As the 1950s wound down, the proliferation of mass-produced, heavily marketed light lagers took an increasing toll on America’s—and San Francisco’s—small brewers. But a number of local establishments still proudly featured Anchor’s signature product, in particular the Crystal Palace Market between Market and Mission at 8th Street. According to the San Francisco Chronicle, it was a “sprawling, pungent, cheap and exotic carnival of delicatessen and delicacy.”

During the 1940s and 50s, Austrian Joseph Erdelatz served Anchor Steam and hot dogs at his bar in the southeast corner of this vast, colorful marketplace. Locals called it the “Steam Beer Parlor,” scarcely imagining its pivotal role in Anchor’s or its beer’s survival. For had it not been for the Crystal Palace, there might never have been an Old Spaghetti Factory, and without the Old Spaghetti Factory and its charismatic owner, Fred Kuh, there might be no Anchor Steam Beer today. Fritz Maytag, who tells the story better than anyone, shared it with me a few years ago:

Ah, Fred. A man of good taste. He had lived in Chicago and been to the Sieben’s Brewery, where I later bought our bottling line. They were the last brewery in America to have a restaurant in the brewery, a little Bier stube. And when he came to San Francisco for a visit, on the way into town from the airport, the very first thing his friend did was take him for a visit to the crystal Palace Market, sort of the equivalent of today’s farmers’ market. He recognized it immediately as similar to the great traditions of good food in Europe. Then his friend took him to the taproom at the crystal Palace Market, where they served Anchor steam on draught. Fred told me that he vowed that day, in the bar, drinking Anchor steam, that he would move to San Francisco, open a restaurant, and serve only Anchor steam Beer on draught.

And Fred Kuh served, on draught, Anchor Steam Beer only, all the years he was open. He had bottled beers, but no other beer on draught ever. And it was a booming place with young people. It was a target for the brewers. Imagine all the salespeople from Budweiser, Coors, and Miller, who would call on Fred at the Old Spaghetti Factory and tell him that he couldn’t possibly survive as a business if he didn’t have their beer on draught. And he told them all to go jump in the lake.

Fred Kuh had made good on his vow.

__________________________________

Reprinted with permission from The Anchor Brewing Story: America’s First Craft Brewery & San Francisco’s Original Anchor Steam Beer by David Burkhart, foreword by Fritz Maytag, published by Ten Speed Press, an imprint of Penguin Random House.

The post The Mannequin for America’s Trendy Craft Beer Increase? Contained in the Small-Brewer Scene in Nineteen Fifties San Francisco ‹ Literary Hub appeared first on Los Gatos News And Events.

After a 21st-century gold rush created by big tech, downtown San Francisco is going to have to reinvent itself. Again.

The city of undulating streets, panoramic views, and booms and busts is now facing a major economic upheaval, as persistent crime, homelessness and high costs are keeping many tech office workers away, and making tech companies rethink their offices. While the city is lately portrayed as going through an apocalyptic descent into hell, this is really just another bad bust cycle for a downtown core that has experienced many before.

After a host of companies moved out in the 1980s, San Francisco saw the beginnings of an economic rebirth in the mid-1990s, when it became the hipper outpost of Silicon Valley, beginning with the dot-com boom with startups renting former industrial spaces in the then-low-rent South of Market district.

But the city became an extension of Silicon Valley for the first time in the past decade, as a generation of startups like Salesforce Inc.
CRM,
-1.70%,
Twitter Inc.
TWTR,
Pinterest Inc.
PINS,
-1.63%,
Uber Technologies
UBER,
+11.97%
and Airbnb
ABNB,
+2.00%
grew up, went public and stayed in San Francisco’s Financial District or nearby environs, as the city became a major hotbed of new tech, rivaling the Valley for software and mobile-app companies.

An even bigger change came from a massive influx of tech workers. So many tech workers decided to live in the city that Valley giants like Alphabet Inc.
GOOGL,
-4.27%

GOOG,
-4.39%
opened offices there, and shuttled their workers to offices in sleek but reviled buses from their San Francisco residential neighborhoods down the Peninsula to Google, Apple and Facebook headquarters in Mountain View, Cupertino and Menlo Park.

But as housing costs climbed, and homelessness and crime increased everywhere, the pandemic fueled a migration of about 7% of San Francisco’s population, or around 59,000 residents, to more affordable cities from April 2020 to July 2021, according to U.S. Census Bureau data. Cities like Atlanta and Miami are becoming new tech centers, and rural towns in Montana and Wyoming are attracting dispersed tech workers and bosses. Even cities in the surrounding region such as Oakland, Berkeley and into the Sierra Nevada, are benefiting.

Now tech companies are joining their workers, scaling down their presence in San Francisco, shedding office floors and keeping a smaller, almost satellite presence in some cases. Sentiment in the city is depressed, as crimes caused by opioids and homelessness have turned many residents, possibly for good.

A recent poll by the San Francisco Chronicle found little hope among citizens in the city’s ability to fix its chronic problems, with most of the 1,653 people surveyed expressing worry, frustration and pessimism. But the mood is no better in the real Silicon Valley, where more than half the residents said in a recent poll that they plan to leave the region in the next few years, unchanged from last year’s poll.

San Francisco’s worker problem, though, is putting its economic engine — the downtown core — at risk. Karen Chapple, director of the School of Cities at the University of Toronto and professor emerita of City & Regional Planning at UC Berkeley, led a group of researchers to study economic recoveries of downtowns across the U.S. since the start of the pandemic.

San Francisco came in dead last.

“There will always be some interesting new tech phenomenon in San Francisco,” Chapple said. “Because of the nature of the beast and the smart people and the culture, it’s a magnet, but I don’t think you will see a huge scale-up anymore, with the Big Five taking millions of square feet in downtown San Francisco, I think that is probably over.”

Kelsey Bishop, founder and chief executive of Candor, a startup professional network to help co-workers connect in a remote environment, agrees. Bishop left San Francisco in 2021 and now divides her time between Lisbon and New Jersey, mostly working remotely.

“I think San Francisco is going to have a hard time recovering from this,” she said. “What we have seen, whether it is a hybrid model or not, people want to live in beautiful places…Why work in downtown SF? I frequently heard gunshots out there, I remember huddling under my desk because there was an active shooter outside.”

How the pandemic slapped San Francisco

The pandemic-era vibes dissipated last month, when San Francisco got a nice little economic boost from Salesforce Inc.’s
CRM,
-1.70%
Dreamforce, the largest in-person tech conference since the pandemic began. Many of the 40,000 attendees celebrating Salesforce and its products were spending money downtown in hotels and restaurants.

While the feeling of a bustling downtown was a nice diversion from the emptiness that the Financial District has largely felt during the pandemic, it was only a temporary infusion into San Francisco’s economy.

The city’s downtown Financial District and South of Market have some of the lowest office attendance rates in the U.S., and San Francisco’s commercial office vacancy rate was 23% in the third quarter, according to Cushman & Wakefield Research, the same level it reached in 2003 amid the fallout of the dot-com bust. Data from the UC Berkeley researchers indicated that Salt Lake City; Bakersfield, Calif.; Columbus, Ohio; and Fresno, Calif., were the top four recovering cities, based on cellphone data of workers returning to the office. More recent data since Labor Day from Kastle Access Control Systems, the card key entry company, found 39.7% of workers in San Francisco offices were back in the office, up from 14.7% a year ago. That data is compared to a pre-COVID baseline, Cushman & Wakefield noted.

A pedestrian walks down a quiet California Street in the Financial District of San Francisco on May 9.

Bloomberg News

SocketSite created a graphic of the amount of empty office space in San Francisco, showing the equivalent of 13.8 Salesforce Towers — the 1,070-foot-high skyscraper towering over downtown — is sitting unoccupied, based on 18.7 million square feet of vacant office space in the second quarter, including 5 million of sublease office space on the market. In the third quarter, that number grew to 19.9 million square feet of available space, according to Cushman & Wakefield.

“We need to re-envision how the city is structured,” said Jennifer Stojkovic, executive director of sf.citi, a tech trade association. “I think there has been a large number of legislative officials who have not taken the downtown recovery seriously. Most people were banking on things recovering by now.”

San Francisco’s proposed $14 billion annual budget is estimating an almost 6% drop in business taxes, to $902.3 million in fiscal 2022-’23, from $957.1 million in 2021-’22. But the city will make up those lost funds with an estimated $60 million in taxes from the newly enacted executive pay tax, a measure that sf.citi fought against.

“San Francisco has a Frankenstein tax system,” Stojkovic said, adding that all the recent tax measures voted on by the city were during boom times. “It was all based on the longest bull market in 100 years. We said we cannot keep adding all these taxes.”

The city is projecting that both sales taxes and hotel taxes will grow this fiscal year, but those numbers could prove to be optimistic if more business does not return. Another looming potential revenue loss, albeit temporary, could come from property owners who are appealing their property assessments with the city, arguing that their property taxes should be reduced to reflect lower assessed property values. Ted Egan, the city’s chief economist, said that there has been a large number of appeals filed, but they have not been heard yet. He noted that the reassessments are mostly being filed by newer property owners, who bought buildings in 2019, for example.

Based on the amount of office space available, a lot of tech may be gone for good, or stay with a vastly reduced presence. For example, in August 2020, Pinterest canceled its plans to lease 490,000 square feet in a downtown office building under construction near the CalTrain transit station, paying $89.5 million to cancel the lease. Instead, it is keeping its nearby headquarters. Oracle Corp.
ORCL,
-1.23%,
which moved its headquarters to Austin, Texas, from Redwood City, Calif., subleased four of its five floors in San Francisco, or about 86,000 square feet.

A failure to act

There have been some discussions on how to remake parts of downtown, or include more culture and arts. But San Francisco Supervisor Ahsha Safai, who represents District 11, which includes southeastern residential districts but not downtown, has been one of the more cautionary voices trying to get the city to wake up. He said the issues downtown have a spillover effect, hurting union workers, such as janitors and hotel workers, and small businesses, to name a few.

“All this has a massive ripple effect on our economy,” he said. “We can’t just hope that people are going to come back to the office.”

Safai organized a couple of sessions of the Board of Supervisors’ Land Use Committee to discuss the problem over the past year. This month, he proposed a working group to focus on the problems, saying it is essential to have an “honest conversation” about how to reinvent the downtown core.

“There might be some land-use changes. We might need to allow more conversion of buildings to residential, convert more to entertainment,” Safai told MarketWatch. “But we have to go through that process of change, determine what level of office needs to be preserved and what needs to be transitioned.”

Many in the real estate community, though, see the city keeping its status as a tech center. “There is some concern about the future of the leasing market in San Francisco,” said Bill Cumbelich, an executive vice president of CBRE in San Francisco. “With some tech companies going completely remote, questions rise there, but I have to say now that San Francisco has established itself as a tech city, it is very good for the city going forward, compared to where we were in the ’90s.”

Cumbelich recalled the 1980s, when companies like Bank of America
BAC,
+0.44%,
Chevron
CVX,
+0.73%
and Pacific Bell moved their headquarters out of the city, as a real stagnant time, until tech began to emerge as a new industry in the mid-1990s.

“Since that early ’80s exodus, before that I don’t think we had seen those types of big shocks to the office market,” he said.

Cumbelich believes that the so-called Class A property buildings, such as 140 New Montgomery, the former headquarters of Pacific Telephone and then AT&T, will fare well in the current upheaval. Last year, Yelp Inc.
YELP,
+0.65%
did not renew its 14 floors, or about 162,000 square feet of space, in the building, but some of that has since been leased, Cumbelich said. He said many building owners are currently engaged in an “amenities arms race” to fix up their buildings to attract new tenants, adding that some of 140 New Montgomery’s features — like its garden courtyard, bike parking and gorgeous lobby — attract tenants and their workers.

“There are a lot of lobby refreshes going on, exterior decks, conference centers, activation of lobbies, lot of upgrading and improvements going on,” he said. “A lot of offices are adopting a hospitality focus, having things that are appealing like a hotel would…to make it more appealing for workers.”

Indeed, some areas of downtown are busier. Some lunch restaurants have reopened since the pandemic, and there are more people walking in the streets during the day. On a Monday night after Dreamforce was long over, it was busy at Tadich Grill, one of the city’s oldest restaurants. But it’s still not like it was, and some businesses are still seeing a huge drop in revenue.

“Our hours are reduced,” said Steve Sarder, co-owner of Ladle & Leaf, a popular family-owned soup-and-salad restaurant chain. “The locations that used to be open for breakfast are no longer open for breakfast.” Ladle and Leaf closed three of the 13 locations it had prior to the pandemic.

Pedestrians walk by an empty Financial District restaurant on Aug. 25, 2022 in San Francisco.

Getty Images

“We are down 65%. It would be worse if it weren’t for so many restaurants being closed. When I look at the traffic in the buildings that we occupy, I think the downtown traffic is around 25% of what it was, pre-pandemic.” When workers only come downtown to the office once or twice a week, they are only spending a fraction of what they used to on a daily basis, he noted.

“That doesn’t make the economic core a vibrant community,” Sarder said.

“The changes we went through with the pandemic are somewhat permanent,” said Jeb Miller, general partner in Icon Ventures, a venture-capital firm with offices in Palo Alto and San Francisco. “About half of our portfolio companies have an office-space location and are fully remote. But that kind of hybrid state of one or two days in the office seems to be where we are heading.” Miller said that in the South Park neighborhood, for example, where his San Francisco office is located, things are happening, even if remote and hybrid work are becoming a permanent way of life.

“You see kids coming back, entrepreneurs and VCs are out on the lawn, I think that’s the first place that will recover,” he said. Miller remains optimistic about San Francisco. “I think S.F. will still remain the heart of innovation, we have a lot of success that fuels the flywheel of giving back. Talent that is here, that helps the next wave of companies. I think our tolerance for failure here is high, there is a lot of experimentation. There will be some creativity, companies sharing office space, probably a little more reduced footprint, a more creative use of space.”

Egan, the city’s chief economist, believes that working from home is still evolving, and is very fluid, and could change on a dime.

“A recession could change the mood for work from home,” he said. “Employers could change. If the market loosens up a lot employers will be a better bargaining position. Ultimately companies have to be productive…it’s far from settled.” However, if the current situation does become as permanent as some VCs and entrepreneurs believe, “it could have a big shock on property values.”

Indeed, according to CEOs interviewed for a study by KPMG this week, over 50% of them are considering job cuts over the next six months. In a separate survey by beautiful.ai, a majority of managers (60%) said remote workers would likely be among the first to go.

But as seen in the Chronicle poll, the dour look at crime and safety in the city pervades many viewpoints.

“You have become a victim of your own success,” said Robert Ackerman Jr., managing director and founder of AllegisCyber Capital, who sold his home in the city’s posh Pacific Heights neighborhood and moved to Wyoming two years ago. Doing a renovation on his building with a scaffolding required a 24-hour security guard. “I live on airplanes so I can live anywhere…I just saw the steady decline of quality of life in the city, it’s not for me.” Ackerman said some of his investments have been taking him frequently to Maryland, where there are an increasing number of cybersecurity startups, founded by engineers who got their start at places like the National Security Agency.

Ackerman believes that the old adage for entrepreneurs that you had to be in Silicon Valley or San Francisco to start a company is no longer true. “Once upon a time Silicon Valley had the whole game, that is not true anymore.” He said other cities that have been attracting entrepreneurs do not have all the whole ecosystem that has been in place in the Bay Area for decades: mentoring, access to capital, legal services, stellar talent from top universities — but that infrastructure is coming.

Recent Cushman & Wakefield and PitchBook data indicate that funding for San Francisco-based startups is on the wane as well. In the third quarter, San Francisco-based startups raised $5.5 billion, down 48% from the second quarter.

 “I am relatively bullish on the Bay Area, but I am also bullish on other cities rising further than they have in the pandemic,” said Gaurav Gupta, a partner at Lightspeed Ventures. “Founders want to be around the founders of their peer [companies], who they admire; they also want to be near where the talent is. And finally they want to be near their investors.” He said he has seen a few companies opening up offices in San Francisco, as a home base or a place to host company events. He said deal cycles are a bit slower now, and pricing is coming down too.

“Things were extremely concentrated in San Francisco for many, many years,” Gupta said. “That does get more distributed to these other hubs, including New York.”

One possibility some have discussed is whether large building owners will look into converting all or some of their office towers for residential use, as some cities have done, such as in New York’s Battery Park City and downtown Los Angeles. But for building owners, converting an office building, especially the more contemporary ones, to apartments or condos would be a costly and unprofitable proposition.

“I think it has potential on a limited basis,” said John Bryant, chief executive of the Building Owners and Managers Association of San Francisco. “People thinking a mass conversion is going to solve the problem is shortsighted. I don’t think it’s technically or financially feasible.” He pointed out that some of the big challenges are the floor plates of big office buildings, and the tall glass windows in so many skyscrapers.

“How do you break it up, versus an office environment?” Bryant said. “You will probably lose 10-15% of rentable square footage. What is the premium I am going to get on residential? It’s not going to be much higher.”

Moscone Center was busy with 40,000 attendees in September for Dreamforce

Therese Poletti

The past shows that the future is not hopeless

San Francisco has rebounded from hard times before. The flag of the city has an image of a Phoenix, the mythical bird that rises from the ashes, which has often been thought to reference the city’s emergence from the devastation of the crippling 1906 earthquake and fire, but likely actually stemmed from the early fires of the early 1850s and its frequent rebirths after the 1849 Gold Rush.

But the bounce-back from the 1906 devastation had powerful business leaders behind it, including French immigrant, department-store magnate and philanthropist Rafael Weill, who led a group of merchants to find and open temporary store locations while their stores were being rebuilt.

The city currently lacks any vocal or involved tech executives who are passionate about San Francisco. Marc Benioff, the co-founder and co-CEO of Salesforce.com, who was once bandied about as a mayoral candidate, now seems more focused on employee retreats near Santa Cruz and his life in Hawaii, rather than on what ails San Francisco. Salesforce, the city’s largest corporate employer, canceled its lease for 325,000 square feet of space in an unbuilt skyscraper near Salesforce Tower.

San Francisco has a history of creating and recreating itself, from an instant city during the Gold Rush, to rising from the ashes of the 1906 quake, to an eventual recovery after the dark days of the 1970s and the assassinations of Supervisor Harvey Milk and Mayor George Moscone. The city that knows how will always evolve and change, but hopefully will never lose its magic.

The post Opinion: Downtown San Francisco turned the epicenter of Silicon Valley’s growth, however now it have to be reinvented appeared first on Los Gatos News And Events.

After a 21st-century gold rush created by big tech, downtown San Francisco is going to have to reinvent itself. Again.

The city of undulating streets, panoramic views, and booms and busts is now facing a major economic upheaval, as persistent crime, homelessness and high costs are keeping many tech office workers away, and making tech companies rethink their offices. While the city is lately portrayed as going through an apocalyptic descent into hell, this is really just another bad bust cycle for a downtown core that has experienced many before.

After a host of companies moved out in the 1980s, San Francisco saw the beginnings of an economic rebirth in the mid-1990s, when it became the hipper outpost of Silicon Valley, beginning with the dot-com boom with startups renting former industrial spaces in the then-low-rent South of Market district.

But the city became an extension of Silicon Valley for the first time in the past decade, as a generation of startups like Salesforce Inc.
CRM,
-3.33%,
Twitter Inc.
TWTR,
-0.43%,
Pinterest Inc.
PINS,
-2.75%,
Uber Technologies
UBER,
-5.58%
and Airbnb
ABNB,
-2.72%
grew up, went public and stayed in San Francisco’s Financial District or nearby environs, as the city became a major hotbed of new tech, rivaling the Valley for software and mobile-app companies.

An even bigger change came from a massive influx of tech workers. So many tech workers decided to live in the city that Valley giants like Alphabet Inc.
GOOGL,
-2.70%

GOOG,
-2.61%
opened offices there, and shuttled their workers to offices in sleek but reviled buses from their San Francisco residential neighborhoods down the Peninsula to Google, Apple and Facebook headquarters in Mountain View, Cupertino and Menlo Park.

But as housing costs climbed, and homelessness and crime increased everywhere, the pandemic fueled a migration of about 7% of San Francisco’s population, or around 59,000 residents, to more affordable cities from April 2020 to July 2021, according to U.S. Census Bureau data. Cities like Atlanta and Miami are becoming new tech centers, and rural towns in Montana and Wyoming are attracting dispersed tech workers and bosses. Even cities in the surrounding region such as Oakland, Berkeley and into the Sierra Nevada, are benefiting.

Now tech companies are joining their workers, scaling down their presence in San Francisco, shedding office floors and keeping a smaller, almost satellite presence in some cases. Sentiment in the city is depressed, as crimes caused by opioids and homelessness have turned many residents, possibly for good.

A recent poll by the San Francisco Chronicle found little hope among citizens in the city’s ability to fix its chronic problems, with most of the 1,653 people surveyed expressing worry, frustration and pessimism. But the mood is no better in the real Silicon Valley, where more than half the residents said in a recent poll that they plan to leave the region in the next few years, unchanged from last year’s poll.

San Francisco’s worker problem, though, is putting its economic engine — the downtown core — at risk. Karen Chapple, director of the School of Cities at the University of Toronto and professor emerita of City & Regional Planning at UC Berkeley, led a group of researchers to study economic recoveries of downtowns across the U.S. since the start of the pandemic.

San Francisco came in dead last.

“There will always be some interesting new tech phenomenon in San Francisco,” Chapple said. “Because of the nature of the beast and the smart people and the culture, it’s a magnet, but I don’t think you will see a huge scale-up anymore, with the Big Five taking millions of square feet in downtown San Francisco, I think that is probably over.”

Kelsey Bishop, founder and chief executive of Candor, a startup professional network to help co-workers connect in a remote environment, agrees. Bishop left San Francisco in 2021 and now divides her time between Lisbon and New Jersey, mostly working remotely.

“I think San Francisco is going to have a hard time recovering from this,” she said. “What we have seen, whether it is a hybrid model or not, people want to live in beautiful places…Why work in downtown SF? I frequently heard gunshots out there, I remember huddling under my desk because there was an active shooter outside.”

How the pandemic slapped San Francisco

The pandemic-era vibes dissipated last month, when San Francisco got a nice little economic boost from Salesforce Inc.’s
CRM,
-3.33%
Dreamforce, the largest in-person tech conference since the pandemic began. Many of the 40,000 attendees celebrating Salesforce and its products were spending money downtown in hotels and restaurants.

While the feeling of a bustling downtown was a nice diversion from the emptiness that the Financial District has largely felt during the pandemic, it was only a temporary infusion into San Francisco’s economy.

The city’s downtown Financial District and South of Market have some of the lowest office attendance rates in the U.S., and San Francisco’s commercial office vacancy rate was 23% in the third quarter, according to Cushman & Wakefield Research, the same level it reached in 2003 amid the fallout of the dot-com bust. Data from the UC Berkeley researchers indicated that Salt Lake City; Bakersfield, Calif.; Columbus, Ohio; and Fresno, Calif., were the top four recovering cities, based on cellphone data of workers returning to the office. More recent data since Labor Day from Kastle Access Control Systems, the card key entry company, found 39.7% of workers in San Francisco offices were back in the office, up from 14.7% a year ago. That data is compared to a pre-COVID baseline, Cushman & Wakefield noted.

A pedestrian walks down a quiet California Street in the Financial District of San Francisco on May 9.

Bloomberg News

SocketSite created a graphic of the amount of empty office space in San Francisco, showing the equivalent of 13.8 Salesforce Towers — the 1,070-foot-high skyscraper towering over downtown — is sitting unoccupied, based on 18.7 million square feet of vacant office space in the second quarter, including 5 million of sublease office space on the market. In the third quarter, that number grew to 19.9 million square feet of available space, according to Cushman & Wakefield.

“We need to re-envision how the city is structured,” said Jennifer Stojkovic, executive director of sf.citi, a tech trade association. “I think there has been a large number of legislative officials who have not taken the downtown recovery seriously. Most people were banking on things recovering by now.”

San Francisco’s proposed $14 billion annual budget is estimating an almost 6% drop in business taxes, to $902.3 million in fiscal 2022-’23, from $957.1 million in 2021-’22. But the city will make up those lost funds with an estimated $60 million in taxes from the newly enacted executive pay tax, a measure that sf.citi fought against.

“San Francisco has a Frankenstein tax system,” Stojkovic said, adding that all the recent tax measures voted on by the city were during boom times. “It was all based on the longest bull market in 100 years. We said we cannot keep adding all these taxes.”

The city is projecting that both sales taxes and hotel taxes will grow this fiscal year, but those numbers could prove to be optimistic if more business does not return. Another looming potential revenue loss, albeit temporary, could come from property owners who are appealing their property assessments with the city, arguing that their property taxes should be reduced to reflect lower assessed property values. Ted Egan, the city’s chief economist, said that there has been a large number of appeals filed, but they have not been heard yet. He noted that the reassessments are mostly being filed by newer property owners, who bought buildings in 2019, for example.

Based on the amount of office space available, a lot of tech may be gone for good, or stay with a vastly reduced presence. For example, in August 2020, Pinterest canceled its plans to lease 490,000 square feet in a downtown office building under construction near the CalTrain transit station, paying $89.5 million to cancel the lease. Instead, it is keeping its nearby headquarters. Oracle Corp.
ORCL,
-3.08%,
which moved its headquarters to Austin, Texas, from Redwood City, Calif., subleased four of its five floors in San Francisco, or about 86,000 square feet.

A failure to act

There have been some discussions on how to remake parts of downtown, or include more culture and arts. But San Francisco Supervisor Ahsha Safai, who represents District 11, which includes southeastern residential districts but not downtown, has been one of the more cautionary voices trying to get the city to wake up. He said the issues downtown have a spillover effect, hurting union workers, such as janitors and hotel workers, and small businesses, to name a few.

“All this has a massive ripple effect on our economy,” he said. “We can’t just hope that people are going to come back to the office.”

Safai organized a couple of sessions of the Board of Supervisors’ Land Use Committee to discuss the problem over the past year. This month, he proposed a working group to focus on the problems, saying it is essential to have an “honest conversation” about how to reinvent the downtown core.

“There might be some land-use changes. We might need to allow more conversion of buildings to residential, convert more to entertainment,” Safai told MarketWatch. “But we have to go through that process of change, determine what level of office needs to be preserved and what needs to be transitioned.”

Many in the real estate community, though, see the city keeping its status as a tech center. “There is some concern about the future of the leasing market in San Francisco,” said Bill Cumbelich, an executive vice president of CBRE in San Francisco. “With some tech companies going completely remote, questions rise there, but I have to say now that San Francisco has established itself as a tech city, it is very good for the city going forward, compared to where we were in the ’90s.”

Cumbelich recalled the 1980s, when companies like Bank of America
BAC,
-2.26%,
Chevron
CVX,
-0.86%
and Pacific Bell moved their headquarters out of the city, as a real stagnant time, until tech began to emerge as a new industry in the mid-1990s.

“Since that early ’80s exodus, before that I don’t think we had seen those types of big shocks to the office market,” he said.

Cumbelich believes that the so-called Class A property buildings, such as 140 New Montgomery, the former headquarters of Pacific Telephone and then AT&T, will fare well in the current upheaval. Last year, Yelp Inc.
YELP,
-1.15%
did not renew its 14 floors, or about 162,000 square feet of space, in the building, but some of that has since been leased, Cumbelich said. He said many building owners are currently engaged in an “amenities arms race” to fix up their buildings to attract new tenants, adding that some of 140 New Montgomery’s features — like its garden courtyard, bike parking and gorgeous lobby — attract tenants and their workers.

“There are a lot of lobby refreshes going on, exterior decks, conference centers, activation of lobbies, lot of upgrading and improvements going on,” he said. “A lot of offices are adopting a hospitality focus, having things that are appealing like a hotel would…to make it more appealing for workers.”

Indeed, some areas of downtown are busier. Some lunch restaurants have reopened since the pandemic, and there are more people walking in the streets during the day. On a Monday night after Dreamforce was long over, it was busy at Tadich Grill, one of the city’s oldest restaurants. But it’s still not like it was, and some businesses are still seeing a huge drop in revenue.

“Our hours are reduced,” said Steve Sarder, co-owner of Ladle & Leaf, a popular family-owned soup-and-salad restaurant chain. “The locations that used to be open for breakfast are no longer open for breakfast.” Ladle and Leaf closed three of the 13 locations it had prior to the pandemic.

Pedestrians walk by an empty Financial District restaurant on Aug. 25, 2022 in San Francisco.

Getty Images

“We are down 65%. It would be worse if it weren’t for so many restaurants being closed. When I look at the traffic in the buildings that we occupy, I think the downtown traffic is around 25% of what it was, pre-pandemic.” When workers only come downtown to the office once or twice a week, they are only spending a fraction of what they used to on a daily basis, he noted.

“That doesn’t make the economic core a vibrant community,” Sarder said.

“The changes we went through with the pandemic are somewhat permanent,” said Jeb Miller, general partner in Icon Ventures, a venture-capital firm with offices in Palo Alto and San Francisco. “About half of our portfolio companies have an office-space location and are fully remote. But that kind of hybrid state of one or two days in the office seems to be where we are heading.” Miller said that in the South Park neighborhood, for example, where his San Francisco office is located, things are happening, even if remote and hybrid work are becoming a permanent way of life.

“You see kids coming back, entrepreneurs and VCs are out on the lawn, I think that’s the first place that will recover,” he said. Miller remains optimistic about San Francisco. “I think S.F. will still remain the heart of innovation, we have a lot of success that fuels the flywheel of giving back. Talent that is here, that helps the next wave of companies. I think our tolerance for failure here is high, there is a lot of experimentation. There will be some creativity, companies sharing office space, probably a little more reduced footprint, a more creative use of space.”

Egan, the city’s chief economist, believes that working from home is still evolving, and is very fluid, and could change on a dime.

“A recession could change the mood for work from home,” he said. “Employers could change. If the market loosens up a lot employers will be a better bargaining position. Ultimately companies have to be productive…it’s far from settled.” However, if the current situation does become as permanent as some VCs and entrepreneurs believe, “it could have a big shock on property values.”

Indeed, according to CEOs interviewed for a study by KPMG this week, over 50% of them are considering job cuts over the next six months. In a separate survey by beautiful.ai, a majority of managers (60%) said remote workers would likely be among the first to go.

But as seen in the Chronicle poll, the dour look at crime and safety in the city pervades many viewpoints.

“You have become a victim of your own success,” said Robert Ackerman Jr., managing director and founder of AllegisCyber Capital, who sold his home in the city’s posh Pacific Heights neighborhood and moved to Wyoming two years ago. Doing a renovation on his building with a scaffolding required a 24-hour security guard. “I live on airplanes so I can live anywhere…I just saw the steady decline of quality of life in the city, it’s not for me.” Ackerman said some of his investments have been taking him frequently to Maryland, where there are an increasing number of cybersecurity startups, founded by engineers who got their start at places like the National Security Agency.

Ackerman believes that the old adage for entrepreneurs that you had to be in Silicon Valley or San Francisco to start a company is no longer true. “Once upon a time Silicon Valley had the whole game, that is not true anymore.” He said other cities that have been attracting entrepreneurs do not have all the whole ecosystem that has been in place in the Bay Area for decades: mentoring, access to capital, legal services, stellar talent from top universities — but that infrastructure is coming.

Recent Cushman & Wakefield and PitchBook data indicate that funding for San Francisco-based startups is on the wane as well. In the third quarter, San Francisco-based startups raised $5.5 billion, down 48% from the second quarter.

 “I am relatively bullish on the Bay Area, but I am also bullish on other cities rising further than they have in the pandemic,” said Gaurav Gupta, a partner at Lightspeed Ventures. “Founders want to be around the founders of their peer [companies], who they admire; they also want to be near where the talent is. And finally they want to be near their investors.” He said he has seen a few companies opening up offices in San Francisco, as a home base or a place to host company events. He said deal cycles are a bit slower now, and pricing is coming down too.

“Things were extremely concentrated in San Francisco for many, many years,” Gupta said. “That does get more distributed to these other hubs, including New York.”

One possibility some have discussed is whether large building owners will look into converting all or some of their office towers for residential use, as some cities have done, such as in New York’s Battery Park City and downtown Los Angeles. But for building owners, converting an office building, especially the more contemporary ones, to apartments or condos would be a costly and unprofitable proposition.

“I think it has potential on a limited basis,” said John Bryant, chief executive of the Building Owners and Managers Association of San Francisco. “People thinking a mass conversion is going to solve the problem is shortsighted. I don’t think it’s technically or financially feasible.” He pointed out that some of the big challenges are the floor plates of big office buildings, and the tall glass windows in so many skyscrapers.

“How do you break it up, versus an office environment?” Bryant said. “You will probably lose 10-15% of rentable square footage. What is the premium I am going to get on residential? It’s not going to be much higher.”

Moscone Center was busy with 40,000 attendees in September for Dreamforce

Therese Poletti

The past shows that the future is not hopeless

San Francisco has rebounded from hard times before. The flag of the city has an image of a Phoenix, the mythical bird that rises from the ashes, which has often been thought to reference the city’s emergence from the devastation of the crippling 1906 earthquake and fire, but likely actually stemmed from the early fires of the early 1850s and its frequent rebirths after the 1849 Gold Rush.

But the bounce-back from the 1906 devastation had powerful business leaders behind it, including French immigrant, department-store magnate and philanthropist Rafael Weill, who led a group of merchants to find and open temporary store locations while their stores were being rebuilt.

The city currently lacks any vocal or involved tech executives who are passionate about San Francisco. Marc Benioff, the co-founder and co-CEO of Salesforce.com, who was once bandied about as a mayoral candidate, now seems more focused on employee retreats near Santa Cruz and his life in Hawaii, rather than on what ails San Francisco. Salesforce, the city’s largest corporate employer, canceled its lease for 325,000 square feet of space in an unbuilt skyscraper near Salesforce Tower.

San Francisco has a history of creating and recreating itself, from an instant city during the Gold Rush, to rising from the ashes of the 1906 quake, to an eventual recovery after the dark days of the 1970s and the assassinations of Supervisor Harvey Milk and Mayor George Moscone. The city that knows how will always evolve and change, but hopefully will never lose its magic.

The post Opinion: Downtown San Francisco grew to become the epicenter of Silicon Valley’s growth, however now it have to be reinvented appeared first on Los Gatos News And Events.

Image courtesy Treasure Island Community Development

Even if smaller projects are in limbo due to market uncertainties and astronomical construction costs, the city’s colossal multi-phase projects such as Treasure Island, Mission Rock, Pier 70 and Power Station will be in full swing. Roads are being laid, sidewalks are being poured, trees are being planted, street lamps are being installed and buildings are springing up from the ground. – The San Francisco Chronicle

The city is currently in the process of converting Treasure Island, the man-made grove named after the Robert Louis Stevenson novel and created for the 1939 World’s Fair, into an 8,000-unit residential area with sub-par housing and retail facilities that is expected to house a population of about 20,000 by 2032 despite fears the former U.S. Navy facility is contaminated.

The hope raised by the projects is dampened somewhat by the bureaucratic process behind the development programs which, according to The San Francisco Chronicle, has stalled several other mixed-use and residential initiatives in more developed areas of the city.

“Working people like our nurses, teachers and even the construction workers who build our houses are suffering because we haven’t built enough homes in decades,” Mayor London Breed told the newspaper. “Even as we move on to big projects, we need to make fundamental changes to the way we approve and allow homes in San Francisco so families can afford to stay.”

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LOS ANGELES (CBS / AP) – Ask for a roast beef sandwich at an Arby’s drive-thru east of Los Angeles and you might be talking to Tori – an artificially intelligent voice assistant who takes your order and sends it to the chefs.

“It doesn’t make you sick,” says Amir Siddiqi, whose family installed the AI ​​voice at Arby’s Franchise in Ontario, California this year. “It doesn’t get a corona. And the reliability is great. “

Not only did the pandemic threaten the health of Americans when it struck the US in 2020 – it could also pose a long-term threat to many of their jobs. Faced with labor shortages and higher labor costs, companies are starting to automate jobs in the service sector that economists once considered safe, on the assumption that machines couldn’t simply make the human contact they believed customers required .

Past experience suggests that such waves of automation ultimately create more jobs than they destroy, but also disproportionately destroy less qualified jobs, on which many low-income workers are dependent. The resulting growing pains for the US economy could be severe.

Without the pandemic, Siddiqi likely would not have bothered to invest in new technology that could alienate existing employees and some customers. But it went smoothly, he says: “Basically fewer people are needed, but these people now work in the kitchen and other areas.”

Ideally, automation can convert workers into better and more interesting jobs, as long as they get the appropriate technical training, says Johannes Moenius, an economist at the University of Redlands. But while that’s happening now, it’s not going fast enough, he says.

Worse, a whole class of service jobs that were created when manufacturing began to use more automation can now be at risk. “The robots have fled the manufacturing sector and immigrated to the much larger service sector,” he says. “I thought contact jobs were safe. I was completely surprised. “

Improvements in robotic technology are allowing machines to do many tasks that used to require humans – throwing pizza dough, moving hospital linen, inspecting gauges, sorting goods. The pandemic accelerated its rollout. After all, robots cannot get sick or spread disease. They also do not require any leave of absence to deal with unexpected childcare emergencies.

CONTINUE READING: The demand for robotic chefs from companies in the Bay Area is increasing with the COVID pandemic

As KPIX reported last year, robotic food service was a trend even before the coronavirus pandemic as hospitals, campus cafeterias, and others tried to meet demand for fresh, bespoke options around the clock while keeping labor costs in To keep check. Robot chefs have performed in places like Creator, a burger joint in San Francisco, and Dal.komm coffee outlets in South Korea.

Prior to 2020, Hayward-based tech company Chowbotics had sold around 125 of its $ 35,000 robots, mostly to hospitals and colleges. Shortly after the coronavirus outbreak, sales rose more than 60%, CEO Rick Wilmer said, with growing interest from grocery stores, senior housing communities and even the U.S. Department of Defense.

International Monetary Fund economists found that past pandemics had encouraged companies to invest in machines that could increase productivity – but could also kill low-skilled jobs. “Our results suggest that concerns about the rise of robots amid the COVID-19 pandemic seem justified,” they wrote in a January newspaper.

The consequences could hit the less educated women who disproportionately fill the low- and middle-wage jobs most exposed to automation – and viral infections. These professions include salespeople, administrative assistants, cashiers and helpers in hospitals, as well as nurses and geriatric nurses.

Employers seem eager to introduce the machines. A survey by the not-for-profit World Economic Forum last year found that 43% of companies planned to reduce their workforce due to new technology. Since the second quarter of 2020, corporate investment in equipment has increased 26%, more than twice the rate of the economy as a whole.

The fastest growth is expected in roving machines that clean the floors of supermarkets, hospitals and warehouses, according to the International Federation of Robotics, a trading group. The same group also expects increased sales of robots that provide information to shoppers or deliver room service orders in hotels.

Restaurants are among the most visible robot users. At the end of August, for example, the salad chain Sweetgreen announced that it was buying the kitchen robot startup Spyce, which makes a machine that cooks vegetables and grains and pours them into bowls.

It’s not just robots either – software and AI-supported services are also on the rise. Starbucks has automated the work behind the scenes to keep track of a store’s inventory. More shops have moved to self-checkout.

Scott Lawton, CEO of the Arlington, Virginia-based restaurant chain Bartaco, struggled to get waiters to return to his restaurants last fall when they reopened during the pandemic.

So he decided to give it up. With the help of a software company, his company developed an online ordering and payment system that customers could use over their phones. Guests now simply scan a barcode in the center of each table to access a menu and order their food without having to wait for a waiter. Workers bring food and drinks to their tables. And when they finish eating, customers pay on their phone and leave.

Innovation has reduced the number of employees, but employees are not necessarily worse off. Each Bartaco location – there are 21 – now has up to eight deputy managers, roughly double the pre-pandemic total. Many are former servers and they wander between the tables to make sure everyone has what they need. They receive annual salaries of $ 55,000 or more instead of hourly wages.

Tips are now shared among all other employees, including dishwashers, which now typically make $ 20 an hour or more, far more than their pre-pandemic salary. “We don’t have the labor shortage you read about on the news,” Lawton says.

The rise in automation has not stalled a breathtaking rebound in the US labor market – at least so far.

The US economy lost a staggering 22.4 million jobs in March and April 2020 when the pandemic storm hit the US. Attitudes have since recovered rapidly: employers have brought back 17 million jobs since April 2020. In June they posted a record 10.1 million vacancies and complain that they cannot find enough workers.

Behind the hiring boom is an increase in consumer spending, many of whom have come through the crisis unexpectedly financially – thanks to both federal relief checks and, in many cases, the accumulated savings from working from home and the elimination of the daily commute.

Mark Zandi, chief economist at Moody’s Analytics, assumes that employers will likely be looking for workers for a long time to come.

For one thing, many Americans are taking their time to get back to work – some because they are still concerned about the health risks and childcare issues posed by COVID-19, others because of the generous federal unemployment benefits that came out on September 6th nationwide expires.

In addition, many baby boom workers are retiring. “The job market will be very, very tight for the foreseeable future,” says Zandi.

Currently, the short-term benefits of economic snapback outweigh any job losses from automation, the effects of which are gradually becoming apparent over a period of years. That can’t last. Last year, researchers from the University of Zurich and the University of British Columbia found that the so-called unemployment rallies of the past 35 years, in which economic output recovered from the recession faster than employment, could be explained by the loss of automation-vulnerable jobs .

Despite strong hires since the middle of last year, the US economy is still missing 5.3 million jobs compared to February 2020. And Lydia Boussour, senior US economist at Oxford Economics, calculated last month that 40% of the missing jobs are vulnerable to automation, especially in food preparation, retail and manufacturing.

Some economists fear that automation will push workers into lower-paying positions. Daron Acemoglu, an economist at the Massachusetts Institute of Technology, and Pascual Restrepo of Boston University estimated in June that up to 70% of the stagnation in US wages between 1980 and 2016 could be explained by machines replacing humans in routine tasks.

“Many of the jobs that are being automated were in the middle of the skill distribution,” says Acemoglu. “They no longer exist and the workers who used to do them are now doing less skilled jobs.”

© Copyright 2021 CBS Broadcasting Inc. All rights reserved. The Associated Press contributed to this report

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PORTSMOUTH – A wave of people is moving to the New Hampshire coast from metropolitan areas in the northeast like Boston and New York City, as well as the nearby states of Connecticut and New Jersey.

The observation comes from Pat Breen, the owner of Preferred Movers in North Hampton, who observed the phenomenon along with employees of his moving company.

Big city folks moving to New Hampshire’s Seacoast have been accelerating for years, Breen said, adding that the trend “hyper accelerated” in the era of COVID-19.

Seacoast residents have been hearing about this influx of out-of-staters for many months. Moving companies see it firsthand every day.

In his business, is more people moving in and out of the Seacoast, or is both a balance?

“Definitely in, mostly in,” said Breen. “The only people who try to move out are just trying to make money and move south or west.”

A team of around 20 people, the Preferred Movers employees, contribute to the company’s sales records while the demand for their services is high. This leads Breen to seek more help as the demand for moving services increases every month.

“It was a challenge, let’s just be honest,” he said.

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‘Different kind of busy’

With homes in Seacoast and Rockingham Counties continuing to sell at record speeds and labor shortages taking its toll, local moving and storage companies are trying to keep up with single-family homes and apartment hunters flocking to Seacoast.

Sometimes it was exhausting.

On July 4th, Deb Harrington, co-owner of Wood Brothers Moving and Storage in Portsmouth with her husband Mark, kept her fingers crossed that she would not receive calls requesting her company’s service.

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She would have accepted any deal if it had been needed during the vacation, but she appreciated the respite for her crew. She said they were revised in 2021 and for most of the pandemic.

How much time do moving companies invest? Harrington said employees clock out six, sometimes seven, days a week after working 13 hours. In a single day, Wood Brothers workers rush back and forth between houses to complete five to ten moves.

Every year from April to October, Harrington said, business is booming.

“It’s busier (now), but it’s a different kind of business,” she said. “There is so much to do at the last minute. It means that fewer employees do twice as much work. “

Mark Harrington says he and his wife often arrive at moves to speed up the process and step in wherever they are needed.

“You have to adapt. You just have to adapt to the situation, ”he said.

How high is the current demand for moving helpers?

State and local statistics, along with anecdotes from moving companies, point to Seacoast and Rockingham Counties as a mecca for apartment hunters far and wide.

The latest data from the New Hampshire Association of Realtors shows that single-family homes in Rockingham County stayed on the market an average of 39 days in May 2020. Last May, homes with an average retail price of $ 515,000 sold nearly two weeks faster than the prior year average and stayed in the market for 27 days.

More:New price records for homes in Seacoast and Counties are in sight

The Seacoast Board of Realtors collects real estate data on a monthly basis from 13 sample communities: Exeter, Greenland, Hampton, Hampton Falls, New Castle, Newfields, Newington, North Hampton, Newmarket, Portsmouth, Rye, Seabrook, and Stratham.

The May report found that 88 single-family homes were sold, with the average price for those households at $ 625,000, an all-time record for the Board since the data began to be collected.

Not just limited to the Seacoast region, an increase in removals is a national trend. Calling it the “Big Reshuffle,” Zillow stated in an April report that 11% of respondents in a Harris Poll poll had moved in the past year.

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The online real estate marketplace reported last month that Chicago, New York City, Los Angeles, San Diego, and San Francisco were the five American cities with the most outbound movers in 2020.

At Wood Brothers, Deb Harrington said, the company’s crews serve people from areas across the country, as far south as San Antonio, Texas and as far west as Montana. Others are moving in and out of areas along the east coast, such as Virginia and South Carolina.

What is the labor shortage for Seacoast movers?

IBISWorld, a global industry and research firm, forecast in a March report that the United States would see 1.7% growth in terms of sales in nationwide moving services this year.

“The main positive factors influencing this industry are low sales volatility and 30-year conventional mortgage rates (which are at all-time lows),” the report said.

Breen is certainly seeing growth as its business just had its second highest month in 16 years in the industry, grossing about $ 300,000, and seeing revenue up about 20% from a standard month. His team in the company’s North Hampton division completed between 70 and 80 local and long-distance moves in June.

Trying not to overload his team, which still needs about five more people to adequately meet demand for moving services, Breen said he then turned down “tons” of job offers for July.

“You can’t overwork the guys (because) you’re getting terrible results,” he said.

A June 15 article in the Washington Post reported that the moving industry, along with psychiatrists, veterinarians and garment factories, is experiencing a parched pool of applicants.

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Although weekly wages rose from $ 736 in February 2020 to $ 745 last April, the number of moving industrial workers has declined since last year as demand rises in the US, according to the Bureau of Labor Statistics.

May 2020 BLS data found that at that time New Hampshire had more than 7,240 workers, freight, warehouse and material handling equipment, earning an average annual wage of $ 33,210.

Most Wood Brothers moving companies cannot afford to find properties to buy or rent in the Seacoast area, Deb Harrington said. To keep the workers, Mark Harrington said, he and his wife bought property themselves so their workers could live, so they could be closer to the constant work of their jobs instead of commuting 40 minutes either way from their homes.

“It just shows you the Seacoast value that we all enjoy. COVID just got it out of the box, ”he said.

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Breen said he is fortunate to have “long-time” employees who have helped the company generate staggering revenues.

“It was a fight, but it was very worth it because we are getting the results we wanted,” he said.

“We’re leaving all these options out there”

The local moving and storage business Calling All Cargo with locations in Dover, Greenland and Portsmouth is always overbooked in the summer, said administration specialist Jess Smith.

However, this summer, according to Calling All Cargo sales director Josh Leonard, record-breaking sales numbers are becoming the norm and schedules continue to be overbooked. Calling All Cargo is always looking for more help.

“Unprecedented times are great,” said Leonard about the current market. “They are things that we find it difficult to meet all of the needs. We can’t hire fast enough. “

On the downside of the company’s success, Calling All Cargo repeatedly had to turn away potential customers because they were fully booked three or four weeks in advance.

Leonard said he has a waiting list and has even referred callers to other local moving companies. Last month he turned away about 30 people.

“They stress me, I feel it emotionally because I have to tell people that I can’t help them,” he said.

With crews carrying items for customers traveling south to warmer regions like the Carolinas, Leonard said the company is seeing more people referring to the Seacoast as their home instead of referring to it as their former home.

“I think there is an influx in this area, especially in Portsmouth, Dover and the Seacoast,” he said.

More than 15 movers are usually on staff for calling all cargo, said Smith.

Leonard’s advice for those willing to move is to plan months in advance when hiring moving workers. Failure to follow this advice may be unlucky.

“It’s hard for us from a business development and growth perspective because we’re leaving all of these opportunities out there,” he said. “We’re not used to having this type of demand without the resources to meet it.”

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The San Francisco Chronicle is the latest publication on California migration and credits the Californians moving to Texas with the Austin real estate boom.

Thousands of newcomers from the Golden State enjoy the rolling hills, burgeoning wine scene, and warm weather of Hill Country, the Chronicle writes, while enjoying greater affordability and quality of life.

Douglas Yearley, CEO of central Texas luxury home builder Toll Brothers, said much of that jump was due to Californians, the Chronicle reported. “Austin, the number one pricing power in the country, is simply driven by California,” said Yearley.

It’s not just sunny skies

Central Texas property prices are skyrocketing as newcomers pile up. The Austin subway transports more than 180 people a day, more than anywhere else in the country.

The latest report from the Austin Board of Realtors found that the average home price hit an all-time high of $ 566,500 in May, up nearly 35% year over year.

California lost residents for the first time in its history last year, with San Francisco losing about 1.3% of its population. Austin is expected to soon become America’s 10th largest city, a seemingly symbolic shift as it knocks off the current # 10 San Jose.

The days of the gold rush seem to be long gone. Real estate agent Ray Shapley, who helped Californians Josh and Jessi Rubbicco find a home in Austin, told the Chronicle that migration patterns across the country are undergoing a massive overhaul.

“I think the last few decades belong to California somehow. I think the next few decades could be central Texas, ”Shapley said. “As someone who was born here and loves Central Texas for what it is, I don’t know if I absolutely love it.”

Shapley’s fears are echoed by many Austinites unsure whether the city is ready to handle such a major real estate boom.

Look in the mirror

The article admitted that some of Austin’s problems mirrored California’s. Homelessness has been a top priority of local politics for years, and the affordability crisis only gets worse as supply and demand roll through the city.

The difference between Austin and its Golden State counterparts, however, is that the Texas capital’s problems may still be solvable. In contrast, the Chronicle reported that many of the crises in the Bay Area are deeply ingrained.

While the average home price has risen in the Austin subway, it’s nearly three times as high ($ 1.3 million) in the Bay Area’s nine counties. There isn’t enough housing in Austin, but the Bay Area homeless crisis could cost a whopping $ 11.3 billion to solve.

Even property taxes, which are higher and constantly changing in Texas, are worth the better quality of life and community spirit, Josh Rubbicco told the Chronicle. “I feel like we have more friends here than ever in California,” said Rubbicco. “The people were so warm and friendly.”

Oracle’s Waterfront Campus in East Riverside recently became the technology giant’s new headquarters. (Shutterstock)

Austin is also the trendy new corporate headquarters – according to the Austin Chamber of Commerce, 22,114 jobs were created in the past year by companies moving or expanding into the subway – but trouble or not, the Bay Area’s role in technology isn’t going Jake Weggman, University of Texas associate professor who studies housing, told the Chronicle.

“I don’t think all of this is going to go away in the Bay Area. But I think the Bay Area is headed for a future where it’s a little less dynamic … rather slow,” said Weggmann. “Austin will grow faster, be more dynamic, and change quickly.”

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