The San Francisco area has one of the highest COVID-19 vaccination rates in the United States, but one of the lowest rates of returning to the office, The Wall Street Journal reports. The disconnect could potentially put the city’s, deemed the center of the U.S. tech sector pre-pandemic, future at risk.
As of July 4, approximately three quarters of eligible San Francisco residents received at least one dose of the COVID-19 vaccine versus 67% of the U.S. as a whole, according to the Centers for Disease Control and Prevention (CDC). Despite being ahead of the rest of the country in vaccinations, the city has fallen behind when it comes to returning to the office. Less than 20% of San Francisco’s workforce has gone back to their office as of mid-June. The U.S. average is 32%, according to Kastle Systems, a nationwide security company that monitors access-card swipes.
Employees continuing to telework might not affect their companies’ bottom line, but it does impact the neighboring stores and restaurants. Many of which are still closed. Steve Sarver, owner of the Ladle & Leaf restaurant group, called the San Francisco business district “a ghost town” and said only one of its eight downtown locations has stayed open.
Cause of the delayed return to the office
One reason San Francisco has seen a delayed return to normal is the city is home to so many technology companies. The tech sector as a whole has been one of the slowest in terms of employees going back to their physical offices, The Wall Street Journal reports. Tech companies have also been the most flexible when it comes to letting employees continue to telework after the COVID-19 pandemic. Companies in other fields across the U.S. are adopting hybrid models so employees split time between the office and remote work.
Tech companies in the San Francisco areas are not following suit, however. Businesses like Salesforce, Dropbox and Google are sticking with remote work policies in part to attract younger, highly skilled workers that prefer to work from home.
“What we’re facing are habit changes more than health concerns,” Colin Yasukochi, senior technology researcher at CBRE Group Inc., a commercial-real-estate services firm told The Wall Street Journal.
Meanwhile, Texas cities like Houston and Dallas have more employers that are requiring their employees to come back to the office. Buildings in these areas are on average back to 50% of their pre-COVID-19 usage, according to Kastle. In San Francisco however, the combination of employers not being in a rush to have workers return to the office, the city government having yet to relax mask restrictions and the Bay Area Rapid Transit system not planning to return to pre-COVID service for months adds up to a lot of vacant office buildings—much to the local small business owners’ frustration.
“We’re really not seeing that much is going to take hold until the latter half of this year or more likely January,” said Laurie Thomas, executive director of the Golden Gate Restaurant Association.
The future of San Fran
San Francisco’s post-COVID-19 future is somewhat unclear due to some of the city’s biggest tenants’ long-term workplace strategies. File-hosting service Dropbox has made telework the primary working mode for all of its employees. This includes the 1,000 who worked in the company’s San Francisco headquarters. Uber recently shifted gears on its return to the office plans after employees said they included too much office time. The rideshare company said it would allow employees to telework as much as half of the time. Initially, Uber planned for employees to come back to their pre-COVID workspace at least three days a week beginning in September.
Some believe it’s too soon to bet against San Francisco, especially given how much the tech industry grew during the pandemic. The city is no stranger to downturns; it’s rebounded from the dotcom bust and global financial crisis, Brandon Shorenstein, chief executive of Shorenstein Properties, which owns about 4 million square feet of office space, said.
Meanwhile, a lot of San Francisco-based companies are still growing. Tech firms that started looking for office space during the second quarter of 2021 want an average of 15% more space than companies that were looking during the first quarter of last year, according to data firm VTS. Benchling, a cloud software provider for the biotech industry signed a new lease for office space in San Francisco. Other startup companies backed by venture capital money and that are considering initial public offerings (IPO) believe, “in order to really grind it out and make it, they need their employees to be in the office,” said Chris Roeder, who runs JLL’s brokerage team in San Francisco.
Concerns for San Francisco’s future remain, despite the city’s ability to bounce back, however.
“It could become a vicious cycle if both city and business leaders don’t commit to bring office workers back,” Sarver told The Wall Street Journal. “If there aren’t enough people, there will be fewer services and that will lead to fewer people wanting to be there.”
Joe Dyton can be reached at email@example.com.