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San Francisco braces for commercial real estate crash

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Re: San Francisco braces for commercial real estate crash

#351

Post by SoftTalker »

throwayyy479087 wrote: post #141
Apocryphon wrote: post #76

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.

Those cities are also not reliant on one market sector that has happened to have a spectacular 20 year run. I guess Financial Services might be the closest thing, but there's a lot more to NYC than Wall Street.

The comparison to Detroit seems apt. When the automakers scaled down, there was no "Plan B" and the city leaders were too incompetent/corrupt to actually lead.

Re: San Francisco braces for commercial real estate crash

#352

Post by hollywood_court »

pessimizer wrote: post #296
hollywood_court wrote: post #13

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…

Because many methods of making money are cruel, a lot of stupid people develop an intuition that the best business decision no matter what is the one the people beneath you least want you to do. They see a world where they're trying to get all they can out of lazy employees that are constantly trying to get one over on them. Those employees' tricks are what is standing between them and retiring on passive income. Thi…

What you described is seen all over small towns here in the South. So many of my peers think that their employees owe them something. As a tradesman, I hear the same thing from so many of my peers in the real estate repair/building industry.

What most of them don't realize is that they are actually successful exploiters of labor rather than successful business people. I judge a company by how well they treat the lowest man on the totem pole.

All around me you'll find small business owners who send their kids to private school, their wives drive fully loaded Yukons/Tahoes, they have lake homes and boats, they have healthcare, they take multiple vacations per year, etc. Yet not a single one of their employees can enjoy a single one of those amenities.

So you effectively have 15-20 skilled tradesmen working full time to support the lifestyle of one family.

When you have all of that, but your employees have none of it, you're exploiting their labor.

Re: San Francisco braces for commercial real estate crash

#353

Post by unethical_ban »

dividefuel wrote: post #165
unethical_ban wrote: post #36

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…

We're 2.5 years into the big, unplanned WFH experiment. I would think all of the in-person benefits you mention would be visibly expiring by now. Are they? I'm sure in some cases they definitely are, but industry-wide I would think we'd see more clear evidence by now if that was the case.

I honestly think it will take half a decade or more. It will take seeing the long term effects on new entrants to the fields (college hires) as well as seeing those people trying to get new jobs at new places.

Re: San Francisco braces for commercial real estate crash

#354

Post by galaxyLogic »

happyopossum wrote: post #274
scarby2 wrote: post #223

Earlier quoted context omitted.

> Housing can be affordable while going up in nominal terms. Housing cannot be affordable if it goes up in real terms though. In an ideal world house prices would increase 1:1 with wage growth from an affordable baseline. There are 2 ways to fix it: either crash the market or introduce policies which will cause either stagnation or below inflation growth in housing prices for at least 20 or 30 years.

> In an ideal world house prices would increase 1:1 with wage growth from an affordable baseline. There's only one way to do that - a command economy, with all housing owned and doled out by the government. That just doesn't work, anywhere, ever. You have to work very hard to ignore the fact that some places are more desirable than others to live in, and sometimes those desirable places change. Also, different people…

You don't need to have "100% control" of the market. Government policies can help steer the situation in one direction or other. It's not like there must be either 100% or 0%. There are 50 shades of gray in between.

Nobody's trying to realistically get to the "ideal world". What you want is an "improved world".

Re: San Francisco braces for commercial real estate crash

#355

Post by intrasight »

The lawyers will do well - with work challenging assessments. The city will be fine - they'll extract their pound of flesh. The owners will do fine - they play a long game. I think the state will have issues. They can't tax workers who don't live in the state. Also businesses in SF who cater to office workers will have issues.

Re: San Francisco braces for commercial real estate crash

#356

Post by bombcar »

ceejayoz wrote: post #240
buscoquadnary wrote: post #212

Earlier quoted context omitted.

> According to the data, crime in SF is lower that it was a few years ago: https://www.city-data.com/crime/crime-San-Francisco-Californ ... Every time I see something like this I will point out that during the anti-police movement that happened a while back, many police started reducing their activity either because they were told to, because prosecutes would refuse to prosecute, or because they didn't want to be the…

This theory falls down when you look at murders. They're down with all the others on that link, and they're highly unlikely to go unreported.

When people talk about "high crime areas" they are usually not talking about murder or arson.

They're usually talking about large amounts of more "petty crimes" - because even in the murder capital of the US (currently St Louis) it is 64.54 per 100,000 residents. Just not that many overall and you probably won't actually know someone who was murdered, especially if you're more toward the richer parts of town.

But the other crimes are much more common and you will see them relatively often if they occur. I wonder what percentage of people have seen shoplifting or had a car broken into, etc.

It's more about the "feel" of the city than the "real", unfortunately.

Re: San Francisco braces for commercial real estate crash

#357

Post by californical »

bombcar wrote: post #327
happyopossum wrote: post #274

Earlier quoted context omitted.

> In an ideal world house prices would increase 1:1 with wage growth from an affordable baseline. There's only one way to do that - a command economy, with all housing owned and doled out by the government. That just doesn't work, anywhere, ever. You have to work very hard to ignore the fact that some places are more desirable than others to live in, and sometimes those desirable places change. Also, different people…

It's a good question and how we "did" it in the past might need to be investigated. House prices and appreciation were basically the same throughout the US until something like the 1950s, when places like CA began to far outstrip other parts of the country. I don't think that CA became a desirable place to live suddenly in the 50s, but perhaps it did?

It became a lot easier to move across the country with the rise of cars and commercial flying, and CA is a really nice place (from a climate and natural beauty perspective, plus the thriving industries). So it may not be the only reason, but I think if prices were equal, many people would choose CA over Indiana for example, if they were looking to move somewhere new.

Re: San Francisco braces for commercial real estate crash

#358

Post by [deleted] »

pessimizer wrote: post #214
smcl wrote: post #87

Earlier quoted context omitted.

I think if people were given the choice - particularly somewhere like San Francisco - they'd would much prefer to live in an apartment they could reasonably afford vs a detached home they could only afford if they travelled back in time 30+ years.

They're given the choice, which is overwhelmingly taken by 99.9% of the people in the world, of not living in SF.

[deleted]

Re: San Francisco braces for commercial real estate crash

#359

Post by unethical_ban »

aaaaaaaaaaab wrote: post #88
unethical_ban wrote: post #36

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…

Hi manager! :-) No, we don’t go back to the office.

I'm "just" a worker who has also benefited from remote work.

It's annoying to see people attack anyone who thinks there is a chance of a negative side effect of WFH.

Re: San Francisco braces for commercial real estate crash

#360

Post by onlyrealcuzzo »

thegjp210 wrote: post #181
throwayyy479087 wrote: post #141

Earlier quoted context omitted.

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.

By what metrics is NYC doing "great"? The amount of crime and visible urban decay/blight seems just as pronounced (in Lower Manhattan) as it does in San Francisco

By rent inflation?
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