San Jose Downtown Activity Recovers Pandemic Losses

Five years on from the pandemic, San Jose is leading the cities of the Bay Area in its foot traffic recovery.

Downtown San Jose has regained about 90 percent of its foot traffic compared to 2019, reaching close to 100 percent recouped activity last December, The Mercury News reported, citing cell phone tracking data from the Bay Area Council Economic Institute.

By comparison, downtown Oakland is back to 74 percent of its pre-pandemic street activity, while San Francisco’s is struggling the most at just 59 percent of pre-pandemic foot traffic regained through the first quarter.

The recovery of downtown San Jose’s foot traffic comes as all three cities experience high office vacancy rates. San Francisco’s office vacancy sits at around 36 percent, though it’s no longer in last place when it comes to return-to-office numbers. San Jose’s office vacancy is at 31 percent, and Oakland is at 23 percent, according to Bay Area Council data cited by The Mercury News.

San Jose’s revival could be attributed to visitors seeking dining, entertainment and other non-work-related outings, per The Mercury News.

To help draw both businesses as well as residents, the City of San Jose is offering zero business tax and free parking for two years to tenants that sign new leases. In addition, it’s looking to capitalize on the artificial intelligence boom by offering cash incentives to AI firms that move into town. In San Francisco, the urban core of the Bay Area, AI is expected to bring 50,000 to 60,000 new workers across more than 20 million square feet of offices by 2030, according to CBRE.

San Francisco Mayor Daniel Lurie has proposed legislative changes that would help keep more people in the city after working hours. That includes a proposal to cut red tape to enable empty ground-floor retail to be converted into amenity spaces for office tenants; another is meant to attract developers using new city-specific density incentives.

— Chris Malone Méndez