Three San Francisco buildings that were at the center of the city's long legal fight with the Academy of Art University have a new set of residents: startup founders and researchers chasing the AI boom.
The for-profit art school has been leasing 1916 Octavia St. in Pacific Heights, 2209 Van Ness Ave. and 1153 Bush St. to The Residency for about two years, the San Francisco Standard reported Friday. The Residency calls itself a housing and coworking space for people who want to work full time on their own projects. It runs four locations in the city.
From dorms to demo days
The Octavia Street building used to be a student residence hall. Today it hosts about 20 founders, researchers and academics on three-month stays, according to the Standard. Former dorm space has been turned into a video studio, and a sunroom is filled with robotics gear. The program runs three groups a year, each ending with a demo day in week nine. Prices start at about $2,000 a month, and residents can also pay with equity in their companies.
The Academy of Art declined to comment to the Standard.
Why these addresses matter
In 2016, the City Attorney's Office sued the Academy over violations of city planning, building and administrative codes, accusing the school of occupying and altering dozens of properties without permits. A key complaint was that it turned housing, including single-room occupancy hotel rooms, into student dorms, which shrank the city's supply of affordable homes. The complaint listed 22 buildings, and the three now leased to The Residency were among them.
Under the settlement approved around 2019 and 2020, the school agreed to pay about $58 million. According to a San Francisco Planning Department fact sheet, $37.6 million of that went to affordable housing and $8.2 million to the city's Small Sites program for buying and preserving housing, with the rest covering penalties, enforcement costs and impact fees. The Academy also agreed to leave nine properties, bring 34 others up to code and restore 12 historic buildings. The deal bars the school from converting any more housing into student housing.
The Planning Department's fact sheet does not address leasing those buildings to outside groups, and the Standard's report does not say whether the city has reviewed the arrangement.
Part of a bigger trend
Founder housing has been spreading across San Francisco as AI startups pull people into the city. Another building named in the lawsuit, the Commodore Hotel at 825 Sutter St., was sold in 2025 and rebranded as the Superhero Hotel, which markets itself to startup founders, the Standard reported.