San Francisco's Rebound: Navigating Challenges Toward a Tech Renaissance
San Francisco is ripe for a rebound as there are clear sign the city has bottomed out. San Francisco is known as a boom or a bust city. Remember the phoenix is emblazoned on the flag of the city. When Covid hit the city those that were not committed to stay left in droves. A clear indication for me was at the beginning of Covid when I was driving through the financial district and South Beach, talk about post-apocalyptic. First were the renters in the larger condo complexes to leave. Those left for brighter futures away from the heavy lockdown, the small elevators, the gyms and amenities in these complexes that residences could not use. The work-from-home mentality was good for the time being but unfortunately it became a mainstay after the pandemic was over.
At the time business leaders were trying to find the right balance between productivity, happy employees and managing the company’s bottom line. Company founders, Silicon Valley figure heads, and tech executives also started to question S.F. as a basis for their headquarters and fled to Austin, Miami, Nashville and other less expensive areas of the county. Plus, some of them turned negative on the city from a safety perspective for their employees, can you blame them? Covid in the city was tough!
I was optimistic over a year ago that the city would bounce back quickly, just like the Wall Street financial companies pushing for a return to work in the office, however, sadly that didn’t materialize in San Francisco. The city quickly became a shell of itself, with small business owners taking the brunt of the impact especially down in the once thriving downtown.
Nowadays, we have a huge commercial real estate issue, with vacancies that are at record highs. The only way to help bring this down will be to create an environment where companies are enticed to bring back workers into the offices. Don’t forget the mountain of commercial debt that will be coming due over the next 18 months, that is a massive one that building owners will need to work through. With that said, I certainly think the FED is aware of this looming issue and the only way to create some breathing room will be to lower the FED rate and for commercial landlords to give incentives to businesses to lease up space.
After 4 years we are slowly seeing that the tech industry is making a return to the city. Today we see entrepreneurs, investors, company leaders coming back to San Francisco because we are at the forefront of the AI revolution that will be the next reincarnate of the city and help us get back on our feet. With much cheaper commercial leasing rates, this will be a boon for companies to keep their overhead low but also tap into the great talent pool that only San Francisco can offer. The best part, is AI companies want to do away with the work-from-home mentality. For me this is huge. Creative ideas do not come about from sitting in your jammies over a zoom. They come from interpersonal collaboration, coming up with ideas and white-boarding them out. Maybe I'm just an extrovert that likes to communicate with others, but how can a growing company thrive in a vacuum without the creative juices that come from an office. Believe me, it's not easy.
Companies such as OpenAI, Delphi, Y Combinator along with a host of other fast growing tech and AI companies are going to help turn the city back into its thriving mecca of innovation and capital flow. During the pandemic many people hoped those greener pastures would be it, but the simple truth is San Francisco is a world class city and will always keep that status. Sure, the city has issues, but there are not many U.S. cities with the grit, the diversity, and the flavor that only San Francisco can offer. Also, the talent pool of brilliant, motivated people is here in San Francisco. Those that stuck it out over the last few years will be reaping the benefits in the years to come.
Last to call out is the rampant crime and drugs, weak city policies and inept leaders have also helped to exacerbate the issues over the past number of years. This has to change, full stop! I know they are trying but the hammer needs to come down. When my more liberal friends say to me we need another Rudy Giuliani, (when we was mayor of N.Y., clearly not the wack that we have seen as of late), then you know the voters of the city are done, they have had enough of the B.S.. Personally I have witnessed a number of car break-ins, and amazed at the absolute inhumanity of seeing the addicts in the T.L.. Is it humane to let these people die on the street?
Clearly, the amount of money that California and S.F. has spent on homelessness has completely not worked. Now, I don’t have an answer to how to clean that up without taking away someone’s civil rights, but a good start would be to prosecute the drug dealers and the criminals! Geez, that would be a novel approach don’t you think? The drug addicts will not become clean when it’s too easy to score a $5 hit of fentanyl. Okay, I’m sorry for the rant, but crime and drugs are the one big holdback to creating a thriving city again where people feel safe.
My belief is Newsom wants to be president, and if that run for office is going to materialize, then S.F. needs to bounce back in a big way. It would be too easy for the GOP to simply take video of the streets of L.A., S.F. and Sac. and show that this will be coming to your hometown.
Remember when Newsom ran for mayor of the city? I certainly do and I remember him back then talking about how he will clean up the city of homelessness, that was 20 years ago. Good grief! Elections will be a deciding factor of a fully successful rebound, so vote for better outcomes and better people to run the city, from the mayor’s office to the Board of Stupidvisors, we need better elected officials for the people of San Francisco.
