BAE Urban Economics Supports Formation of San Francisco’s Downtown Revitalization and Economic Recovery District

San Francisco, like many North American cities, is pursuing new strategies to revitalize its Downtown amid persistent office vacancies, including creating new tools to incentivize housing production.  In support of these efforts, BAE prepared a technical and financial analysis to support the formulation and adoption of the City and County of San Francisco’s Downtown Revitalization and Economic Recovery District, signed into law by Mayor Daniel Lurie on February 12, 2026.

Enabled by Assembly Bill 2488, the Revitalization District provides property tax incentives to encourage the conversion of vacant and underutilized Downtown office and commercial buildings into housing across portions of the Market Street corridor, the Financial District, Union Square, the East Cut, Rincon Hill, and Yerba Buena.

For this District Financing Plan, BAE developed a data-driven methodology to identify candidate buildings and estimate the potential scale of conversion activity, including the range of commercial square footage and housing units that could result. The team also considered development economics, projected 30-year property tax increment, and prepared a comprehensive fiscal impact analysis assessing changes in City General Fund revenues and service costs.

The work provided City decision-makers with a clear understanding of the economic and fiscal implications of advancing large-scale Downtown housing conversions as part of San Francisco’s long-term revitalization strategy.