It’s not like warning bells aren’t ringing all over. Between February and August, the labor force in San Francisco’s metro area shrank by 4.5 percent. During the same period, consumer spending fell by 11 percent — nearly twice Chicago’s 6 percent decline. While the rest of the country showed signs of recovery in September, San Francisco added all of 800 jobs to a workforce of more than 1 million.
Between the economic downturn and the option to work remotely, the city is starting to resemble a ghost town. There are twice as many homes for sale in San Francisco at present compared to a year ago. Asking prices for rental units have fallen 23 percent. In the past three months, San Francisco’s office building vacancy rate jumped from 9.9 percent to 14.1 percent.
None of this has stopped the city from advancing social-engineering fantasies that may send progressives into fits of excitement but could send everyone else to — well, Texas.
On Election Day, San Francisco voters approved Proposition L, known as the “Overpaid Executive Tax.” The measure applies a surcharge on annual business taxes, starting at 0.1 percent and peaking at 0.6 percent, to any company doing business in San Francisco whose top executive earns over 100 times more than the company’s “typical local worker.” For reference, Gap — which is based in San Francisco — pays its chief executive more than 1,000 times the median employee salary.
The measure’s backers didn’t tell voters that when Portland, Ore., tried this — with much steeper rates — corporations didn’t limit CEO pay and made median payments of just $3,900. Nor did they explain that companies can avoid the hit by replacing low-wage workers with contractors, costing them health-care coverage and other benefits. Or that some might take their business — and related jobs — out of the city entirely.
It’s sort of like Proposition I, which voters also approved on Election Day. The law doubles — and in some cases more than doubles — the city’s 2.75 percent transfer tax on real-estate sales above $10 million. The measure’s champions sold it as a way to stick it to San Francisco’s billionaire class — but the results could include depressed real estate sales, meaning lower tax revenue, as well as costs passed on to the little guy in the form of higher rents.
While voters embraced laws to kill jobs and make San Francisco more expensive, authorities have been busy imposing regulations to sap the joy out of city living.
In November, the San Francisco Board of Supervisors voted unanimously to ban natural gas in new buildings — 54,000 homes and 32 million square feet of commercial space under development. Goodbye, gas fireplaces for those chilly San Francisco nights. Hello, electric stoves — which foodies and restaurateurs may associate more with Mike and Carol Brady’s suburban split-level than a mansion atop Nancy Pelosi’s Pacific Heights. Assuming, that is, you can even get electricity in the land of rolling blackouts.
It’s not just gourmets feeling the squeeze. Cowering before the anti-car Bicycle Coalition, city leaders implemented the Slow Streets Program — which closed off crucial transportation arteries to vehicle traffic, spawning gridlock. San Franciscans are even at risk of losing cherished pleasures in the privacy of their own homes: The Board of Supervisors is considering a $1,000 fine for individuals caught smoking (or vaping) tobacco or cannabis in apartment buildings with three or more units.
Higher taxes. Fewer jobs. Steeper rents. More traffic. Substandard home appliances. No weed. This is how San Francisco plans to get its groove back?
One could argue that San Franciscans have only themselves to blame, given their high pain tolerance and addiction to tax increases. Then again, the city needs money: San Francisco is looking at a $1.8 billion deficit over the next two years, and Propositions L and I will allegedly generate between $256 million and $336 million per year.
But that assumes businesses and individuals stay. Companies such as Twitter and Slack have already announced they will allow remote work indefinitely, and others, like Google, plan to give employees more flexibility in where they live. The city, in other words, is at a “crossroads” — waiting to see whether workers, tourists and real estate bidding wars return.
Unless city leaders and voters change their priorities, though, they may soon find that a lot of their neighbors have left their hearts in San Francisco — along with a forwarding address.