Breaking the SF doom loop: Convert downtown offices into student housing

Since the start of this year, a rotating cast of San Franciscans have been gathering for dinner and drinks while discussing the city’s most pressing problems. Rather than the typical bitchfest, this discreet group of tech entrepreneurs, nonprofit leaders, elected officials and City Hall commissioners spends less time bemoaning what’s wrong and more time noodling on solutions.

Bilal Mahmood, a startup founder and neuroscientist who finished third in a state Assembly special election last year, designed the dinner parties after the Junto Club, a 12-member group of tradesmen and artisans formed by Benjamin Franklin in 1727. Franklin’s goal was to develop ideas on how to build a new nation and more humane society, and the result of these meetings led to the colonies’ first community fire department and the country’s first hospital. The latter was created through a public-private partnership, an untested concept in the burgeoning nation.

Mahmood told The Standard that these off-the-record dinner parties will soon go by another name Franklin’s group used—Leather Apron Club, a decidedly metal-meets-Folsom Street Fair moniker. In mid-January, Mahmood and 11 others gathered to discuss one of San Francisco’s most existential issues: how to save Downtown.

The loss of businesses and in-office workers since the pandemic has kneecapped the flow of tax revenue to City Hall, and foot traffic to small businesses in the area has evaporated. San Francisco is staring down the barrel of a nearly $800 million deficit, and increasingly hyperbolic concerns of a real estate collapse, death spiral and doom loop are becoming commonplace.

But as Mahmood and his guests discussed the state of Downtown over karaage, sashimi and wagyu at Ozumo, an upscale Japanese restaurant near the Embarcadero, one guest floated an idea that seemed to linger. Zach Klein, the venture capitalist and co-founder of Vimeo, suggested San Francisco should create a new university, or at least a vast array of college student housing, in the downtown core. 

“That was one idea that nobody had any negative thoughts around, and we thought it could be a really powerful way to revitalize the area,” said Cristina Cordova, an early stage venture capitalist who also attended the dinner.

Klein, who declined a formal interview request, told The Standard via direct message that he got the idea from Kim-Mai Cutler, a partner at Initialized Capital who tweeted about it last year.

The theory goes: Vacant commercial towers in San Francisco will likely never again reach capacity, but they could be converted to student housing by public universities, which are exempt from much of the red tape that otherwise stymies development. These schools also receive substantial tax breaks, making the cost of such projects “pencil out.” Large cohorts of new, young residents would not only make use of the buildings themselves but also reinvigorate Downtown by supporting local restaurants, bars and other small businesses.

The idea might not be a silver bullet for saving Downtown, but it’s a possibility that makes other ideas floated over the last year feel small.

“We are proposing a university or an academic campus or student housing Downtown as one of the major solutions to solve this crisis, because we have a lot of piecemeal solutions that are important and necessary,” Mahmood said. “But there’s no big, bold idea that could radically solve this in a single swoop.”

Mahmood and others have spent the last few months studying the issue and taking meetings to figure out what’s feasible. And while the idea of transforming Downtown into a mecca for college kids is still in its infancy, the initial reaction from city officials, urban planners and developers appears promising.

Downtown San Francisco is clearly in crisis. The remote work shift has hollowed out many buildings and made issues like street conditions and homelessness more stark. 

The Bay Area Council Economic Institute published research that found a nearly five-fold increase in people working from home during the course of the pandemic, a key reason why San Francisco’s economic recovery ranks 24th out of 25 large U.S. cities, beating out only Baltimore. The neighborhood’s resulting 60% drop in daytime population has been an albatross around the neck of small businesses that rely on a steady stream of office workers. 

The growing consensus among the business community, city officials and the general public is that Downtown needs to evolve in order to survive. Putting student housing at the center of that transformation, advocates say, could reinvigorate the city in the way New York City has embraced campus culture across different boroughs with NYU, Cornell and Columbia. Meanwhile, a younger population could also help reactivate BART, which continues to struggle with low ridership. 

An analysis conducted by architecture firm Gensler and public policy nonprofit SPUR found that the conversion of vacant office buildings could yield 11,200 new units Downtown. But the study also noted that current economic conditions and costs make most conversions “not financially feasible.”

In recognition of this, Mayor London Breed and Board of Supervisors President Aaron Peskin recently introduced legislation to streamline office-to-residential conversions. The changes would address planning codes and zoning issues, although cost remains an overriding concern. 

But state agencies like public universities are able to take advantage of their tax-exempt status to limit the expense of such projects.

“Look, Downtown San Francisco is super-rich in transit,” Peskin said. “It’s just a couple or three BART stops from [UC Berkeley]. So yeah, it sounds like a fine idea. The University of California is not subject to the laws of any city or county in the state of California. And they know how to acquire real estate, and they know how to do development projects. So, I’m happy to knock on their door, and they’re welcome to knock on mine."

UC College of Law, formerly known as UC Hastings, recently unveiled plans for its Academe academic village development. The 14-story project is slated to open this summer, offering 650 apartments for graduate students at the law school, as well as surrounding institutions like UCSF, San Francisco State and University of the Pacific's Dugoni School of Dentistry.

Jeff Cretan, a spokesperson for Mayor Breed, said the city would be open to UC Berkeley and other universities expanding student housing Downtown, but there have been no discussions with school officials. 

"The Mayor’s Roadmap for Downtown calls for diversifying uses in our commercial areas, and a proposal to add either an academic institution or housing for students would certainly fit that goal," Cretan said, adding that the UC College of Law development is an excellent example of what’s possible.

Sujata Srivastava, the San Francisco director for SPUR and another attendee of Mahmood’s mid-January dinner, referenced UC Berkeley’s scuttled campus in Richmond and suggested that part of the reason behind its failure to launch was a lack of access to amenities and transit.

“It’s really interesting to look at this against the backdrop of what’s happening at UC Berkeley and some of the other UCs too, where they aren’t really able to adequately house not just students, but also their staff,” Srivastava said. “There’s no place more central than Downtown San Francisco.”

Across the board, local higher-ed institutions struggle to house their students, and UC Berkeley is a prime example. The UC system wants to expand enrollment by 33,000 students by the end of this decade, and UC Berkeley was one of three campuses designated to absorb half of those new students. 

However, the university is unable to guarantee more than one year of housing for its current student body, who regularly report issues around housing insecurity. The university houses only 23% of its students—by far the lowest percentage in the UC system. 

UC Berkeley spokesperson Dan Mogulof said the university is notably not a commuter school, and one of its ambitions is to open up housing opportunities closer to campus, particularly for undergraduates. 

“Their ability to take advantage of the full university experience is hindered if they don’t live in close proximity to campus—not just in terms of the academic programs, but all the extracurricular programs that make the university something special,” Mogulof said. “Chancellor [Carol] Christ refers to this as an ‘equity of experience’ across the undergraduate population.”

UC Berkeley’s housing initiative has a particular focus on the development of properties owned by the university in close proximity to campus, Mogulof said. Still, the university is thousands of beds short of its goal of guaranteeing all incoming freshmen at least two years in housing in university facilities.

While the university has attempted to develop more housing in line with its charge to increase enrollment, school officials have been stymied by legal challenges like a lawsuit filed against a $312 million project at People’s Park. The development would contain 1,100 beds for students and 125 beds for supportive housing.

UC Berkeley operates a few graduate student housing projects in neighboring cities like Albany and Emeryville. The latter development, known as The Intersection, is roughly 30 minutes away from campus via public transit, similar to a commute between San Francisco’s Financial District and UC Berkeley by BART.

Matt Dorsey, a San Francisco supervisor whose Downtown district would absorb the proposed student housing, said he hadn’t heard of Mahmood and others’ plan, but he liked the initial concept.

“Hey, if they’re running into issues in Berkeley, great, we would love to have them,” Dorsey said.

Mogulof said looking toward Downtown San Francisco might be more of a possibility for the roughly 11,000 graduate students at UC Berkeley. 

“The university is always going to be interested in options that are of interest and appeal, particularly to graduate students if something in the future like that is proposed and real and tangible,” Mogulof said. “I’m not going to sit here and dismiss anything offhand.”

Mark Hogan, the principal of architecture firm OpenScope Studio, has been one of the thought leaders shaping San Francisco policy around office-to-residential conversions. He has personal experience that would be instructive for the Downtown proposal, as he attended grad school at UC Berkeley and commuted to class on BART from San Francisco. 

Hogan highlighted the design and financial advantages that make office conversions into student housing more feasible than other projects.

“One of the benefits of student housing is that you could potentially do more of a group housing setup, with fewer kitchens and bathrooms,” Hogan said. “That can be cheaper to build and easier to retrofit into an existing building.”

Outside of public operators like universities, a range of private developers that specialize in student housing could also create opportunities for transformation. Case in point, a Lower Nob Hill office building at 701 Sutter St., which previously housed tech tenants, was sold at a major discount to a developer that specializes in student housing. 

Ben and Elle Black, a venture capitalist and entrepreneur couple in the city, are also working on the idea of vastly expanding student housing Downtown, although their concept calls for creating local and international university campuses.

“We want to open San Francisco to the world,” Elle Black said. “San Francisco gives a very attractive proposition to everybody. I don't know a single university that wouldn't want to have a footprint in Silicon Valley.”

All of these ideas, for the time being, are still just that: ideas. But a groundswell of support for creating a younger, more vibrant Downtown San Francisco appears to be taking root across the city. Mahmood said he plans to continue hosting his dinner parties to try to confront other crises in San Francisco.

“City Hall does not hear from younger professionals, younger tech,” he said. “A lot of the business community here is more than the hotel industry and real estate.”

Imagine an influx of young people that could shift the staid reputation of Downtown, help feed a thriving arts scene and fill restaurants, bars and nightclubs with energy and activity past happy hour. In a town that is already on the younger side, bringing in a bunch of kids may be San Francisco’s best bet for the future.