Mayor Lurie Signs Legislation to Accelerate Downtown Housing Creation and Drive San Francisco’s Comeback

SAN FRANCISCO – Mayor Daniel Lurie today signed legislation establishing an innovative special financing district that will support the conversion of vacant and underutilized downtown offices and commercial buildings into much-needed housing. The steps to add more housing downtown continue the mayor’s efforts to drive the city’s recovery and transform downtown into a 24/7 neighborhood where people live, work, play, and learn. 

Mayor Lurie has taken steps to accelerate San Francisco’s economic comeback and make the city more affordable for families and workers by adding more housing. He has taken steps to cut red tape and keep the streets safe and clean, delivering key pieces of thePermitSF initiative and establishing a permanent San Francisco Police Department Hospitality Zone Task Force, which has contributed to a 40% drop in crime in downtown. In September 2025, he unveiled his Heart of the City plan to accelerate downtown’s comeback, exceeding his goal of delivering five Vacant to Vibrant popups and supporting the continuation of year-round programming in Union Square. The mayor is working to make San Francisco more affordable so that the next generation can afford to stay in the city they love, adding more housing downtown and citywide through the Family Zoning Plan. 

“Through our Heart of the City plan, our administration is accelerating downtown's recovery by activating our public spaces, prioritizing safe and clean streets, and creating a downtown where people live, work, play, and learn,” said Mayor Lurie. “This new financing district will support office-to-residential conversions and help turn empty office buildings into thousands of new homes—helping us add more housing in San Francisco and delivering on a promise in our Heart of the City plan. I’m grateful to our partners on the Board of Supervisors for their partnership and their commitment to creating a stronger, more vibrant future for downtown and for San Francisco.” 

The resolution establishing the Downtown Revitalization Financing District was co-sponsored by Board of Supervisors President Rafael Mandelman, District 3 Supervisor Danny Sauter, District 5 Supervisor Bilal Mahmood, District 2 Supervisor Stephen Sherrill, and District 6 Supervisor Matt Dorsey. It completes a formation process that began last spring when the Board of Supervisors unanimously approved initiating legislation introduced by Mayor Lurie and builds on an ordinance that passed overwhelmingly in February 2025 to waive city impact fees and extend the Commercial to Residential Adaptive Reuse Program that streamlines the approval process for conversion projects. 

“For San Francisco to thrive, our downtown must thrive. Establishment of the Downtown Revitalization and Economic Recovery Financing District is one element of the city’s broader strategy to unleash the potential of underused buildings, support adaptive reuse, and produce thousands of much-needed homes,” said President Mandelman. “Thanks and congratulations to former Assemblyman Ting and Mayor Lurie for moving the proposal forward. I am proud to co-sponsor this legislation.” 

“San Francisco’s Downtown Revitalization District is open for business. We’re ready to engage with partners to help transform empty offices into new homes and usher in a new wave of activity to accelerate our downtown recovery,” said Supervisor Sauter. “I’m confident this new initiative will help build on San Francisco’s comeback and create homes for thousands of new residents downtown.” 

“Converting San Francisco’s office buildings into housing will create construction jobs, fill stores and restaurants, and add to the vitality of our city’s downtown,” said Supervisor Mahmood. “I am proud to support this creative approach to investing in new homes in the transit-rich heart of the city.” 

“With the passage of this legislation, we’re taking concrete steps to correct outdated 20th century land use decisions and build the kind of vibrant, mixed-use neighborhoods that define a thriving 21st century downtown,” said Supervisor Dorsey. “I’m grateful to Mayor Lurie and my colleagues on the Board for advancing this effort and for our shared commitment to revitalizing downtown. Together, we’re beginning to address decades of underinvestment in downtown housing and charting a more resilient, dynamic future for San Francisco.” 

“When downtown thrives, our entire city thrives. Right now, we have the equivalent of approximately 20 Salesforce Towers of vacant office space,” said Supervisor Sherrill. “This initiative reinvests in our empty office buildings by facilitating their conversion to much-needed homes, bringing us one step closer to downtown becoming a true 24/7 neighborhood.” 

The new financing district was enabled by Assembly Bill 2488, sponsored by former Assemblymember Phil Ting and the Bay Area Council in 2024, and covers core downtown office and commercial areas including the Market Street corridor from the waterfront to Civic Center, the Financial District, Union Square, and the East Cut, Rincon Hill, and Yerba Buena neighborhoods south of Market. Eligible projects within these areas may enroll to receive an annual incentive payment over 30 years to offset the development costs of converting underutilized office and commercial space into new residential units. The annual payments are backed by the increases in future property tax revenue that will be generated by the projects, allowing the city to provide the incentive without impacting current city revenues.  

The Downtown Revitalization District is governed by an independent Board of Directors that is responsible for enrolling eligible projects and issuing the annual incentive payments. Members are appointed by President Mandelman and include Supervisors Sauter, Mahmood, Dorsey, and Sherrill, and two members of the public, Tony Tolentino and Kristy Wang. Following the mayor’s approval, the Board of Directors voted today to adopt the district’s financing plan and begin receiving applications. Now that the financing district is established, eligible conversion projects will have through 2032 to enroll in the program.  

The financing plan projects approximately 50 properties could currently be suitable candidates based on building characteristics such as age, size, condition, and current vacancy rate. These projects are projected to yield approximately 4,400 residential units that could be home to over 7,000 new residents downtown. A similar tax incentive in New York City led to the conversion of obsolete office space into over 12,000 units in lower Manhattan. 

“This district helps move downtown from a 9-to-5 office core to a true 24-hour neighborhood,” said John Grubb, Bay Area Council Interim President and CEO. “The Bay Area Council thanks and congratulates Mayor Lurie and the Board of Supervisors for getting this done. More residents downtown means more life on our streets and a stronger future for San Francisco.” 

“With the finalization and inauguration of the downtown revitalization financing district today, San Francisco joins the ranks of major cities around the country, from New York to Boston to Chicago, that have recognized the power of property tax relief to enable the revitalization of downtown districts through office-to-residential conversions,” said Marc Babsin, President of the Emerald Fund. “Combined with the city’s prior efforts to reduce impact fees and transfer taxes on conversions, we anticipate that the creation of this financing district will lead directly to the conversion of numerous downtown office buildings into much needed housing, which will bring energy and activation to the streets of downtown San Francisco.”  

“Our office has been laser-focused on finding creative ways to move projects forward and strengthen our partnerships with developers who are ready to invest big in San Francisco,” said Anne Taupier, Director of Development at the Office of Economic and Workforce Development. “Downtown’s economy is in a new phase of opportunity that calls for focused and innovative strategies to support its momentum, and this new financing district for commercial-to-residential conversions is the final critical piece to achieve that. We’re already hearing from investors who are interested in taking advantage of this new opportunity—a sign of great things to come.”  

For more information on the Downtown Revitalization Financing District visit sf.gov/drfd