San Francisco braces for commercial real estate crash • Hacker News Board

Re: San Francisco braces for commercial real estate crash

#241

Post by JamesBarney » Tue, Sep 06, 2022, 6:42 PM UTC

AlexandrB wrote: post #216

JumpCrisscross wrote: post #180

Earlier quoted context omitted.

> "Housing is an investment that should only go up in price" will eventually kill any market It doesn't have to. Housing can be affordable while going up in nominal terms. Neither do I think most San Francisco homeowners think about housing supply strategically. They're pissed off about a specific view being blocked. Or construction noise. Or their area's average rent going up. (?!?) Alternatively, they're comfortabl…

> It doesn't have to. Housing can be affordable while going up in nominal terms. For how long? If housing is a good investment, eventually the cost of housing will outpace the ability of new entrants to the market to afford it. If you're already "in the market", you might be OK. But if you're not, even the down payment may be completely out of reach.

Inflation and real wage growth.

Re: San Francisco braces for commercial real estate crash

#242

Post by jmoak3 » Tue, Sep 06, 2022, 6:42 PM UTC

fundad wrote: post #227

jmoak3 wrote: post #160

Earlier quoted context omitted.

I know people miss SF as it was before the boom, but can it actually readjust to substantially less tax revenue with the city government + responsibilities it has now? From what I read about Detroit, once businesses started shrinking or leaving the tax base shrank. The city was unable to cut down on services and spending, so it raised taxes on everyone remaining and the squeeze of more tax and worse QoL made people l…

It seems the faster people leave, the cheaper the housing gets which attracts more people. Will the millions of people clamoring to move into SF or any dense US city turn into a negative number?

That's true - the hills, whales, architecture, and density that attracted bohemians before aren't going anywhere

The people on the sidelines will definitely provide a floor to the prices of the homes.

Home prices aside though the loss of the lucrative office workers buying lunch and renting offices will decrease tax revenue.

Unless someone has any examples of a city that has navigated a downsizing well I do believe the QoL in 5 years will be worse than today's (provided we don't see an epic return to office).

The question for people invested in the region is: "how much would demand from sideline people for these properties change if QoL was worse?"

EDIT: Reworded the heck out of this

EDIT: again

Re: San Francisco braces for commercial real estate crash

#243

Post by anthonybsd » Tue, Sep 06, 2022, 6:43 PM UTC

bvanderveen wrote: post #182

I do ask myself how long the WFH trend is going to last. My hypothesis is that at some point in the next 5 years we're going to starting seeing articles on HN promoting the productivity and well-being benefits of in-person interaction with your co-workers. From where I'm standing, productivity doesn't look so great. It's an open secret in my remote-heavy, North American west-coast social circle that everyone knocks o…

>From where I'm standing, productivity doesn't look so great. It's an open secret in my remote-heavy, North American west-coast social circle that everyone knocks off at 1-2pm when the east coast people are definitely logged off. Probably the east coast people are doing the same thing, but in the morning. Lots of happily phoning it in.

That hasn't been my experience at all. I work for a multinational company with teams spread across the globe - daily meetings with West Coast, London, and Mumbai and productivity has been fantastic in the past 2 years across all R&D teams (can't speak for others). Are you sure this isn't just an issue with your internal culture?

Re: San Francisco braces for commercial real estate crash

#244

Post by 55555 » Tue, Sep 06, 2022, 6:43 PM UTC

inamberclad wrote: post #138

darth_avocado wrote: post #127

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…

Drug use isn't associated with crime and filth until we make it so via harsh city policies. I would, however, like someone to clean the 4 different instances of poop I saw on my 3 block walk this morning.

I don't live in San Francisco, so please humor me, but are you talking about dog poop or human poop? I know this is an absurd question -- I've never seen human poop on a sidewalk in my entire life -- but I've heard stories about SF...

Re: San Francisco braces for commercial real estate crash

#245

Post by parineum » Tue, Sep 06, 2022, 6:43 PM UTC

pixl97 wrote: post #166

JumpCrisscross wrote: post #137

Earlier quoted context omitted.

> city officials are asleep at the wheel Eh, San Francisco's voters have been drinking crazy water for some time. New developments blocked by renters. Stringent building codes and environmental reviews defended by those who think they're being compassionate to the poor. Scolding tech companies for hiring in the city and then panicking when they stop hiring in the city. This obviously isn't all of them. But it's not l…

Yea, people love blaming (elected) city officials but NIMBYism and "Housing is an investment that should only go up in price" will eventually kill any market.

NIMBYism is only a problem because you aren't allowed to build anywhere but their back yards.

Maybe when all of this commercial real estate dies they'll rezone/remove zoning and allow people to build where they can.

Sure residents can be NIMBYs but FAANG doesn't want to have their beautiful campuses flanked by the poors either.

Re: San Francisco braces for commercial real estate crash

#246

Post by llsf » Tue, Sep 06, 2022, 6:44 PM UTC

JumpCrisscross wrote: post #137

darth_avocado wrote: post #127

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…

> city officials are asleep at the wheel Eh, San Francisco's voters have been drinking crazy water for some time. New developments blocked by renters. Stringent building codes and environmental reviews defended by those who think they're being compassionate to the poor. Scolding tech companies for hiring in the city and then panicking when they stop hiring in the city. This obviously isn't all of them. But it's not l…

I guess we got the elected we voted for. Now unfortunately, we did not have much choice. Nonetheless they are supposed to plan for this city. They should recognize that NIMBism is not sustainable. The BoS needs to act swiftly and help convert most of the commercial into residential units. This could help mitigate the issue. If Wework started to not pay its property tax, maybe converting those square feet in residential condos would at least bring some property tax money.

Re: San Francisco braces for commercial real estate crash

#247

Post by gibsonf1 » Tue, Sep 06, 2022, 6:44 PM UTC

gernb wrote: post #156

gibsonf1 wrote: post #81

Earlier quoted context omitted.

The requirements for residential units are primarily the International Building Code, which are the expensive ones. The city only manages planning, such as a residential use can go in a certain area. To actually build, you need a building permit which has to conform to City and State building codes [2], which right now is basically the International Building Code [1]. And yes, it would cost a fortune to convert offic…

Many of those codes have been designed to protect incombents from competition and various other forms of encouraging one form of living (car dependent) over others. Plenty of people in Japan, Korea, Hong Kong, etc live happy lives in much much smaller living areas. This makes them more affordable. But building codes in many places in the USA disallow making places that small. Other examples of questionable codes are…

(I'm an Architect who has built in SF)

Parking spaces, front yards, back yards, building heights, building types, density etc are all City Planning functions, and you're right, have little to do with life/safety typically, and in many ways are quite destructive by making walkable livable cities very difficult to do now.

The Building codes, on the other hand, have evolved with each disaster over the last century or two - a building collapsing in an earthquake, people dying in fires, etc. So those have real life/safety protection as a primary directive.

Re: San Francisco braces for commercial real estate crash

#248

Post by onlyrealcuzzo » Tue, Sep 06, 2022, 6:44 PM UTC

hattmall wrote: post #225

onlyrealcuzzo wrote: post #195

Earlier quoted context omitted.

Crime is down - but so is population. Is the decrease statistically significant after adjusting for population loss?

Violent Crime IS low in SF. It's pushed into Oakland. Property crime is insane and artificially held low by apathy with regard to reporting and redefining offense levels.

Also wondering how much this has to do with Shoplifting and other crimes simply being decriminalized.

Re: San Francisco braces for commercial real estate crash

#249

Post by pessimizer » Tue, Sep 06, 2022, 6:44 PM UTC

purim wrote: post #213

Still waiting for Vancouver real estate to follow suit but feels weird that in Vancouver its' socially acceptable for people without homes single out a certain ethnic group every cycle. Used to Japanese in the 1980s, Hong Kongers in 90s, Taiwanese in 00s and Chinese in 10s. This type of scapegoating doesn't seem prevalent in other real estate markets like California, their money is correct on high wage disparity betw…

> In both markets there is surprising silence on REITs and corporations buying up residential living spaces and flipping it. Wouldn't be surprised if those special interest groups also own/influence local media as well.

I imagine that they're all financing YIMBY organizations, whose aims would do nothing but increase the value of their holdings.

Re: San Francisco braces for commercial real estate crash

#250

Post by thatfrenchguy » Tue, Sep 06, 2022, 6:44 PM UTC

cpursley wrote: post #191

darth_avocado wrote: post #127

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…

Money goes to where it's treated best and people vote with their feet. I know people thumb their nose on the state, but Florida is open for business. But the real secret is Puerto Rico and their incredible tax incentives for software companies.

I mean, comparing San Francisco and Florida is crazy. One is a medium-density place with one of the best climate on earth and vaguely decent state politics, the other one is a soon-to-be-sinking-in-the-water mostly red state with cities that are just suburbs with crazy traffic and stupid laws.

People don't live in SF because they want to live in a detached SFH and stay inside most of the day, I could do that anywhere in the US.