San Francisco Mayor London Breed said her tech-dense city will have to adjust to the new reality that many workers are not returning to the office.
In an interview that aired Friday night on CNBC’s “News with Shepard Smith,” Breed admits that tech workers return to the physical space in San Francisco more slowly than in other major cities.
“I wouldn’t call this an exodus. I would call it a change,” Breed said. “We’ve been through a global pandemic. People have been working from home. And I think most employees want to work from home to some degree when they return to the office. And a lot of employers. Apps are offering that as an option.”
According to CBRE research, the office vacancy rate in San Francisco increased to 24.2% in the second quarter from 23.8% in the previous period. Breed’s office estimates that a third of San Francisco’s workforce is currently located far away from and outside of the city. Last year, that resulted in tax revenue reaching $400 million, according to the San Francisco Comptroller’s Office.
“Of course I worry about this trend, but again, you know, this is a global pandemic where lives have changed,” Breed said.
Some tech companies have moved out of California to states like Texas and Florida. Others have closed their offices in favor of a shift to telecommuting or staff reductions to prepare for a future. Sales forceSan Francisco’s largest private employer, said this week cut office space in San Francisco for the third time during the pandemic and is currently listing 40% of the 43-story building located across from the main Salesforce Tower.
However, not every major tech employer is making the cut. Breed, who said she works out of her office five days a week, only goes to companies like Autodesk, Google and Twiliohave expanded their office space in recent years.
“They’ve expanded their space, but they’re also committed to having San Francisco as their headquarters,” Breed said, referring to several companies. “Some companies are looking at other alternatives, but what San Francisco has to offer, she says, is the highest concentration of venture capitalists” anywhere in the country.
Breed said there has been a recent increase in pedestrian traffic downtown, following a prolonged drought due to the Covid-19 shutdown. She highlighted the recent Golden State Warriors championship paradeattracts an estimated 800,000 people in a city of about 875,000 inhabitants.
Last month, same offer annual budget of $14 billion for fiscal 2022-23. More than a third of that money is spent on public works, transportation and commerce, including the City Transportation Authority.
For San Francisco to thrive, “I think it’s really going to have to be adjusted,” Breed said. must also focus on, and working in the office will only be an adjustment to change. “