San Francisco’s incentive program offering up to $1 million in tax breaks for companies relocating their offices downtown has seen no participants since its launch two years ago, according to 2024 tax-return data from the San Francisco Treasurer and Tax Collector’s office, as reported by the San Francisco Chronicle.
City officials expressed confusion over the lack of uptake. One possible explanation is that economic activity downtown remains slow to recover, which may be discouraging companies from moving into the area. It is also possible that some recent tenants intend to apply for the tax credit in the future, so their participation would not yet appear in current data.
To qualify for the incentive, a business must not have operated a location in San Francisco during the three years prior to claiming the credit. The city anticipated distributing about $4.4 million through this program last year and projected $11.2 million for this year.
Following last year’s passage of Proposition M—which exempts businesses earning less than $5 million annually from gross receipts taxes—officials hope small companies will consider relocating downtown.
“Our office is happy to help any business that wants to invest in San Francisco navigate the opportunities, incentives and connections to ensure long-term growth and success,” said Laurel Arvanitidis, Director of Business Development for San Francisco.
Despite tepid interest in relocation incentives, there has been increased leasing activity among artificial intelligence firms in San Francisco’s office market. Anthropic recently expanded its headquarters by 100,000 square feet and is reportedly considering additional space near Salesforce Park. Sierra is nearing agreement on a lease for 300,000 square feet at China Basin—one of the largest deals this year—and Nvidia has leased its first office in Mission Rock.
