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)