association campus as 100 Van Ness. The plan calls for 104 apartments, a new seventh floor, and a glass-and-bronze facade designed by Solomon Cordwell Buenz. Construction is estimated at roughly $45 million, with work starting as early as June 2027 and lasting about 18 months.2300 Stockton Street (Ocean Avenue Real Estate Fund). A 70-unit proposal near Fisherman's Wharf, extending the conversion conversation beyond the downtown core.Behind these, the city's Office of Economic and Workforce Development has reported four conversion applications on file and multiple calls a week from interested owners. As one city official put it, "We're finally seeing people looking seriously at conversions."

From Business District to Neighborhood

Consider what this could mean for a place like the Financial District, the clearest symbol of San Francisco's nine-to-five. No conversion there has been filed yet, but the district sits squarely within the new financing zone, and city staff reports fielding multiple calls a week from interested owners. Picture it on a Tuesday at nine in the evening: not empty, but lived in. Residents walking dogs along Montgomery Street. A neighborhood café that stays open past the commuter rush. Weekend brunch in Jackson Square. A short walk to the Ferry Building on a Saturday morning, then home again without crossing a single bridge.Some of the groundwork is already in place. Front Street, between California and Sacramento, became California's first designated entertainment zone and has already hosted events like Oktoberfest. Mayor Lurie's Heart of the City plan has raised more than $50 million toward a downtown where people live, work, play, and learn, and its Vacant to Vibrant program continues to fill empty storefronts in Union Square and the Financial District. The city reported in late 2025 that crime was down more than 40 percent in both neighborhoods.What conversions add is what events and storefronts cannot: permanent residents. People who shop on weekends, eat dinner close to home, and give a district a reason to stay awake after the office lights go off. That is how a business district becomes a neighborhood.The architecture helps. Several leading projects occupy historic buildings, including the 1912 Hale Brothers department store at 901 Market Street, with the kind of character new construction rarely replicates. Downtown living in San Francisco may soon mean residences inside landmarks.

What This Means for the Market

Perspective matters here. A few hundred units is modest relative to San Francisco's overall housing needs, and only a fraction of office buildings are physically suited to conversion; Moody's estimated about 13 percent of the city's older office stock as viable candidates. Most early projects are also planned as rental apartments rather than for-sale residences. This is a long transformation, not an overnight one.Still, the direction is clear. The policy framework is now in place, approvals are moving faster, and the conversions are arriving in a market defined by renewed demand and constrained supply. For buyers, a new kind of downtown residence is emerging: walkable, architecturally distinctive, and close to the waterfront. For property owners across the city, a stronger downtown supports San Francisco's recovery.For clients whose lives move between the city and Wine Country, the shift is worth watching closely. A downtown San Francisco residence paired with a home in Napa Valley or Sonoma County has long been a natural rhythm. A more vibrant, residential downtown makes that city half of the equation more compelling.

A City That Reinvents Itself

San Francisco has rebuilt itself before, most famously after 1906. What is happening downtown now is quieter, but no less significant. The skyline will look much the same. What happens beneath it will not.

Sources

Disclaimer: The Goodrich Group and Arthur Goodrich operate as independent real estate professionals. We are not affiliated with, sponsored by, or authorized representatives of any of the developers, resorts, hotels, or entities that may be mentioned in this blog. All information provided is for informational purposes only and is based on publicly available sources, including planning documents, news reports, and other materials in the public domain. While we strive for accuracy, we cannot guarantee that all details are current or complete. Any errors brought to our attention will be promptly reviewed and corrected as appropriate.

Beyond the 9-to-5: How San Francisco Is Turning Offices Into Homes