Can Free Rent Revive Downtown San Francisco?

There’s a buzz of energy in downtown San Francisco from a source that has been missing for years: occupied storefronts.

One of those shops is Paper Son Coffee, a roaster with flavors popular among Latin and Asian American communities that has been operating in the South of Market neighborhood since June. Before that, the space had been empty for nearly three years.

“People who work or live in the neighborhood stop in and are like, ‘Wow, there is something here!’” said Alexander Pong, an owner of Paper Son. “They’re excited.”

Paper Son is part of an initiative to help San Francisco return to the days before it became a devastating example of what could go wrong with U.S. cities during the pandemic. The company was chosen to participate in Vacant to Vibrant, a program initiated last year by the city’s mayor, London Breed, to fill empty space downtown, which largely makes up several blocks straddling Market Street in the Financial District and South of Market neighborhoods. Downtown San Francisco has the highest concentration of vacant storefronts in the city.

“Retail rents have historically been very high in the Financial District,” said Santino DeRose, a principal at Maven Commercial, a real estate brokerage with offices in San Francisco and Chicago. “But now these businesses have the ability to get their feet wet and determine whether their concepts are viable in those locations.”

Under the program, city and business leaders provide free rent for up to six months, as well as other funding for business expenses and incentives like technical and business permit assistance, to entrepreneurs who want to set up shop in empty spaces, many of which are on the ground floor of office buildings.