To coax developers into turning empty downtown offices into apartments, San Francisco cut transfer taxes, rezoned commercial blocks, and eliminated affordable-housing requirements. After years of that, the pipeline is still a handful of boutique deals — and the newest one, a 104-unit conversion of a vacant Civic Center tower at 150 Hayes St., illustrates exactly how narrow the winner's circle has become.

Last week a development team filed plans to gut 150 Hayes St. — a six-story, 1968 office block vacant for years — and rebuild it into 104 apartments, adding a seventh floor and a new glass-and-bronze skin, The San Francisco Standard reported. The developers, Marc Babsin of Emerald Fund and Jack Sylvan of SDG, spent years lobbying for the very incentives that made the math work and years more scouting more than two dozen buildings to find one where it did. That's the story the city doesn't put on a press release: even with the rulebook rewritten in developers' favor, conversions remain rare, dependent on a distressed building, a willing owner, and a specialist buyer all lining up at once — and the affordable-housing giveaway that helps them pencil means these downtown-revival apartments add few, if any, income-restricted homes.

San Francisco has spent two years building an incentive package for office-to-housing conversions: a transfer-tax cut, commercial rezoning, and the elimination of fees and affordable-housing requirements, as The San Francisco Standard reported. The pitch is that a downtown emptied of workers can be refilled with residents. The results, so far, are thin.

Before this summer, only one other conversion had even been announced in six years — the Humboldt Building on Market Street — and it was abandoned last year when the developer couldn't line up financing, according to the Standard. That is the track record the city's newest showpiece is measured against.

Enter 150 Hayes. The building's dusty green-and-glass facade has looked the same since 1968, but inside it has sat empty for years, furniture stacked in the dark. Its owner, the Academy of Art University, has been shedding downtown property amid falling enrollment — a retreat The Dissent has tracked as the school unwinds one of the city's largest private real-estate portfolios. Emerald Fund and SDG plan to buy the tower later this year at an undisclosed price, gut the interior, swap the mechanical systems, and add a floor, lifting the building from 74 to 100 feet. Of the 104 units, more than half would be one-bedrooms, with 42 two-bedrooms and seven three-bedrooms; parking would shrink from 110 spaces to 88.

What the plan does not appear to include is a floor of required below-market-rate housing — because the city stripped that requirement out to make conversions viable in the first place. It's the same accountability gap that surfaced with Mayor Daniel Lurie's Nordstrom Rack conversion at 901 Market, where the city would not say how many of 136 promised homes would be affordable. Downtown revival, it turns out, is being built almost entirely at market rate.

The developers are candid about why the field is empty. Class A towers in the Financial District were too expensive or still had tenants, leaving "only a handful of distressed, functionally obsolete buildings," Sylvan told the Standard — each with a different owner and a different set of problems. San Francisco's office stock is roughly an eighth the size of New York's and sits in a seismic zone that piles on construction cost.

"It takes a certain perspective to want to pivot a property's use," Sylvan told the Standard. "A lot of owners are so used to collecting rent checks and are looking around at the AI boom thinking they could still take part." Translation: many landlords would rather wait for a tech tenant than sell into a conversion — so the buildings that trade are the ones with no future as offices. "The building literally cannot be offices anymore," Sylvan said of 150 Hayes.

That leaves conversions to a small club of boutique specialists. Two more filings have surfaced — Hudson Pacific's 901 Market and a 70-unit proposal at 2300 Stockton St. — but as Sylvan put it, "the opportunities in San Francisco are so niche and spotty that most larger players would have trouble justifying it."

150 Hayes may well pencil. Whether a boutique business can move the needle on a downtown with millions of empty square feet — while the incentives that make it possible quietly strip out the affordable units the city says it needs most — is the question these deals keep leaving unanswered.