Sure, individuals are leaving San Francisco. After many years of development, is town on the decline?
The grim economic signs of life in San Francisco over the past six months strongly suggest residents will be abandoned amid record job losses, remote work anchoring, and a coronavirus pandemic that shows no sign of an end.
It is still unclear how many people are left, but moving trucks and middle posts tell the story of ongoing migration. The weakness of the rental market and the practically constant online spending while on-site accommodation shows that residents not only stay at home but also leave, experts say. The city’s ability to attract new residents or lure old ones to return will be critical to avoiding a huge hole in a local budget that has swelled to nearly $ 14 billion.
In an increasingly virtual economy, where everyday goods are delivered not out of convenience but out of pandemic necessity, all you have to do is count the Amazon boxes.
Todd Trumbull / The Chronicle
Between April and June, the nine counties in the Bay Area saw a sharp drop in brick and mortar sales taxes as home stay orders went into effect, from a 17% decrease in Santa Clara County to a decrease of 53% in San Francisco. compared to the previous year. But eight of the counties – anywhere but San Francisco – saw huge leaps in online sales taxes, up to 36% for Contra Costa County.
In San Francisco, the tax on online sales only increased 1%. That number was by far the worst not only in the region, but among California’s 20 largest counties. Los Angeles County saw online sales taxes increase 31%, San Diego County increased 38%, and Sacramento County increased 32%.
“That’s a sign to me that people aren’t here,” said Ted Egan, chief economist for San Francisco.
The empty streets are a reminder of the aftermath of the dotcom bankruptcy in the early 2000s, said Noni Richen, president of Small Property Owners of San Francisco.
Its members have ex-tenants who left town because they saw no reason to stay after losing their jobs or moving classes online.
“The utilization is declining,” said Richen. “They’re moving home to mom and dad or cheaper somewhere else.”
Real estate data firm Zumper reported a 20% decline in average one-bedroom rents per year in San Francisco this month, the largest decline among major cities. The inventory of homes and condos for sale hit a 15-year high amid a flurry of new listings, although prices for single-family homes are still rising, according to realtor Compass.
An empty Market Street during the second week of Shelter-in-Place in March. Economic indicators over the past six months suggest residents are leaving San Francisco amid record jobs and the rise of remote work.
Gabrielle Lurie / The Chronicle
One difference to the dotcom days is that tech titans like Google and Facebook, who have large offices in both San Francisco and Silicon Valley, haven’t cut jobs. Richen said she was encouraged that companies haven’t scaled back, despite allowing workers to stay away until next summer.
“I think San Francisco will recover,” said Richen. “I think they will recover.”
Between February and August, the workforce in the greater San Francisco-Redwood City-South San Francisco area declined 4.5%, higher than the 4.1% decline for the state and 2.3% nationally. It agrees with evidence that urban areas are harder hit than the rest of the country and could indicate people are moving away from San Francisco, according to the Federal Reserve Bank of San Francisco.
Chris Thornberg, founding partner of research firm Beacon Economics, said talk of San Francisco’s downfall and decline was exaggerated.
“Once the virus is under control, the economy will recover like it’s nobody’s business,” he said, predicting a recovery in San Francisco by next spring. “I don’t think you need a vaccine.”
He said excessive restrictions on reopening businesses were unnecessary and ineffective. “I don’t think there is any way to eradicate this disease by shutting down the economy,” he said.
But San Francisco officials remain cautious. There is still no schedule for when non-essential office workers can return. Tech companies – now dominating the ranks of San Francisco’s largest private employers – are increasingly turning to remote work, for extended periods of time, or in some cases, indefinitely.
“That begs a big question: when are they coming back? Are you coming back? “Said Egan.
Online sales tax collections in the Bay Area and other major California counties showed a sharp rise during the pandemic – except in San Francisco, where they were practically flat.
|
district |
Change in stationary sales tax income, April-June 2019-April-June 2020 |
Change to online VAT receipts, April-June 2019-April-June 2020 |
|
Alameda |
-32% |
24% |
|
Towards the coast |
-25% |
36% |
|
Marin |
-34% |
31% |
|
Napa |
-35% |
24% |
|
San Francisco |
-53% |
1% |
|
Saint Matthew |
-41% |
18% |
|
Santa Clara |
-17% |
14% |
|
Solano |
-19% |
27% |
|
Sonoma |
-24% |
34% |
|
The angel |
-31% |
31% |
|
orange |
-28% |
27% |
|
Sacramento |
-13% |
32% |
|
San Diego |
-28% |
38% |
Source: San Francisco Office of the Controller
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Roland Li is a contributor to the San Francisco Chronicle. Email: roland.li @ .com Twitter: @rolandlisf
