San Francisco put a seven‑figure carrot on the table for companies willing to move offices downtown, and not a single firm took the deal. The unused incentive exposes a deeper problem: the city is trying to fix a structural office crisis with a tool that many businesses either do not trust, do not understand, or simply do not need.
As I look at the policy in context, the empty response says less about the size of the tax break and more about how far the city’s value proposition has slipped in the eyes of employers. A one‑time savings of up to $1 million is competing with long‑term questions about safety, talent, and the basic math of operating in San Francisco.
What the $1 million offer actually promised
The incentive that drew so much attention was straightforward on paper: San Francisco authorized a tax credit worth up to $1 million for companies that agreed to move offices into the city’s struggling downtown core. The idea was to nudge firms that were already in the region, or considering a Bay Area footprint, to sign a lease in the central business district instead of choosing a suburban campus or another city entirely. According to a widely shared summary of the program, the credit was structured to offset local business taxes for qualifying companies that relocated into designated zones, with the cap set at that headline‑grabbing $1 million figure.
Yet by late 2025, discussion among local observers highlighted a stark outcome: no company had actually claimed the credit. One widely circulated post noted that “in 2023, San Francisco authorized” the relocation incentive and that “no one has used it,” a detail that has become shorthand for the city’s struggle to convert policy ideas into real‑world moves. That same discussion framed the unused benefit as a signal to employers that the city’s challenges run deeper than a single tax tweak, a sentiment captured in the way residents dissected the relocation tax break and its failure to attract takers.
Why a seven‑figure tax break was not enough
On its face, a $1 million tax credit sounds like a powerful lure, but relocation decisions rarely hinge on a single line item. Tax specialists have long argued that companies weigh a complex mix of costs and risks when they choose where to put their offices, from long‑term rent and labor expenses to regulatory stability and political climate. In San Francisco’s case, those experts have stressed that business location is the result of a “complex calculus” and that it is difficult to isolate any one policy as the deciding factor. That perspective helps explain why a one‑time credit, even at seven figures, could not overcome concerns about the city’s broader environment.
Earlier debates over the city’s tax structure underscore the point. When Block, the company behind Square and Cash App, decided to leave its Mid‑Market headquarters, analysts pointed to a web of factors that included local tax measures, shifting remote‑work patterns, and the company’s own strategic priorities. Reporting on that episode noted that tax experts saw the move as part of a yearslong debate over how San Francisco treats employers, not a reaction to any single ordinance. If a major firm like Block was willing to walk away from a neighborhood it once helped anchor, a temporary credit for newcomers was always going to be a tough sell.
The city’s broader tax strategy and its limits
City leaders have not relied on the downtown relocation credit alone. In parallel, San Francisco has tried to make itself more attractive to new and expanding firms by offering broader incentives that go beyond a single neighborhood. One recent initiative, promoted by local business advocates, highlighted that SFgov now offers “up to $1M/year tax credits for new businesses” that meet specific criteria. In a post that drew attention among founders and landlords, Aug professional Sam Shapiro described how the city would provide recurring relief on certain business taxes, positioning the program as a way to “help open your business” and keep it operating in San Francisco rather than elsewhere in the Bay Area.
That recurring benefit is more generous on paper than the one‑time downtown relocation credit, since it can reach $1 million per year instead of being capped at that amount over the life of the move. Yet the existence of both programs raises a hard question about strategy. If a company can qualify for substantial ongoing relief as a new entrant, the marginal value of uprooting an existing office just to claim a separate downtown incentive shrinks. The city’s own menu of options, as described by Sam Shapiro, may unintentionally encourage firms to structure themselves as “new” operations or to time their growth, rather than to physically relocate into older towers that are already struggling with high vacancy.
Perception, risk, and the post‑pandemic downtown
Even the best‑designed tax incentive has to compete with what executives see when they walk through downtown. Since the shift to hybrid work, San Francisco’s core has been defined as much by empty floors and quiet streets as by its remaining anchors. For a chief financial officer weighing a move, the question is not just how much the city will shave off the tax bill, but whether employees will want to commute there, whether clients will feel comfortable visiting, and whether the neighborhood will still be vibrant five or ten years from now. A one‑time credit cannot erase the risk that a company signs a long lease in a district that has not yet found its post‑pandemic footing.
There is also the issue of trust. Businesses that watched the city’s tax debates over the past decade, including fights over gross receipts and special levies on large employers, may worry that today’s incentive could be offset by tomorrow’s surcharge. The experience of firms like Block, which saw the policy environment shift around them even as they tried to invest in Mid‑Market, feeds a narrative that San Francisco can be unpredictable for corporate planning. When tax experts describe relocation as a “complex calculus,” they are implicitly acknowledging that political stability and regulatory clarity matter as much as the size of any single credit, and that is a front where the city still has work to do.
What the unused credit reveals about the path forward
For me, the most telling part of the unused $1 million offer is not the lack of applicants, but what it reveals about the hierarchy of concerns inside boardrooms. If a company is already skeptical about downtown San Francisco, a one‑time tax break is more likely to be seen as a sweetener on a decision it was going to make anyway than as a reason to change course. The fact that no one took the deal suggests that there were not many firms on the fence to begin with. Either they were committed to the city for other reasons, or they had already decided that their future lay in Oakland, Austin, Miami, or a fully remote model that makes the question of headquarters almost symbolic.
That does not mean incentives are useless. The city’s broader package of recurring credits for new businesses, including the program that offers up to $1M per year, can still shape where startups incorporate, where they hire their first engineers, and where they sign their first leases. But the downtown relocation credit’s failure is a reminder that tax policy cannot substitute for the basics: reliable transit, clean and safe streets, and a regulatory climate that feels stable over the life of a 10‑year lease. Until those fundamentals improve, San Francisco can keep writing bigger numbers on its incentive packages and still find that nobody is willing to cash them in.
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Julian Harrow specializes in taxation, IRS rules, and compliance strategy. His work helps readers navigate complex tax codes, deadlines, and reporting requirements while identifying opportunities for efficiency and risk reduction. At The Daily Overview, Julian breaks down tax-related topics with precision and clarity, making a traditionally dense subject easier to understand.
