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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

#521

Post by koheripbal »

onlyrealcuzzo wrote: post #14
ryandrake wrote: post #6

Residential crash is potentially already upon us, at least in the outskirts (East Bay for me). We've had our house on the market for over a month now, and nobody else in the neighborhood is selling either. Big changes from only 3 months ago, when sellers were closing in days.

I'd argue that a "crash" isn't really a "crash" if it comes after a 50% increase in 2 years. Anything short of a 20% correction is simply a reversion. If prices shot up 100% in 1 year, and then were down 3% in two months - no one would be talking about a crash.

This is a pointless semantic argument.

Re: San Francisco braces for commercial real estate crash

#522

Post by inferiorhuman »

abeppu wrote: post #518
inferiorhuman wrote: post #508

Earlier quoted context omitted.

First off – nobody, not even me, is claiming that San Francisco spends a small amount of money. However you're not comparing like for like here. The San Francisco expenditures are a combination of factors including high cost of living, high level of infrastructure and social services, and state funding. Honolulu is expensive mainly because of the Jones Act, not because they're providing a particularly high level of s…

I'm not convinced that we're getting what we pay for, or that we're funding the most important things -- no one's life is being ruined by an insufficient quantity of library books, or access to too few museums. I'm glad we have the hetch hetchy water we do. I'm glad when the East Bay has brownouts SF often doesn't. The botanical gardens are _nice_. But again: ~$16k per head. For comparison, I checked and Denver is pr…

  I feel like we have a lot of non-critical stuff that we should be able to cut.
Right. And if you don't value books, music, or art then San Francisco is not for you. There are plenty of other more bare bones cities to live in. Even in the Bay Area. You would likely be much happier in a city like Emeryville or Denver.

It costs more to do more. San Francisco does a lot of things that other consolidated cities push off onto the state or private companies. Speaking of world class education, City College is run by San Francisco. Denver's community college is run by the state and doesn't even have a dedicated campus. Muni was servicing well more than half a million trips daily and is funded in large part through the city budget. Denver's got a regional transit district funded independently and the whole region only sees about 200,000 riders.

I mean, look, I get that you're tap dancing around cutting social services. Who wants to pay to deal with homeless people or drug addicts? However, that's only part of the puzzle. All of the other cities (except for NY and DC) either push off the cost of the services San Francisco funds or they simply don't offer them at all.

Re: San Francisco braces for commercial real estate crash

#523

Post by acchow »

effingwewt wrote: post #478
onlyrealcuzzo wrote: post #340

Earlier quoted context omitted.

> Population and income shocks hit poor neighborhoods first Oakland has a Median HH Income of $80k - which is 20% higher than the US median HH income, and above median for California. Oakland as a whole is definitely not poor.

The problem with median income is income inequality far outpacing inflation. You can have most of a city making minimum wage (~30k pre-tax), but enough CEO's and mil/billionaires to completely skew the medium far higher than it should be. We need to look at income without the high outliers to get a real sense of the population. This is why the shocks always hit the poor first- they are the real representation of the…

> but enough CEO's and mil/billionaires to completely skew the medium far higher than it should be

Are you confusing median for arithmetic mean?

Median is meant to avoid the skew from the top 1% (or top 10% or 20% or whatever). Half the population is above the median and half below.

Re: San Francisco braces for commercial real estate crash

#524

Post by effingwewt »

onlyrealcuzzo wrote: post #509
effingwewt wrote: post #478

Earlier quoted context omitted.

The problem with median income is income inequality far outpacing inflation. You can have most of a city making minimum wage (~30k pre-tax), but enough CEO's and mil/billionaires to completely skew the medium far higher than it should be. We need to look at income without the high outliers to get a real sense of the population. This is why the shocks always hit the poor first- they are the real representation of the…

You can look at HH income by decile. SF: https://statisticalatlas.com/place/California/San-Francisco/... Oakland: https://statisticalatlas.com/place/California/Oakland/Househ... Considering rents - I would imagine you are FAR worse off in the bottom 20% in SF than Oakland. The income for the bottom 20% is 30% higher in SF. Median rent in SF is $4k. It's 42% higher than rent in Oakland at $2.8k

That's cool, much appreciated. I don't think any of them are livable on the minimum wage.

The charts are terrifying.

Add the highest gas and now electric prices in the US, California is headed for a reckoning.

I know myself and several associates are looking at getting out, with some of us looking at north Washington to be close to the Canadian border.

The great thing about skyrocketing everything in California on top of their already insane prices, is that it makes other places that may have seemed out of reach cheaper by comparison now.

It's pushed me personally to finally open another business. Not because I was ready- or even wanted to again, but because I'm tired of making others rich for nothing.

I've a friend who is maintenence for Marriott properties- they just had a housekeeper hit 20 years with the company and she is still making minimum wage (bonus- it's the 14/hr not 15/hr because Marriott properties consider each location a separate business, so they don't think they should have to oay the 15/hr for employers with more than 26 employees).

Not even a $.05 raise a year.

Really opened his eyes, he is now looking at taking a year off to enjoy himself since he doesn't have rent or anything.

Sad, truly.

Re: San Francisco braces for commercial real estate crash

#525

Post by colinmhayes »

Spivak wrote: post #111
onlyrealcuzzo wrote: post #20

Earlier quoted context omitted.

> The underlying issue is government preventing development of both houses and office space. We live in a democracy. The underlying problem of government is voters. Most home owners ( especially in The Bay) refuse to allow anyone to build anything because they see that as a threat to their home value.

Unless your plan is to undermine democracy I don't see how you can really fix this. With some exception, the people who decide the rules for what is and isn't allowed to be built in an area are the people who live there. I can be mad all I want that a city/township doesn't want to provide me the kind of housing I want but it would be wrong to force them.

DOesn't have to be this way. NIMBYism is a failure of hyperlocal politics where the population looks out for their own interests at the expense of everyone who wants to move there. It can be solved by higher level governments banning restrictive zoning. California has already begun that process with the mandatory duplex zoning.

Re: San Francisco braces for commercial real estate crash

#526

Post by vkou »

fakethenews2022 wrote: post #493
seanmcdirmid wrote: post #149

Earlier quoted context omitted.

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 wind…

My opinion is that the problem with SF isn’t as much housing. It is more with mental health and drug addiction. You do know where many immigrants live right? It isn’t so much on the streets. It is 16 packed into a single apartment. So the mechanisms people talk about already exist. It is that the homeless can’t work because of mental or social issues that compound with drug abuse. You need to fix the mental issues, s…

SROs were a housing solution for low-income people who were not functional[1] enough to live with roommates, but were functional enough to be able to live alone.

When we got rid of them, many of their former inhabitants ended up on the street.

[1] For an incredibly broad definition of 'not functional'.

Re: San Francisco braces for commercial real estate crash

#527

Post by acchow »

onlyrealcuzzo wrote: post #509
effingwewt wrote: post #478

Earlier quoted context omitted.

The problem with median income is income inequality far outpacing inflation. You can have most of a city making minimum wage (~30k pre-tax), but enough CEO's and mil/billionaires to completely skew the medium far higher than it should be. We need to look at income without the high outliers to get a real sense of the population. This is why the shocks always hit the poor first- they are the real representation of the…

You can look at HH income by decile. SF: https://statisticalatlas.com/place/California/San-Francisco/... Oakland: https://statisticalatlas.com/place/California/Oakland/Househ... Considering rents - I would imagine you are FAR worse off in the bottom 20% in SF than Oakland. The income for the bottom 20% is 30% higher in SF. Median rent in SF is $4k. It's 42% higher than rent in Oakland at $2.8k

You're comparing 20%ile incomes against 50%ile rents. I imagine SF 20%ile rent is not 42% higher than Oakland's 20%ile rent

Re: San Francisco braces for commercial real estate crash

#528

Post by Apocryphon »

spookthesunset wrote: post #503
Apocryphon wrote: post #198

Earlier quoted context omitted.

What if, as a compromise, the first step is we get rid of open offices. That would go a long way towards getting rid of a near-universal complaint (at least on HN) about the pre-disease status quo, which WFH has freed tech workers from for a while. > It's kinda funny to me how so many arguments for WFH are centered around the individuals themselves. Many of those individuals may have families who they want to be arou…

> And less work commuting is inherently better for the environment. Urban sprawl caused by everybody living in remote single family houses is bad for the environment too. I mean why would you live in a tiny apartment and zoom into work all day?

Are you claiming the last two years have greatly accelerated the construction of single-family homes over higher-density housing?

Plenty of people are going to work to Zoom into with others, so sounds like that suboptimal experience is happening both at home and in the office.

Re: San Francisco braces for commercial real estate crash

#529

Post by [deleted] »

vkou wrote: post #526
fakethenews2022 wrote: post #493

Earlier quoted context omitted.

My opinion is that the problem with SF isn’t as much housing. It is more with mental health and drug addiction. You do know where many immigrants live right? It isn’t so much on the streets. It is 16 packed into a single apartment. So the mechanisms people talk about already exist. It is that the homeless can’t work because of mental or social issues that compound with drug abuse. You need to fix the mental issues, s…

SROs were a housing solution for low-income people who were not functional[1] enough to live with roommates, but were functional enough to be able to live alone. When we got rid of them, many of their former inhabitants ended up on the street. [1] For an incredibly broad definition of 'not functional'.

[deleted]

Re: San Francisco braces for commercial real estate crash

#530

Post by pixl97 »

lotsofpulp wrote: post #447
bombcar wrote: post #327

Earlier quoted context omitted.

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?

The relevant metric is did a place become far more desirable to far more people. Which seems obvious when information becomes more and more available, culminating with instant transmission of pictures and videos and forums that create lists of the most scenic or best weather or best beaches, etc. This is also ignoring sheer population growth, and the unrivaled economic behemoths that have come out of California since…

Huge population growth without corresponding new home growth.
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