San Francisco faces a challenging task of turning around its struggling economy, with a nearly $800 million deficit and underutilized real estate. To spearhead post-pandemic recovery efforts, Mayor London Breed recently appointed Sarah Dennis Phillips as the head of the Department of Economic and Workforce Development, a position that had become vacant. This agency is responsible for allocating subsidies to small businesses, offering loans, and creating job opportunities for residents.
The pandemic has caused significant changes throughout San Francisco, resulting in rising vacancy rates and plummeting demand from tenants. Dennis Phillips, a former Tishman Spier executive with years of experience in urban planning and economic development management, is expected to provide the necessary expertise and perspective to help rebuild rental demand and boost property valuations.
According to Koster data, vacancy rates in certain parts of downtown San Francisco have risen to over 26% in the past year, up from less than 7% earlier in 2020. Additionally, tenants are selling more properties, leading to an additional 1.8 million square feet of office space being added to the market in the past 12 months.
Mayor Breed has proposed several legislative changes to promote investment in the city’s revival, including tax breaks for businesses opening downtown, streamlining the development plan approval process, clarifying city planning standards, and drafting legislation to make it easier to convert unused office towers into housing.
In a statement, Mayor Breed expressed confidence in Dennis Phillips, saying she had a unique combination of public and private sector leadership experience that would help her navigate San Francisco’s economic recovery.