Downtown San Francisco continues to struggle as more businesses leave

San Francisco's downtown is still struggling to recover from the pandemic as the impending closure of retail behemoth Nordstrom looms.

What's happening: Downtown activity is just 32% of what it was before the pandemic.

• That's according to anonymized mobile device connectivity data analyzed by researchers at the University of Toronto's School of Cities.

Why it matters: Downtown San Francisco became a ghost town during the height of the COVID-19 pandemic as people stayed home.

• Even as the pandemic ebbs, the era of remote and hybrid work it ushered in means fewer people visiting restaurants, bars and shops.
• That has big implications for downtown economies, which have historically relied on commuting workers who spend money before, during and after their daily 9-5s.

Zoom in: San Francisco's sluggish recovery is due at least in part to its heavy concentration of tech workers — many of whom decamped elsewhere amid the pandemic — as well as a shortage of affordable housing.

• Downtown is also facing a retail exodus, with the departures or planned departures of stores like Nordstrom, Uniqlo, Gap, Saks Off 5th, H&M and more.

What they're saying: "Nordstrom leaving is very disheartening and shows the need for fast-tracked legislation to help retail and immediately focus on zoning that meets the critical needs of a time when the entire retail landscape has changed nationwide," said Marisa Rodriguez, CEO of the Union Square Alliance.

Between the lines: Some city leaders have pointed to crime as a driver behind the retail exodus downtown, the San Francisco Chronicle reports.

• Last week, a Walgreens security guard was arrested on suspicion of fatally shooting a 24-year-old who police said shoplifted.

Zoom out: Downtown activity has returned to — or even exceeded — pre-pandemic rates in a handful of U.S. cities, but most are still struggling to attract the foot traffic they once did.

• Salt Lake City (139%); Bakersfield, California (118%) and Fresno, California (115%) had among the country's highest post-pandemic downtown recovery rates as of February (the most recent data available), as measured by estimated foot traffic.

• Joining San Francisco at the bottom are St. Louis (38%) and Portland, Oregon (40%).

How it works: The researchers essentially treated smartphones and other mobile devices as a proxy for their owners — if a device pings a nearby cell tower, it's a good bet that's where the device's owner is.

Reality check: While downtown activity is one indicator of a city's economic health, it doesn't paint a full picture on its own.

• The lure of better, springtime weather, meanwhile, might convince more people to head back into the city — to enjoy dinner and drinks al fresco, for instance.

What's next: San Francisco is experimenting with various efforts to rethink its downtown neighborhoods — including, most notably, office-to-residential building conversions, which are poised to skyrocket in the coming years.

• Yet that idea is more cumbersome than it might seem, in part because the design and shape of some office buildings make them ill-suited for residential use.