If San Francisco Mayor Daniel Lurie is able to push more city workers back into the office five days a week, it would be a boon for the city’s downtown, especially the hard-hit Civic Center and Mid-Market neighborhoods, according to commercial real estate experts. But with union contracts that run until 2027 featuring a two-day remote policy, it’s unclear how many of the city’s hybrid workers the new administration will actually be able to get back to full-time office work in the near future.
In an interview with CNBC shortly after Lurie won the hotly contested mayoral race last year, he said that the city’s recovery “starts with City Hall going back to work five days a week.”
“My administration will be going back five days a week,” the Levi’s heir said at the time. “We want to send a signal and role model for the private enterprises that we’d like them to come back five days a week as well.”
He added that there are “ongoing conversations” with department heads on the subject.
A Jan. 16 memo from Human Resources Director Carol Isen to department heads, and obtained by The Real Deal, said that Lurie had “directed each department to review its business and operational needs to ensure that public services are available onsite during standard business hours.”
It added that departments “may consider” “reviewing all active telecommute agreements, flexible schedules, and any other arrangements that allow for remote work or alternative schedules” and exploring changes to “existing or future staffing arrangements” if gaps in service are found.
It also said that, pursuant to the city’s telecommute policy and program, departments may approve up to two days of remote work, with any additional requests approved by the HR director and reviewed on a rolling basis. Departments may “deny or modify telecommute agreements based on any reason that is not arbitrary or capricious but should give special consideration in evaluating telecommuting agreements where FFWO [Family Friendly Workplace Ordinance] or RAs [Reasonable Accommodations] are in place.”
Lurie’s office told TRD the memo was a “first step” in increasing in-office presence and added that the mayor has not been shy about stating that the people of San Francisco deserve a higher degree of service, which he does not believe is possible with remote work. The office is in regular conversations with their partners in labor about “what is possible,” a spokesperson said.
In his inauguration speech last month, Lurie said that he wanted to entice, not force, private sector workers back to the office with safe, clean and active streets. He made no mention of public workers, though the city is the second-largest employer in San Francisco, after Salesforce.
Just under one in three of the city’s approximately 34,000 workers is hybrid, according to San Francisco Department of Human Resources data. There is one city worker for every 21 San Francisco residents, according to California Controller data, with an average cost of about $7,000 per resident, the highest in the state.
The vast majority of those workers are represented by 35 different unions, whose contracts were just renegotiated last summer and are in effect until 2026 or 2027, depending on the contract. There is different language regarding remote work in the different Memorandums of Understanding, but they typically refer back to the city’s two-days-remote telecommuting policy.
A spokesperson for Service Employees International Union 1021, which represents over 16,000 city workers, declined to comment on attempts by the Lurie administration to get its workers back in the office full time. A spokesperson for the International Federation of Professional and Technical Engineers 21, which has a higher percentage of remote workers and includes over 11,000 municipal architects, appraisers, lab and health care workers, legal assistants and planners across the Bay Area, did not reply to repeated requests for comment.
A Reddit group for city employees is full of comments and questions about the Lurie administration’s push towards in-office work, as well as the hiring freeze he announced on his first day in office. Some commenters said they have heard about city employees being “forced back” to full-time in-office work by their department heads as early as next month, while others wondered if the push would backfire, leaving city departments understaffed as employees look elsewhere for remote work opportunities in the private sector. A few spoke of urging their unions to strike pre-emptively before any new mandates are announced.
One in three government workers would strike over their ability to work from home, according to November 2024 through January 2025 data from the Survey of Working Arrangements and Attitudes, which is run jointly by the University of Chicago, Instituto Tecnológico Autónomo de México, Massachusetts Institute of Technology and Stanford University since May 2020. The monthly survey of up to 10,000 U.S. residents between 20 and 64 also shows that 63 percent of government respondents are fully in office, 22 percent are hybrid and 14 percent are fully remote, with the average remote days for government workers at just under 1.4 days per week.
Impacts felt hardest downtown
San Francisco chief economist Ted Egan said that his office did not have any data on the impact of city workers in particular working remotely or how it would affect the city economically if they returned to the office five days a week. But data from Avison Young’s Office Busyness Index shows that, as of December 2024, government office use was 44.8 percent compared to December 2019, the second-lowest-performing industry in the city. Since most government buildings are located in Mid-Market, SoMa and Civic Center, these would be the areas most impacted by an uptick in in-office city workers, according to Louis Thibault, senior research analyst with Avison Young.
“If government workers are required to return, it would certainly be an infusion of foot traffic and subsequently an economic driver to the submarkets for retail and restaurant activity,” he said.
William O’Daly, a senior associate at Avison Young, called a return-to-office mandate “a bold and exciting move by Lurie” that would greatly benefit Mid-Market, since the city leases 5 million square feet and owns about 3 million square feet in and around that area. He added that the administration should start with mandating in-office work for younger and newer employees, “as they tend to benefit the most from in-person training and experience.”
Colliers’ John Jensen agreed that the Van Ness Corridor, Civic Center and Western SoMa would be most impacted by a city worker return, with the increased foot traffic helping out restaurants and shops in the surrounding area. Sales tax revenue was still down 12 percent in SoMa between the second quarter of 2021 and the second quarter of 2024, according to Colliers data, one of just a few markets in the city that has not seen a retail rebound since the depths of the pandemic.
Union Square and Downtown sales tax revenue is up 43 percent in the same time period, according to Colliers, though still down double digits from 2019. Robbie Silver, CEO of the Downtown San Francisco Partnership, said that even if Lurie’s plans to “set a new standard” are still mostly theoretical, they could have “a significant ripple effect across the greater downtown area” to get more employees, public and private, back to the office.
This return is crucial to an overall city recovery, he said, as downtown makes up 40 percent of the city’s tax base, 70 percent of its office base and 42 percent of its small businesses, according to his data. Those figures include the Financial District, Union Square, East Cut, Yerba Buena, and parts of Mid-Market, but not Civic Center or the Tenderloin.
“The return-to-office rate has reached 50 percent, but after four years, that’s simply not enough to generate the economic momentum downtown needs,” Silver said. “More workers downtown mean higher foot traffic for small businesses, increased demand for restaurants and retail, and a stronger ridership base for public transit and street services that keep the city running.”