I would say the city being “closed” is the major driver. Among my group of ~40 coworkers, about 30 (including me) have left the city. As far as I know all but one were renting.
Everyone who left gave the following rationale:
- we can work remotely so move wherever or nomad now
- SF is not very fun during the pandemic
- WFH in my tiny apartment is much less enjoyable than when I was working in the office and didn’t spend much time in the apartment
- therefore I’m moving for a year or so until things fully reopen
Now I think the question is what does the eventual full reopening look like and how long does it take?
Many people will move back, because many office jobs will return, and many people love city life and the office work environment (including me).
But the longer things take, the more people get established elsewhere, and the more companies decide to make remote permanent and don’t reopen an office, the more I think this market reset in SF will be long-lasting.
As other posters have said it’s a welcome relief though. Prices are still very high, and new construction remains far from sufficient to keep up with demand.
What is curious to me is that NYC rents haven't seen the same crater at all (link says 15% but anecdotally most of the desirable top of market neighborhoods aren't budging). I don't buy the "SF is not very fun during the pandemic" rationale as more special than any other notable city, and NYC tends to have less space than SF. To me, that says the SF case has more complexity. IMO, the key factor here is that there appears to be a much higher ratio of people that were primarily there because work was best there, where many other cities have populations that tend to choose the city in question specifically more than happen upon it.
Speaking anecdotally I think this has some truth in it. A lot of people I know seem to loathe San Francisco and only put up with it because they’re required to live here for a job.
If that’s the true reason for an exodus, then I hope it benefits the city to have residents that want to live here.
What little I understand is if a landlord is leveraged (?) up the wazoo, the lending bank can make the landlord pay a lump sum if the revenue projections on which the loan is made shrink, since the risk is higher. Somehow, free months don’t count against these revenue projections (assumed a one-off?), through what I imagine is the magic of contract law. The higher end, nicer real estate is probably more highly leveraged. Someone in RE can probably clarify this better.
our rent went down, total, a little more than a third. half was a price drop and half was the averaged value of 2 free months, which we will have to pay back if we leave before the lease is up. We had budgeted an increase, so it’s a covid windfall. Less traffic and one of the lowest covid numbers in the union atm are a bonus. The constant smoke in the air is the real problem. Haven’t had a blackout yet.
I haven't seen rents really drop in LA either. Commercial landlords would rather let the building go half vacant and try offering 1-2 months of free rent before they drop the base rent.
From what I've read, in the case of commercial lets there's a good reason for this.
The companies that manage these properties acquire/refinance loans based on the value of their assets and the value of their assets is mostly determined by the rent they ask for, much less the rent they are actually getting. This leads to commercial landlords refusing to budge on a ridiculous price that was determined in different market conditions and as a result will opt to leave it vacant.
Taking the lower price would adversely affect their access to financing and could put them under water (they already were) on their loans.
Why these agreement/loans don't take this problem into account to prevent this situation is a total mystery though.
Yeah it’s weird. I haven’t seen for rent signs before but now I see them on every single building but rents are same. It probably means landlords are basically charging too much and making too much money and not paying enough in taxes(1-2% tax increase per year is probably nothing compared to increases in rent prices)
if you do the math, it's expensive to let a unit sit for more than a couple months as opposed to offering a discount on the rent. This assumes your tenant will turnover in a couple years time, mind you.
I did the math for SF and IIRC ~2mo was equal to a 15% discount. if it sits empty for longer than 2mo, you should have just given the 15% discount. if you let is sit for 2mo AND have to give a 15% discount, now you've really fucked your finances up.
You're ignoring the fact that SF has rent control; it resets only once a vacancy hits.
If market rate was 3k a few months back, but is only 2k now, if you take a 15-year view, it's still cheaper to let your rent-controlled unit sit unrented for 12mo than rent it at just 2k for 15 years provided the 3k/mo rates recover in two years.
Basically, that's one of the major reasons why rent-controlled units aren't going down in prices. Bundle in Prop 13, and you aren't even paying any real property taxes on those units to sting your finances.
In my experience, most market rate units turn over every 2 or 3 years. 15 years in sf apartment leases are unusual except for people who cannot afford to move out.
If you assumption, as a landlord, is that the next person into your unit isn't moving for 15 years, then yes, the cost calculation moves. However, that calculation is very different from a 7 year calculation, which is very different from a 2 year calculation. So how much are you going to hedge against not losing money in the future, when you're losing concrete money right now?
> 15 years in sf apartment leases are unusual except for people who cannot afford to move out.
I'm a little confused here. If your rent is 1.2k for a 2bd in SF (because resident since 2000s), whereas market rate for a 2bd now is 3.9k in SF -- what is your determination -- is a person able or not able to move-out?
Why would anyone move out every 2 to 3 years if they're rent-controlled, and they'd have to pay significantly more for any new place?
Likewise, if you've been owning a property since the old times, and it's fully paid off, the property tax liability in Cali is tiny, and for older owners perhaps entirely a wash-off due to infamous Prop 13. Which is part of the reason that many owners don't even bother renting their properties.
I think properties are somehow valued based on the rent potential, so landlords are disincentivized to move base rent and would rather offer 1-2-3 months free and keep rent at standard rate.
you can easily take this into account too, and my calculation did. Assuming your tenant is staying for 2-3 years, you can really only afford to let it set empty for a few months. Your yearly rent increases are just a couple percent (tenths of pecents a month). Every month it sits empty is 8% of your yearly income for the unit.
The yearly income isn't what's important to these landlords, it's the real estate value of the property. Loosing out on a full year or more of rental income is the cost of doing business if it keeps the underlying valued high and appreciating.
I recently moved from Manhattan to outside New York (for reasons mostly unrelated to the pandemic; my roommate decided to move in with his significant other, and I didn't want to pay for a 1 BR in Manhattan). The building we used to live in did officially originally say the rent would be increased for the next year, but when we told them we weren't staying, they pivoted and offered us three extra months for free if we signed on. I'm not sure if this is evidence for or against your statement that rent isn't falling much in New York, but I thought it was an interesting data point.
I just added a caveat about that, but many of the top of market neighborhoods people tend to go for here haven't dropped nearly that much (e.g West Village area, Chelsea, UES/UWS). NYC is huge and that drop is not spread equally. Guessing it isn't in SF either, but it seems 31% is going to hit every neighborhood at least a good deal.
From what I’ve seen in San Francisco, the biggest decreases in rents have been in the newer upscale construction in SOMA. There’s nothing to do in SOMA other than walking to your tech office job and most of the restaurants around there are specifically for business lunch so many of them aren’t open now with the offices are be closed. Given all that, I imagine that area has seen the biggest exodus in the city. Plus the rents were stratospheric to begin with, so even a 30% drop is still ridiculously expensive. In other parts of San Francisco prices have dropped but not nearly as much as in SOMA.
This is all from my casual observations on craigslist and Zillow, I would love to see broader data and analysis if anyone has any
IME, sf has falled 20-30% even in desirable neighbourhoods.
You can get a recently renovated 3 bedroom with laundry and dishwasher, in a desirable area for $4500. Those bedrooms weren't going for less than $2k a year ago.
As a counter anecdote, I know three people from the bay area who moved out during covidtide, but had already planned the move beforehand. (This is a very high percentage of people I know from the bay area, hence the anecdote).
All had the same rationale: taxes and housing were simply far too high when they could work remotely and live anywhere else. Sure, you don't get the same outdoors, food or retail scene, but plenty of places have those things too.
I imagine the move to working remotely has made that move possible for more people than before, but those I know aren't making temporary moves, they are buying houses.
In my experience this is becoming less and less true, smaller cities are really catching up, it's not 2010 anymore. My pet theory is that social networks like Instagram have done a good job spreading fashion and food experiences/expectations that were previously exclusives to big city centers.
I haven't found it to be even remotely true for the food my family is inclined to eat. Every time I've gone to visit hip small college towns for the last 5 years, I've eagerly sought out the talked-about eateries, and they were all... distinctly mediocre compared to NYC or Bay Area or LA food.
You still can't find anything but Americanized Asian food, even the California-cuisine upscale places are decidedly mediocre, and the food trucks are... fine.
Certainly, it's better than it was at the margin, but it really depends on what your baseline is.
I’m honestly surprised so many people put Bay Area/SF food on the same scale as NYC and LA. It only makes sense when you consider top-tier fine dining (like, Michelin star(s)) IMO. For middle-tier dining I think SF and the Bay Area don’t even come close to either of those cities. In fact I think those hip young college towns are much better, in my experience. It’s just that it’s going to be a different set of foods: more barbecue, Mexican, Central European, soul food, and less asian/what I would call “California health” foods.
Agreed, I feel like SF restaurants are relatively pricey, so in order to get the good stuff you'll have to pay a lot more than in many other places in the world.
Tonga room is a terrible example because, as someone else mentioned, it's a bar in the Fairmont.
If you want a great literal hole in the wall, try Yamo in the Mission. Burmese food, grand total of 6 seats (all at the bar) in the restaurant, and the entire kitchen is right in front of you. $6 entrees.
The SF Bay Area as a whole has some great holes in the wall, and there's even still some in San Francisco proper if you dig around, but in addition to being a bar in the Fairmont as others have noted, the Tonga Room is a world-famous tiki bar that opened in 1945, with two themed dining rooms that wrap around an artificial lagoon with a "rainstorm" every thirty minutes. That's a really weird definition of hole-in-the-wall. :)
While I haven't been up to SF proper for food and barhopping in a few years now, the Lark up in the financial district is much more of what I'd call a good cheap bar. I tend to bristle a bit at people dissing the SF food and drink scene, but I have to remind myself that with few exceptions my favorite places in the Bay Area aren't actually in SF itself. The metro area as a whole has virtually everything you can imagine at a very wide range of price points. I suspect one could make a case that the most interesting stuff happening is in the East Bay and South Bay, though.
This is enough to say that then it isn't comparable. "There exists" is only a useful quantifier in mathematics. "There exists" better food elsewhere if you idk pay a world reknown chef to cook you a meal herself for $5000.
I lived in LA for a long time and I would say NYC has it beat by a large margin when it comes to bourgie restaurants. Most of the hip places in LA are uniformly terrible, the places that have been around a long time are about as good as the same kinds of places in NYC, and the various ethnic restaurants are better in LA (assuming they’re in their neighborhood enclaves).
Well, agree to disagree. Personally I've found food in the $15-40 range in NYC to be better executed and be a better value, with more options. I think other cities also blow SF out of the water with execution and value for that price range, but few are able to compete on the diversity of options.
> It only makes sense when you consider top-tier fine dining (like, Michelin star(s)) IMO
Within a narrow window. The diversity and turnover of New York or London’s food offerings compared with the Bay Area’s is on par with the latter’s offerings in relation to Fresno’s. If anything, the Bay offers its uniqueness in the middle tier of immigrant fusion.
Yeah. The problem is that food is not something you can do remote, and so specialized chefs and specialty ingredients need clusters of people to be profitable to sell.
My baseline is grilled cheddar cheese on plain white bread with Campbell's Tomato Soup is the greatest food ever invented. I once went to a work lunch at one of the city's most raved about restaurants. I ordered the grilled cheese and tomato soup. That was when I realized that I really am not a food connoisseur. How can something so simple as grilled cheese and tomato soup be so thoroughly ruined, just in an effort to make it fancy?
You can't serve something like that at a restaurant and make it in a plain way, because it's something that basically everyone can make at home for really cheap. People are looking for an interesting take on something like that in a restaurant, which isn't going to fit what you want.
That's a poor choice to judge a restaurant on. You need to base your judgement on things you can't or won't cook at home because it takes too much time, is too complicated, or uses ingredients that are difficult to get.
Well, you can't make something simple in a simple way unless you are both really confident and really good :).
In a sign of the crazy times we live in, Chez Panisse has started doing takeout. First time I tried it, I got a BLT sandwich. Exactly what it says on the tin: bacon, lettuce, tomato, no weird spices or creative takes or deconstruction. Just a stock BLT sandwich—except better in every way. I'm not even sure how. I would not have thought there was that much room to improve on a BLT through better ingredients and execution, but apparently there is.
Anyway, if you're in Berkeley, I would highly recommend giving it a try.
Sometimes people just want to go have a get-together including well-trod "comfort food" style means, but with someone else (the restaurant) doing the cooking and cleanup.
I don't go to restaurants to be entertained by the food or "impressed" by the "creativity" of the chef, and I'd wager neither do most people.
That’s just one aspect of a vibrant food culture. That is, access to multiple cuisines is a different discussion from how fancy the preparations are.
There are plenty of “sit down” restaurants that aren’t fancy, but are more than “solid takeaway” that fit in this picture. And these are what most folks actually think of when they picture dining out.
There's a kind of weird inverse elitism in going to a fine dining restaurant, ordering an expensive fancy grilled cheese and tomato soup combination, and bitterly complaining about it because it's not a can of Campbell's and a slice of American on white sandwich bread.
It's true that you can't buy a whole jackfruit at the grocery store in most of the US but I've always been able to find good restaurants of some variety with minimal effort. It's real hard to justify SF prices based on food options.
I often end up spending more for distinctly worse food in other American cities. It is sometimes hard to swallow paying premium prices for food and then immediately realizing after the first bite that the ingredients are subpar or there is more focus on making it Instagrammable than actually delicious
From that perspective, eating out in SF always felt like a good deal because for $15 you can get some truly exceptional farm to table food.
depends on your priorities. I would rather have nice restaurants than a nice apartment or house. I've lived in a culturally devoid suburb, where the options are fast food, or chain restaurants, and it affected my quality of life substantially.
No, and I think it's uncharitable to assume that's what the parent is suggesting.
But even if we expand the statement to "outside a major city" or even "outside a major metro area", I think a lot of places are culturally devoid suburbs (though I probably would have picked a nicer way of putting it).
I would wager that the majority of suburbs in the US don't have much variety in cuisine, and while communities will certainly have a few stand-out restaurants, there will also be a lot of mediocre fast food, fast casual, and pizza shops. I grew up in places like that, some of my family lives in places like that, and some friends who used to live in cities, but moved out for more space, also live in places like that.
Get too far outside Seattle, Portland, the SF bay area, greater LA, Chicago, Boston, NYC, DC, Austin, Dallas, Nashville, and even many smaller cities, and there really isn't much to write home about when it comes to food. And for some of those cities, "too far outside" can be as little as a half hour drive.
> You still can't find anything but Americanized Asian food
Anecdotally, I moved from the bay area to somewhere near los angeles a while ago, and the americanized chinese food here sucks compared to what I could get in the bay area. And it costs twice as much! :(
As everyone else is echoing - really not true. I grew up in Orange County which, for a suburb, has really good food options. Tons and tons of restaurants and a lot of people accustomed to nice things.
The difference in food options between SF (where I am now) and OC (or LA vs OC) is absolutely astounding. Its really not even close. Its gotten better but large cities are still orders of magnitude better.
Did you mean to write “much” instead of “orders of magnitude”? If not, please provide support for even a single order of magnitude compared to OC.
Sincerely, the League for Reducing Hyperbole on the Internet
PS: “Everybody else”, “absolutely astounding”, “its [sic] really not even close”...sit down and have a nice glass of warm milk and think about what you wrote. :-)
I live in OC now, and have traveled quite extensively as well as spent time working in the Bay. While lacking in Michelin star restaurants (only a handful) it is otherwise phenomenal when it comes to options and quality, even compared to bit cities. Now bars/nightclubs/music venues are where it is sorely lacking.
I think this is really true. Ive been getting great coffee and food in the smallest towns, tourist towns albeit, but metropolitan level fanciness on a gateway town to capital reef NP is impressive. I can get my fancy latte's in almost every nook in america, some might be closed on sundays though.
If you have to eat outdoors, a mobile restaurant (aka “food truck”) can recreate a good portion of the experience anywhere.
As one example, NYC opens Governor’s Island to the public for only part of the year. Food service comes in the form of a “food court” made up of a bunch of food trucks/container kitchens.
By this metric food scenes can only exist in 2-3 cities in the US (or world for that matter). I think food scenes that do one or two things well are totally worthwhile and a huge improvement over bland suburban chains.
Effectively, there's never more than a dozen cities, tops, in any country in the world where you can get close to top-level food quality, and even so that applies only for a few genres of food.
Except for Italy, Peru, Mexico, Japan, France, Thailand, and many other countries where you can find top quality food in thousands of small towns and out of the way places. So probably not a great rule to go by.
You can get top-quality Japanese food in thousands of small Japanese towns, and top-quality Thai food in thousands of small Thai towns. However, rest assured you will have a very hard time finding (say) Mexican in either. The only places in either country where you have a genuinely cosmopolitan food scene are Tokyo and Bangkok respectively.
Not an American, but the last time I rocked up to a random small American town and chose a random small restaurant, I had a really good turkey chili burger [1]. Hardly gourmet, but delicious, and it's quite difficult to find this kind of thing outside the US.
[1] The "Chili Monster" at the Dillinger in Boulder City, NV, in case you were wondering. https://www.thedillinger.com/ (Not to be confused with Boulder, CO.)
In addition to the burger previously mentioned, off the top of my head as "American cuisine" there's obviously barbecue, as well as Southern cuisine, Cajun/Creole, and -- while some might argue -- I'd throw in Tex-Mex and New Mexican (e.g., the state of New Mexico) as gastronomically distinct. Where you find it is, well, all over. You have to do a little research. :) But you can find really well-regarded restaurants around America for those cuisines, across a wide variety of price points.
Sure, but you don't get the variety. If you move out to rural France but are used to rotating among eating Mexican, Japanese, Chinese, Spanish, Thai, etc. throughout the month, you might be disappointed with the lack of choices.
You are probably used to this rotation just because you grew up in the US. As someone who has grown up in Italy we don't think about food this way, not even regionally. I.e. don't expect a great risotto in Naples or a decent carbonara in Milan...
I think there is a spectrum, the US being a country of immigrants is on one extreme, Italy having been several different independent states up to 160 years ago and having many different climates and cultures is on the other. While it's true that the Italian approach to cuisine might be overly provincial I think that most of the world is closer to Italy than the US.
Being in rural France, I like trying some new foreign cuisine once in while as much as anybody else, but it wouldn't come to my mind to make it my daily routine.
Going out of your way to not eat local stuff is completely pointless to me. People take quite a lot of pride in having good stuff specific to their area.
The best Indian food I've ever had (and I only ate there once so maybe it was a fluke) was an Indian restaurant in Brno, Czech Republic, population 400k.
I can't imagine there were very many Indian people there, but the food was amazing.
Very true! But I'd be disappointed if the only plentiful cuisine was the local one. As much as I love each of the cuisines you mentioned, I can't imagine predominately eating any one of them.
I think in Japan you could probably go to a different restaurant serving a different type of Japanese food (e.g. ramen, sushi, soba, tempura, steak... even the US has the more famous ones) and continue on for weeks before exhausting the possible options for different restaurant types, all of which count as "local" food. At least local to the country.
fair point. I think my comment was US centric. There really isn't a cuisine culture in a lot of small usa towns. Probably do to the short lived actual history of the US, and the nearly forced consumption of preservative ridden and processed food following the world wars.
This is the mindset I really don’t understand though. Sure your company can say “we’re all remote” today, but they can just as easily say “everyone has to come back” in six months. Or “everyone doesn’t have to, but those who don’t are the first laid off next time”. I’ve been fully remote since March, so I’ve been weighing this for awhile”
Many companies have publicly stated they will allow permanent work from home [1]. Many others have said so privately to their workers. As more companies adopt this, this provides more options to those who relocate and whose employer tries to pull them back.
Keep a long runway in an emergency fund, keep your professional network warm, always be ready to bounce if your employer tries to change your quality of life for the worse (mandatory return to an office somewhere, for example). (Disclosure: This is how I operate, and have worked from home for over 7 years.)
I spoke to a recruiter at a company that publicly said they'll allow permanent WFH. He said it's on a case by case basis and you still need manager approval. It's guaranteed only till next Summer. Companies can something public with if and buts and caveats added internally.
And when you decide to leave your current company?
Certainly I believe that remote work was already on the way to becoming more and more accepted, but by moving out you're still limiting your employment prospects to those companies that decide not to focus more on in-person roles. Maybe that will still work out in the long-run, but I still think there's significant long-term financial benefit in maximizing your number of potential employers.
Plus, if you're expecting to move back to San Francisco at some point, right now is the time to do it while prices are through the floor. You're far better off moving in right now at a 35% discount—which is permanent given rent control—than trying to come back in another year when COVID-19 is (hopefully) over and people are flooding back in.
> And when you decide to leave your current company?
You apply at companies with remote roles. I haven't lived in SF though, and would never do so, so I can't speak to solving for timing the market there.
As another poster said, companies aren’t going to risk lose talent in troves if they enact a work from office policy.
When you got major companies like Twitter, google, Facebook, and others already saying WFH is a permanent option that’s put pressure on others to figure out how to make it work.
Talent is needed at many, many companies and if the talent is a.) needed and b.) good enough the company will make “exceptions” to the rule.
Enough companies make enough exceptions and it’s a mainstay policy.
Overall, the other part is that companies that now offer remote work as a permanent option may not have to pay SF salaries so that’s a bonus to the company. It’ll go both ways, the company can say I’m not requiring you to live in high COL area and we have an office in X city, we pay 10% above the market average of ~35-40 cities so they’re still competitive on pay (assumption being that most companies move to this model, FAANG may overpay still but that’s always been the case) so now what do you do?
As someone who has worked both in the Bay Area and outside of it, I moved here because of the job market, not because of the salary. I would take a salary cut any day to move away, but I want to stay with my current company AND keep access to the SF Bay Area job market.
Literally the only thing keeping me from listing my house right now and moving to a different area is that not enough Bay Area companies have committed to permanent WFH yet. Once that happens, I'm gone.
there is a huge difference, not only in the kinds of work you can put on your resume, but in the quality of co-workers, and what you can learn from them.
You can approximate that experience in some other areas (Provo, Boston, Austin, San Luis Obispo, etc) but a LOT of American cities are still technological backwaters, and there's nothing available but garbage jobs that will drain your soul and turn you into a code zombie.
Depends on the exact WFH environment. If companies go with permanent full remote option, then I'd pick an area with zero or low state income taxes, warm weather, and cheap housing. Las Vegas area, South Florida. Texas is interesting but I don't know much about the cities there, having never lived or visited.
If companies look like they're aligning on more of a hybrid model where you can WFH but they expect you to show your face in the office every so often, then I'd have to stick to $CA$ and maybe head out somewhere on US-50 between Folsom and Placerville, or maybe way up I-5 somewhere towards Shasta.
Young people are extremely agile. When I was in my 20s, I could decide to move today, and by out of my apartment and into the new one by Saturday. Except for my queen mattress, I could probably still do that. Same will probably happen upon the return to SF
There’s a lot more flexibility being pondered, with only one or two days in the office instead of 5. It’s easier to consider moving to the East Bay, Modesto, Gilroy or whatever if you only have to get to the office once or twice a week. Depending on rent, a hotel and flight could even open up much of the west coast.
It's absolutely true that the home-office staff always get the best projects, be in-contact and visible to the executive staff, and are last on the list when layoff-time comes.
This is also true when you're at a home office, and you get acquired, and it becomes a remote office. Your career gets fucked.
I've had it happen to me over and over again; and it's very different when you work at the headquarters.
It's my biggest worry about 'permanent WFH'. It's that I'll end up being like the remote-office nightmare all over again.
The eternal choice between career and quality of life. What is nice about WFH is the expanded options for improved quality of life.
If the commitment is there for WFH to become an option for all, corporations will promote one or more WFH VPs to send the message that it’s OK, as occurred for women and minorities. I’d guess they’d choose rising stars with personal commitments that make WFH the obvious humane and moral choice.
Realistically, the vast majority of companies aren't going to issue an edict like that. They're going to find a way to work with their employees.
If you have employees who have been working productively remotely for a year, it's probably better to find a way to keep them happy and working than to have to find a new employee.
For engineers, at least, were used to finding new jobs fairly quickly and easily. It’s not worth it to live in a bad situation for an unknown amount of time because you might need to find a new job sometime in the future otherwise.
The WFH is a huge part. Just moved from a tiny 1 bed near downtown LA to a 3 bed place in Chicago with lower rent. My girlfriend and I both get our own offices, we have a yard, and enough places that are half open nearby that we're pretty happy.
In the north central US, you have to stay indoors for a while because it's too cold. In the sunbelt, you have to stay indoors for a while because it's too hot. In CA, you have to stay indoors for a while because of the poor air quality.
Take your pic. CA folks seem to think the rest of the world is an inhospitable wasteland. Sure, CA is a bit more mild, but it's not perfect.
> you have to stay indoors for a while because it's too cold
The advantage with cold is that it’s possible to do something about it. You can always layer up and get better materials for your layers. I spend hours skiing outside at like -15F and am actually comfortable. In hot weather though, once you’re sprawled out naked on the ground, you’ve exhausted your means to get cooler without some kind of machine.
In CA, you have to stay indoors for a while because of the poor air quality.
Maybe once or twice per decade is the AQ so bad in CA you have to stay indoors. As opposed to weeks or months every winter (depending on your tolerance - I hate cold).
> Maybe once or twice per decade is the AQ so bad in CA you have to stay indoors
We definitely had stay-inside days this year and last year, and I could have sworn we did the year before as well. That blew through your per-decade quota in recent consecutive years.
I fully expect we'll have some stay-inside days next year too.
But I do agree that the number of days the air quality is bad just does not come close to the number of days where it's really cold or really hot in other places.
The entire Western US is in the midst of a climate change-induced super drought that is worst in at least 1400 years, probably longer. The air quality is degrading due to huge swaths of the area being engulfed is wildfire. Perhaps your statement was true for the past few decades, but certainly not now. Its not a fluke, its the new normal.
Air quality is getting to be a national issue. I think even Wyoming had some issues this season?
The problem is environmentalists don't want to do planned/controlled burning anymore, hence, the things burn by themselves on their own schedule now, out of our control.
I can't speak for the US, but in Australia this argument has been used as an untrue talking point being pushed by climate-change deniers. A cursory google indicates to me that in CA prescribed burns have actually been increasing over the last few years, so I suspect it's probably the case in the US as well. In Australia it's clear that the higher frequency of catastrophic wildfires is a direct consequence of climate change.
I grew up in Jersey and Maryland. The summers were quite hot, and the winters were quite cold. One winter in MD it snowed so much that heavy ice formed on power lines and took them down; power was out for six days.
Spend a few hundred dollars on some quality winter gear and don't worry about it.
Wear layers. A scarf makes a huge difference. Probably larger than you would think.
Chicago will probably get a "polar vortex" in February or March. It will be a week of really cold weather and then it will be over. You'll probably find that November and December are warmer than you expected. January is a bit dreary, but only because of the reduced daylight hours (compared to LA). Chicago is just a bit further north than NYC, but compared to Paris or London it gets a lot more winter daylight.
The think I've noticed about winter since moving to Chicago is that the really sunny days are the coldest and the cloudy days are warmer. If you've got large south-facing windows, you might need to close the shades or even open the window slightly when it is really cold. That sun can be intense!
Obviously an exaggeration but you can go to work in the dark and drive home in the dark on the shortest days of the year. Can be a real bummer for those that didn't grow up like that.
I live in New England and a bunch of people have moved up here from all over. I'm most curious about how they handle it getting dark at 4pm and everything being closed by 9.
Chicago doesn't get -40°. When I was in Champaign (admittedly, that's ~100mi south) for 6 years, exactly once did we have windchill reach -40°. Your typical "coldest low" in Chicago will be single-digit degrees Fahrenheit.
Per Wikipedia, Chicago's record extreme low is -25°F.
The winter gets cold. Big deal. From the way people talk these days you would think that human beings will shrivel and die if the temperature dips below 50F.
There are no -40 days in Chicago, but I'll agree the winter is unbearable. I don't mind the cold. I mind the never ending cold. December + January are fine, February is depressing, but March and April really are awful.
Even worse than the cold imo is the 'about to be cold' weather preceeding and following winter. Rain that freezes overnight and encases your car right when you have to run to work. Muck and mud everywhere the minute you step off a path. Everything green turns to brown. Coupled with the limited daylight and it's depressing, frankly.
I grew up there, and really the worst part was that stretch in February where it's overcast every single fucking day.
Then there's the humidity with 100+F days in the summer. And mosquitoes.
The other problem was I grew up in a reasonable, livable suburb, and now, when I go back there, I see that rents and housing are really extremely expensive compared to salaries. Jobs suck (there's no real tech industry anymore). And traffic in the suburbs is constant gridlock wherever you go. It's become a real horror show and I couldn't ever contemplate moving back. Weather/Climate is not even the consideration.
When the polar vortex dipped down in 2014 and 2019, wind chill did get that low in Chicago. I think it actually hit -50 F on the coldest day for one of them.
Compared to other big tech-hub cities, I'd think SF would be one of the better ones to spend the pandemic in. There's great parks like Dolores, Lands End, etc, and they'll still be comfortable to be in during this winter. Is there more to it than that?
SF is indeed a nice city and better than many in terms of parks and outdoor amenities. However, the space at home, when you WFH, is pretty rough.
If you take what a typical couple pays for SF rent you can buy two houses in most of the US. So... if you're going to be spending a lot of time at home, for many people it makes sense to move out to a cheaper and more spacious locale, at least for now.
agreed -- portland is right there with very similar recreational activities and literally 25% the rent. why rent a 1b1b in SF when you can rent a mansion right on washington park for the same price?
That's a fair question, and the answer will depend on what people emphasize in life. I'll venture a firm answer for SF:
Though SF is no New York, it is notably more urban than Portland. San Francisco is physically more strikingly beautiful than Portland, with magnificent views of the bay and ocean from the hills. Portland is surrounded by beautiful forests and parks, but so is SF - you can get from downtown SF into the middle of a quiet redwood forest in about 25 minutes, and the coast, north and south, is far more accessible than it is in Portland[1]. While SF has a severe problem with street addiction and mental illness, so does Portland, and SF does still have extensive walkable urban and semi-urban neighborhoods. Golden Gate Park, the Presidio, and Crissy field are just a few of the outdoor options within the city. There are also plenty of options to live in lower density, SFH neighborhoods with small backyards. Culturally, San Francisco is much more diverse than Portland - SF actually ranks first among US cities in the number of languages spoken by 1000+ households. Portland is overwhelmingly white and has a historical hostility toward ethnics and immigrants (some believe that the anti-Californian sentiment has roots in hostility toward Catholic and darker skinned immigrants) - and, ironically on the other side of the political spectrum, a lot of immigrant or first generation communities are actually uncomfortable with predominantly white, left wing progressive politics. Immigrants may be more likely to find a community in SF than Portland.
[1] I surf, which makes Portland a hard pass for me, though that's a bit too niche for a general comparison.
You make excellent points -- the point related to culture is the most common I've heard from people outside Portland (particularly non-white people).
I think the only things you omitted are the differences in weather and the size of the cities.
- Portland is a fairly small city (especially inner portland) with a long history of anti-growth sentiment. The result is very rural agricultural areas _just_ outside of Portland.
- The weather patterns bring different wildlife and kinds of beauty. While the forests outside SF are quite pretty, they are also very different than the wet douglas fir forests up north. Beauty is in the eye of the beholder -- Portland also extends into the hills and provides famous views of Mt. Hood from the SW hills. The portland zoo for instance, is like going from a city into a rain forest.
The oregon coast is cold and rainy 95% of the year, not the most fun place to visit.
Portland is really nice, I've enjoyed my trips up there. I was positing an answer to the somewhat open question of why someone wouldn't leave SF for Portland. I think there are compelling reasons why someone would prefer to stay in SF, but nobody would need to explain to me why they prefer Portland! I can see all kinds of reasons someone would prefer it.
Portland is right by Hood River if you kitesurf (which, despite 17 years of regular surfing and only 2 months of kiting, I've decided is objectively better)
The positives have to out weight the negatives of high crime, a large homeless population, high rents, small apartments, etc. Having nice parks is not unique to SF.
The actual reason people are leaving the city are high rents and small apartments. How the hell do you work from home when you're sharing a place with roommates? And affording extra space for an office given current rents is a huge problem.
Crime and homelessness, while problems, aren't major factors for people in my experience. After all, those two things haven't really changed.
Homelessness is objectively worse, as in higher counts, in SF. Up 72% since 2011. And it is subjectively worse, as enforcement has dropped and homelessness has spread, become more bold, more petty crime, and caused a bigger disruptions.
> Crime and homelessness, while problems, aren't major factors for people in my experience. After all, those two things haven't really changed
I disagree. Its consistently brought up, along with high rent, as one of the worst parts of living in the area. In my experience, the people who stay in SF are willing tolerate it for access to all the amenities there. When the pandemic makes it difficult to enjoy those amenities, it will drive people away.
no... but neither is having a problem with street addiction and mental illness. SF has it bad, no doubt, but on recent (<5 years) to Seattle, Portland, Nashville, Los Angeles, and Milwaukee, I did see the extent to which this isn't purely a SF problem. NY was actually the best of the bunch, remarkably, though last time I was there was 6 years ago, and things have deteriorated remarkably in SF even in the last 10 years, accelerating in the last 5, so this may be less NY vs SF and more 5+ years ago vs now.
You are certainly not wrong. This is a major problem in many places in the country. It's gross. Portland and Seattle are definitely much worse than SF. LA is much nicer than what it used to be, and still better than SF, but I grew up in LA so I have the natural tendency to ignore everything bad with it.
I hear you. San Franciscans historically had an extremely obnoxious tendency to only see the negative side of LA. Seems like it's fading a bit, though, partly because SF's are too severe to stay smug, and partly because LA keeps getting more interesting. I grew up in SF but moved to LA for a while in the late 90s to work in the software side of film compositing/editing. Finally opened my eyes to how much fun it is. My guess is that with electric cars and more urbanization, LA will may well become a warm, crowded, culturally varied and ethnically diverse place with sprawling suburbs and dense urban areas, a lucrative and creative entertainment sector and somewhat smaller tech sector, clean air and water, beaches, and eternally lousy traffic.
Did you work for Dolby or RED? I've always thought it'd be fascinating to work in software for pro film production. I'd really like to hear anything you have to share about your experience.
And if you haven't heard, all the public school names are going to be renamed, since people like Lincoln and George Washington were terrible people who shouldn't be celebrated /s [1]
I don't know why you were downvoted. Even if someone supports renaming a school called Lincoln to something else, the ... extreme nature of such a thing is a consideration for people to consider whether or not SF is a nice place to live. Because there are people in charge making decisions like this, and people in charge wield power, and if you live in SF you'll be subservient to these leaders.
I'll add, the fact there are people who downvote information is quite possibly another strike against SF.
I think the downvotes fall into two categories. Some people agree with the renaming, and others just don't care either way. In a subthread about why people might want to move away from SF, "they're going to rename some schools" is not particularly relevant, and comes off a little flamebaity.
My personal opinion is that some of the renaming is a bit over the top, but I'm glad we're re-examining our historical "heroes"; most of what kids read in their US history classes paints an idealized, unrealistic picture of these figures, and ignores real harm they caused, both by their actions and attitudes. Regardless, I just frankly do not care whether a building is named Lincoln High School or John Doe High School. If ditching Lincoln's name makes a bunch of people feel more comfortable, it's no skin off my back.
What's actually important is that we teach the truth, and all of it. When we teach kids about Thomas Jefferson, we should certainly give him credit for the statesman he was, and for what he did to free the US from England. But we should also teach how he owned slaves throughout his entire life and saw no problem with that, and how he was a rich, elite landowner who believed that only a very small, single-digit percent of the population should be allowed to vote. Even Washington, who seemed not entirely comfortable with slavery, owned a slave that was only set free upon Washington's death. And Lincoln... well, his main concern was keeping the Union together. If that ultimately meant allowing the South to keep slavery intact, he was fine with that.
I don't bring all that up to say that they were awful, irredeemable people with no positive qualities. Some of them, if born today, might grow up with very different attitudes. But I think it's reasonable to suggest that quite a few people, especially non-white people, might not be particularly comfortable sending their kids to schools named after these people. And it's perfectly ok that they feel that way.
Of course it's relevant. It says a lot about the local government, about their priorities and perhaps about the people who live there that led to it. Their attitudes on this are reflective of their attitudes on other things. The exodus is being driven at a surface level by the lockdowns, but by now the lockdowns are well past the point of being driven by leftist ideology. See:
End of lockdowns in CA are being tied to vague "racial justice" goals. These things are all connected. Renaming a high school says "we consider this the most important thing we could be working on right now" which is clearly absurd when you consider the real problems CA has.
I assumed "everybody knows" that Lincoln was not a super abolitionist. And "of course" it's ok if people don't regard him as a super hero.
But despite being a lifelong Democrat there is a certain level of concern over purity that makes me uneasy. All my Jewish cousins who were in Europe mysteriously disappeared during WWII. Yet, I own and enjoy a German car whose corporate origins are very intertwined with the history of that period of time. I think the Apollo program was pretty cool, and that was fundamentally rooted in the exploitation of German expertise from rocket research involving Nazi slave labor during the war.
So, if someone is disgusted with these things and personally avoids them, that's cool. But if they are on a crusade to purify society from them, I probably don't want to be neighbors.
I do think a community should decide. I don't think outsiders should be telling people they have to keep the school named after Lincoln, if they want to change it, democratically.
>The names of presidents and other political and historic figures could soon be purged from SFUSD schools. This includes George Washington, Diane Feinstein, even Abraham Lincoln.
I think most people who leave during the pandemic aren't leaving for equal-sized apartments in other cities.
I think they're leaving for places where lower land prices mean homes with more space - which could mean the suburbs, smaller towns, or could even mean moving back in with their parents.
I know people, in London, where three 20-something couples were renting a three-bedroom house, living 2 people to a room. They barely had room to set up comfortable desks and chairs for everyone, let alone things like exercise equipment. Some of them decided temporarily moving back in with their parents wasn't such a bad idea after all...
Yes, there are good parks in the city, but even back in June I thought some were too crowded for a pandemic. You also have access to lots of nature and hiking within a reasonable drive of the city, but that only works if you have a car or trust a rental company to disinfect thoroughly.
The hard bit is the live+work space. I was incredibly lucky that I moved to a larger place right before the shelter-in-place order hit (from a loft to a condo with walls and doors!), but I know a lot of people who have been working on dining tables and sub-optimal improvised desks for the past seven months. If you live in a loft-style place with another person, the lack of personal space can really get to you.
Go to denver/boulder. You get snow on occasion, but it's gone the next day, and the whole state is a park. Plus Skiing, 300 days of sunshine, and while the housing has become much more expensive, it's still way less then California.
section in the USECODE file from Ultima VII, specifically
"Looks like shit... could be west Texas."
- PHILIP
...... because apparently my brain remembers free association tidbits like the above that I found while (cluelessly) digging in binary game data files ~27 years ago.
Who cares about the weather? For the price of an apartment in SF you could easily have 2 apartments in different cities. Get one in Colarado for when you want to snow ski and get one in south Florida for when you want to water ski.
Don't know about SF but the so cal parks were closed, even the beaches in some cases. Heavy fines if you are found in the park.
My favorite restaurants are all closed and you have police state ensuring you don't use public facilities. Why would I pay $4000 a month for housing with none of the benefits?
If you want access to parks and nature, you don't need to spend SF prices to get it. Other places on the west coast are warm during the winter and have parks.
And you're discounting the fact that they will still be living in a tiny apartment compared to other areas with much lower housing prices.
I’ve seen a lot of folks come to Arizona during the pandemic, and I think more will move here. Outside of the summers, which aren’t that bad because you have A/C, and in the summer you’re an hour from being in the forest with pine trees and three hours from Flagstaff where it’s great weather year round (plus a ski mountain in the winter) you got a lot of folks from California coming & staying while looking at much more affordable housing & taxes.
Especially as Arizona has become more and more liberal/left leaning, you got less folks viewing it as hostile & enjoying the fact you have a lot of hiking/outdoor activities, rivers, lakes and camping all within a short driving distance.
I'm a transplant here, and I feel like I'm living in a weird post-apocolyptic nightmare with all the Trump signs and Trump flags on their giant lifted trucks. I really hope that this state can pull it's head out of Joe Arpaio's ass, and wriggle leftwards a little bit.
I think the weirdest and most noticeable thing is people riding motorcycles without helmets.
That said; yeah, the heat is not really that bad (it took me about 2 years to acclimate), and there are options for relief. Surprisingly, I think we get more rain in Arizona than in California (not this summer though), and winters are definitely much colder in Arizona than they are in California.
SF wasn’t fun before the Pandemic. I’ve visited friends who work in tech 3 different times the past 5 years. The city lacks culture, the food and drinking scenes suck, and the people are all the same.
(I spend most of my city time in miami, nyc, and montreal)
SF literally has an award winning food and drink scene, but you go off king. Sounds like you were spending time in the wrong places. Please enjoy Miami
I think this as many other things are highly subjective.
One might say that something that could be considered a fairly good indicator of a "good" food-scene would be this: https://www.statista.com/chart/16308/michelin-restaurant-us/
Where SF is no 2 in the country for number of Michelin star restaurants.
Again as the first sentence states; one might argue this is not the indicator of a "good" food-scene but I guess we'll have to take what we can in terms of objectivity to try to judge a city on different things, and for food this is at least for high earners, probably a somewhat good indicator.
You have a point, and there are parts of NYC that are very heavy finance workers, but I'd point out a few differences:
- You'd have to include SF, San Jose and Oakland together to equal the size of NYC (and much of that SF metro area is single family home suburbs with no one on the street at night)
- Tech workers concentrate in SF proper because there is not much outside of it (yes, there is, but SF is the core)
Just my take, but SF seems to revolve around tech, while finance is big in NYC, it's not the dominating industry like tech is in SF.
you ignore a lot of other industry around the bay and around nyc. Neither Queens nor Fremont are representative of the other areas, neither is Brooklyn or Oakland. Or Berkeley. Or Bronx.
> Microsoft is moving to essentially the Github model of letting people live where they want
My understanding is that at Github working remotely is the norm, while I believe the changes Microsoft announced require manager approval if you want to work remote > 50% of the time.
therefore I’m moving for a year or so until things fully reopen
Do you see an end to this pandemic in the next year or so? A good percentage of people are still refusing to wear masks, we aren't anywhere closer to a vaccine etc. I am trying to be optimistic, but the situation isn't improving from any direction and we are already 10 months in :(
It's a fair question, and for me the answer is open-ended. I expect this to last at least another year, but I really have no idea when things will feel "normal" and "safe" again.
In what sense are we not closer to a vaccine? I’m not following vaccine development closely, but my understanding is that many candidates are progressing along nicely.
It's important to point out that while these trials appear promising, there has never been a vaccine developed for any coronavirus before that eradicated the illness in humans[0]. Influenza vaccines, for example, work to fortify the immune system from various strains of influenza, but they do not prevent illness. There's a lot of political and commercial pressure to make this happen, but the reality is that this is an incredibly hard problem to solve and we may be dealing with COVID-19 in some form for the foreseeable future.
Covid has already got to the point where it's more likely that you'll die in a car accident than of covid... so I think with something like the flu vaccine is probably good enough.
Motor vehicle deaths per year in the US are under 40,000. In less than ten months, more than 210,000 people in the US have died of COVID. You're an order of magnitude off.
That’s extremely routine procedure for any trial. When there’s an u explained illness the trial is halted to investigate if it is linked to the vaccine or not.
I don't think the downvotes here are fair. Drug development is hard. Most candidates never make it to market. This is a vaccine for a virus that's never been successfully vaccinated against.
Expect a majority of the vaccines in trial to fail over the next 6 months, either for safety or efficacy.
> This is a vaccine for a virus that's never been successfully vaccinated against.
For lack of economic need. Most coronaviruses only cause mild symptoms, so there's not been a need for one. SARS vaccine efforts died early because the disease itself died out and there was no impetus to continue searching. MERS is similar in that, even though it hasn't gone away, it burns itself out so quickly that the need for a vaccine is relatively small, and therefore research efforts have been limited.
> Drug development is hard. Most candidates never make it to market.
For vaccines, something like 80+% that make it past Phase 2 end up making it past Phase 3. Its unlikely for most vaccines that make it that far to fail. We already have half a dozen candidates around the world at that point, with more on the way. If anything, its highly unlikely we won't find some kind of vaccine. If not one that grants sterilizing immunity, one that provides enough protection that it makes the disease far less deadly, like the flu vaccine.
Exactly, and because of lack of economic need our experience with creating vaccines against coronaviruses is pretty minimal.
And yes, I agree that we'll get something, but people should be prepared for a few of the vaccines to fail, a few to be pretty mediocre (are they worth even getting) and a few that actually have some utility. The challenge is the ones in development are strung out along a pretty long timeline, so if we're lucky, one of the earliest ones works and we don't have to wait until late 2021 for something worthwhile.
And not only that, but people should expect something promising to be approved and then likely pulled off the market 6-9 months post-approval. It's just the nature of trying to accelerate a vaccine and then once approved, dosing tens of millions of people with it.
Wearing masks won't make this end any sooner. Reducing transmission rates flattens the curve meaning smaller spikes but likely longer presence of corona virus.
I disagree that it's a demand problem alone. There was tons of new construction. If I wanted to, I could have moved to any neighborhood in the city on a whim... As long as I was willing to move into a brand new luxury apartment $4k studio.
The demand was high for reasonably priced older units. "Just add new construction" doesn't work if all that gets built is luxury apartments.
Again, think on the margin. If there’s suddenly a lot of new luxury apartments then those looking for something cheaper have less competition from the deep pocketed. If they build so many luxury apartments that prices for them break that’s also a victory condition.
It's not so simple. The newer buildings were constructed at a much higher cost than the old ones and they are priced accordingly (and with less flexibility to go down in price). In spite of the price tag and the 'luxury' appellation, they really are not that nice (they tend to be small and the gym/pool that comes with the apartment is closed during Covid. Consequently there is a subtle structural shortage on apartments that doesn't go away by simply building more apartments. If it were possible to build apartments at a lower price with more space per unit in the city then it would be a simple matter of total housing stock. As long as housing stock is differentiated in price and quality a shortage can endure even with an increase in total supply (rent controlled units for example will always be in short supply regardless of new construction).
> As long as housing stock is differentiated in price and quality a shortage can endure even with an increase in total supply (rent controlled units for example will always be in short supply regardless of new construction).
If you build enough quality housing you end up with old crappy housing being impossible to rent out so it either gets abandoned or redeveloped. If you build enough housing the price floor that is rent control ceases to bind because market rates drop below the floor. There can absolutely be a “shortage” of a given combination of quality and price but that’s like saying there’s a shortage of Peter Norvig talented Computer Scientists who’ll work for $50K a year.
New housing is always for the richer. Those who want a deal go for older ones. However when there isn't enough construction those who are willing to pay for new go for used as well driving all costs up.
That said, housing can be profitably built cheaper, but why would any sane developer make a low price house when there is more profit in luxury housing. SF has refused to allow enough construction to meet demand, and this has resulted in only luxury being built.
Cities with less growth than SF are building more than SF, and as a result all housing is cheaper.
No, but SF's byzantine planning and approval process jacks up the total cost to build to the point where it doesn't make financial sense to build low-end housing. That means the developer has to increase sale prices in order to turn a profit, which in turn means new landlords need to charge more rent to just break even.
If you consider that a newly constructed 750 sqft 1BR apartment can easily run $800k-$1M, a buyer is looking at $4-5k per month to cover the mortgage, property taxes, insurance, HOA, maintenance, etc. Do you really think a buyer is going to turn around and rent it out for $2k/mo?
For buildings wholly owned by a leasing company, the economics are better, but still not to the point where they're going to rent that out for under $3-4k/mo.
I'd argue that new construction is inherently a luxury just because people are willing to pay so much more for it. You can't just directly build reasonably priced older units, any more than you can directly build beater cars.
There have been a number of studies looking at this, but the TLDR is that globally most new construction is and always has been high-end compared to the surrounding market. What typically happens in a healthy market is the rich overwhelmingly live in new construction (or remodels), and everyone else lives in the places that rich people lived in 10, 15, 20, or more years ago. Since construction is durable, a luxury apartment building from the 70s should still be a nice place to live as long as it has been maintained. And if lots of nice new stuff has come in since then, the old stuff should be in less demand and therefore affordable.
I think people are asking the wrong questions. We know that people moving back in with their parents is up about 3 million due to COVID [1]. It would follow that studio apartments are the mostly likely to be rented by those same young people, thus the demand has dried up.
The question we aren't asking is, what happens when the economy recovers and these people move out of their parent's homes? Will they go back to the "destination" cities or will newer, smaller cities be the target? Will they crave experiences or space more?
My guess as to what will happen, for the sake of playing along with the hypothetical simply because it’s fun.
Destination cities will still be desirable, however there will be a very slow rebuilding of demand. The magnitude of that demand will never reach the same height. The entire world was forced to work from home for an extended period of time, introducing those from industries that would scoff at the idea to a different lifestyle. Sure some people don’t like it, they will be the ones moving back to cities, but I think enough find it vastly favorable to the grind of commuting too and from a physical office that it will have some stickiness once social distancing can safely be stopped.
This general shift in attitude will make it far more realistic to work where you actually in your heart of hearts want to live. I’m excited for this change, I live in downtown San Francisco right now and it’s not BAD— life is fine, we’re making due with the times. But I never wanted to permanently live here, and now there is this perfect chance to move out of the city, you bet your ass I’m taking it when my lease is up :)
People really do need to zoom out a little bit. Yes, we may see negative or slow growth in some cities over the next couple years, but in 50 years? I would bet NYC, SF, and other big cities will be stronger than ever.
.. except there will probably be more pandemics within the next 50 years.
Given that we've had multiple localized epidemics or global pandemics in the last two decades alone (SARS, Ebola, Swine Flu/H1N1, etc), the likelihood of more seems increasingly high. Perhaps it doesn't even matter whether the next one will have a higher CFR; whether large cities prosper depends not only on whether people believe it will, but also on how well the cities do in many other respects, such as crime, taxes, pollution, trash, homelessness, etc. SF is not only suffering because of the pandemic: the pandemic just put an extra sense of urgency on the snowball effect that was already happening.
When cities are safe, healthy, clean and beautiful, they're great and everyone is happy to live there, but now? Not so much.
Are suburbs any different? I’ve visited at least a dozen suburban areas during the current pandemic and they are all as equally affected by the pandemic as cities are.
It’s important to note also that sanitation, preparedness, and scientific knowledge will all continue to improve over time. Pandemics may become more common but that doesn’t necessarily mean that they will be as deadly or effective as the current one.
How much of that history includes jobs that can be done remotely? I'd say that's a significant change for certain cities that have a significant such workforce.
Agreed. What has happened in the last 75 years is historically new:
1. The growth of information/knowledge (the Information Age) jobs, which are now the majority of all jobs in the U.S.
2. The growth of remote work tools (the jury is out on how productive people are remotely at the moment, but new tech will drive this soon so that you will be just as or almost as effective in your kitchen or local coffee shop)
3. The growth of global transportation (the Jet Age) that allows previously localized diseases to spread globally in hours, instead of months or years
These factors are new and together likely presage a historic shift in how and where people work.
Ironically, except for this market adjustment in larger cities, the ability for people to work productively in other locations will put continuing downward pressure on the cost of living in cities as people leave, and probably hit some sort of equilibrium at some point soon.
... all this to mean that you should sell your investment properties in the Tenderloin ;)
I would argue that high paying jobs are a big driver of cities and never in human history have people had the ability to work in high paying jobs outside of big cities like we do now. The ability to effectively work remotely is largely dependent on job duties and IT in general can work remotely with little productivity loss. Hence the bay area getting hit harder than most.
To me the question is whether companies/employees will continue letting/wanting to work remotely in the future. I am certainly not concerned about a population collapse in big cities because many companies and people want to live there and don't because of cost.
> The magnitude of that demand will never reach the same height.
I don't believe this; very few companies are okay with permanent remote work after the pandemic is over, even though they are very notable exceptions, eg Facebook.
This also assumes the population of people interested in living in destination cities is constant, but it's been growing every year the last decade except this one. COVID and the possibilities of remote work and COVID will dampen growth, but when we get through COVID, I expect demand to be higher than ever. It's not like SF will solve their systemic housing problems in the next 20 years, or our lifetimes.
I work in oil and gas, by no means the epicenter of innovation and many of these companies are talking about a moving to a mostly remote work force to save on real estate expenses.
By a long shot, the largest expense for large companies in employee salaries - rent, by comparison, is a drop in the bucket. What follows is that companies should be most concerned about employee and team productivity rather then office expenses.
Salaries do get affected by WFH policies, since if you move to a cheaper state/country, a company will often do a pay adjustment. So, from a cost savings perspective, it becomes a question of how much a company thinks being in the Bay Area brings in terms of attracting talent, vs how much they can save by having their employees work from Pennsylvania or Canada or India.
I know companies in Canada that are way ahead of the curve on this: they've been consulting for American companies for years, meaning they can afford way more person hours than american counterparts given a US dollar contract size solely because of the salary gap difference.
I am skeptical that the labor market for high quality tech talent is as large in the rest of the country or that it is that tied to COL. The US vs not US gap seems much larger than the HCOL vs LCOL for senior IC jobs.
Maybe not 10 months ago, but a lot of people have dispersed to various places in the US, and that may continue as companies relax their in-person work requirements. Talent still has its concentration points, but its less concentrated than it was, and I expect that trend to continue.
The US vs. not-US gap is certainly larger, but I expect that US-based companies would much rather hire someone 3 timezones away than 8 or 12. Having to be on conference calls at 7am or 8pm gets old real quick.
Do you know of any remote-first tech company that pays Bay Area salaries regardless of location?
I haven’t heard of one, and I would think this would be a huge selling point so anyone doing it would want to advertise it to engineers.
On the other hand there are plenty of companies transparent about their policy to match pay to cost of living, for instance gitlab publishes their conversion percentages for different cities. Many places in the US they pay ~60% of Bay Area.
There's like a $25k difference between Google L4 in the Bay vs in Boulder and with considerably less average years of experience. That's less than the COL difference.
> companies should be most concerned about employee and team productivity rather then office expenses.
Can companies measure productivity of knowledge workers to that granularity?
Office expenses make a relatively small fraction of employee overall expenses. Say 10% to be extremely generous. NYC five-borough average back in 2015 was around $15K per year [1]. A fully-burdened employee expense is around 2X base salary, so a $100K salary position clocks in around $200K fully-burdened, or around 7.5% of that 2015 NYC average figure. I don't currently see companies wholesale changing employment strategies for 10% differentials.
I'm not sure companies can measure productivity down to that expense detail level for knowledge workers.
True, but if giving up that office also means you're more amenable to hiring employees in LCoL areas for 30% less, then you start to see some savings. Ditto if some of your existing employees move somewhere cheaper and you cut their pay a bit.
It seems like this argument is easily dismissed when you look at the push away from offices and cubicles into cramped tables with no visual separation. Fitting more people into less space has been the trend for a while, despite study after study demonstrating that it’s less productive.
It's very difficult for a corporation to measure changes in employee or team productivity in many white collar professions ..specifically software development.
I personally don't know of any large corporations that track it well enough on a corporation wide level to be able to tell you if any change significantly affected developer productivity.
But the check they write every month for rent is very easily measured and reduced.
Also I was specifically told by the VP who was in charge of making the decision for his division why he was doing it, and it was costs savings.
Is it an obvious move? I can work from home, and currently do, but much prefer working in an office. I'm more productive when I'm in the office. It's easier to get into and stay in a more focused headspace. There's also a lot of relevant context and info that I pick up just by being around the office that I don't have when working remotely.
I'm aware that there are people who feel differently than I do. However, I believe there are a reasonable number of people on both sides of this. That's why I don't think going completely remote is an obvious move. Not having offices will eliminate some people from the applicant pool. Not offering remote positions will eliminate other people from the applicant pool. It's okay for a company to do either of these but I don't agree that the choice to go remote only is obvious.
I'd imagine that a group of employees who already work well together moving to remote work would be very different than hiring/training/integrating new remote employees.
Different, yes, but nowhere near as difficult as I expected. We've continued to hire a lot over the past 7 months, and while onboarding people remotely took longer at first, I'm not really seeing meaningful productivity differences (due to the remote onboarding) after a month or two on the job.
It's also possible that after the pandemic, when it's an option again, the youngest employees will prefer to work in offices. Won't the talent drive their choice ultimately?
I’d counter that many young people permanently leave their “hometown” for financial opportunities that are currently only available away from that “hometown”.
For privileged young folks who are “amenity migrants”, your statement would be admittedly true. It might be a bit classist to extend that assumption to all young people.
I'm not convinced that most people will want to move back to their hometown after being away for any non-trivial amount of time. I certainly wouldn't. My old high school friends are different people who I don't know anymore (save for a few who who I'm still close with, who coincidentally also don't live in our hometown and wouldn't move back). My friends are mostly people I've met in my new town, and I wouldn't want to leave them without good reason.
Sure, people who grew up in $COOL_PLACE but moved to $OTHER_PLACE for a job might want to (and be able to) move back to $COOL_PLACE now, but I don't think that generalizes to most of America.
I don’t think it needs to be so absolutely black and white. I just mean, if you lived somewhere for reasons other than “I enjoy living here” you’re likely going to have options that didn’t previously exist.
Even during the lockdowns only 40% of the US workforce worked from home. Here’s another stat: only 33% of the us population has a bachelors degree or higher.
Step out of your bubble and think about all of the people making the goods you order, maintaining your roads, construction workers that fix your home, the workers at the grocery store, the person that delivers your packages, the warehouse workers, etc etc etc.
The world runs on people being physically present working jobs that can’t be done from home... that must continue so that you CAN work from home. Until robots can do those jobs, it'll always be the minority that works from home.
Vast majority of those jobs don’t rely on the network effects of major SF/NY/Seatle hubs. There’s little difference To prospects to someone working as a plumber in a town of 30k people vs a city of 3m people.
> Vast majority of those jobs don’t rely on the network effects of major SF/NY/Seatle hubs.
If you reduce the need to maintain both a worksite for people and a home, while you will increase the need for labor to maintain/service the home and supporting infrastructure somewwhat, it will probably be less than the reduced demand for labor to maintain and service the worksite. The initial effects of a large scale shift to telecommuting is going to include a lot of net physical service/maintenance/support jobs lost.
Step out of your bubble and think about what it would mean if 40% of Americans worked from home full time.
It can be done, we've seen that, now people are running the numbers and seeing what that means. Pre-covid it was something like 3% that worked from home at least half the time.
If 3% turns into 40% - or even 20% or 6% - that starts to change things.
A small fraction of those 100m are going to be working in corporate jobs where WFH is even an option. Retail workers, trade workers, transportation workers.
The whole WFH discussion is an upper-middle class discussion. Low income workers don't have the option of working from home.
I would flag github as a more crucial requirement. We've had various im/irq platforms for decades. They weren't really a substitute for video - but video is only a tiny fraction of team communications, and simple chat satisfies most of those requirements.
You're thinking too small. A tiny fraction of the people in the US use GitHub. Even a relatively small fraction (certainly under 50%) can use Zoom to do their jobs.
Remote collaboration tools like GH have been crucial for remote work for software developers, but that's a really small slice of the pie.
Even at companies that employ software developers, many don't use GitHub specifically or don't use much. And most of the sales, marketing, finance people at those companies don't use GitHub much either. Many of the developers I know were collaborating on open source projects around the world before GitHub came along so it's hardly a prereq.
Instead of github you should say code repositories. We used subversion back in the earlier 2000s to do remote work with contractors. It worked just as good as GitHub for remote collaboration.
This assumes that companies are always operating in a maximally efficient way. Anyone who has worked in a corporate setting, particularly for a large corporation, knows this is never the case. Far too often, things are done one way because that's the way its always been done.
WFH is fine. Bothers me not at all. I hate not being able to breathe the same air as my friends. It makes so many things impossible - things that are also impossible unless my friends mostly live within 30 minutes travel of me.
Moving to a rural area is even worse. In principle I can maintain friendships with people separated by any distance from me, but there's no substitute for being in a highly populated area in terms of making new friends. And the more highly populated the better.
Who are you talking about? Tech workers or people who don’t work in tech?
Everyone I know in the service industry left. I doubt they ever come back. COVID was the nail in the coffin for most bars, restaurants, and clubs in SF that were already struggling. The city isn’t going to be the same after this.
Even if all of them go bust this year, there will be new ones once population return and will need entertainment. The nature of entertainment might change a bit, but it will be still there.
I think there's an implicit assumption here that there will be a definite end date to this. I really hope there is, but there's another possibility that looks more likely as time goes on: lockdown has permanently broken the brains of some types of political leader and they will in fact never fully release the restrictions. Places like SF and NY will have long term restrictions lasting years, justified in the name of public health, the "new normal" and epidemic curves that never flatten (given current testing levels the curve can never drop to zero just due to FPs alone).
Many parts of the US will definitely go back to normal, but maybe not everywhere. It may be a permanent structural change in laws and government approaches.
I think the answer to that question depends entirely on the employer. While some are making waves becoming remote companies, the vast majority are chomping at the bit to get butts in seats. I know several people who have been called back in, to sit in an enclosed office in their cubicle for 8 hours a day with their mask on doing the same exact task that could be accomplished on their laptop at home.
Why? No reason at all beyond managers wanting to see people physically in the office working. The management class rarely takes a page from science and reason when making decisions, gut feelings are king, and the gut feeling in many boardrooms right now is that people are slacking off working from home. Whether that is true or not in real world productivity isn't considered. That's why I think not much will change ultimately once things do eventually return to normal, whenever that may be. People will go right back to living conveniently to work.
Care to share the actual names of who these several companies are, requiring workers to take on the additional COVID risk with no actual business requirement? The companies, not the people. Not to be skeptical, but I will be. Government, small business, big corporations?
After reading a lot of replies in this thread, I think people are thinking way too small. As another commenter points out, we need to zoom out quite a bit more.
SF, for example, was a popular place to live before it was a tech hub. Even if all the companies go away (they won't), there will still be plenty of demand. Maybe it will be a healthier sort of demand that doesn't push lower-income residents out of their homes. But there will still be demand, and it will grow as COVID becomes further behind us.
For a lot of the people who moved back in with their parents, I think social circles will be an important factor. I know if I'd moved away, I'd be anxious to see my friends again, and live close to them. That doesn't mean everyone will end up back where they started, but some will. Others might band together and pick a new, smaller city or town to live in. Some social circles won't get back together, and some will split into new combinations. Some might see it as an opportunity to move to a new city where some old friends have lived for years. Still others might decide to stay with their parents, especially if they're older and may not be around much longer.
Also consider that only something like 30% or 40% of the workforce has been working from home during COVID. Everyone else works in restaurants, bars, state and local government agencies, retail and grocery stores, hospitals, universities, and a host of other things that require a physical presence everywhere. There's no "grocery hub" like there's a "tech hub" or "entertainment hub". Every city and town needs a hospital or clinic and people to staff it, telemedicine notwithstanding. Those professions will continue to grow with the US's population, which will drive more demand everywhere, including cities.
IMO, there is a certain younger generation with an affinity for urban life. As they age, they will, to some degree, lose that affinity for urban life. I think there's a chance that cities will lose their appeal for a while.
Combine that with companies pushing more remote work, or setting up satellite offices, and you may see a slight decline in urban areas for a few years until it is in fashion again.
Everyone is on the remote work bandwagon right now because there's no adjustment in pay at the moment. For people with little or no ties in the area, it makes sense to move back home and save on rent. As far as I know, no company, other than GitLab, has published any clear numbers on COL adjustment, I suspect many will come back once COL adjustment is known (not necessarily back to SF, but to the Bay Area).
Wonder if 80+ US Senators would be willing to extend employment discrimination law to include place of residency? It would be in the economic interest of 40 US States (just a guess), and the long-term political interest of companies with National presence or aspirations, to do so...
Also being Silicon Valley, they have more companies than average that were well positioned to wfh. And with high rents, people are more likely to live in a smaller apartment, making wfh even more uncomfortable... making them even more likely to want to leave.
Rent surveys are usually heavily biased towards large buildings. SF has a ton of new development in currently moribund neighborhoods, so I suspect some of the massive drop is due to that being oversampled (Mission Bay, for instance). In the more desirable neighborhoods with lots of rent controlled places the price drops likely aren't as steep. My friend is trying to rent a condo in a desirable location and most people looking at it are moving within San Francisco, trying to get into the more established neighborhoods at a better price.
Not every single individual all the time, but mass of people generally moves that way. I dont mean it in derogatory "they are all shallow consumerist" way.
1.) There are too many people who dont have strong preference and thus go for salary because why not. Or follow friends. The higher salaries also go with bigger social status, often better negotiating position. There are people who do need money. And yes, there are many people who measure worth in salary too.
2.) Historically, people move that way. When programming turned out to be good job, students started to be way more interested in that. When you look at which majors students pick, they generally go for the ones that sound practical and earn money. Yes, some people go for antropology or history of art, but not nearly as many of them.
People moved to San Francisco in the first place because they followed opportunities. People moved out of Detroit because they followed opportunities.
> The figures underscore how the pandemic has roiled property markets and changed renter preferences. With companies allowing employees to work from home, people have fled cramped and costly urban areas in droves, seeking extra room in the suburbs or cheaper cities.
I am skeptical. Yes a lot of Bay Area companies are allowing work from home for now, but are people really weighing that so heavily that they’re moving? If we’re blaming the pandemic, maybe it’s that fewer people want to move to the city because they can’t enjoy it (bars, restaurants, etc)
"I am skeptical. Yes a lot of Bay Area companies are allowing work from home for now, but are people really weighing that so heavily that they’re moving?"
It is the marginal buyer, not the entire population, that swings the price. It's the last few properties for sale that swing the price.
Someone downthread explained it very nicely:
"Rent is like a traffic jam. The market collapses on the margin. You don't need to remove 30% of the cars to reduce freeway congestion by 30%, and you don't need to remove 30% of the residents to lower asking rents by 30%, either."
Elasticity features depend on the specific housing market but in the basic mental model housing supply can contract in the medium term when demand contracts and vice versa.
Demand is also elastic at least in the sense that people get bigger houses / move on to their own earlier / get roommates depending on the situation.
And geographically people spread out further if prices get high or move in from neighbouring locales which can be seen as demand elasticity if looked at from pov of a local housing market.
Housing supply is 100% inelastic in the 6 month time frame. In the medium run it's pretty inelastic in the bay because of NIMBY backed zoning laws not allowing for densification.
BTW the price elasticity of supply equation is always discussed as how the price affects supply. Anyone know how economists think about changes in supply affecting the price, is the same equation used? Eg destruction or creation of housing units.
This is what leases are for, they fix prices for a year or so by adding cost friction to moving (usually a few months of rent). Which, in theory, act as a buffer to stabilize prices.
The problem is that the cost savings of moving is so great that it was cheaper to pay to break the lease than it would be to stay. We saw the reverse of this before: when landlords were paying people $8,000 to move early because rent inflation meant they could charge much more than that to the next tenant.
SF is an outlier because of the income disparity, relatively low housing density, and unique climate & economic opportunity available there.
> cost savings of moving is so great that it was cheaper to pay to break the lease than it would be to stay
What's the law on this? I've read that the landlord is required to make a good faith effort to replace you, but if they can't (or if they can't recoup the costs), you are on the hook.
So if the cost is 32% lower and the landlord can only find a tenant willing to pay that much, it seems like you are responsible for the 32% for the remaining months of the lease - which is no better than if you just hadn't moved. And that's not even including the fact that the place might be on the market for months.
All of my leases had buy-out provisions, usually one or two months of rent. I've never lived in SF, but I'm going to guess that tenant-friendly laws in California combined with historically good price growth provided landlords with an incentive to make it easy for tenants to break leases.
I know more than a few people from SF who were paid to break their leases. More churn means more "market adjustments" for rent prices, and market adjustment historically favored landlords.
You're confusing a few things. Because SF (until recently) has disproportionately been a sellers market, leases are written such that they benefit the landlord.
Buyout clauses are not symmetric and are uncommon in SF.
In the context you described, both the tenant and the landlord have incentives: the landlord wants to pay you to break the lease so they can charge higher prices, the tenant might want to accept the money. The landlord doesn't have to have any clause in the lease whatsoever to make this offer because you aren't obligated to accept it.
On the other hand, in the current market the landlord has no incentive to accept an offer that is less than what they feel like they will lose by you leaving. Since the market has collapsed, they'll lose quite a bit.
I don't see the math adding up to making money by breaking out of the lease in SF - unless the prices fall considerably more.
> You're confusing a few things. Because SF (until recently) has disproportionately been a sellers market, leases are written such that they benefit the landlord.
Right, which is why it makes sense that landlords would allow tenants to break leases for a fee. The landlord gets two/three months of rent from the current tenant, plus they have a waiting list of people and will have the unit moved into within a few days paying higher rent.
So the benefits to the landlord is more money. They get to legally double-charge for rent and raise rent prices on an accelerated schedule at the cost of one or two days of lost occupancy.
The only time this doesn't benefit the landlords is when rent prices collapse. But considering SF rent prices have been inflating at a double digit annual clip for a decade or more now, I doubt any landlord considered a drop in rent prices to be possible.
Here's the difference: the landlord can already choose release you from your lease if you pay a fee, there doesn't have to be a clause about that.
Adding a clause to the lease forces the landlord to let you leave if you pay the money, which in situations like this can hurt the landlord quite a bit.
So there's really no upside and only a downside. The only time you'd need to include a clause like that is to make the lease more attractive, which in SF until recently has not been necessary.
Your understanding is correct, at least in general. If the tenant moves out and stops paying rent, the landlord has a claim for breach of contract. The landlord, however, must try to mitigate his damages by renting the property to someone else. The breaching tenant will be liable for vacancy costs as well as costs of finding a new tenant. If fair market value has gone down and the landlord can’t find a new tenant at the old rate, then the breaching tenant will be liable for the difference in the remainder of the lease term.
There may be statutory exceptions that allow a tenant to break a lease without liability in some circumstances. They’re things like military service, domestic violence, unsafe property, or landlord harassment. See this article for more info for California: https://www.nolo.com/legal-encyclopedia/tenants-right-break-...
there are ways to break a lease without penalty; I'd guess the qualifying circumstances vary state to state. also, some leases have explicit buyout clauses. I can get out of my current lease free and clear at any time by giving sixty days notice and paying an additional ~$2000 (a bit more than one month's rent). so if rents collapsed soon after renewing my lease, I could break even pretty easily by moving out.
Possibly leases did stabilise this. Not everyone was in a position to cheaply give up their lease so if x% of people (on net) would want to leave the city modulo lease obligations, maybe something like x/12% of people would actually leave in a given month.
how would this work? the only way I can think of is for the government to buy above market when prices are going down and then unload them when prices go up. it's hard to see how the public would actually benefit from this. it's a little insane to use government funds to take perfectly good housing stock off the market and prevent people from living in it. seems like the cure would be worse than the disease.
imo, it's best for cities not to try to influence the price of housing in the first place. but if you really want to bring down prices in a tight market, the best solution is to make it easier to build new (and especially denser) stuff. many cities could achieve this "simply" by relaxing zoning restrictions, but if necessary, they could go so far as to subsidize high-density developments. in the much more rare case that prices are collapsing, a city could be more aggressive in condemning dangerous structures.
And yet this is exactly what is done for farming: Paying farmers to leave fields fallow in order to maintain supply and thereby pricing.
Dropping property prices shouldn't even be an issue for owners. Property value and thereby property taxes should also go down. As long as they can cover that, then they can continue to own the property. Except in reality everyone is actually leveraged against their property and don't own outright. In which case, sounds like their leveraged risk failed and losing the property is supposed to be the outcome of that. And the new buyer can get it at a cheaper and more maintainable price.
I want to be clear that I'm discussing business owners of commercial property -- including residential rentals. Obviously the above is less desirable when we're talking about real people becoming homeless. But no one is going homeless if a business loses a leveraged property to another buyer.
I propose a moratorium on all analogies using, and discussions on, agricultural practices on any media based in the Bay Area or NYC. Not beating up on these posters. But geez, people...
Our generation is unique in the history of the world in the social and cultural chasm between the vast majority of first-world people and the agricultural systems that generate their food. Practically everything written off-the-top on agricultural sciences and practices by this generation by the average smart person on these sites, although it sounds simple and logical, is somewhere between naive and wrong. A hundred years ago this wasn’t true. It is now.
As analogies, it is not worth the off-topic thread to clarify things.
On actual practices, farmers have better things to do than correct posters on these sites. It’s harvest season for most of them, they have enough problems. Although bean prices are up, so many are smiling...
> And yet this is exactly what is done for farming: Paying farmers to leave fields fallow in order to maintain supply and thereby pricing.
I'm sure there are some subtleties I'm missing, but this has always struck me as a little odd. why do we subsidize agricultural production and then turn around and also pay farmers not to use fields to stop the price from falling too low?
also a price collapse isn't necessarily cataclysmic for someone with a mortgage. as long as they can keep making the monthly payments, nothing immediately changes. it's only a problem if you need to sell or if the prices never recover.
>I'm sure there are some subtleties I'm missing, but this has always struck me as a little odd. why do we subsidize agricultural production and then turn around and also pay farmers not to use fields to stop the price from falling too low?
Farm fields need to be left fallow every four years or so to replenish the soil
>Fallow is a farming technique in which arable land is left without sowing for one or more vegetative cycles. The goal of fallowing is to allow the land to recover and store organic matter while retaining moisture and disrupting the lifecycles of pathogens by temporarily removing their hosts.
Fallow fields also tend to be good habitat for small mammals, which in turn draws in birds of prey and stuff and provides habitat for them.
They work with farmers and pay them to actually plant native grasses and nitrogen fixing cover crops for a couple years to allow natural habitat to develop.
As far as I remember, those farmers tend to have a couple fields they rotate every 4 years or so. Leaving one fallow with natural grasses while planting the others with crops.
It’s mostly about buying votes cheaply. There are significant incentives to consistently maintain a food surplus, but one you start handing out government subsidies you get the usual corruption. As subsides crash prices it’s cheaper to just pay farmers to do nothing than to pay them to create a crop that’s just going to rot.
Basically, you don’t want to pay 1$ to farmers per ton of corn just to lower the price of a ton of corn by 1$. The goal is to hand that dollar to the farmers not the general public.
Inelastic just means consumers aren't sensitive to price. The classical example is prescription drugs. Consumers are not price sensitive b/c they NEED those drugs. As such the seller can raise price and not see a drop off in sales.
I think a good example of a highly elastic good is hamburgers. Is McDonalds raises burger prices by 300% there a ton of other options for consumers to switch to and sales will drop.
A better example is brand name prescription drugs. State substitution laws end up meaning that when generics come on market, a lot of consumers become proce sensitive by law since the pharmacy must fill the prescription with the lower priced generic. However, anyone who is still buying the brand name at that point is highly inelastic - they really want the brand name only for whatever reason. Thats why the brand name version of a drug usually spikes up in price when a generic enters the market - theres no way to compete with the generic folks on price so at least get as much out of your smaller remaining market segment that you can by using their price inelasticity
In particular it's not only brand name medications, but patented ones, because then there is by law only one supplier, and the temporarily high price is on purpose as a reward for developing the new drug.
The problem we have then is that it's getting paid for by insurance, and we don't have a good mechanism to distinguish between essential things and merely new things. If somebody comes up with the cure for cancer, letting them soak the insurance companies for 20 years is a fair trade. If somebody comes up with a pill that does the same thing as the combination of two pills that had been standard practice previously, but can convince doctors to prescribe the new thing, letting them soak the insurance companies for 20 years is some kind of regulatory failure.
Well actually, the only patent prescription drug is a bit elastic since insurance/PBMs negotiate on price. In referring to the particular case of a formerly on patent brand name drug that goes off patent that spikes in price.
You'll notice that even over the counter non patented brand name drugs are more expensive than the generics - brand loyalty breeds inelasticity
You should consider that the market really removed 30% of the residents. When 30% of people don't know whether they will be able to find/keep a job to pay the expensive rent, they simply refused to pay the current rent or found themselves unable to. Rent went down.
For me and most people I know when the landlord came asking about renewal (London is all about yearly contracts) for a similar price or more, he was told to f* off. When everybody is doing that, rent is going down.
In a sense the perception of the market is driving the market. The virus is affecting 90% of the population, it's not just hitting the margin.
I say landlord but it's very often a letting agency (taking commission for finding tenants), the landlord is someone abroad or an investment company that's nowhere to be seen. They don't have each other interest at heart.
SF is great (really, just stop it haters!) and there will always be people who want to live there and prices will always be relatively high.
However, for a long time SF has been a place of extreme price distortion because of low (~no) new construction and huge concentration of high paying jobs. The result is many many people feeling trapped there way beyond where it makes sense for their lives. If you are single and living with roommates, making $200K at Twitter, then great! SF is awesome! But when you have two little kids, and/or you just aren't making that much, in a place where small houses are > $2M things are very different. That's me BTW. We hung on for 6 years after having kids and in that time almost all couples with kids we were friends with left. The people we knew who stayed were either much wealthier (had nice exit from previous company) or were really trapped and talked constantly about leaving.
So honestly it does make sense to me. Somewhat anecdotally, I personally know about 15 people who have left since April (including me, SLC is freaking awesome!). For comparison, I personally know exactly 2 people who've had covid. So yeah lots of people really are leaving and the closed bars are just a small factor (IMO), being able to finally move is the much bigger change driving this migration.
I don't think SF will die but rents and home prices coming back down to earth will be a very good thing for the city (my landlord bought the building in 1981 and was charging us $4K/mo for our 900sqft 2br flat, I won't feel bad for him if that deflates to $2500/mo where it should be). The ultra high prices have slowly gutted large parts of the city of anyone but the young or wealthy, mostly tech people. Maybe in a few years SF will be more affordable and consequently a much more diverse city again. That would be great IMO.
I’m curious as someone who has never lived in SV (only visited for work) but do you feel like there are certain areas that displaced SV gravitate towards and would eventually cause property in those areas to rise as well?
I haven't lived in the bay area in 9 years (used to live in Berkeley), but so far my old SFBA friends have moved overwhelmingly to Portland, with one going to Colorado, another to Seattle, and two staying. One is a wealthy engineer, and the other (who has a kid in Marin) an incredibly fortunate person who was curious about this bitcoin thing 10 years ago..
I don't know of any "regular" people who stayed in the bay, except for a relative who's stuck there because of shared custody over kids with an ex and can't practically move. She'd like to though.
Look at Bay Area price-to-rent ratios - some of the highest in the nation. California property prices are heavily driven by speculation. We have laws like Prop 13 that incentivize buyers to take out the biggest loans possible and put NIMBYs on steroids.
If SV workers move to a state that welcomes newcomers instead of punishing them don't expect the same meteoric property increases.
As someone who also has never lived in SV, I'd imagine that, if the majority of these people leaving are young, active, relatively wealthy individuals, that they would move to areas where they can advantage of that position. A lot of people in that demographic are probably relatively active and might have would want to move somewhere with access to lots of outdoor activities. My guesses would be: SLC, Denver, Phoenix.
Disclaimer: I'm from the Denver metro so am obviously biased here. Also please don't move here because housing is expensive enough ;)
Tahoe, SLC, Portland, Austin, Minneapolis. It is only in part about moving somewhere awesome. A lot of people I know are just moving home to where their parents live. So lots of places.
For us, a lot of our family actually is in SF or Seattle. We're a skiing/biking family and I need to be in SF pretty regularly (but not daily) so SLC was the obvious choice. Portland was a candidate because it also has short flights to SF but I figured if we were going to move I wanted world class skiing and biking, in my backdoor, not just decent skiing 1.5hrs away.
As someone who lived in SV 30 years ago... I moved to Portland. And yes, property values here have risen quite a bit since then. And many moved to Seattle where prices have risen even more.
Changing your question a bit: Given that prices here in Portland (and Seattle) are relatively high now (though not nearly so much as SV) what are some other lower cost alternatives on or near the west coast? Maybe Spokane. Possibly Olympia. Eugene? Though now we're getting into smaller urban areas.
Saw friends of friends leave sf and together rent a mansion in Hawaii.
If the bars, clubs, gyms, and even beaches shut down why stay if you are renting at market rate. It’s literally cheaper to move your belongings into storage and move into a vacation home with friends.
Also most sf apartments don’t have office space for all the tenants.
If there was no rent control, prices would drop even more. Firstly landlords are afraid to permanently lock down at a lower price, offering free months of rent instead. Secondly rent controlled tenants are afraid to lose their apartments, that are still below the market rates.
Rent control has a miniscule impact on housing prices according to the latest economic research (1). You won't hear that from people still reading 60 year old neoconservative economic theory, though.
Rent controls do sometimes specify how much rent can be raised year over year. Drop it too low one year, be stuck with relatively low prices in the short term.
They regulate rent increases in Oakland at least. Of course our landlord took the maximum allowed rent increase each time, as if it were the required increase rather than the maximum.
I don't live in the bay area and pay half the rent for three times the space in Boston... not exactly a small town... the Bay Area was already unattractive for me financially and I have an advanced degree in an engineering field.
I, like many of my peers, moved out of Oakland this year over the summer. For a while, I was considering staying around and trying to lock in a lower rent on a larger space, but rents really didn't budge.
Your effective rent _did_ drop, but landlords did it by offering 2-3 months of free rent on a one-year lease (with old rates applying.) It doesn't take Nostradamus to see what happens in 12 months: maximum allowed rent increase and no more sweetheart deals, meaning an effective increase of like 35% (or move again to try and get another deal somewhere else.)
It wasn't worth it to me, so now I'm paying less than half my previous rent for around 2x as much space in SLC.
Rent control means that renting at a low price this year means you're also renting it at a low price next year. Without rent control you could give a discount this year and then jack the rate back up to normal next year.
Also not all property management is about renting out. Sometimes it is just about parking wealth and extra rent is gravy. So if you are just parking, moving to the max rent possible can be a desirable effect. As you may price people out and you do not have to have someone to 'manage' that property as intensively (broke AC, leaky sink fix, etc). Which would be an annoyance on a passive property.
> are people really weighing that so heavily that they’re moving?
Given region as a large portion of young/single professionals, I believe it. What you pay to move/break a lease is a fraction of what you’d save after a few months of “normal” rent. Or no rent if you’re going to stay with your parents. It will be relatively easy to move back when they need to, and prices will be better. This group has no deep local community dependancies (eg family, childcare, ete). and is still probably rather nomadic from their college days.
I personally live in Texas, lower COL, but I am tied into my local community due to family, owning my home, and general entrenchment type stuff that comes with age. Otherwise I’d have bailed in April for a rural or expat setting.
While I don't want to live in a super urban place like SF, I will always live near a downtown. The draw for me is that I hate depending on cars, so I want everything (mail/barber/grocery/work/restaurants/etc) within walking distance.
The lifestyle advantage to walking around as your primary source of commute is so significant that I couldn't imagine ever going back.
Yes. I live in SF and I see people loading up moving vans in my neighborhood all of the time now, my neighbors in my row house moved to auburn, multiple houses are now up for sale, it used to be impossible to get a parking space but now it is not a problem anymore. Things have definitely changed
If I were living in SF and gone fully remote for the foreseeable future, I'd absolutely get out of my expensive apartment and (literally) head for the hills.
Some of my coworkers have done this. One of them has moved to Santa Cruz and another is staying with their parents. I would have moved if it wasn’t for immigration complications and laziness. Depending on how things work out from here, I might just go back to live with my parents until things blow over. If not, I am going to upgrade to a nicer apartment as a compromise
I would counter that proximity to work is a huge influence on where people decide to live. There are (or will be) bars and restaurants everywhere, which means if you can work from home, there is significantly less incentive to live in a small, overpriced apartment.
The bars are restaurants available in most cities in the USA do not compare to the bars and restaurants in cities like SF, Los Angeles, NYC, Tokyo, Paris, etc.....
I mean places like Flagstaff Arizona, or Temecula California, etc.... In the cities listed in the first paragraph there are, unique bars (not sure what word to use) and interesting restaurants. In most cites there are just places like AppleBess and the local versions of same. If that makes me a bar/food snob okay but what's available in many cities is just not comparable in random small city.
Flagstaff is a decent sized mountain town. Decent sized mountain towns have pretty good food and bars, including unique establishments. Of course they won’t please a true snob looking for a new home, but they plenty suit low key snobs like me. Last time I made a pit stop in Flagstaff it took 30 seconds on Yelp to find a great independent Cajun-creole joint with a pleasant patio, friendly staff, and delicious food and craft beer.
And frankly, let’s not let SF off the hook for its large proportion of mediocre restaurants and bars. IMO they are a another sad consequence of Prop 13: old businesses with low property taxes don’t need to be much good to survive, but the cost of starting a new business is spectacularly high.
Do most old restaurants in SF own their property rather than rent? If they are renting, why are landlords passing down prop 13 property tax savings to them especially?
Most of the interesting bars and restaurants in SF are closing as we speak. As the pandemic drags on expect it will continue. Who do you think will have the money to replace these places?
Investors, like always. Do you think its mom and pop opening a bar with smoke infused cocktails in SF, or anywhere else for that matter where commercial rent has been astoundingly high for decades now? Investors will buy back in once it makes sense economically. Restaurant turnover is typical.
Right investors who open cookie cutter hipster bars that exist in every other city. The unique bars and restaurants in SF that have been there for decades are dying and they won’t come back.
I don't think it makes you a snob to say that there is better food in certain cities. If you have any special requirements, like being vegan, you aren't going to find anywhere near the same options in smaller cities. But I think for most people, access to quality restaurants is fairly low on the list. Certainly far below proximity to work. Put another way, would you pay an extra $2k a month to be able to eat at certain restaurants? You might! But most people wouldn't.
This was maybe true twenty years ago, but not anymore. In addition the variety of food available at grocery stores or online is vast and with an actual kitchen you can make food you like at home.
Bay Area demographic process involves a pretty large net influx of people from abroad and an almost equally large domestic net outflow of people to other states. If you stop the former but the latter continues, housing pressure suddenly disappears.
Bay Area is insane. I pay $850/mo for a 4B/2BA house in upstate NY.
I work locally and telecommute now, but I used to commute regularly to the Boston and NYC metro areas with commute times similar to what I hear about from some colleagues in the Bay area. 2 hours on Amtrak (+10m drive) is much more pleasant than 90 minutes in the car to me. The haul to Boston was truly awful, but the pay was too good to pass up.
Wow! My mom lives in a small, dated apartment in an unexciting suburb of Rochester away from colleges, with paper-thin walls and ceilings, and pays about $1000 in rent. That seems standard for the area. About 20 years ago we paid $650 a month for a tiny two-bedroom. How does your upstate New York cost less than one fourth of that?
Rents always suck upstate. A two bedroom in a nice development in a suburban town near me is about $1400/mo. Ownership is always cheaper.
As for the costs -- I cheat a bit. I've been able to build more equity over the years and refinanced into lower LTVs as time and rates went down. I bought my first house as a student at a SUNY school -- my mortgage was about the same as a "student ghetto" apartment. This house I bought about 15 years ago. In my urban neighborhood, houses sell for about $135 sqft today. In the suburbs, it's about 30% more, and you are basically paying for better schools.
You can get a small, nice house in a place like Fairport, NY for $150k. I don't know that area super well, but you might find lower costs in an adjacent county without the tax/infrastructure burden of Rochester.
I know this is an unpopular opinion, but SF is like an open air homeless shelter and getting worse. Crime is also getting worse. People put too much focus on cost of living. Many people have plenty of money to afford to live there, but it's increasingly difficult to justify that cost compared to the quality of life.
My friends are leaving for cities like LA where they expect to enjoy it more. In my experience the majority of new SF residents move in to start a new job - not for the food, nightlife, or culture. If the jobs are remote, that segment will not come back, and will not move to SF in the first place. It’s a good thing, fewer people having to make trade offs for better careers.
It also seems like renting is the most optimal way to take advantage of a long term, temporary WFH situation.
A major advantage of renting (over owning) is being able to move when your lease is up. If the WFH thing blows over you can always move back at that point but at least you'll have saved yourself X months of expensive rent.
You’d be surprised. There is a surge of demand away from metro areas eg upstate NY, Tahoe, etc.
I don’t get it. The pandemic will get under control, and people will go back to offices. Will employers require 5x per week in office, or 2-3x per week, or perm WFH?
Yeah, that’s my anecdotal take. Montreal has had relatively cheap rent, and it’s attracted the youths. (Assuming said youths work for an English company and can get transferred, or they speak French.)
Not surprised to see Ottawa up a bit. Still pretty flat, but I have definitely known people who have moved there for the rent, or to buy.
That title reads super awkwardly. Anyway, on the flip side, the trend seems real from my observations. I live in a mountain town in North Central Washington. The real estate market has seen around a 35% price increase, homes are selling in hours all cash and almost every builder is already booked through 2021. It's almost exclusively people bailing from Seattle.
But Seattle has seen the same thing, the market has gone crazy here and there isn’t much housing supply to meet demand. That is just the forsale market, rentals are much weaker.
Seattle's reckoning/correction is coming. The city is doing everything in its power to chase money away, Amazon is trying to move to Bellevue as an example. People are growing tired of the messy streets, needles are tents are spreading as the city ignores the problem.
On the plus side, our landlord is doing everything in his power to keep us happy, for the first time.
> Seattle's reckoning/correction is coming. The city is doing everything in its power to chase money away
And yet the skyscrapers and office buildings are still going up. The construction boom hasn't mitigated. Seattle isn't doing a good job at chasing money away.
> People are growing tired of the messy streets, needles are tents are spreading as the city ignores the problem.
It's just a handful of streets. It's certainly not endemic to the city. 99.99% of seattle doesn't have that issue. Unfortunately for seattle, that problem is concentrated around the touristy section.
> On the plus side, our landlord is doing everything in his power to keep us happy, for the first time.
> And yet the skyscrapers and office buildings are still going up. The construction boom hasn't mitigated. Seattle isn't doing a good job at chasing money away.
I don't have skin in the game here, but I noticed this statement, which I think isn't right. You need to consider that commercial construction, skyscrapers no less, take years. From conception to funding to planning to approvals to building, the lag is long.
So long, in fact that some have come up with the (controversial, not saying it's correct) "Skyscraper Index" which argues that historically, peak skyscraper height correlated with the worst economic dips in the economic cycles.
Latency is huge. No one thought up COVID, WFH or even CHAZ when they were standing around plastic models of plastic buildings.
Amazon buildings tend to go up fairly quickly, many a couple of years of planning and construction, especially since Paul Allen's Vulcan real estate (who owns most of the land and construction) laid all the plans a long time ago.
> So long, in fact that some have come up with the (controversial, not saying it's correct) "Skyscraper Index" which argues that historically, peak skyscraper height correlated with the worst economic dips in the economic cycles.
Considering that none of these buildings are very tall, we are fairly safe then.
But I think this slow down will be useful in the long run: Downtown Seattle is currently turning into office space for Amazon without much for anyone else anymore. Especially compared to downtown Portland, which is a much better place to live (more retail and services, better access MAX). The boom was really going in the wrong direction, it would be nice if it could be corrected.
I just moved to Ballard, and we have a few homeless encampments (the closest one to me is at Ballard park). I'm really surprised in how bad it isn't here: the residents are mostly well behaved and don't leave needles or anything like that hanging around (and they don't poop on the streets since the city installed a bunch of portable toilets). It is still kind of a bummer, but it is far from a deal breaking nuisance.
Maybe, but it hasn’t happened yet, it’s a seller market ATM. And we just moved from Bellevue where we were renting, houses are actually cheaper in Seattle, we could never afford anything decent in Bellevue.
That isn’t true, no way do 30% of Seattle students go to private school. We moved to Ballard, which has some pretty good schools (it’s high school is a 9/10). And yes, schools are why we didn’t consider south Seattle.
Hello neighbor - I bought my first house in Ballard this February myself.
For SF / SV readers: Ballard is a hip Seattle neighborhood, somewhat like Hayes Valley but also near a beach and bike paths. My house is new construction and walking distance to everything. I paid list price.
When I was doing my undergrad, I used to run up to Ballard via the trail (well, it stopped just short of Ballard back then). It was mostly industrial and blue collar, Amazon didn't exist yet in SLU (which was pretty seedy anyways), how times have changed.
That's a lot higher than I thought it would be. Oddly enough, I have a friend in Clyde Hill (not Seattle, pretty good schools) who sends his daughter to private school in Queen Anne.
I wouldn't be surprised if this is how people in South Seattle deal with living in South Seattle, or in downtown (e.g. capital hill), the schools really aren't great there. The schools don't get good until you hit Queen Anne, Magnolia, Ballard, Wallingford, Green Lake, north of UW (Roosevelt is where all the UW professors send their kids), but then they aren't so great again in north (of 85th) Seattle (not as bad as South Seattle, however). I'm not sure how even the reputation of South Seattle is either; my cousins went to West Seattle high school and they had pretty good experiences.
In my area (Methow Valley) rentals have gotten way harder to score since so many of the people who rented out second homes have moved here full time. It's a pretty big problem for the local workers.
I bought a house in the east bay, walking distance to a BART station. We contemplated “cashing in” on a rent controlled 2 or 3 BR apartment but prices on those haven’t dropped quite as much, and we still wouldn’t likely have a yard.
We have 3 kids and we were in a rent controlled 2BR in the Richmond district, but we had no w/d and the landlord was increasingly hostile.
At the end of the day my mortgage is $4200/mo which is about what we would have paid for an okay 2BR, probably without a yard.
My wife does not work right now and a house in SF was out of reach. We did see one 850 sq ft house in Portola District sell for below 850k in the between May and September. Everything else under 900k is either 1BR, 650 sq ft 2BR, or a TIC.
There is currently an article (in German) in the Frankfurter Allgemeine called "The Demise of San Francisco" [0] in which the possible reasons for this are discussed. One reason given (which I cannot verify as I don't live there) is: people are fleeing the city because it has become a terrible place to live:
Quote from the article, Google translation:
> Jayson Hill recently stopped by his old apartment. He didn't feel sad that he hadn't lived in San Francisco since the end of August. Instead, he thought of all the things he won't miss: the dealers on every corner who go about their business so bluntly that passers-by can see money and drugs change hands. The syringes lying around everywhere. The human feces on the street and the unbearable smell of sewers. Hill once saw a corpse on the sidewalk who had obviously died of an overdose, a coroner had just come to the scene. Hill ran into drug addicts so often that he learned how to give Narcan, an antidote to heroin and other opiates.
> Hill was once threatened on the street and was increasingly afraid to leave his house in the dark. "It was starting to feel like a terrible nightmare," says Hill. During a farewell visit to his old apartment building, he heard that ten other former neighbors had given up their apartments.
> Nevertheless, some companies are now adjusting to the fact that they will need less space in San Francisco in the future than expected. Pinterest has accepted a contract penalty of almost 90 million dollars to get out of a rental agreement in a new office building. Twitter has just offered part of its headquarters to sublet. CEO Jack Dorsey has already said before that he no longer wants to be as focused as he has been in San Francisco. Other companies are also loosening their ties to the city. When the software company Oracle announced that it was relocating its annual mega-conference "Open World" to Las Vegas, the reason for this was not very flattering: It was not only the costs that were decisive for this decision, but also the desperate conditions on the streets of San Francisco.
I think it’s pretty naive to assume people having a problem with drug deals happening in their neighborhood are primarily concerned with the drugs themselves — although some may have moralist reasons to feel uncomfortable with illicit drug trading, most regular people probably feel that way due to the inescapable consequences of it, which are many. Some examples include violent crime, burglaries, robberies, and the general discomfort of being around people on a daily basis who are chemically dependent on a drug they need to take on an interval and usually because of it desperate for money, sometimes with psychological issues on top of it.
Having a serious problem with drugs in your area does not mean some people buying weed every now and then. It infects and ruins entire communities due to the effects of extremely addictive narcotics.
I mean people are going to take drugs either way right? Let's not pretend rural America doesn't struggle with addiction. I guess I can see the "out of sight out of mind" that seeing the transaction occur reminds you of societies failures, but you still know it's happening.
There's collateral damage from the drug trade. I'm not arguing one way or another in terms of legality. All I can say is with absolute certainty is that the drug market has competition for clients and space, and if you look at shootings in NYC and Chicago, you'll find the majority of them gang-related. Gangs compete over territory and profit, just as you'd expect them to.
These are not intersectionally-educated feminists in coffeeshops distributing sustainably-sourced organic heroin at cost, here.
There's no 'lesson to be learned' from observing a drug transaction or living next to a drug corner, which is impled by your statement of knowing about society's failures.
But seeing the transaction occur doesn't change gang violence. It will still happen if people deal from their homes or at night. And there will always be drug dealers unless there is legalization.
There will always be drug dealers, legalization or no. Maybe more legitimate drug dealers, but illegitimate will still be around. It isn’t the total fix, no pun intended.
I don’t mean for this to sound blunt but your perspective sounds like one that can only be held by someone who has no experience of living in these types of areas.
(Smile) Take the opportunity to talk with folks who live there and like it. Maybe even visit. A big part of happiness in this era is finding someplace that fits you like a well-made suit. A place of the heart. Don’t miss out of that opportunity. Don’t just go with the default.
Depends whether you are living alone or have a family. I'm fine with peaceful drug-deals in the street but that would be a no-no if I had kids/family. You don't want your 6 year old walking alone around that.
The free market wins again - supply and demand uber alles. If we can't build tons of new apartments, then 1/3 the city fleeing for the suburbs does the trick too!
Rent is like a traffic jam. The market collapses on the margin. You don't need to remove 30% of the cars to reduce freeway congestion by 30%, and you don't need to remove 30% of the residents to lower asking rents by 30%, either.
Traffic jams are a quite sudden occurrence; 1000 cars / hour is no problem, but 1100 cars / hour and the whole system can suddenly collapse.
https://getpocket.com/explore/item/why-a-traffic-flow-sudden... is one source, I'm sure there's better ones out there.
This has similarity to rain storms that cause sewage to overflow into the river in Portland, Oregon.
Portland uses a combined sewage overflow system (CSO). When there is a heavy rain, it used to be sewage would pour into the Willamette river.
However, for the past 10 years the city has been installing rain gardens that contain water storage devices that allow flash rain to be collected like a capacitor and then slowly drain into the ground after. [1]
These have had a big impact, not only in reducing or eliminated sewage spills into the river, but also reducing the amount of storm water being processed by sewage treatment plants.
Traffic jams are a catastrophe, not just in the qualitative sense but in the way that theoreticians mean: an abrupt shift from a desirable operating equilibrium to an undesirable equilibrium. That's why speed-flow curves are ⊃-shaped. Speeds are near maximum until a critical flow rate and then they collapse to zero after that one last car gets on the road.
Or making the slow cars faster. It's the interaction between the traffic of varying speeds that causes the problems (this goes for all sorts of queuing, not just vehicle traffic)
There's a limited tolerance/buffer (a literal buffer: the distance cars keep between themselves) for the compression waves caused by humans "overbraking".
Once the buffer is gone, the whole system dramatically collapses to stop-go traffic jam.
It's why (theoretically) automated highway driving can increase the car throughput: they can gain foreknowledge and better "system planning" via mesh communication and consensus (they are motivated because without consensus the system crashes to traffic jam), and probably/possibly follow each other much more closely to maximize the use of the concrete geography.
When you thread a needle through a hole: when the needle becomes approximately equal to the hole diameter it becomes much harder, but before then it's easy.
1) 'Marginal buyers' could explain it - but it might be something else.
There is a smaller group of buyers, investors, of the inelastic type - who if they run away, will cause a market to plummet. They are the opposite of price sensitive, they're maybe from overseas snapping up property at 'above asking' because they need to get $1M out of their countries and they're looking for any kind of return that's reasonable.
Consider 1% interest rates in a foreign country (or region within the country) and possibly a government who may come and confiscate wealth? This is a risky proposition for the burgeoning international middle class.
And of course, the cohort of 'IPO winners' who are less elastic in their acquisitions as well.
These 'inelastic buyers' (local, regional, foreign) are important because they are 'strong signals' to the market for price validation. Consider that nobody knows objectively how much a home should be valued at. Everyone is 'looking down the street' to see how some other property sold which is used as a primary reference. In a 'sea of ambiguity' then the 'inelastic/confident' buyers will anchor the prices. And if they don't care (i.e. inelastic), then then prices go up, way up.
The confluence of:
a) Low interest rates
b) Globalism
c) The 'belief' that real estate will never go down
d) Lack of capital controls and tons of corruption in one regime exporting to another with a different set of rules which creates huge asymmetries (really part of #2)
e) Expanding local economy.
Means real estate will go insane.
The numbers for SF are 4-6% [1] which is actually quite high, similar numbers for Vancouver and Toronto - and this only includes international buyers, whereas in the Valley there is obviously a cohort of IPO Winners.
It also means: there will be no local culture. Almost all citizens who were born and raised in an area will be pushed out over the course of their lives so local ideas, customs, language, norms etc. go away. This is not accounted for in our economic models. Edit: FYI the newcomers in the expanding economy won't be these 'inelastic buyers' who are
a small cohort and may not be residents anyhow - newcomers will be regional/national/international workers, but the side effect is the same. The Silicon Valley is not a normal community, it's more like a 'workplace residence'.
2)The issue with the traffic analogy - is that some drivers are considerably more likely to cause problems than others.
2-3 break-heavy drivers who are slow to catch up can cause a backlog.
The "yellow peril" theory that Bay Area housing bubbles are caused by foreign money laundering is popular on Nextdoor but I think on HN you're going to need some evidence. Prior to this pandemic 97% of dwellings in San Francisco were physically occupied by actual living people. Nobody is parking money in empty SF condos.
It's true that investors are attracted to Bay Area real estate, because the government has dedicated itself to making real property have outrageous risk-free returns, but putting "foreign" in front of "investors" is just baseless. Go look at the press release from when Dinerstein bought several large apartment buildings in Berkeley a year ago. Why did they do it? Quoting the buyer, they wanted to be "in a market that has historically had a very high barrier to entry.” In other words, in a market where the government is too stupid to build houses. This has nothing to do with money laundering.
1) 'Occupation' less of an issue, it's 'Ownership'. Foreign owners can rent homes out. Though it's such a problem in Vancouver, they are now taxing empty homes for precisely this reason [1]. Maybe SF should follow suit.
2) That foreign ownership is a primary factor in the rise of home prices in SF, Van, Toronto is completely unambiguous. There's plenty of evidence. The degree of impact is still debatable, but not that it's a major influence. [2]
From those articles you can see the type of demand is 'inelastic' - this is key to understand because it's not just 'a few more buyers'. 2-8% foreign ownership wouldn't mean much at all if they represented the 'same type of buyer' as local buyers. It would be just a small nudge in demand. But the terms they are seeking are completely different and the inelasticity is what makes their kind of demand potent.
3) 'Yellow Peril' (?!?) holy camole. There are foreign buyers from all over the world, it's a big place.
4) This is not just an SF phenom. New Zealand has banned foreign ownership [3]
The problem with your thesis is "foreign" is a throwaway word that doesn't serve any non-inflammatory purpose. It is just as relevant that investors from Texas or Delaware are buying real estate, or, for that matter, SF landlords who live in Orinda.
There just aren't a ton of Texans looking to buy up property in SF because 1) inequality, much as we may not think it's good in the US, is actually not that extreme and 2) places with extreme inequality and hyper concentrations of wealth tend to also be very corrupt places where private capital is likely to take flight.
The 'non resident buyers' in SF/Van/Toronto are going to be from China, India, Russia, some other places like that, not Texas.
Obviously, it takes on different characteristics, depending on.
Florida is a domestic getaway and retirement spot for Americans, so it's a different kind of place.
Non high-growth places like Van and Toronto have large foreign populations which act as points of entry. Chicago, Montreal, Portland ... do not.
SF/Valley has a very unique characteristic of IPO Winners and 'local super high net worth' individuals that's hard to factor - and of course, it's not NY with the possibility of rapid expansion.
> There just aren't a ton of Texans looking to buy up property in SF
I mean, are we just ignoring REITs for the purposes of this thread? TPG and Dinerstein and other domestic interests (I only chose these two because they are from Texas, to directly address your point) have dumped tens of billions of dollars into SF property holdings.
No one said they have to be empty for foreign real estate investment to be a problem. Especially when you have you foreign nationals and companies making it harder for your local residents to buy property and prosper. I think something like Vancouver’s, “ Foreign Buyers Tax (which) applies to foreign national, a foreign corporation, or taxable trustee buying a residential property in BC. BC Foreign Buyers Tax rate is 20% of the property's fair market value after February 21, 2018.” Is a fair comprise to allow people who have no local ties to invest in the market but allows the residents and those with local ties (those who will add money to local economy, shop/ eat local) a better shot then those who just want to invest.
Chinese has had a huge influence on markets like Vancouver BC. In the USA west coast, tech jobs are much more of a factor, though many of those techies happen to be Chinese (but many are also Indian, American, Russian, and so on...).
My aunt in West Seattle had people make unsolicited bids for her house (that wasn’t in the market), but these people were Indian (and they could have as easily been Chinese, Russian, American, etc...).
A guy rang my doorbell in Oakland and brandished a bank check for well over a million dollars to buy my house. He was a white American, though, so I don't get to build an awkward racist narrative around that event, I guess.
People come from different parts of the world, different things are happening in different places, it means Americans may be more likely to be out and about doing one thing, the French another, the Chinese another.
That there are 'differences' in are world is the uniquely qualifying aspect of diversity itself. 'Diversity' is not 'racist'.
Actually, while many units were built, they were almost all in tall buildings in Soma. Many of those are occupied by renters, and approximately everyone wanted out (100 unit building with a pair of elevators isn’t a covid friendly plan).
Like jeffbee says below: if you take just a little supply or demand out of the system, it can massively swing. As an example, in addition to the flight of many renters, single-family homes are up year over year.
Yeah, the other issue with Soma is that most of the appeal is that it’s in/next to the areas with all the big tech offices, which has been made obsolete. That (in addition to being new construction) commanded a large premium that’s erased. And the homeless situation in parts of Soma has got worse to boot.
I'm curious what folks here feel about the serendipity factor? I've been remote for 4 years and love it (in the NY suburbs area), but there definitely isn't that "random creativity" as being in the office, as the valley has been trying desperately to analyze and recreate artificially.
Established companies will allow mass remoting, and new start-ups will step in to take advantage of the temporarily collapsed rents. The new companies will gain an advantage from in-person dynamics that you can't generate over Zoom, versus the companies that go heavy on remoting. Start-ups will thrive from it, then the established companies will tamp down their remoting as they see the brain drain from new companies having superior work environments and pulling talent away.
That's what the cycle will look like.
Like everything else in tech, the overzealousness about remoting is a partial fad, that will swing too far, and then you'll have to endure 487 articles on HN about how remoting was the wrong way to go ("Why remoting was the wrong choice for us" says the future Medium post) and in-person dynamics are superior in every way. Tech is nothing if not a fad chasing perma teenager constantly repeating the same mistakes over and over again.
And I’d be curious if there are systematic data-driven studies on the existence and level of unique-to-physical-collocation creativity in the era of advanced multipoint videoconferencing.
There will be a lot of anecdotal evidence presented over the next few months, but I suspect it will be tied to political agendas. There’s a lot of money and economic dislocation at stake if downtown real estate, or commercial real estate in general, suffers a structural drop in value, so I’d expect those interests, along with mayors, will marshal their direct or indirect PR minions to talk down WFH.
Cutting through that fog will be worth it for those parents who, saved from (some of) the commute, have the energy and time to build a better family life.
But the longer I've worked for big companies, the less I think a big company needs these.
There are departments for new ideas, they can be calculated for profitability by a different department.
An engineer has a great idea from brainstorming with coworkers, how often does that make it into production? Instead of focusing on the job, the Engineer is working on a project that never happens.
I guess that sounds pessimistic, but I've rarely seen anything come from the bottom up.
It definitely feels harder to break ground on a project when you can't easily have a brief chat with someone (need to instead schedule a meeting that defaults to 30m), go look at something your coworker has pulled up on their screen, easily sketch something out on a whiteboard.
On the other hand, there are some benefits to formalizing things. For example, by being more rigorous in defining an approach to a problem you can more easily identify roadblocks. Also I think some people I work with prefer articulating themselves over text as opposed to face to face, so for them serendipity (in terms of creative output) is probably actually improved.
We have tried to "manufacture serendipity" by having unstructured video chats but it usually ends up feeling cliquey (too small groups of friends, people feel excluded) or too awkward (too many people, not enough rapport for conversation to flow easily). I think the problem of building rapport is the biggest issue.
A good start, let's hope it continues. Rents are still roughly double what they were 15 years ago, when decent studios in central neighborhoods went for under $1000/mo.
Yeah it's better for everyone. The people who like the city life can enjoy it at much cheaper cost, the people who don't like it get to have good jobs that would otherwise have required relocation.
Wonder if it is because it is a University and Government town. Stable mostly higher-paying employment means more people in a position to buy their home, so less land for apartments. Also the captive market of students that had continued to grow puts upward pressure on prices for studios. Shrug.
In some of the 'worse' parts of town rent dips into the upper $700-800s or if you get very far from downtown into the suburbs in older buildings. The eyeball-average price for suburbs/outer areas for a studio is $900-1000. The median appears to be in the $1100-1500 range overall [0].
I lived in a sub-500 apartment with roommates so I was probably just wholly unaware - thinking back more deeply one friend lived in a studio the size of a closet that was just shy of 900.
You're comparing housing prices to rents. In that bubble they disconnected. During the bubble you could rent houses and apartments for around half the monthly mortgage. My friends and I were renting a million dollar house for 2200/month.
To be fair, we could say you 'cherry picked' by selecting the 20 year mark. It's just as cherry picked as picking the peak: it's a discrete moment in time, compared to the present, in either case.
Unsurprising. I don't know why anyone would actually want to live in SFO. Most people live there because they had to for work. Now that they don't, it just makes no rational sense to stay. I'm surprised it's not more, to be honest.
I've been living in the bay area for 16 years, and SF for the past 10. I love it here, and absolutely would live here regardless of my employer's stance on remote work.
Just because your tastes are different, it doesn't mean most other people agree with you. For some it does make rational sense to stay, and for others rationality isn't the driving force, and there's nothing wrong with that.
(Though I guess you said "SFO". I wouldn't want to live in that airport either.)
SF isn't an address for close to 800,000 residents just because of tech (or work if you will). There are myriads of other factors of why anyone would choose to live close to nice beaches, a long beautiful Pacific coastline, proximity to wineries/breweries, 4 full seasons w/ unparalleled weather conditions all year round to name just a few :)
I live here, and love it. I'm from Colorado, and have lived in NYC, Sacramento and in the Denver area and traveled extensively. SF is my wife and Is favorite. The combination of culture, food, art, weather, natural beauty and outdoor space, dog friendly beaches, and robust employment market for me (I design medical devices) is unparalleled.
Name another major city where you can get amazing food, have a bonfire on the beach with your dog, and enjoy views of the ocean and bridges like you can here. Its really the most European of the US cities.
It is expensive. It is dirty and dingy in places. It does have a homelessness problem (what major city doesn't?). It is all these things and still one of the most desirable places to live in the US. It must have a lot to offer to outweigh all those cons - and does.
I live in downtown SF: streets are filthy, homeless situation is worse than ever before, everything that I would want to do outside is closed, there’s no reason to live “close to work” anymore, I only go outside for groceries and laundry. I’m moving to LA in 3 weeks.
SF is more dense than LA, and the Bay Area as a whole is comparable to the LA area in terms of population. Fun fact, the most populous city in the Bay Area (and NoCal) is actually San Jose, not SF.
Really similar situation and just signed a lease in Sacramento. I’m so over San Francisco and its filth. Can’t wait to leave. I’m a Bernie voter, but London Breed and Chesa Boudin and their ilk are destroying this city.
A lot of people I know have left San Francisco, many businesses have closed. I'm curious to see voter turnout this year as a further evidence marker. You can see all things being equal [1] amongst bay Area counties SF sales tax went up only 1% from April to June - implying large amounts of people have actually left the city, consistent with anecdotal evidence I see such as friends leaving and seeing many moving trucks.
The surrounding counties have far different demographics and density profiles.
Also, the article never stated if neighboring counties had decreased or increased aggregate tax receipts-- it only talked about online sales tax, which is a subset of all sales taxes collected:
> But eight of the counties — everywhere but San Francisco — saw major jumps in online sales taxes, as high as 36% for Contra Costa County.
When San Francisco has it’s businesses open (pre-Covid) it is a fun city.
When the businesses closed it became the opposite of a fun city. Restaurants and bars have been shut down and only a few have started to reopen. Many Parks outside of The city have had their parking lots closed. The city itself started doing massive road renovations which seem to be in every neighborhood. Helping the homeless seem to become less of a priority. All of the real problems that people covered up by going to shows and having a good time at restaurants and parks and bars became quite apparent.
I don’t think San Francisco will recover for a long time.
Is there any data on rent changes in Texas? A Bay Area school district employee told me that she has noticed a big increase in requests to transfer student records to Texas districts. But I don't know how widespread that is.
The events of the past 6mo have caused tons of people in places like NYC, SF, etc who were on the fence to cash out an move elsewhere.
Housing prices, local politics, just about everything is gonna suck real bad for the people in the destination locales because a bunch of people with more money than them are showing up and trying to tell them what to do.
That’s been a hidden instability of those markets, in my opinion - housing prices being so outlandish makes it trivial to cash out. For an average renter, moving probably maxes out at a few thousand.
Weak topsoil because of too few roots leads to a dust bowl like scenario.
H. Clinton did relatively well in Texas -- it's one of the few states where she out-performed Obama. Still, a 800,000 vote gap is much too large too close in only four years.
Austin is pretty pricey by Texas standards and San Antonio is on it's way up. Property taxes in Texas are what may surprise you depending on where you are from. I used to live in the Seattle area and property taxes there are around 1/2 of what they are in Texas. Neither has a state income tax and both have around the same sales tax rate.
Yeah, part of this may be that one- and two-bedroom apartments are undesirable during a pandemic.
I know it's a sentiment I've expressed to friends and family: I bought a house last year and I've repeatedly thought "boy I'm sure glad I'm trapped in a single-family home with a nice backyard for a year, rather than in my old apartment for a year". I would have been climbing the walls there.
Of course there are more factors in single-family home prices as well: interest rates are directly tied to how much money people can afford to borrow, so the rate reductions this summer drive a surge in housing prices, and generally the fed injected a ton of money into the financial system that is sloshing around looking for safe places to park, and housing is a very safe place to do that. There are a lot of properties being bought up by investment firms to rent out.
My theory on that is that people are spooked by the virus and want to remain isolated.
That and living in a smaller apartment isn’t that much fun when you have to spend all your time in it versus going out to eat or meet friends.
There's been a few articles lately about the number of west coast people moving to Texas to the point that Texas will be considered a purple state after the upcoming election.
I'm from Texas, moved to CA for a number of years, and have since returned to TX. Things like no state income tax and lower sales tax are major attractions, add to that the dirt cheap prices of property in comparison to CA. There are other things that are cheaper that just make day-to-day life easier. Fuel prices are much cheaper in TX. Auto registration fees are cheaper. In TX, my Corolla was <$75 per year while in CA it was >$400. When I registered my car in CA, I was required to pay taxes on something purchased in another state. (Why CA limits this tax/ransom to cars is a real question. Why not any large ticket purchases like computers,washer/dryer,fridges,etc.)
TL;DR - It's pretty widespread. TX population is rapidly increasing
> Why not any large ticket purchases like computers,washer/dryer,fridges,etc.)
Technically they do. You’re supposed to declare purchases on your taxes and pay the “use tax” on them. It’s just that you can’t get away with not paying the tax on a car so it’s easier to enforce.
> There are other things that are cheaper that just make day-to-day life easier.
Not having any protections or laws supporting laborers help make things cheaper too. No parental/sick leave, no per day overtime maximums, no mandatory break times, no non compete ban, lower minimum wages, etc.
Not that it’s the only reason, but I notice it to be a trend in “low cost” states. The exception seems to be WA, which has decent labor protections, but not quite as good as CA.
More labor protections also tend to cause higher unemployment rates. The unemployment rate in Texas is currently about half the rate in California. No one wants to see desperate workers exploited by employers, but if we increase worker protections too much then we end up hurting the people we meant to help.
Only because other states are offering cheaper labor by not having those protections, much like other countries offering cheaper labor by not having worker/environmental protections.
Theoretically, I agree it's possible to have too much worker protection, but it's a laughable notion in the US where pretty much all but a handful of states have no protections and "too much worker protection" is not even a remote concern.
I have a family member complaining that they cannot eat and have to stand for 8+ hours straight, a pharmacist because who is enslaved by their student loan debt, and are on the wrong side of supply and demand and there is no law that says employers need to give their employees the ability to pause and eat. So they snack on junk food in their pockets while they work.
I think it's worth keeping in mind that this is not a reflection of low prices in TX but of insane prices in CA. Tons of states have costs on the order of TX.
The fires will follow a sigmoidal curve just like epidemics. Once there are no trees left to burn, the fires will stop. But actually the big fires will stop long before that once the contiguity of fuel decreases below a certain level. This is "herd immunity from fires."
Yes, trees regrow, but global warming is shifting rainfall away from California so trees won't regrow at the same rate as before.
Sounds a welcoming change to SF locals. The politicians and locals have been saying that techies were wreaking havoc in the city and that techies were gentrifying the city, dealing death blows to local culture. All these horrible horrible deeds will finally stop, right?
The article says that a half-decent single-person apartment - one bedroom, one living room - costs $2,873 to rent in SF.
To think that even in the midst of a pandemic these are the prices is patently insane. This is significantly above the median monthly wage where I live.
I think most single people live in shared homes in San Francisco, so living on your own would be a luxury and most people wouldn't be paying that much.
I've even heard of some people with roommates, which seems extraordinary to me for an adult to be doing that in a Western country.
Yeah, for better or worse, shared homes are entirely normalized in the area. Even rich professionals who could afford to live on their own often split a 2 bedroom apartment or group house.
Very different. San Diego is not a mega city like LA or the great Bay Area. Much better weather than SF, seems a bit more relaxed pace and not as overrun.
I wouldn't be surprised if the massive, long-standing military presence in/around San Diego is a factor for the region being more conservative than most of coastal California.
This is part of the reason. Another part is that typically the closer you get to the equator in the US the more conservative. It's related to the reason why beach towns typically have bad food and no real culture.
I worry for San Diego. I moved here to escape the bay area, too. I figure there's only a couple or so years until this region gets wrecked by California politics, too. Then, it'll be time to finally move on back to America. I just want to escape before I suffer any loss on real estate investment.
The large misalignment of prevailing median wages to land pricing around the world has puzzled me for decades. Personally, as someone outside of the real estate industry, any of my real estate-related expenses in my business (I'm all remote) and personal lives are near-total deadweight losses to me. But I don't ever see a kind of "your margin is my opportunity" transformation drop real estate around the world >90% in valuation to free up the stranded capital for other industries, as the real estate industry is enormously powerful and wealthy, and I see no horizon where that is ever disrupted.
Since you are right in the middle of this, what prevents you from walking out on the lease? As in, what starts a flood of renegotiation / changing apartments from similarly lease-locked renters?
This exact discovery has me reconsidering now. Trying to solve the following now:
1) Convincing company to let me work remote full time in a much cheaper city.
2) Commit to learning how much it's gonna cost me to break my lease.
Before the factors was: "This is a lot of talk in SF about falling rent, but, what, a 10% savings?" (It's a lot larger than that, even locally. Knowing I'm overpaying in my locality is enough frustration that it makes me want to move, or get a new lease, or something) And how well the company was going to handle WFH, and they've been doing fine, so, good opportunity to find a cheap place to live.
yeah, the landlord will be chomping at the bit to find a new tenant in the middle of a pandemic to get you off the hook from your lease alright. real honest people, those landlords.
But what's legally binding? Can't the lease just be abandoned and you refuse to pay? It hurts reputation, but if the demand is so high for renters, they can reestablish reputation.
Personally I think SF itself, compared to the surrounding region, is a terrible place to live whos downsides must only be barely mitigated by specific positives which appeal to some people-- E.g. nightlife and access to high paying jobs. And right now the pandemic has killed the positives: destinations are closed and businesses have cut back and/or accepted remote work in large numbers.
Not everyone sees it my way, of course, but you don't need a large drop in demand to create a large drop in price.
Having living here for about 5 years I originally had the same thought but I've realized that this is an overstatement.
San Francisco is actually quite a beautiful city in many respects, especially in the more northern parts of the city. The weather is usually quite nice. There is (was?) a really good restaurant scene with pretty good cuisine in pretty much any category you could want. There's great nightlife, with a strong music scene, good theater and some great museums. It's also proximate to a bunch of really cool areas (Tahoe, Napa/Sonoma, Marin). I think there are genuinely a lot of people who really enjoy living here.
That said, there are also a ton of folks that are effectively forced to be here for work and would leave if they could. I think there are enough of these folks that want to leave that if they could, it could have a pretty sizeable impact on the rental market and the whole economy. Remember that not everyone has to leave. Even a 10% outflow could potentially tip the balance back towards a real estate market crash (or at least a correction).
I think you missed an important part: the people. There’s LGBTQ+ culture, Latino culture, startup culture, etc. People like being around people like them. Unless other cities can recreate these agglomerations, SF will still be a destination for a lot of people.
It is manifestly the case that enough people disagree with you to keep San Francisco rents among the highest in the world under normal circumstances. Not only do we have nightlife and good jobs, we also have world-class restaurants (seven three-star Michelin restaurants in the Bay area and an accompanying halo of lower-tier options), theatre, opera, ballet, good weather most of the time, redwood forests, beaches, sailing, surfing, kite-boarding, and a culture of weirdness and innovation that keeps the street life very interesting. Oh, they make some decent wine nearby too. Show me a place with affordable real estate and I'll show you a place that not many people want to move to.
I think it's telling that a number of your examples are things found outside of San Francisco.
It's SF proper seeing these drops-- not surrounding areas in the bay (at least not to anywhere near the same degree).
And just like you see the benefit of being able to travel out to those things it's also possible to travel in to SF for the things that are there-- from my perspective the things that are good about SF (like a performing arts event or a fancy restaurant) are things which I'd only partake occasionally and not every day.
Some of it is just subjective: I think the SF weather is pretty terrible compared to anywhere else in the bay-- continually cold and foggy. I can't stand the constant mind numbing noise. I can't stand the traffic, the lack of parking, and the public transit necessary to deal with it but which stops running early and poorly connects significant parts of the city.
But I don't see a reason to argue it with you: Different people have different preferences and I don't doubt that SF is great in all kinds of ways that matter to you. For me not living in SF was a trivial decision that had nothing to do with real-estate prices, and so it's easy to me to imagine how things are for people who decided otherwise but with the pandemic are finding that the trade-off they made doesn't make sense.
My point was only that there were are many people who find it generally awful and only counterbalanced by factors that, at least temporarily, now don't apply.
> Show me a place with affordable real estate and I'll show you a place that not many people want to move to.
That is a misrepresentation of the economics. Prices can shoot to the sky based on relatively modest differences between supply and demand. Some places have affordable real-estate because they're a lot less attractive, but others have more affordable real-estate because they're only slightly less attractive or because they have slightly less constrained supply, which can just be a product of geography or differences in public policy.
I'll hold up the twin cities as a more affordable place with lots of people. In summer, it's very bike friendly. There's a bunch of lakes throughout Minneapolis and St. Paul. Mill City Museum is one of the best I've ever been too, and there's a ton of theatre all around.
Sure, winter gets cold, but it's easier to handle on the cities where downtowns have pedestrian subways, and the city clears the snow. Plus there are events like Luminary Loppet.
Sure, the summer is humid, but lots of folks have basements. And offices have AC. And the lakes are still cold once you get more than two feet down.
The only things it really needs are mountains and ocean nearby. Even then, it's got some excellent areas nearby
I'd imagine most San Fran companies aren't going to require anywhere near the same amount of commitment to living close to the office period so you might be able to get away with living in Sacramento and driving down for one Friday a month or something.
I'm more concerned with working class people though. Anyone working a service job is sol
Is data on ownership of rental stock available to the general public? Curious about what percentage of landlords are individuals vs. larger companies owning multiple properties/units.
It is sort of publicly available, but in an inconvenient way and you have to be dedicated to get an aggregate picture. For an individual building you can look at a few different things. I look at the address to which the tax bills are sent. This is usually a good way to estimate how many parcels are owned by the same entity. For a specific building, I search recorders records for the name of the entity I think owns it. This will turn up all the recorded deeds with the same entity name. Problem is many buildings are owned by single-purpose entities so then you have to also look in county fictitious business name permits and state business licenses.
Doesn't look like landlords are expecting this is a long term thing. Monthly rents are more expensive for 12 month leases than 6 month leases right now
This is not unusual regardless of circumstances. Most landlords nowadays use software that generates prices based on lease terms. A lease for six months is less desirable than for 12 months because there is always a gap in tenancy, necessity for renovation between tenants, etc.
This causes weird outcomes depending on the lease length, like 13 months being significantly cheaper per month than 12, or one month (if you needed some extra time before your next place opens up) being three times the cost per month as compared to a standard lease.
The confluence of Covid and conflagration is a dealbreaker for many. The former, alone, could have been balanced with outdoor dining. The latter, alone, would be softened by company. The two, together, make the state’s tax policy and city’s take on crime a cruel joke.
Contrast that with New York. It has—in my opinion—become a finer city since the pandemic for those with the fortune of continued employment.
Wayne, MI studio rents are down by 23%? First of all, I wonder if they mean Wayne County, MI, or actual Wayne, MI. If it's the former, that almost makes more sense because Wayne, MI has a total of 17,000 people. The only thing I can think of is that demand has cratered because car company employees took the time to relocate once their leases were up.
Downtown rents in Detroit were very, very high compared to the surrounding area because of workers desiring to live in a very small radius of the immediate downtown area primarily to be close to work and downtown amenities/restaurants.
QuickenLoans would be the biggest employer downtown right now, not the car companies, and other tech companies have been moving in as well. Rents were exacerbated by a shortage of apartment stock, homogeneous ownership of apartments (i.e. by Dan Gilbert), and lack of affordable parking in a city where cars are still required. Rents outside the downtown area can be almost half as much because of this, despite all still within a 10-20 minute drive.
Overall, I've seen most downtown rents drop by several hundred dollars, usually by maybe a fifth of the previous amount (which seems very close to the percentage mentioned). Outside of downtown, the drops have been MUCH less steep, if at all.
My buddy moved into a closet there ~4 years ago now. His rent was something like $2,500 per month. I am living in an apartment now that has twice the space and better ammenities while only pay $1,000 per month. My friend has since moved to Denver because mainly of price.
SF resident here. Yes, lots of people have left SF...however every single person I know who has left is a MAN! I don't know a single women that has left SF out of dozens of people. Has anyone else noticed this?
That would be really nice, but for that to happen we need to build a ton more housing (or lose a lot of population, which personally I do not find appealing). And since decreasing rental values means that property owners and landlords are making less money or seeing their investments rise in value more slowly, and since such property owners control city governments, it’s unlikely to happen unless control can be wrested from those hands.
Such housing abundance would be good for everybody, but change is scary, and nearly all factions in SF oppose change of all varieties, even when it would benefit them materially. Don’t know as much about why NYC has not produced enough housing to support the number of people that would prefer to live in NYC.
San Francisco is rekt on so many levels and irrecoverable.
Pensiontracker.org
This is why I left:
I’m bullish on the W2-pocalypse and bought Facebook, did you? Facebook twisted its earnings with W2pocalypse.
Silently through the night W2’s are being slashed, this is front running the onerous taxes, fees, and small scale apocalypse that has been accumulating in California.
Let me walk you through some metrics on California.
Min. wage $12/hr
40% of California’s income tax revenue is generated by .5% of the state’s population. (the wealthy)
California’s new tax bill targets the wealthy more on top of what they’re already charged.
1% for $1M-$2M
3% for $2M-$5M
3.5% for $5M+
The worst part is that these taxes are possible for the 2020 year retroactively, meaning if you decided to stay in California under the existing tax regime, they can come after you for the new rate hike. (assuming you’re wealthy)
California’s congress is single party and this bill will likely pass according to some friends of mine who sit in legal and policy spheres.
California is aggressive in collecting taxes from moving residents in all other 49 states.
$50,000/yr or less is 60 percent of California tax filings but ~2 percent of its income tax revenue.
SFBA makes up 40% of the state’s income tax revenue but makes up only 20% of the state population California has the highest average impact fees for construction of a single-family home, at $23,455. (up to 3 times higher than other states)
25-34 year olds can’t easily own homes in the state of California. ~500k+ is the minimum to purchase a home, at least 5-10 times a yearly salary.
The bottom 20% pay 7% of their <23k/yr incomes on sales tax.
The state’s pension unfunded liabilities are estimated to total $93.1 billion ($59.7 billion at CalPERS for state employee pensions and $33.4 billion at CalSTRS for teachers’ pensions) California has some of the highest electricity costs, it will go green and the price will go to $0.25-$0.40/kwh in the next 2-4 years likely.
In some cases, your electricity rate can be $0.54/kwh. CA taxes will be almost double the 2nd highest state. Free healthcare for everyone, including illegal alien immigrant violent criminals.
Gov. releasing inmates, defunding / slashing police forces, 3x the per capita welfare spending of the nation, sanctuary for illegal immigrant violent criminals, reparation bills coming, business-crushing regulations, huge secular departure of companies and individuals, and traffic/smog.
According to some of my legal friends and people who talk to city controllers, the forces that be will torch Prop. 13, double property taxes, and crush real estate values.
California has a 10% sales tax in many situations.
“California’s top rate is 13.3%, astronomical for a state…
In 2016, the top 1% paid 45.8% of the state income tax revenue while accounting for 23.1% of the personal income.
The whole point of a progressive tax system is to distribute wealth from the wealthy to the poor. A very small percentage of the population controls the vast majority of the wealth in this country. I'd argue that the wealthy (myself included) should be paying _more_ taxes.
With that said, in California, there's a lot of problems that can't be solved by simply throwing more money at it -- for instance, homelessness.
As someone who grew up in SF and went to school in LA, all this talk of where it is hard to date seems silly. People always like to complain about things like that but the truth is dating can be hard for some people anywhere.
The trick to LA is that it is huge, and you will tend to gravitate to certain parts. Different parts have different attractions. When I met my wife we both lived near by Fairfax & 3rd, which meant I could walk to her apartment. What didn't occur to me at the time was that we lived close to each other because we liked a lot of the same things and had similar life priorities. In retrospect location was a sorting mechanism that worked great for us.
I mean, tech companies have way more males than females, I would expect that areas full of tech employees like the Bay Area would not be ideal for males trying to find partners due to the bigger competition.
Is that the case? How is the male/female ratio in those areas?
Dating is horrible in the Bay Area unless you grew up in the Bay or don’t work in tech.
If you’re an outsider you’re considered a gentrifying techie so you already eliminated mostly anyone who is from the Bay. So now you have to date other outsiders and guess what, most of them work in tech. Most people who work in tech are male.
Psh I don't think that's true. I think you will have trouble if you basically match every single other tech person in every attribute - ie. if you lean really hard into the stereotypes.
It's not as true as it's talked up to be, but there is definitely an "Eww, techies" sentiment found among a non-trivial chunk of those that identify as "natives". You run into it a few times and you learn to spot some of the early warning signs.
Might be true for dating in the short term but not the long term. Once you start meeting family and lifelong friends there’s a good chance peer pressure causes the relationship to splinter.
It happened to me exactly once (and the sample size is big enough) that a date was turned off by me being in tech. It happens. And it happens much more frequently when being in tech is part of your identity, like being actively in politics, or saving the oceans. A strong proposal is likely to cause a strong reaction, sometimes negative.
But while I understand why being "political" may be part of someone's identity, I am more skeptical it is needed for a techie to have "tech" as part of their identity.
I find that building solidarity around the distortionary/gentrifying effects of the tech boom, to at least show that you are cognizant of the problems people are facing goes a long, long way.
I stopped trying that after it was turned into a series of direct and personal accusations of how I am the evil techie gentrifier. My experience has been the opposite of yours - showing awareness comes with the expectation that you accept blame.
Personally, I'm not big on accepting personal blame for fifty years of bad urban planning decisions made by other people, almost entirely before I could vote. But I understand that that's not a helpful, satisfactory, or emotionally resonant response to someone looking for an enemy to accuse of wrecking everything they hold dear. Certainly not when they have someone who represents all those evils right before them.
I've learned to cut such people off immediately. Nothing good can come of attempting to offer sympathy, solidarity, or compassion to someone who views you as a mustache-twirling cartoon villain.
Oh they definitely are - just not on the listed prices. What you're describing is also only true of new luxury towers that don't want to lock in a low price, which is the minority of housing in the Bay.
I found it easy to get the landlords to drop the price $200. The few landlords who refused to play ball were messaging me a month later with discounts begging me to take the place.
Which is the exact same thing as reducing rent by 1/12th or 1/6th. Most near luxury complexes do this to maintain the “luxury” price but have the price actually be lower.
When an airplane hits the ground, it leaves a crater. "To Crater" is to fall precipitously or crash. In this context, it is in the age-old tradition of financial journalism of selecting exaggerated descriptors of market movement.
"Pork bellies fry in early-market trading, fall 5%."
It is generally helpful to completely remove the descriptors and replace them with "increase" or "decrease".
"San Francisco Apartment Rents Decrease 31%"
That way, you can decide for yourself whether or not it is a big deal.
>When an airplane hits the ground, it leaves a crater.
That's a strange/morbid example. I would have assumed meteor for the obvious example. An airplane leaves a trench since it's speed wouldn't allow it to bury into the ground, and it's trajectory is much more in plane with the ground. Meteors on the other hand plunge deep but do not travel far laterally.
Usually when we say something "cratered" we mean that it fell rapidly, as one might imagine a meteor would fall from space and impact the earth with enough force to produce a crater.
It doesn't get used very often in my experience.
As mentioned in another post, "crater up to" is a bizarre formation of words. "Rents fall by up to 31%" is perfectly understandable phrasing, but replacing "fall" with "crater" makes it sound very strange.
> The title would be better written as:
> "San Francisco Apartment Rents Crater, up to 31%"
No, it wouldn't. The comma makes the “up to” phrase bizarre and detached, and does nothing to improve things. It would only make sense if it was trying to say the rents both “cratered” and somehow went up (though what the % would be measured against in that case is hard to understand.)
As a sentence, it would read better with a “by” after crater, though it would be even better (and be a more accurate title) if it dropped the “up to” and just gave a single measure of the drop rather than one end of a range. “Up to” is a clickbait term that always obscured rather than clarifies.
I'm always amused by "up to" in advertisements and such. "You mean you promise me there won't be any discount over 40%? Good, I was really worried you might give me 50% off in some cases."
Like a few lawyers at the bottom of the ocean, that's a good start, but it should be city and state policy to chop another 80% off the price of housing, to get it back to historical norms.
Indeed, but that's why the state needs policy for this. It's should not be true that landlords capture all of the marginal productivity of 2-income households.
Everyone who left gave the following rationale:
- we can work remotely so move wherever or nomad now
- SF is not very fun during the pandemic
- WFH in my tiny apartment is much less enjoyable than when I was working in the office and didn’t spend much time in the apartment
- therefore I’m moving for a year or so until things fully reopen
Now I think the question is what does the eventual full reopening look like and how long does it take?
Many people will move back, because many office jobs will return, and many people love city life and the office work environment (including me).
But the longer things take, the more people get established elsewhere, and the more companies decide to make remote permanent and don’t reopen an office, the more I think this market reset in SF will be long-lasting.
As other posters have said it’s a welcome relief though. Prices are still very high, and new construction remains far from sufficient to keep up with demand.
(edit: typo)