In the past few years, the viral narrative around San Francisco's downfall has contained a mix of wild exaggeration from outsiders as well as legitimate reporting on the city's complex economic turmoil. On the propaganda side, you can find right-wing commentary along the lines of:
"San Francisco is sunk in a rancid drug-ravaged pit of human misery," conservative columnist David Marcus wrote last year.
"It's worse than a slum," Donald Trump said in 2020.
"San Francisco is like a failed state," says the conspiracy-prone podcaster Joe Rogan.
And while there is some truth to the story of the lefty hippie Mecca collapsing in on itself, the economic reality on the ground is far more nuanced, as my colleague Samantha Delouya writes.
In many ways, the city's downtown is in bad shape. Stores that were once packed are now boarded up. The unhoused population has surged. Property crimes and retail thefts have risen.
But the city isn't only its downtown. Sources (mostly my friends, people on Twitter X) tell me there are still plenty of beautiful parks, sourdough peddlers, aging flower children and bright-eyed tech workers clad head to toe in Patagonia.
The reasons for San Francisco's economic troubles are, like any city, complicated and deeply rooted. But the pandemic was the force that tipped the city into crisis mode.
Tech exodus
In 2020, San Francisco's tech-focused white-collar workers were among the first to embrace remote work. Now, those workers haven't returned at the same levels as other major cities. Many won't be coming back: San Francisco County's population declined by more than 60,000 people, or more than 7%, from 2020 to 2022, according to US Census estimates.
Turns out, when you can work from anywhere, you often opt for a place where there's less traffic and entire homes that cost less than a million bucks...
Unaffordable housing
The median sale price of a home in San Francisco is currently $1.32 million —and that's actually down 10% from a year ago. That puts the typical home in SF at a price point 214% higher than the national average.
The lack of affordable housing, a problem long before the pandemic, has made the city's homelessness problem worse. Some 30% of the nation's unhoused population live in California, and most attribute their situations to the high cost of housing in the state, according to the results of a University of California, San Francisco survey released in June.
Property crimes
As downtown SF has emptied over the past three years, property crimes and retail thefts have risen, according to San Francisco Police Department data.
Even though violent crime has remained relatively low compared with other major cities in the United States, businesses that have fled have cited worker and customer safety concerns among their reasons for closing shop.
Tourism slowdown
This is one that often gets overlooked...
Travel to San Francisco hasn't returned to pre-pandemic levels, and tourism revenue isn't expected to reach 2019 levels until next year.
Tourism from Asia, in particular, has been an integral part of San Francisco's overall economy. Even during the pandemic years, travelers from Asia outspent those from the Americas and Europe, according to data compiled by Oxford Economics.
But SF is still missing out on its revenue from visitors from China, where strict zero-Covid policies prevented people from traveling.
Breaking the doom loop
In a statement to CNN, San Francisco Mayor London Breed's office said that although the city is in recovery mode, the mayor is encouraged by the "significant progress" the city has made to revitalize downtown.
Breed hopes to increase office attendance by "identifying and recruiting strategic sectors that support San Francisco's resilience," including AI companies. She also plans to expand the police force and amend city codes to convert some commercial buildings into housing.
Despite the high-profile shutdown of Nordstrom's flagship store and other shopping destinations downtown, not all businesses are fleeing.
Chicago-based hotel investor Oxford Capital Group said Tuesday that it was ready to open four renovated and rebranded downtown SF hotels.
"We are sanguine about the long-term prospects of downtown San Francisco, which has proven resilient over a number of economic cycles and challenges," said Sarang Peruri, the chief operating officer of Oxford Capital Group.
Similarly, Ikea this month opened a three-level, 52,000-square-foot store just a few blocks from Union Square.
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