What If San Francisco Does Not Recover?

Authored by Rich Cibotti via The Epoch Times,

San Francisco looks worse now than I’ve ever seen it. Like any major city, San Francisco had bad areas before 2020 – those rough areas you knew to avoid – but you could go anywhere else, basically unmolested. Today is something entirely different.

The streets are dirty. Homeless encampments, trash, and excrement can be found all over. Car break-ins are so frequent that it has basically become a non-government-imposed tax for people who come here. Of course, some areas are much worse than others, but almost all areas of the city suffer from this decay, and it is appalling.

Every year, the city seems to find new ways to dig deeper and deeper toward ruin. But what happens to San Francisco if it really does not recover? What if the financial woes, homeless encampments, rising crime, and dwindling police force are the new normal for this once great city?

Whether or not politicians want to admit it, San Francisco is in a very precarious situation. Big Tech is gone, and it’s not coming back. Of course, some companies will keep a building here or there, but tech has realized they can work anywhere. Why would anyone want to put up with onerous San Francisco regulations and taxes? Once you pay this high cost of entry, you still must deal with squalid conditions just to get to work. Instead, why not stay in your pajamas with a nice shirt or top on and fire up the Wi-Fi at home?

The pandemic caused many offices to transition into working from home or some form of hybrid model. Now that many companies and their workers realize working from home can be effective, why wouldn’t these companies keep it permanently? Why continue to pay a premium for San Francisco office space?

If you go downtown during the day, you can see the difference. The office buildings are empty. Vehicle and pedestrian traffic are not half of what they used to be. But what other effect does that have on the city?

Well, there are a lot of small businesses in the ground floors of those large buildings. These businesses survive by servicing all the workers commuting into those buildings. As they start to realize the workers aren’t coming back, they are forced to accept the new reality and close. Those businesses closing will be the start of the economic death spiral.

Closed businesses put up boards to secure the storefronts. The closed-up shops lead to more homeless encampments taking over the area. Urban blight and homeless encampments don’t exactly inspire people to risk their savings, open a business, and try to clean up the area. This only exacerbates the problem and makes it harder and harder to get out of the abyss. The encampments will spread and cover the entire area like a virus.

Tourism Is the City’s Lifeblood

In addition to those issues, the pandemic wrecked tourism. San Francisco’s local economy survives on tourism. In 2019, tourists spent an estimated $10.3 billion in the city. But today, some hotels are still closed or have been converted into homeless housing. The hotels that have reopened are not near their full occupancy. Add that to the constant national stories of San Francisco’s urban decay, and why would anybody want to travel here?

The tourists who are brave enough to come, get to experience all of the things that are not printed on postcards. Things like open drug dealing on the street, open drug use, homeless encampments, filthy streets covered in human feces, and the high cost of just about everything.

Even if tourists get through all that, they may get to become one of the many victims of our famous auto burglaries, in which case they get to replace a rental car window and all of their luggage. Not exactly what someone would want to pay a premium to experience on a vacation.

Who Will Pay the City’s Bills?

San Francisco had tech and tourism. It does not have some other large industry that pays for city services. Also, San Francisco’s bloated budget is over $13 billion a year for a city of fewer than 900,000 people. What happens when the money dries up?

It already happened last year, until the federal government bailed out the city. As reported in the San Francisco Chronicle in March 2021, the $1.9 trillion COVID relief bill paid off San Francisco’s deficit, allowing the city to avoid “painful cuts” to services.

The article states that the bill “will erase the majority of San Francisco’s projected $650 million budget deficit over the next two years.”

So instead of ushering in any sort of fiscal responsibility, the balance sheet goes to back to zero and everything is business as usual.

“We still have a problem,” Jeff Cretan, the mayor’s spokesman, said in the article. “We just don’t have a problem right now.”

Jeff Cretan is right. What happens when Uncle Joe and company are not there to pay our bills? Running the city like a first-year college student who maxed out their first credit card is not sustainable. Mom and Dad won’t always be there to pay off the bill. Eventually Peter Pan has to grow up.

Hopefully the city finds a golden goose to lay golden eggs, because without that, there will need to be severe cuts in services the city prides itself on. Add that to the police staffing crisis, and a “city in decline” may be the softest way to state it.

San Francisco is in dire straits. Whether the powers that be want to admit it or not, her best days may be behind her. People have asked me, “Do you really think it could all fall apart?”

I’ll leave you with the same parting thought I give them:

When looking at San Francisco right now, does our situation look more like Detroit when the auto industry left?
Or is it more like when New York City cleaned it up in the late 90s?