Committee holds wide‑ranging hearing on vacant downtown offices, hears health, economic and industry data

The Land Use and Transportation Committee convened a hearing April 26 to review the economic impact of vacant office buildings in the Financial District, SoMa and the Embarcadero. Presenters included the acting health officer, the city economist, the small business commissioner, the Chamber of Commerce, building‑owner representatives and city economic and public‑works staff.

Acting Health Officer Dr. Susan Phillips said vaccination progress is the primary enabler for workers to return to offices, noting that, at the time of the hearing, transcript figures reported roughly two‑thirds of eligible adults had received at least one shot and public‑health tiers limit in‑office capacity (25% in "orange", 50% expected in "yellow"). She emphasized ventilation, masking and awaiting state/regional guidance on workplace approaches for vaccinated employees.

City Economist Ted Egan presented vacancy and rent history charts, described 8.4 million square feet currently on the sublease market and cited forecasts by Moody's that anticipate larger rent declines as the market adjusts. Egan and other presenters said large sublease inventories and firms' evolving hybrid work strategies are key drivers of elevated vacancy and downward rent pressure, but they noted signals such as renewed broker tours and tenant interest that could point to market rebalancing.

Small business and industry witnesses described challenges for downtown service firms and nonprofits. Regina Dickendresi (Office of Small Business) and Rodney Fong (Chamber) recommended short‑ and medium‑term activation strategies (street activations, arts and ground‑floor use flexibility) and called for coordinated support for small firms and cultural venues. Building Owners and Managers Association representative John Bryant underscored owner concerns about occupancy, safety, and operating costs while noting some owner guidance and healthy‑building work to support reentry.

Department of Emergency Management data showed calls for service in core downtown police districts fell sharply comparing early 2020 to early 2021, consistent with reduced foot traffic. Planning and OEWD staff said Central SoMa zoning provides flexibility and that developers will reassess projects as market conditions and financing permit; Public Works described near‑term streetscape projects and efforts to minimize construction impacts.

After testimony and questions, Supervisor Safai moved to continue the hearing to the call of the chair for further follow‑up; the committee voted unanimously to continue.