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San Francisco braces for commercial real estate crash

sfstandard.com

141–150 of 622 posts

Re: San Francisco braces for commercial real estate crash

#141

I had always thought the supposed end of automaker dominance Detroit-style doomsday scenario was impossible for S.F., but turns out the normalization of remote work was all it took. The American software industry didn't need to end, it just had to go home.

NYC is doing great, as are quality-of-life focused cities like KC, Miami and Columbus.

Maybe calling every critic in your town names and letting QoL go to absolute crap is the real driver of movement.

Re: San Francisco braces for commercial real estate crash

#142

Earlier quoted context omitted.

We as an industry are still sailing through the air thinking things are fine with WFH, but in reality the engines have stalled and we're gliding. What I mean by that is that the industry has all the benefits of in-person work, having social connections, having gotten jobs through networking, and of knowing the ins and outs of a domain from pre-covid standards. As time goes on, I think the working population will have…

I also think there are a lot of people in California who don't want to RTO who aren't thinking about competing with jobs with people in a state with COL like Arkansas or Idaho. WFH is really going to depress wages for most tech workers.

Californians and the like are moving to Idaho, so the COL there will gradually increase towards parity.

And perhaps Arkansas eventually?

https://www.camdenarknews.com/news/2022/aug/31/will-climate-...

Re: San Francisco braces for commercial real estate crash

#143
post #25

Earlier quoted context omitted.

Is the use of just the space free or are the drugs free too?

Free drugs of course, supported by the tax payer

I can't tell if you're being serious or not, but I feel it needs to be clarified.

The reality is free drugs at safe injection sites, supported by the tax payer, is cheaper for the tax payer. Overdoses and emergency services for overdoses cost a LOT of money. "a period of 2 years and 3 months", "with a savings of over $2.3 million for the lifetime of the program"[0].

Roughly $1 MM per year for just the 1 city in this study (and the population of the city is relatively small).

Additionally, there is a reduction in overall costs funded by the tax payer of rehab, help programs, etc because of benefits from colocation with the safe injection sites.

Additionally, this study doesn't even include the long term savings from reduced police/boarder patrol workload. Not only do free drugs reduce the need for petty theft to fund an addiction (costing tax payer time to file insurance claims - let alone the improved safety of no more petty theft), but when drugs are free, there is no longer a profit for organized crime and smuggling. Reducing the overall tax payer burden for the city / country.

[0] https://harmreductionjournal.biomedcentral.com/articles/10.1...

Re: San Francisco braces for commercial real estate crash

#144

Earlier quoted context omitted.

I’m not near a big tech center, but I know of exactly 3 businesses in my town that no longer exist because they would not allow their employees to work remotely. Two of them were owned by former clients of mine. They allowed themselves to fail because they wanted to make their employees’ lives more difficult. It was that simple. There was no need for either business to have a brick and mortar location at all. No need…

We as an industry are still sailing through the air thinking things are fine with WFH, but in reality the engines have stalled and we're gliding. What I mean by that is that the industry has all the benefits of in-person work, having social connections, having gotten jobs through networking, and of knowing the ins and outs of a domain from pre-covid standards. As time goes on, I think the working population will have…

Totally agree. The pendulum is gonna swing back, it's just a matter of time. Yes there will be more remote-first companies but we will see how that pans out over 5 or so years. There is a hell of a lot more to running a tech company than just writing code. Code writing can easily be done from home but there is a lot of other roles where it isn't as easy.

Plus, are people really gonna just hunker down in isolation? Aren't they gonna get a little stir crazy?

We will see.

PS: The fact that suggesting WFH isn't all peaches and roses gets one so harshly attacked suggests that there is some serious unspoken ulterior motives at play. It's kinda funny to me how so many arguments for WFH are centered around the individuals themselves. None of them are really arguing that WFH is actually the best for a business.

Re: San Francisco braces for commercial real estate crash

#145

The city officials are asleep at the wheel. Blame it on remote work and pandemic as much as you want, but the reality is that the city was in decline even before that. It is too expensive to live in the city. It is too expensive to commute to the city. It is too expensive to feed yourself in the city. Crime is rampant. Drug use and filth is everywhere. Most importantly city has been hostile to tech and business owner…

100% agreed. Ben Shapiro did a pretty in-depth analysis of this on the Joe Rogan Experience.

Re: San Francisco braces for commercial real estate crash

#146
post #34

How's this compare in other cities? Just annecdotally speaking, I feel like I know a lot more people who used to live and work in San Francisco who don't anymore post pandemic, as opposed to friends of mine who left and came back to Austin/New York/Seattle

NYC looks the same as before but with outdoor dining and legal weed.

Re: San Francisco braces for commercial real estate crash

#147
post #32
post #19

Earlier quoted context omitted.

Maybe SF should relax the legal requirements of residential space, then? If they choose not to build sufficient housing... they can at least choose to use what they have. A windowless room with a community bathroom doesn't sound appealing, but at a certain price point it's better than nothing.

But that is also key to the problem: the cost to convert these buildings is already prohibitively expensive, and converting them into dormitories cannot possibly recoup the cost. It's like how sometimes it just doesn't make sense to refactor code because it is fundamentally designed for a different purpose. Sure you can grind it out but will it be any better or cheaper than starting fresh?

> converting them into dormitories cannot possibly recoup the cost

Once we start talking easing housing code requirements, especially if it's done in the name of increasing access to housing, the conversation becomes about just how much conversion is really necessary, and how little can be done to break even. And there's a big continuum.

If one end of this continuum is a standard college dorm setup, the other is literally just letting people camp out in an otherwise-unmodified office floor. In between are probably SRO-level accommodations, building four-wall cubicles with open ceilings for sunlight and ventilation (sometimes traditionally covered in chickenwire).

As grim as this sounds, it might actually be preferable to the current practice of allowing tent cities to proliferate downtown. The idea of an office tower slum is incredibly dystopian, but if the alternative is the properties becoming write-offs, it may be the most likely outcome.

Re: San Francisco braces for commercial real estate crash

#148

Earlier quoted context omitted.

The one I was most familiar with was a business that edited wedding photos and videos. The owner insisted that each employee be on site each day. There were other factors too such as the fact that he forced them to work on Windows machines when each employee had M1 Macs at home. He made the fatal mistake of saying “if you don’t like it, go start your own business.” Well, two of them did. My wife and I gave them the m…

How can you be sure that the business itself didn't fail?

It did fail. He had no employees and he didn't know how to perform the work himself. In our local FB and Nextdoor groups, there were many brides complaining about not receiving their photos/videos for months after their weddings. He wasn't bright enough to outsource. He ended just returning all the original photos/videos and refunding deposits. The building he leased is still vacant today.

Whenever my wife saw someone complain, she would refer them to the former employees who went and started their own LLC.

Re: San Francisco braces for commercial real estate crash

#149
post #29

Earlier quoted context omitted.

As long as its safe to occupy for permanent living it should get permitted, not sure how its much different than a hostel/rooming house-like arrangement. You don't need a kitchen and bathroom in your unit to live.

Safety will always be a top argument to constrain and block off new housing. Look at current building codes. Sure all those things make us safer -- if you ignore the homeless left on the streets and the people who no longer have money left over for good food, education, and healthcare after paying the high price it costs to build an up-to-code house in America. You can restrict housing practically as tight as you wan…

China has a lot of people living in subbasements ("ant tribe", not just the immediate floor before ground, but the 3rd or 4th floor below ground). No egress, crappy ventilation (mold is a huge problem), but its cheap. Also, a lot of restaurants in Beijing have their staff sleeping out in their dining room after they close up as a form of worker dorms (people also sleep in their shops, which is why they cover the windows up after closing). So this is all very crappy housing situations, but its cheap, and one reason why China doesn't have a huge homeless problem (though still larger than the government admits).

Japan has a lot of 2.5 tatami sized apartments that you can get for $500/month (even in Tokyo). No heat, but you can plug in a space heater. Shared toilet, and no shower necessarily in building (so you have to use a bath house down the street).

America goes out of its way to avoid such living arrangements, and to avoid things like slums. I think we could do a better job at creating lower end housing, however, by sacrificing some of our livability principles. But it isn't going to fix the guy who wants to cook meth in their state provided housing.

Re: San Francisco braces for commercial real estate crash

#150
post #78
post #19

Earlier quoted context omitted.

Maybe SF should relax the legal requirements of residential space, then? If they choose not to build sufficient housing... they can at least choose to use what they have. A windowless room with a community bathroom doesn't sound appealing, but at a certain price point it's better than nothing.

> A windowless room with a community bathroom doesn't sound appealing, but at a certain price point it's better than nothing. You make this legal and tomorrow every RE developer stops putting in windows.

> You make this legal and tomorrow every RE developer stops putting in windows

This sounds like new housing supply. I'm failing to see the problem. Developers still have to sell the apartment, after all.

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