The only people I actually feel sorry for are regular homeowners who bought way overpriced properties because they had no alternative.
No. The US could also go and fix their tax code for once - start taxing the uber rich. Warren f..ing Buffet complained years ago he has to pay less tax than his secretary. A lot of the issues that cripple many Western countries relate to stupid tax breaks for the rich and mega corporations who have bought out politics.
We're talking about a municipality, not the US. Plus your whole point is fine in theory, but it's not going to happen any time in the near future. The question of whether SF is going to get stuck in a doom loop is a real one, and it should be examined through a lens of the social and political environment we're in, not a theoretical and unrealistic one.
In theory the US could go very far taxing a much smaller base because it has allowed so much money to be redistributed to this tiny base.
But even ignoring that your comment is unnecessary. Even if a Sweden like social democracy is the goal (which it doesn’t need to be…there’s many stopping points in between), the US doesn’t need to do it overnight. Raising taxes on the richest and then increasing the tax rates on lower brackets gradually over the decades as needed is an absolutely fine way to head in that direction as well.
My larger point is that Americans are largely under the delusion that heavily taxing the 1% would be enough, which is just not the case.
728 people in the US own more assets than half the US population together [1].
Let that fact sink in, and then ask yourself why the fuck no one in the US has taken to the pitchforks yet. At least here in Europe, the lower classes are on serious strike runs the last months - the UK, France and Germany are just examples.
You know what, you could leave each of these 728 uber rich people a billion dollar each. Enough money that neither they nor their children and their children have to work a day in their lifes ever. Basically, aristocracy, "landed gentry" or however you want to call it, just legally recognized. The rest of the wealth gets distributed among the population. Easy, isn't it?
[1] https://www.snopes.com/news/2023/04/13/728-billionaires-hold...
I'm not defending the massive inequity which clearly exists, but wealth tax that targets a theoretical (eg) land value will lead to silliness as this 0.00017% aggressively devalue their holdings to avoid this tax.
SF is the most liberal city in the most liberal state. They don't have any issues taxing rich people (or any other person, that's for sure).
for years there have been fewer and fewer of those "regular homeowners" and increase in offshore money speculation, purchase-to-AirBNB, and other non-obvious transactions. A recent examination of US Tax filings (posted on YNews IIR) show that +1 million adults in the USA have the financial ability to purchase a home, and have not done so.
That doesn't seem like a good measure. There are a lot of people with means who would rather rent a space downtown that own a SFH in the suburbs. Those people would/should not be considered "regular homeowners".
Many markets in other states are still going up. The condos in my building are selling for $100 - $150k more than they did in 2022. Lower inventory and volume, but the demand is red hot.
The difference is the doom loop leads to things going below "normal" levels (and "normal" is not really a useful term here). Also, I don't think it's fair to say elevated office building prices in SF were the result of wild speculation - it was one of the most booming employment markets in the US with an incredible dearth of supply. High prices are just economic principles at work. Then something totally unexpected came and upended how we work, and that changed the market entirely - it was an external force, not people paying prices that weren't supported by the rents.
The thing is, if one is investing money, one should also take into account risk. Remote work has been a thing for years now, with ever faster adoption of broadband Internet. But it seems like a lot of people have either put way too much money into one single asset class or preferred to distribute money to shareholders instead of building some buffer for when tides start to turn. Either of these mistakes is completely avoidable and part of virtually any economics class, it's not rocket science - it's just plain old greed all around.
This is true, but I think the idea that people should have priced in a black swan like a pandemic (and not only a pandemic, but a pandemic that changes the way we work) is not a reasonable one.
> Remote work has been a thing for years now, with ever faster adoption of broadband Internet.
This makes exactly the opposite point that you intend - despite the fact that people, especially those in tech, have had the infrastructure to work remotely for many years, SF's market still continued to go up in value and have incredibly high occupancy rates. If the condition existed for remote work for years and yet it had no appreciable impact on the use of office space, it wouldn't make any sense to assume that there will be a sudden change to cause everyone to work remotely and the market for office space to crash.
The world has become ever more chaotic the last years. Natural disasters, general political instability, even geopolitical instability has been on the table for a long LONG time now. Acting like a "black swan" event is unthinkable has been beyond foolish.
No alternative?
Highly doubtful.
More like they were just the "greater fool".
I can feel sorry for them in that because someday I may be in their shoes.
But they did have alternatives.
Good time to be a small business. Bad time to be a landlord. Landlords don't create value, small/medial/large businesses create value. And excess rents are a real impediment to actual productive businesses.
So rents in SF/Bay Area dropping would be very beneficial to San Francisco.
Please explain your logic because it doesn't seem to match reality.
From what I see, there can be 3 types of landlords: those who built a house from scratch (obvious value creation), those purchased the house from someone else (value transfer; but that needs the buyer to hold alternate value in the first place) or inheritance (yeah, one just got lucky with right parents).
Only the 3rd category seem to match your statement and I agree that inheritance should be heavily taxed. But the first 2 categories? Landlords have literally created value or exchanged their created value for a house.
That's called a developer not a landlord.
> those purchased the house from someone else
Transfer of ownership doesn't create anything.
Unless you know something specific that is getting in the way.
I won't hold my breath until there's some actual action - I don't count taking requests for information from people as action. I definitely hope they move quickly (and FWIW I like Breed and I think she's done as good of a job as anybody could expect in what is an impossibly hard job), but years of living in SF have taught me that pessimism about the city getting things done is the right frame of mind.
The CEO was in SF and said that SF properties have lost as much as 52% of business, where NYC (where they own a bunch of properties as well) will lose ~2-4% of bookings business...
He stated that after evaling SF - he said it will be back to normal after FIVE TO SEVEN YEARS. Maybe longer.
So, SF - is going to be a billionaire realestate cluster as hedgies swoop in for depressed prices.
So, the overall "slurped up" (as opposed to 'trickle-down') economy is really weak currently, and they are not seeing a positive return for a while, thus - Market street is going to suffer.
Let make Zuck and Ellison and Benioff (the largest land owners in Hawaii) convert/rebuild Lahaina - but provide some housing in SF for refugees... :-)
https://www.cbsnews.com/news/park-hotels-leaving-san-francis...
I'm going to hire for AI roles remotely. 100% of our ML hires have been outside of California.
Once the cost of living difference between SF and NYC becomes large and well known enough, companies will start hiring more, or choose to start, in SF vs the current trend of picking NYC because talent will begin to prefer it.
Many of my younger friends have moved to NYC (or elsewhere) and they have told me they don't like the overwhelming tech culture that permeate the bay drowning out the rest of the culture. I could see that happening to Seattle as well, but probably not NYC.
I can kind of understand it being like competing colonies of bacteria (each sub-culture). I think its pretty valid, but I don't mind all tech all the time ;D.
I guess my line of thinking is that young professionals will eventually find SF trendy again once NYC becomes passé for being too expensive, overhyped, attracting too many of the charlatans and clout chasers. People love different parts of the country for many reasons but I think in aggregate SF is generally a number 2 choice after NYC for many young professionals if cost is not a (big) factor. Which is why I think if the trend continues and NYC gets more and more expensive vs SF, 23 year olds will start picking SF over NYC