Copyright © HT Digital Streams Limited All rights reserved. Katherine Bindley, The Wall Street Journal 6 min read 20 Oct 2025, 17:01 IST Some attendees at a recent conference held by Salesforce, which will make a $15 billion investment in the city. Summary Crime is down and rents are higher in the city, which is recovering largely thanks to the AI boom. SAN FRANCISCO—San Francisco is back. Or at least on the way. Crime rates have fallen to their lowest levels in decades and are still falling, with burglaries a particular nuisance for homeowners and tourists, down 28% this year. The homeless tent camps that block sidewalks and ghost retail businesses have shrunk, while foot traffic and transit ridership have increased. Rents overall rose 12% year-over-year in the city, with September marking the 13th month in a row of consecutive growth, according to Apartments.com. And the hotel industry is showing signs of recovery. On a recent sunny October Friday—everyone’s favorite day to work from home—dozens of workers typed away on laptops around Salesforce Park and tourists strolled its leafy paths. Restaurants were buzzing with more than half their tables full, many taken up by people in the San Francisco work uniform: a button-down shirt and a puffer jacket. The rise of artificial intelligence has prompted many firms to expand their real estate footprints. Institutional investors bought buildings at a discount, and demand for office space will recover. And increasingly strict return-to-work policies have brought more foot traffic to the city’s business districts. The developments mark a turnaround for a city that gained national notoriety a few years ago for broken storefronts and broken car windows. Convention-goers demanded a stronger law enforcement presence, and residents elected a moderate mayor who promised to beef up the police. Private investment in the city is now starting to follow. Salesforce, which bills itself as the city’s largest private employer, last week announced a $15 billion investment over the next five years in a new “AI incubator center,” workforce development programs and other AI-related initiatives in the city. Similarly, Databricks, a data analytics software company, announced in the spring that it will open a new 150,000-square-foot headquarters downtown and plans to double its staff in the city over the next two years. And OpenAI opened a new headquarters in Mission Bay in March. “The sentiment is back. The willingness to invest is back,” said Ted Egan, the city’s chief economist. View full image. Keba Konte, founder of Red Bay Coffee in Oakland, was initially reluctant to open a new shop in downtown San Francisco last fall. His wholesale business suffered during the pandemic when offices didn’t place orders and a Civic Center retail location he opened in 2021 didn’t even last a year. However, he decided to move forward after landing a lease with Yes SF, a foundation through the San Francisco Chamber of Commerce focused on revitalizing downtown. Allowing changes allowed the foundation to run an event space in the back that Konte’s clients can also use to do work and meet with colleagues. Sales are up 20% since the store opened, which Konte attributes to the city’s recovery and more people working from the office. “It was a fantastic decision,” he says. Comeback story For decades, the city hummed thanks to the burgeoning tech industry and became a soft playground for its ever-increasing number of workers. Buses transported them from the city to the Silicon Valley campuses of Apple, Google and Meta. Then the pandemic hit, causing remote work. Many residents decamped for suburbs and cheaper places. San Francisco’s office vacancy rate rose to the highest in the US, and small businesses closed with fewer people going to work. Burglaries climbed to their highest levels since the 1990s. Residents complained of homelessness and open drug use. Retailers such as Nordstrom and Banana Republic have left downtown. Around the same time, the tech industry began doubling down on AI. The fruits of that investment are a big factor in San Francisco’s current recovery. The number of young people moving into the city is increasing slightly, San Francisco Planning Director Sarah Dennis Phillips says, after the city lost more than a quarter of its 20- to 29-year-old population from 2019 to 2023, the largest decline of any age group. Katie Treene, 24, who works for a renewable energy company and lives in San Francisco’s upscale Russian Hill neighborhood, always thought she would land on the East Coast after graduation. But she was drawn to San Francisco for the outdoor lifestyle and was pleasantly surprised by both the social scene and how safe she felt. Treene pushes back when people from the East Coast and South question her decision to live in the city. She can swim at Aquatic Park, hike in the Marin Headlands and take advantage of the many events around town, she tells them. Among fellow young people, she says, San Francisco offers much more to focus on than just drinking. “They have soccer games the next morning,” says Treene. “A lot of people get up early on weekends.” Lured by the promise of being part of what they see as a technological revolution, young founders and AI workers are dropping out of college and moving to neighborhoods like the Mission and the once-industrial but now chic Dogpatch. A former shipbuilding hub, more of Dogpatch’s factories now house art galleries, cafes and loft apartments. AI companies, flush with cash, have snapped up high-quality office space in the city. The firms account for a quarter of all demand in the city’s property market, says Colin Yasukochi, executive director of CBRE’s Tech Insights Centre. They took in nearly 1 million square feet of office space in the first half of this year. View full image. “Mayors always tell me they would die to have one of these companies, and we have dozens and dozens,” said Daniel Lurie, San Francisco’s first-term mayor, who is busy fending off busy companies like OpenAI and Anthropic. Some residents and business people also credit Lurie’s addition of treatment facilities for drug users and increased police presence in tourist areas, and the tougher-on-crime approach of District Attorney Brooke Jenkins, whose predecessor was recalled after de-emphasizing the prosecution of low-level crimes. Foot traffic from city visitors and riders on the local transit system, Bay Area Rapid Transit, or BART, has increased, while the city counts 168 homeless tents and structures, down from 242 a year ago. ‘Work to do’ The city still has sore spots. Salesforce CEO Marc Benioff recently told the New York Times that he would welcome National Guard troops into the city to help reduce crime. He later apologized for his comments. Lack of growth among non-AI companies has contributed to the slow decline in San Francisco’s office vacancy rate, which peaked at 36.9% last year and fell to about 34.4% in the most recent quarter, according to real estate services firm CBRE Group. San Francisco’s office vacancy rate is still well above pre-pandemic levels and its largest mall remains mostly a ghost town. There is also a flip side to the city’s backlash. Steep monthly rents, which fell during the pandemic, have returned to levels even more out of reach for many families. The AI gold rush, while fueling much of San Francisco’s revitalization, has not provided the number of jobs that previous tech booms have delivered. Citing advances in coding tools and productivity gains, Benioff told analysts and investors in February that Salesforce would not hire any new engineers this year. “I don’t want to sit here and just say everything is perfect, it’s not. We have work to do,” said Lurie, the mayor. The city must continue to tackle drug use and address a shortage of affordable housing, says Lurie, as well as bring back more retail and further cut red tape that can be burdensome for businesses. Still, Lurie says public safety improvements and cleaner streets, combined with many workers returning to the office and AI growth, have San Francisco “on the rise.” “I went to get coffee yesterday, and the guy behind the counter just looked at me and said, ‘Let’s go to San Francisco!'” says Lurie. 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