A close relative of mine is a top real estate appraiser based in San Francisco, and she's terrified about what happens in Q2 2021, when leases will start terminating en masse. She's had a call with the St. Louis Fed, as they're trying to get an idea of what this will look like. She thinks it will be a bloodbath, and deal a death blow to corporate real estate (and other capital markets by extension).
Same in Boston —- the office space market is a bloodbath. I have little knowledge of the commercial office space market but it’s not difficult to imagine how mass defaults in this sector could trigger a crisis.
My bigger concern with SF is property crime and homelessness. I don't feel safe in this city. It's been getting worse every year and there is no end in sight. Major conferences already relocated because of it.
Interestingly, the "visible homeless" population has decreased substantially over the course of the pandemic, and is now below pre-pandemic levels: https://missionlocal.org/2020/10/citys-homeless-tent-count-d... The pandemic has managed to cure a few of San Francisco's ills. Rents and real estate prices are trending down towards sanity, the city/county government has managed to get a large number of homeless folks si…
I agree on most points. My guess is that some homeless were put into hotel rooms, which is why there are fewer on the street. I don't know how sustainable that is or what will happen when the pandemic is over. Will they be allowed to stay there indefinitely? Who will pay for all that? I have a hard time believing that the homeless population actually decreased during COVID with all the generous social programs going on.
Interestingly, the "visible homeless" population has decreased substantially over the course of the pandemic, and is now below pre-pandemic levels: https://missionlocal.org/2020/10/citys-homeless-tent-count-d... The pandemic has managed to cure a few of San Francisco's ills. Rents and real estate prices are trending down towards sanity, the city/county government has managed to get a large number of homeless folks si…
Just need to recall Chesa and we're off to the races..
Still shaking my head that he won; what a sad day for the city.
I can't help but think this take is projecting a bit too much. Inundated? How so? What are you seeing? Tax benefits, work-life balance and bigger homes? Really, you can see these changes in the last 6 months of a pandemic? I could be wrong but I don't think the majority of employers are letting employees change states (and state taxes). WFH does not mean work from anywhere, especially tax-wise. This all sounds plausi…
Not OP, but I know three different families who are actively visiting other states to decide where to live next because they so loathe Newsom and the California governance writ large. They never liked it, but the wildfires, pandemic response, and ability to work elsewhere pushed them over the edge.
Yea, I would leave the Bay Area in a millisecond, but only if I could still keep access to the Bay Area job market as a remote employee. There are plenty of great places in the USA without the crushing taxes, endless commutes, and one-sided politics of CA. I would gladly accept a "cost-of-living adjustment" to my salary if I could work from home in NV or FL or something.
A majority of tech workers in California are from somewhere else, who came to California for the opportunity. They know what it's like back home. And yes, especially the 30-somethings with kids, they're leaving
I'm not saying there isn't some desire among employees but most companies do not want to pay taxes in 50 states. I don't think the vast majority of workers can simply move without changing employers.
> but most companies do not want to pay taxes in 50 states
Surely not but I would wager that most employees work for companies that already have multi-state (and in many cases multi-national) operations, and therefore have the administrative infrastructure to support employees in arbitrary states.
Their mandate requires a stable financial system with solvent institutions and sufficient liquidity moving through the system. By definition, solvency and liquidity at the country level depend on major asset classes maintaining some amount of value. That baseline changes based on regulations of what can or cannot be used as collateral for different measures, what ratios institutions have to maintain, etc, but there i…
The problem with this is that no amount of efforts by CBs can cure solvency risk, and attempts to do so only exacerbate moral hazards and make those collateral valuations even more fragile since the fundamentals underlying the collateral valuations, like cashflows and trust between counterparties, will continue to decline.
Define "reasonable tax rates." I'll tell you this: states where there are very low taxes (e.g. no income taxes, low sales/other taxes) tend to be net takers when it comes to federal dollars: they get more from the federal government than their populations pay in taxes. States like California are net givers: their populations send more to the federal government than they get back. As a bonus irony, the "taker" states…
I'm taking a look here (visualization is crummy, but there's a list below) https://worldpopulationreview.com/state-rankings/donor-state... There are only ten donor states in 2019: - Connecticut (- $4,000) - New Jersey (- $2,368) - Massachusetts (- $2,343) - New York (- $1,792) - North Dakota (- $720) - Illinois (- $364) - New Hampshire (- $234) - Washington (- $184) - Nebraska (- $164) - Colorado (- $95) And these ar…
Virginia/Maryland are a special case, since they are immediately adjacent to DC, so are home to a large number of federal workers. New Mexico is impoverished and filled with elderly retirees, and also has (relative to population) a large number of well-paid federal workers at Los Alamos and Sandia national labs.
In every state though, rural and ex-urban areas are subsidized by federal and state tax revenue coming from cities.
A close relative of mine is a top real estate appraiser based in San Francisco, and she's terrified about what happens in Q2 2021, when leases will start terminating en masse. She's had a call with the St. Louis Fed, as they're trying to get an idea of what this will look like. She thinks it will be a bloodbath, and deal a death blow to corporate real estate (and other capital markets by extension).
At risk of extreme naivety, why do failed real estate investments merit Fed support and attention? I thought they were just for maintaining a sound dollar and liquidity and the financial system, not charity for real estate kings.
After 2008 the Fed and various gov agencies are constantly on the hunt for "systemic risks" to the economy. They only really care if the failure of one section of the economy could spill over into others. Commercial real estate definitely could pose a systemic threat. I remember they were looking into bitcoin briefly at the height of the bubble but something like that is way to small of a market to rise to the level systemic risk and warrant fed attention
I would love real estate markets to crash in SF and NYC. My body is fucking ready.
Commerical real estate != residential, I wouldn't get your hopes up unless demand drops, which it totally could.
It seems unlikely that a commercial real estate crash wouldn't have second-order effects on residential. After all, if none of this commercial space is getting used, there is less of a reason to be interesting in the residential housing that surrounds said commercial space.
Thankfully you can do sound isolation without concrete. If they do that or want to save money is a different topic I guess.
Concrete separation also acts as fire barriers, which is very important in areas where people will be cooking stuff. Office buildings don’t typically have stoves with open flame everywhere.
Most apartment buildings in the Bay Area are made of wood with 2x4 wall framing and sheetrock, except for a relatively small number of high rise buildings. We haven't really had a fire problem.