The Times, being the Times, frames the disaster that is San Francisco as something that happened to the city when in large huge measure the current situation is exactly what the politicians and their policies created over the last 58 years.
And spinmeisters deliberately conflated the prosperity that comes from having the whole world send money to your area with the politics of the area. The same thing happened in Seattle when all the money flowing into Amazon and Microsoft was attributed to forward-thinking politicos. In June 2020 we posted "Seattle Real Estate Not a Good Bet":
The news that the city is going to shut-down CHAZ CHOP is not going to be nearly enough to save Seattle.
Amazon and Microsoft have been the engine of growth, in a way similar to Silicon Valley where the whole world is funneling money into a small geographical area and in the case of Amazon with coronavirus we've just seen the high-water mark for this cycle.
Like so many societies throughout history getting wealthy means getting flabby, with politics and programs that a poorer, hungrier society can't afford.
Looking at a third metro area, Minneapolis' heyday was roughly 1880 - 1980 with the northern tier railroads, Great Northern and Northern Pacific and the heavyweight ag businesses, Pillsbury, General Mills etc. giving way to first round tech, Medtronic and St. Jude Medical, Control Data and Cray Research and then stagnation into a violent* little backwater, coasting on accumulated capital and slowly becoming irrelevant on the world stage except as a chokepoint for soybeans and corn being sent down the Mississippi or up to Duluth and eventually the Atlantic.
Seattle was touted as heaven-on-earth with the $15.00 minimum wage for restaurant workers but the touts never mentioned that it was only because of Amazon that it was possible.
And now those jobs are no more and 50% of them will not come back.
For a while Seattle had more construction cranes than New York and even London but those days are gone and here's the rest of the story from Phoenix's KTAR news....
That was followed, in September 2020 by: "Amazon takes another major step to abandon Seattle" (AMZN)":
Sooner or later the politicians in Seattle, Portland, Minneapolis, Chicago and the rest of the northern cities are going to realize they've destroyed the goose that laid the golden eggs and in particular the last two cities, that they have been coasting on the fumes of past glory.
But the realization will come too late....
This stuff isn't rocket surgery, just paying attention is usually enough.
From the New York Times, December 17:
The coffee rush. The lunch rush. The columns of headphone-equipped tech workers rushing in and out of train stations. The lanyard-wearing visitors who crowded the sidewalks when a big conference was in town.
There was a time three years ago when a walk through downtown San Francisco was a picture of what it meant for a city to be economically successful. Take the five-minute jaunt from the office building at 140 New Montgomery Street to a line-out-the-door salad shop nearby.
The 26-story building, an Art Deco landmark that was once the tallest in the city, began its life as the headquarters for the Pacific Telephone & Telegraph Company. Decades later, it served as the home of the local search company Yelp. The nearby salad store was part of a fast-growing chain called Mixt.
Yelp and Mixt had little more than proximity in common, which at that time was enough. Yelp was an idea that became billions of dollars in value on the internet. Mixt was a booming business serving lunchtime salads to the workers who traveled on electrified trains and skateboards to their jobs in downtown cubicles.
Their virtuous cycle of nearness, of new ideas becoming new companies, feeding other ideas that become other companies, was the template for urban growth. Businesses like Yelp took root in the high-energy, high-density city; chains like Mixt flourished alongside them as their workers ventured out for lunch. As downtowns have emptied out, their once-symbiotic relationship is coming undone.
“This area was always packed with people,” recalled Maria Cerros-Mercado, a Mixt manager who built her career in food service downtown. “People would get off the BART, buy coffee, buy this, buy that. There was always just so much walking.”
Today San Francisco has what is perhaps the most deserted major downtown in America. On any given week, office buildings are at about 40 percent of their prepandemic occupancy, while the vacancy rate has jumped to 24 percent from 5 percent since 2019. Occupancy of the city’s offices is roughly 7 percentage points below that of those in the average major American city, according to Kastle, the building security firm.
More ominous for the city is that its downtown business district — the bedrock of its economy and tax base — revolves around a technology industry that is uniquely equipped and enthusiastic about letting workers stay home indefinitely. In the space of a few months, Jeremy Stoppelman, the chief executive of Yelp, went from running a company that was rooted in the city to vacating Yelp’s longtime headquarters and allowing its roughly 4,400 employees to work from anywhere in their country.
“I feel like I’ve seen the future,” he said.
Decisions like that, played out across thousands of remote and hybrid work arrangements, have forced office owners and the businesses that rely on them to figure out what’s next. This has made the San Francisco area something of a test case in the multibillion-dollar question of what the nation’s central business districts will look like when an increased amount of business is done at home.
“Imagine a forest where an entire species suddenly disappears,” said Tracy Hadden Loh, a fellow at the Brookings Institution who studies urban real estate. “It disrupts the whole ecosystem and produces a lot of chaos. The same thing is happening in downtowns.”
The city’s chief economist, Ted Egan, has warned about a looming loss of tax revenue as vacancies pile up. Brokers have tried to counter that narrative by talking up a “flight to quality” in which companies upgrade to higher-end space. Business groups and city leaders hope to recast the urban core as a more residential neighborhood built around people as well as businesses but leave out that office rents would probably have to plunge for those plans to be viable....
....MUCH MORE
When the money stops flowing the rot underneath becomes visible, the piles of human excrement on the sidewalks become more noticeable.As does the crime.
If interested, use the 'search blog' box upper left, we've been chronicling this stuff for a long time.
