For the past three decades, Nancy Wallace, a professor of finance and real estate at UC Berkeley’s Haas School of Business and a former adviser to the U.S. Treasury Department and Federal Reserve, has been channeling her harrowing escape from the 1991 Oakland Hills Firestorm into groundbreaking research on climate risk, as detailed in a recent NPR piece.

The fire, which killed 25 people and destroyed nearly 3,000 homes, spurred Wallace to investigate how extreme weather events like wildfires threaten housing, real estate, and insurance markets. Her work combines digitized mapping and financial data to assess these risks, uncovering vulnerabilities in fire insurance and mortgage systems.

Wallace’s research reveals alarming trends in California’s fire-prone housing markets. Insurance companies are canceling policies or raising premiums for high-risk areas, leaving millions of homeowners unprotected. Yet rebuilding continues in these zones, often with larger, more expensive homes. Wallace’s team discovered that wildfires act as a gentrifying force, increasing property values within five years of a fire.

To combat these issues, Wallace advocates for a shift from outdated, deterministic insurance pricing to probabilistic models that account for future climate risks. By modernizing how risks are priced and managed, Wallace aims to stabilize markets, protect homeowners, and confront the escalating impacts of climate change on housing and insurance.

Top image: Photo via Wikimedia

Continuing their mea culpa over all that "doom loop" coverage they've done for several months, the San Francisco Chronicle has a piece today where they — finally! — get SF's own Chief Economist Ted Egan to weigh in with his sober opinion on the matter.

The Chronicle had the audacity the other week to publish a story in which they pretended that they were keeping all the "doom loop" coverage at arm's length and taking it with a grain of salt themselves, and sounding the alarm over how the national media had run with it like mad.

Now, sheepishly, after enabling the likes of Good Morning America and CNN to tell a sensationalized narrative not entirely based in fact about San Francisco's inescapable demise as a great American city, the Chronicle has gotten Egan on the record to state some plain economic facts — there's also a new city report out on the state of the city economy. And Egan says, "doom loop" talk is "premature," and that would be more appropriate if people were still fleeing the city en masse.

First off, as SFist previously reported — on the very same day, March 30, that the Chronicle ran their first big "doom loop" article — the exodus of city residents slowed considerably last year after the first year of the pandemic, from 6.3% to 0.4%. And could likely even turn around when we get the Census estimate numbers for July 2022 to July 2023, which we won't see until next spring probably.

The Chronicle's writers couldn't even have known that figure when they had their "doom loop" piece ready to run — and they were still referring to the 6.3% population decline, which happened between July 2020 and July 2021.

Looking at the stability of people heading into offices in SF for the past six months, Egan tells the Chronicle "the worst of remote work seems to be behind us," even if this means that the new normal is going to be a lot of office vacancy downtown for a bit here. Egan foresees that if office rental rates continue to drop, eventually some companies will bite and vacancies will go down — and surely there are some employees stuck traveling to offices on the Peninsula who'd rather just be going into downtown SF by BART or Muni, and their managers would like them in the office more.

One interesting fact that Egan shares with the Chronicle, San Francisco sales tax data shows that the city collected $33 million in sales tax in the first quarter of 2023 — which is 89% of where it was in the first quarter of 2019, at $37.1 million. And that's up from $30.6 million in the same quarter last year, with the Financial District showing an 11% gain year over year.

As Egan tells the paper, "It’s not sliding down. It’s just a really slow recovery."

According to the city's report, apartment rents have been flat since February, remaining about 10% below 2019 levels.

Domestic air travel through SFO the last month or so has been at 93% of 2019 levels, and international travel reached 93% a couple months back. And Egan also points to SFPD crime statistics, which are basically flat compared to last year, with some types of petty crime down in the first half of the year to date. Assaults are down slightly as well, contrary to what Elon Musk and his friends think — and both assaults and robberies are down compared to the first halves of 2018 and 2019.

Retail vacancy, we should note, is an SF problem that began well before the pandemic, leading to supervisors putting a vacancy tax on the ballot to address it — and as CNN has reported recently, downtown shopping centers like the Westfield are suffering in other cities as well.

The other dark spot, besides office and retail vacancy and, of course, transit ridership, is depressed tourism — which, again, will likely be further depressed by the media's obsessive "doom loop" and drug coverage. We heard this morning from SF Travel that, despite some convention cancellations next year, the Moscone Center is looking at being 93% booked in 2028 on the current schedule. That's a whole five years from now, but maybe things will improve sooner than that, convention-wise, if hotel rates and other costs get slashed. SF's problem used to be that it was one of the most expensive cities to hold a conference in in the country, so... maybe there's some improvement to be done there.

Whether or not we've hit bottom when it comes to retail and office vacancy, we shall see. Summer travel should hopefully give a boost to some businesses — and hopefully European and Asian tourists haven't all heard the negative stories quite so loudly. Still, somebody should really be telling them, over and over, to stop leaving luggage unattended in cars while they park at popular tourist spots. This goes for many major cities, including, unfortunately, ours.

Related: SF Chronicle Now Seems to Regret Amplifying the 'Doom Loop' Narrative It Heavily Amplified

Top image: People line up to ride on a Cable Car in front of an empty retail space on May 11, 2023 in San Francisco, California. San Francisco's downtown continues to struggle with keeping retail and commercial properties rented following the COVID-19 pandemic, and lags behind all major cities in the U.S. and Canada. Downtown San Francisco has an estimated 18.4 million square feet of available real estate. (Photo by Justin Sullivan/Getty Images)

Bust out the $4 toast, French Laundry reservations, and third-wave Champagne, all you “average” San Francisco workers out there! You make substantially more money per hour than your also-average counterparts elsewhere in the United States. According to a new report from the U.S. Bureau of Labor Statistics released Tuesday, San Francisco workers makes 53 percent more money per hour than the national average.

The regional Occupational Employment and Wages report, whose deep-dive details can be seen below, finds the average San Francisco worker makes $36.61 per hour. That compares to an average hourly wage of $26.61 elsewhere in the United States. Feel any better about your inability to afford owning a home?

The findings are slightly Silicon Valley-skewed. The BLS defines San Francisco as the “San Francisco-Redwood City-South San Francisco Metropolitan Division,” so a number of wealthy Bay Area neighborhoods outside San Francisco are included in the statistical dragnet. Redwood City is a particularly notable variable here, as the presence of Google, Oracle, and Box campuses is likely affecting these averages.

The BLS separates this data into 22 occupational groups. “When compared to the nationwide distribution, [San Francisco] employment was more highly concentrated in nine of the 22 occupational groups, including computer and mathematical; business and financial operations; and management,” the report said.

“Conversely, 12 groups had employment shares significantly below their national representation, including production; healthcare practitioners and technical; and education, training, and library.”

Of course, averages are not helpful indicators in a city that has almost no middle class. And our misleadingly high ranking is likely to go up again in future iterations of this twice-annual report, as San Francisco minimum wage increases to $14 on Saturday.

Related: Local Panhandlers Are Not Getting Rich

According to Bloomberg's analysis of data for the 100 largest metropolitan areas in the United States — numbers from the Bureau of Economic Analysis — San Jose is the figurative gold medal winner.

At $105,482, the gross metropolitan product (GMP) per capita in the nouveau riche capital was more than twice the national average. Bridgeport, Connecticut earned silver with $94,349 and San Francisco was bronze with a paltry $80,643.

According to Time Money, "since the Great Recession, technology hot spots have inched their way forward in attracting the smartest and most highly compensated residents, surpassing the East Coast centers of the financial elite."

There's an ''ongoing trend towards skilled places being far more compensated than non-skilled places," Harvard University professor Glaeser, a keen observer of city growth, told Bloomberg. "The poster-child of this in the data is the San Jose metropolitan area, which is off the charts in terms of income growth.''

Here, the top capitals of capital:

1. San Jose - $105,482

2. Bridgeport - $94,349

3. San Francisco - $80,643

4. Seattle - $75,874

5. Boston - $74,746

6. Durham - $73,523

7. Washington D.C. - $72,191

8. New York - $70,830

9. Houston - $70,097

10. Des Moines - $67,256

Related: Atherton Is Still, Pretty Definitively, America's Most Expensive Zip Code

A new study by two economists out of UC Berkeley and the University of Chicago suggests that overall national growth, as in the gross domestic product, is being strangled by the insanely high rents being paid by workers in high-growth urban areas like San Francisco, San Jose, and New York. And the only real answer, they say, is to build more, and build higher.

Quartz reports on the new paper, which was written by Enrico Moretti of the University of California, Berekely, and University of Chicago’s Chang-Tai Hsieh. They note in the abstract that "Despite some of the strongest rate of local growth [between 1964 to 2009], New York, San Francisco and San Jose were only responsible for a small fraction of U.S. growth in this period. By contrast, almost half of aggregate US growth was driven by growth of cities in the South."

What they conclude is that the relatively high portions of individual salaries getting paid to landlords in rent is largely responsible for constraints on overall growth — the thinking being that the money going into landlords' pockets is not benefiting the employees or the employers in their local economies, or helping maximize job growth. Instead, it's money being stowed away or funneled out of the local or even the national economy (in the case of billionaire landlords who may reside abroad part time).

In fact, they estimate that if New York, SF, and San Jose had done less to protect their "cute" three- and four-story townhouses and done more to build densely and vertically, thereby bringing down rents over the last several decades, the overall US economy would be 9.5% bigger than it is now.

This is some wild conjecture, of course, but fairly interesting in theory — and pretty much everyone in San Francisco is more in favor of density now than they were when they passed things like the "Sunlight Ordinance" of 1984 to protect against tall buildings casting shadows on city parks. But I don't think anyone in New York or San Francisco would stand for mowing down our signature brownstones and Victorians in order to aid economic growth.

But now land values are so sky-high in these cities that developers need to fetch top dollar for as many units as possible in order to make projects pencil, which in the case of San Francisco has meant rent increases of 15 percent year over year.

And are they really saying that New York isn't dense enough?

Previously: Bay Area Officially Named The Worst Place For Renters (Again)
All previous coverage of the housing crisis on SFist.

New data from the U.S. Census Bureau shows just how much San Francisco's middle class has faded amidst a growing population of high-income earners. As reported by the SF Examiner, the middle class declined by about 10 percent from 2008 to 2012, while the upper echelon of earners increased by the same amount. This means middle class earners now represent only 33 percent of the city's population, compared to 42 percent of California households in general and 44 percent nationwide.

But just how do you define "middle class" in San Francisco, besides the usual nods to professions like teaching, nursing, and hospitality? As it turns out, any household making between 50 and 150 percent of the area median income of $73,000 is officially identified as "middle class," which means that combined household incomes between 36,500 and 109,500 qualify. These are divided into categories of low, moderate and above-moderate income, with low and moderate middle income earner categories declining, hitting 55,000 and 60,000 households respectively. But above-moderate income households have, unsurprisingly, risen to 36,000, and 38 percent of all city households are now high-income.

That means that anyone from a single resident earning $100,000 a year to a married couple with a combined income of $50,000 qualifying as "middle-class," meaning that the shrinking sector comprises a wide swatch of individuals, from the people you'd typically think of (non-profit workers, construction workers, bartenders, etc.) to so-called "tech workers" who are single and not breaking a $100K salary. So, basically, you and me and everyone we know.

Previously: Middle Class Screwed In Current S.F. Housing Market, San Francisco Is The Least Affordable City For Middle Class Homeowners

[Examiner]

"We need a big stimulus package," said President-elect Barack Obama today. You're preaching to the choir, Big O. But seriously folks, today Obama announced his starting lineup for his economic team. This groups of "assertive, bold personalities" will, hopefully, pull us out of this recession. (Though, as Barack points out, things will get worse before they get better. Joy.) Anyway, the team consists of Peter Orszag, director of the Office of Management and Budget; Timothy Geithner, treasury secretary; Lawrence Summers, head of the National Economic Council (NEC); and Christina Romer, Council of Economic Advisers (CEA) chairman. Romer, a handsome woman, is an economics professor at UC/Berkeley and the sole female voice on the team.

In more pink slip sadness today, (owned by Denver-based MediaNews Group) eliminated 50 jobs. Fifteen newsroom employees and 19 employees from "other parts of the paper" were let go today. Citing a loss of advertising revenue because to the evil Internet, this most recent workforce slashing represents "a cut of about 5 percent" of the over Merc staff.

On the flip side, two editors received promotions: Barbara J. Marshman, associate editor, replaces Stephen E. Wright as the Merc's editorial page editor. (The first woman to hold that title); and deputy business editor Stephen R. Trousdale was rechristened business editor.

Stay strong, print publishing folk. Stay strong.

This tickles us ever so. Last year after 4,000+ folks in the Richmond held their breath until their faces turned blue, the San Francisco Board of Supervisors voted to ban the popular coffee chain Starbucks from setting up shop at the corner of Fifth Avenue and Geary. Problem solved, right? Wrong.

Being the crafty little coffee making bastards that they are, Starbucks "had the audacity to sneak a kiosk into the Safeway store at Cabrillo and Eighth." (Hee!) Naturally, people curled up into the fetal position and started sobbing hysterically after seeing the chain serving its poisonous yet smooth brew. That is, until Jake McGoldrick got wind of this near-criminal activity and put his foot down. Hard. The kiosk has since stopped selling coffee there.

But isn't Safeway--a chain itself, we should point out--neutral territory? The Switzerland of retail marketing?

Anyway, Starbucks beans are still, oddly enough, for sale on store shelves at Safeway, which is fine by all, it seems. But pulverizing the beans and pouring hot water though them into differently-sized paper cups is the real problem here? Huh. Curbed goes on to point out that "the final fate of the shop will be decided within the next month, as city planners decided whether the thing should be treated as a separate biz or part of Safeway itself. Tedium reigns." And how.