Wealthy Buyers Reportedly in “Mad Rush” to Leave San Francisco
sfgate.com
sfgate.com
Sometimes “word on the street” is the best you can get. But for now I’d say the headline is clickbait “mad rush”, a very extreme conclusion given the scarcity of data.
Another micro data point - I’m not a real estate agent but I do watch local sales. I live south of 280 near the excelsior, not a fashionable address in SF to be sure. Everything is selling fairly quickly, inventory is low, and this is true of houses listed during the covid closure. However the effects may still be delayed and wouldn’t reflect the real estate effects of recent demonstrations and riots.
http://socketsite.com/archives/2020/06/inventory-levels-in-s...
https://www.dailybreeze.com/2020/06/07/coronavirus-rebound-s...
Also, it's not really an apples-to-apples comparison. While LA's population is more than 50% larger than the SF Bay Area's population, LA is geographically much larger so there's more space to build housing.
https://www.movebuddha.com/blog/sf-outbound-surge-2020/
https://www.movebuddha.com/blog/new-yorkers-relocate-post-co...
To spell it out more concretely, it's suggested that if a city is vital and people want to live there, a disaster will not hurt that growth and city's long-term trajectory. Physical damage, or even population damage will recover and people will still move there to be around other productive people.
On the other hand, if a city was already losing its vitality and drive and attractiveness, no amount of stimulus afterwards will stop it. People simply don't want to live and work there, or be part of the city's growth. The examples (I'll try to dig up the articles) were:
- Kobe after their earthquake (stimulus and reinvestment did not stop a general decline of that city that was happening long before the earthquake)
- New York, after natural disasters, 9/11, etc. (the city rebounded and people continued moving there no matter the physical aftereffects)
So for SF, you ask, aside from this virus situation, what was San Francisco and California incentivizing people to do? It has been a confused message. Tech and jobs, weather, and pleasant environment clearly drive SF's growth and attractiveness. However, homelessness, traffic, zoning, high housing prices/unaffordability, all the problems of SF that the supervisors have been too ineffective to tackle meaningfully, drive unattractiveness.
I think the virus (like any other natural disaster) just exposes to a greater extent what people really think and are likely to do about a city.
San Francisco (and any other city's) fate was made long before the current situation, and short-term popular messages of "we will get through this and get stimulus money or reform x,y,z" generally will not outweigh the years and decades of what the city had set up for itself up to now. Personally though, I think SF + Bay Area will manage to slide (survive) through it, despite many faults, because it's been fundamentally a desireable place to be.
Also, SF isnt the only issue with homelessness etc. Cupertino has their "first" homeless camp, solely because they used to live unseen in ravines, under bridges and have been kicked out of there
Some are indifferent to location. Some are exacerbated by, or simply drawn to, cities.
An earthquake, tsunami, hurricane, flood, or wildfire is to a high approximation not particular to the level of urbanisation. It occurs, and strikes whatever happens to be in its path.[1] There's no real reason to see a one-off or random strike as part of a long-term trend, absent some compelling causal relation.[2]
There are phenomena which are exacerbated or directly caused by cities and their concommitant industries, populations, and activities: crime, corruption, pollution, and disease, principle among these.[3]
Looking at the COVID-19 data, greater incidence seems strongly associated with larger (and often poorer) urban areas. That concentration and lack of hygiene promote the spread of disease is hardly a novel concept, and there's a strong argument to be made that disease co-evolves with human social patterns of settlement, transport, and commerce.
You may be aware of a period of urban decline in the US beginning roughly 1950 and progressing through about 1980, as crowding, crime, pollution, soaring property values, and similar factors made cities less desirable, and open space, low housing costs, cheap and uncongested (for a while) transport, and high-paying jobs made suburban regions (Armonk, Mountain View, Walnut Creek, Pasadena) attractive.
The urban revival of the late 20th century, and continuing until ... recently? ... owed much to the virtual elimination of urban industry (and hence pollution), falling crime, and a small number of centres of largely informational work (software, banking, entertainment, some government contracting) favouring a small number of very large urban centres: New York, Seattle, San Francisco, London, Berlin, etc. At the same time, the recently-attractive suburbs themselves became crowded, expensive, congested, and obviously underserved with infrastructure and services. "Distributed cities" isn't a concept that works well, long term, I believe.
If COVID-19 isn't merely a one-off, but a harbinger of a future in which rapidly-disseminating novel diseases travel via airline and other transport systems to dense and highly co-mingled urban centres, then the calculus may well be shifting from the winning urban megacities of today. Whether or not that proves an accurate scenario of course remains to be seen.
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Notes:
1. There are factors which may make a city more likely to be in that path -- many urban areas are along rivers or in low-lying coastal areas, Because Reasons (mostly transport). But the city itself doesn't cause the disaster.
2. Climatic change and its related afflictions would of course be one of those causal relations with a plausible long-term trend line.
3. I highly recommend Kyle Harper's The Fates of Rome, which explores this for the Roman empire and its unprecedented urbanisations and wide-ranging commerce, including to China. Adam Kucharski's The Rules of Contagion, forthcoming in the US, published 2020 in the UK, looks at similar concepts.
Now, it seems like the dominant narrative has shifted: the downside to working in tech is that you have to live in San Francisco. Brutally high housing prices and severely deteriorating mental health and addiction conditions on the streets are big factors in this, I'm sure.
Nonetheless, there are few problems so severe that they are completely resistant to hyperbole, and you get a lot of that in the "I hate SF" rants. Much of SF's extraordinary livability remains. I still have beautiful days here.
To me, though, SF's advantages have eroded. First, the uniquely urban pleasures are diminished by street conditions in many of the very urban neighborhoods that set SF apart from everywhere in the US outside New York (which exists on an entirely different urban scale). The diversity and cultural options that were once hard to find outside SF are more more widely available in smaller, more livable cities (try to get a good espresso west of the Mississippi a couple generations ago, and you'll find North Beach is more than a historical curiosity - in 2020, you can get this in a strip mall). SF's opera is pretty exceptional for a small city, and again, outside NY, it may be the best (and NY is a long way from the west coast). But cultural options have expanded in smaller cities, even if they are somewhat more limited, and how often do you go to the opera, really?
And SF has become so, so, so expensive. I just think the good life is more attainable elsewhere - and high rents limit your life and creativity in serious ways, and quite a bit of what SF had to offer is largely available elsewhere. Maybe not all, but quite a bit.
/Ex-New Yorker
It's not for poor people (no doubt) and it's not really for billionaires either, for people so untethered from jobs and material needs that place is irrelevant.
If you can pick up and pay cash for a Tahoe house tomorrow, sure, you might leave. But that resident was never very plentiful. They might make for an interesting anecdote, but in the big picture, they don't matter.
SF's core value, today, is for this person:
You work for Google, or Apple, for FaceBook, or an accomplished startup. You are a senior engineer or an executive. You may have gone to an Ivy League. You want to live in a fun, world-class, brand-name city - but not Palo Alto or San Jose. Where can you go?
San Francisco is pretty much alone in its category here, as the type of city that type of person likes. There's no good substitute in the area; "a really clean Starbucks and a top-notch Target" ain't it, and will never be it.
While there may be fluctuations in house sales and so forth, I think SF will continue to rank highly with that demographic. And as long as that's true, housing prices will be safe.
The irony is that none of those companies have a real presence in the city. Their campuses are miles away. So you live in the city and ride on a tour coach down to your megaplex every day.
I don’t know why anyone strives to live a life like this.
Though yes, a large number of employees do travel south from SF daily.
The larger issue is that the Peninsula and South Bay have resisted housing densification and transport improvements for decades.
If SF can figure out to automate away all of their poor service workers and then crack down on the homeless, then it would be truly a paradise for them eh?
This would require a level of fed-up-with-SF that I don't see in practice - like every other tech worker deciding to leave, and people in other industries too. But if that happened, yes: SF would become affordable and people with lower incomes could purchase houses there, and honestly that might not be such a bad outcome.
The city was once like this, after all - a place where people with low incomes, along with oddballs and misfits, could put down roots (buy houses) and live.
I've talked with residents who lived in SF back when it was a lower income city. Here's what they had to say.
Example: there used to be a time when you could find sporting good stores, tire repair shops, thrift shops, toy stores, and generally not-very-much-money making businesses in SF.
Those are all gone now - priced out.
If tech workers left, it's not like their office space would stay vacant. It would get repurposed. Those kinds of businesses would move back in.
They'd need service workers, so they'd get hired back.
And house prices, rent prices would drop.
If you think that's unrealistic, I would say: that's far more realistic than hoping for something that demonstrably is not going to happen - say, 500k new housing or apt units being built. That's not gonna happen.
If you want more affordable housing at any cost, no matter what, this is one actually realistic way to get there.
I'm just not sure it would, at least not until the long term. It's pretty challenging to make a retail store work on upper floors of an office building.
I thought the rent control crowd wanted the wealthy to leave?
I'm not sure it has to be one to the other...
Are these necessarily the same people and what kind of volume are we talking about?
In absolute terms, it's pretty crazy that there's only 252 houses in inventory, in a city of almost 900,000.
No, I'm not a realtor, just visit often.
As for Reno, I've never hear there, but I hear that the primary source of entertainment there is to shoot a man just to watch them die…
Moreover, those cultural and culinary options don't exist in a bubble. Supply is a product of demand.
1.7mm is not wealthy by local standards.