How San Francisco Can Solve Its Empty Office Problem
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- เผยแพร่เมื่อ 4 มิ.ย. 2024
- San Francisco is facing its highest office vacancy rates in nearly 30 years. At the same time, the city is facing a housing crisis with the state demanding 82,000 new units of housing to be built by 2031. CNBC sits down with San Francisco Mayor London Breed to discuss how the city could tackle two of its biggest issues head-on. Plus, CNBC visits a building in the Civic Center neighborhood that undertook the biggest office-to-residential conversion in the city to date.
Chapters:
0:00 Intro
1:09 Empty offices
4:25 Office conversions
9:42 Overcoming hurdles
Produced by: Sydney Boyo
Additional Camera: Katie Brigham
Supervising Producer: Jeniece Pettitt
Editorial Support: Lindsey Jacobson
Graphics by: Christina Locopo
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How San Francisco Can Solve Its Empty Office Problem
I left sf when the home i wanted was 10k/month and i actually considered it, then i realized that would be insane.
that & plus California politicians are a bunch of fools
Sounds like you were in the luxury market
@@lewizzrocks probably around 2 million. Average home price there is alittle over a million. So it’s probably nicer than normal but not lux. Lux in San Francisco is way more than 2 million
That is an insane amount of money you have access to
@@lewizzrocks more like a 400k home in texas but in the middle of sf.
As an Ex-Detroiter, I can only laugh a mirthless laugh at what is occurring elsewhere in the country. What happened in 1970s Detroit should have been something for others to take as warning, not steps to emulate.
Detroit is the ideal leftist city. It’s got affordable housing, a large community of color, high taxes, lots of social programs and a monorail. Of course they want to emulate it
They gonna learn the hard way
Would the last person to leave Detroit, please turn out the lights!
@@jolaz69 bruh
Entirely different situation.
I love how nobody mentions how much of what Cesspool that place has become. Nobody wants to open a business in a failed community. It’s counterintuitive to think that the same people that got us here are going to deliver us from this tragedy as well.
Exactly
This CNBC piece exists in a dreamworld. All my friends who work at top companies in SF have people crapping on their doormats during the night.
That's what happens when government whores run the parasite state as their personal tax slave colony.. same shiz happening in Porkland Whoregone.
@@oooodles3 Yes, I noticed that no one challenged the assemblymember on being "one of the most vibrant downtowns in America."
Start up owner here. All my 16 employees agree to work from home. I like the idea so much I didn't renew out lease for our office on Brannan & 2nd. Currently I'm saving $30,000 a month.
Out of curiosity, do you plan on ever returning to brick and mortar?
@@shafeena7247 Yes, but not in San Francisco.
Are they going to make sure the new 82k homes are purchased by families and not big corporations that turn them into rental properties?
Only supply (can be changed) and demand (difficult to change) will resolve that long term.
Legislation can affect the demand but that's a slow slippery slope
Lol, what families can afford to buy with this high interest rate?
Sounds nice but would be anti open market
@@leeo268 Average 30 year mortgage rate over the past 50 years is 7.75%. Mortgage rates are not high historically. We just got used to insanely low mortgage rates, and home prices have been driven up likely 10%-20% too high just because of this.
I love working from home. No time wasting commutes. No speed traps, no accidents, no car breakdowns. Just turn all of the office spaces into condos and apartments.
Right. They get so much funding for housing homeless people, just convert it to housing homeless people. Don't make hardworking people commute. Damn.
Converting office space to residential is a herculean task. You basically have to gut the building and re-do all the plumbing, electric & HVAC. Hotels are better candidates for conversion.
@@obiwannut well they mentioned in the video that converting office space is cheaper than building a new residential building
It needs to be affordable housing. Not $2k for a studio. Like for normal people that give time from their life in exchange for money.
very difficult to convert commerical space to residential spaces. think of how many bathrooms are on one floor of a commercial building and how many are necessary per unit of residential space. you can't just add water and drainage pipes to a building without starting over from the bones.
I was born & raised in SF. Loved it until 2005. It has changed (not for the better). It mirrors Seattle's decline. $ 700 million budget deficit is criminally negligent. The Civic Center area is also. I know of a one recent hire to a very prominent SF Governmental position there (Aug. 2022)... a complete was of money at 180k/year salary.
Pre-pandemic, I live 9 miles from my work place. In order to be on time by 6:30am, I had to leave home (driving) by 5:45am taking the longer 14 miles route because the shorter route was already stop & go. It was worse in the afternoon going home or taking paratransit. Time wasted when technically I worked remote from the campus in our office space. Now entering my third year working from home, I would never consider commuting unless I was 1. working and living in the same city. 2. Access to either a bus line or BART. Changing these vacant office spaces or malls for housing is long overdue.
Frisco needs to embrace what it is: an open air homeless shelter. I'm just amazed vacancy isn't higher.
In my state office building today, there was a total of 7 people on the top 3 floors. This was a lower occupancy rate than most days but demonstrates the need to reevaluate office space need everywhere.
How about reevaluating gub'mint employment?
@Karl with a K I don't know how old you are, but it's obvious you weren't around when any of these things occurred. All your stats and dates here are incredibly inaccurate. You community college needs to fire that instructor.
Wait, maybe your comment was a joke of some sort. If so.....🤣
Every day we have a new problem. It's the new normal. At first we thought it was a crisis, now we know it's a new normal and we have to adapt. 2023 will be a year of severe economic pain all over the nation.. what steps can we take to generate more income during quantitative adjustment?I can't afford my hard-earned $180,000 savings to turn to dust
@Patricia Martin >>>Absolutely, Fiduciary-counselors have exclusive information and data paths that are not disclosed to the public.. I've made north of $260k in raw profits from just Q3 of 2022 under the guidance of my Fiduciary-counselor “SHARON LOUISE COUNT”. Am I selling? Absolutely not.. I am going to sit back and observe how this all plays out.
@Nick Sharon covers things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment risk. many things like that. Just take a look at her full name on the internet. She is well known so it shouldn't be hard to find her.
Yeah better hold on to the nest egg buddy!
@@johnwhittington1079 How is that greedy? That's no where *near* what one needs to retire on in the Bay Area.
Rule 1: dont write the amount of your life savings on the internet
The pandemic has forced employers to admit you don't have to go the office at 9am after spending 1 hour in traffic. Some change can be bad, some is good. The disappearance of office buildings along with shopping malls brings a smile to my face.
9am? Every office job I've had expected us there 8am-5pm. Some even had earlier hours (I'm on the west cost) where you had to be in at 7am.
@@M123Xoxo I am lucky enough to work for myself and had a home office for the past 25 years, but when I was asked to "have a meeting a 9 am" I would refuse and set it up for afternoon when the traffic was light. I know I am glad to be in the position to do that and a lot of people can't.
@@M123Xoxo I had one job where I worked 7am to 4pm in an office, it's brutal waking up at 4am everyday. I'm grateful to work remotely now!
what about the small businesses that rely on foot traffic from employees in office buildings? I feel bad for them who are the biggest losers of this
@@johnadams1281 what about them? What about the blacksmiths who relied on de horse draw carriages?
SF was such a beautiful city! But it has gone downhill! So expensive, drug, and homeless is out of control! I live in the east bay and I hate going into city now!
I see that you didn't mention poop and needles on the sidewalks. How come? Not a problem or you don't mind?
@@meesterp I really do mind! We went to China Town yesterday and saw all of it yesterday! I thought my comment encompasses all the poop and the needles!
@@SiaoFam2010 I understand and I feel bad for you. I figured that you really did care but I just wanted to bring it up for anybody that forgets. Whenever I run into somebody that's complaining about the user interface or some glitch in some of their software especially if it's in a product that I identify with the Tech Corridor in that general area I remind them that a lot of their products are built by people who pay top dollar rent to live where sidewalk poop and needles are common. It's remarkable.
I live in the DC area & work in downtown DC. Before the pandemic we had already had a hybrid telework system where we would go into the office three days a week & work from home two. After two years at home we are now only required to be in the office twice per pay period and productive has actually gone up. I realize that things can change but now that everyone knows that you don’t have to be in the office everyday & deal with nightmare commutes to get things done this is going to be the new normal.
same thing in Los Angeles. A relative works in a downtown LA bank and has to go in a few days a month - she can spend more time working since she's not commuting for 2-3 hours a day
That's been a myth for decades. Mostly repeated by traditional managers that rely on having a physical staff they can interrupt several times a day.
Of course productivity went up. However it was never about productivity. If that was the case, simply eliminating the number of unnecessary meetings would accomplish that goal. It's more about control than anything. 😶
Same thing in Salt Lake.
@@alphaomega1351 That`s exactly why I get annoyed with everyone talks about productivity going up. It was never about productivity being better or worse at the office.
Ones I srted working from home, there is no way I can go back to office work. I'm actually happy/contempt having to go to work and I'm in pajamas
I’m a recruiter in SF. I’m from California but moved away to Colorado and Texas for many years and now I’m back. (And yes, contrary to popular opinion, many of us come back.) I’ve always loved SF. Vacation in SF as a kid. Met my husband in CO and we vacationed in SF, and even came back an got engaged in SF. SF is a terrifyingly different place now, and even though most of my coworkers used to live in SF, no one will now. It is incredibly dangerous due to the extreme laws of the city that prevent police from doing their job. I’m addition to being incredibly unsafe, you will more than likely get your car windows smashed if you drive, and it is FILTHY!!! Feces everywhere, homeless shooting up drugs on the street, etc. People are moving out of SF in droves. That’s the problem not the housing…
I hope it gets better for real. I enjoyed my visit to the city of SF.
What has become San Francisco now is just heartbreaking. I was there in 2017 and it was such a great time. Beautiful place. I hope the city bounces back.
There's NO bounce left in SF
I enjoyed going to work for my first job many years ago. It was in New York City and I was young and found it exciting. I had a romantic image of working hard would lead to success. After 911 I was just never the same, and didn't like going to work. I would take a huge cut in pay in order to work from home (I save Many hours a week, not having to get up early to get ready/getting home later, dealing with traffic on the road, spending money on gas/mileage on car, or cost of public transit (the train costs over $5,000 a year to go to NYC where I live), dealing with the weather/especially ice in parking lot at office or going out to lunch, having to spend more money on haircuts/shaving over the course of a year, more money on clothes/shoes, the list goes on and on as to why I I don't like working in the office anymore). Avoiding all the nonsense from coworkers (the back stabbing, the interruptions, the fake team 'motivation' exercises). I don't plan on ever going back to work in an office. The salary would have to be huge, and I know I will never find a high paying job like that at my age.
Also the Nimbys. They refuse to allow more multi level units being built in their neighborhoods. Therefore, there's less land to build on and with scarcity comes higher prices around the city.
Agreed. Municipality need to change their zoning bylaws (e.g., fewer opinions from public (nimbys), and or deregulate the circulation process (planners should not be commenting on the aesthetics of buildings which add unecessary costs and time to project approvals).
@@thesofullsfamily3591 nimbys tend to be older s0 they have more free time to attend most public events regarding to zoning laws. They will fight tooth and nail to keep their property value as high as possible and to keep the "undesirable" people out (aka young people, etc.). Some of them have the money to do that so they donate to local politicians and they are way more involved in local politics. It will be hard.
Nimbys are no problem. There are 20 saleforce towers worth of space to live. Go outside and witness the apocalyptic human fecal strewn open sewer of San Francisco.
@@thesofullsfamily3591 the pay gap needs to change.
it's not just the NIMBY it's also the politicians who depend on these people to get elected. like every government official interviewed in this. amazing how this story only includes the government officials who got SF into this issue in the first place. curb your enthusiasm perfectly epitomizes the sadness of california municipal politicians. at least in texas the state politicians are part time.
I cant believe rent control is never mentioned once in this entire piece!
I agreed. Especially devoted teachers, I have all the respect to them. For me, they actually the real hero.
Solve the housing problem you'll solve the office problem. A short commute to the office is a blessing.
One thing the video doesn't mention is high taxes on butts in seats for tech companies in SF. A tech company gets a substantial savings from moving its office 20 min away to downtown Oakland or to San Jose
@@fark69 All the tech companies have realized that their people would rather work from home. There's no longer any reason for these "technology parks" in high tax, high price areas! People can work from ANYWHERE now! No commute. No wasting gas. And you can raise your kids or play with your pets while you work at home!
Be very scared when government gets into housing. Think.... Cabrini Greens: permanent malaise and crime. By that measure, Breed is part of the problem Personally, too much office space has been built downtown, and adding housing units cannot cure that: the office building is stuff of the last century, where a host of people needed to share materials & access filing cabinets.
Yep. I live in Hillsboro OR, and the Intel office I work at is a 5 minute drive (or 15 minute bike) down the road. I honestly prefer coming in rather than remote when it’s this close.
@@chantzgaming then you should never drive there
Something's missing from this conversion idea - the biggest reason there was a shortage of housing in SF is because being in or close to the city is where people wanted to be, because that's where the jobs were, because that's where high earners were commuting to. But if high earners are now working remote then the downtown businesses that catered to them are no longer necessary, the jobs dry up, and the need to live in the city is no longer there.
Exactly. This “problem” is only affecting wealthy people. So who the hell should even care?
@@CapnCody1622But it’s not just affecting wealthy people as this comment above stated when wealthy people stop commuting jobs that cater to those wealthy people become far and few. This will affect all of us, our economy is not going to survive, small businesses are rapidly dying, in fact it’s going to affect people who are less financially stable first. The economic crisis of this country is upon us once again it’s how the system is designed to protect ourselves we have to make sure our local communities economies are as stable as possible.
Wfh is so 2021. You must not be from around here or in Tech
No there's shortage of housing because of overly restrictive zoning. In 70% of SF it's illegal to build anything but a detached single family home. Not even a duplex or triplex
@@Patmorgan235Us yes! It's been like that for decades. They simply don't allow zoning for residential buildings despite having lots of land available.
There actually doing things such as this here in philly, except its developer led, as the council is like San Fran's, in that its anti-development, densifications etc. But theyve converted several buildings to residential, and alot of former warehouse buildings, office buildings, lab spaces etc are converted to apartments, but also offices are converting to lab as well
SO INSIGHTFUL THANK YOU!
I have been discussing this concept WELL before the pandemic.
I still live in SF, and thru pandemic... its a great opportunity to finally do
WHAT JUST NEEDS TO BE DONE
When I lived in the area, there was nowhere affordable to park in SF. BART doesn't reach everyone. Renting in SF means sharing with roommates to afford anything. Since I've left, my friends from healthcare, IT, and others moved to Oregon and Washington.
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The real risk in the Crypto market is the risk of not investing, not the risk of short term price volatility.
I have been investing in crypto but have had a bumpy ride. How can I reach your broker? will appreciate any tip or pointers
I once tried trading myself but made more losses than profits. wouldn't suggest it to anyone
Those rents are ridiculous. I live on 18 acres for half that (1.4k) and work from home. There is no way, no job, that would get me to move back to a big city. OE
Where do you live?
Most people didn't want to move to SF. They only did so because of work. Now the city needs to find competitive ways to keep more people from leaving.
How about cleaning up the streets and ensuring public safety for productive citizens and businesses alike? Instead, SF gets HARM which distributes drug paraphernalia and city officials who protect shoplifters.
People do want to live in the city, but it has so many problems that no one wants to bother and those that will literally can't afford it. The main issue with San Francisco is the over priced rent. The crime is a direct result of over priced housing. As people flood out of SF due to remote work, the city is gutted and all that's left in the city is criminals and opportunists. The people who genuinely love living in SF are forced to move due to the crime. Meanwhile, the real estate buyers and sellers continue to treat real estate as a stock market or bank and rent prices just go up and up and up. This bubble has not popped yet and will likely pop if no one wants to use these buildings for work or housing. People always think the city will 'come back" and people will flood into the city. They're not wrong, but the new remote work option has really screwed up this philosophy. I don't see how the cities are going to come back unless a large baby boom occurs and young people flood into the city for fun.
The issue is that anytime they build new apartments they charge market value or higher for the rents. This forces ALL of the rent in the area to go up and now everyone is competing for the same housing. If a one bedroom apartment is 3000 dollars then who the hell can possibly afford that? Or would want to pay that much when cheaper, older alternatives are available? Most people don't want to pay that (even wealthy professionals) and will look for the cheaper, older apartments. No one wants to pay 3000 for a one bedroom apartment and everyone is competing for the very few affordable units. Obviously, the wealthier applicants are going to get these apartments. Who can blame the landlords for wanting financially stable rentors?
Also, even if people wanted to pay 3000 dollars a month for a one bedroom apartment, they likely are not going to get the apartment. Most landlords require you make 3 times the rent at the least. That means that a single person is required to make 108,000 pre tax dollars in order to afford a one bedroom apartment in the city. That is roughly 30% of the population that's even eligible for these apartments in the first place. Most people are, by default, incapable of affording a one bedroom apartment in the city.
I'm a city persona and have lived in Boston for almost 7 years now. I see the same issue every time they build new apartments or try to gentrify a neighborhood in the Boston area. They are currently trying to gentrify my neighborhood, which one of the last affordable parts of Boston. My partner and I make just under 100,000 dollars combined and yet these units are just too damn expensive....
My personal view is that someone needs to be done to stabilize these out of control rents. People should not be allowed to use real estate or banks as a stock market.
@@felixthecat2786 I agree with most of the comment. But I see it as a supply and demand problem. There is not enough supply which drives rent high up. Supply can be improved by reducing building costs, restrictions and fees
@@felixthecat2786 fully agreed. 3000 for a single bedroom is so expensive
What people don’t want is more suburban hell holes that condemn workers to hours of driving every day living life without walking anywhere, which is the only alternative to living in SF. Why don’t we build new cities anymore? This isn’t just a SF problem. No cities are building housing that’s affordable and walkable. All housing that offers car-free living is priced at luxury prices nobody can afford.
I've worked in tech my whole life and when the latest tech boom came into San Francisco (rather than Silicon Valley where it belonged) the tech people chased out the Arts, and all the great bars, nightlife and beautiful old buildings that gave The City it's value were ripped out. Now it's overrun by people staring at their phone screens, and they don't care about what San Francisco was, just what new shiny tech thing they can look at. It lost it's soul, the reason it was so desirable. Many people like myself just simply left and will never go back. The City government is corrupt beyond imagination - the budget for San Francisco - 49 square miles and under a million people is about twice the budget for the entire state of Nevada.
Maybe, just maybe in another two generations it can evolve into a civil and functioning city again.
San Francisco lost its night life long before the tech boom. It happened around 1980 when yuppies came in. They worked 70 hours a week and only went out on Saturday night - if that.
Don't worry, it seems the migration has shifted to Texas. So now they'll get to experience what we've had to go through over the last 4 decades.
Your focus is on the newcomers but that's the wrong focus. If there wasn't rampant NIMBYism in SF and they allowed enough housing to locate new tech workers without displacing lower earning artists etc none of the things you claimed would have happened. The city didn't sell its soul, the city's own residents got greedy and to protect their home values stopped the city from growing like a normal city needs to and now what they get in return is a dystopia where only $150k/yr earning tech workers can afford to live there
I used to enjoy going to the office downtown. Not anymore though. The crime, traffic, homelessness, litter, feces on the streets and restaurant closures make me want to avoid the financial district now. I love working from home and do not want to go back to the office now. The mayor created a huge problem and cannot fix it. This is why companies like Oracle left. More companies will be leaving for less expensive locations that offer tax advantages.
Love coming to this channel and learning! You’re the man!
I have confidence that Mayor London Breed will do the right thing. Hahahaha lol
I don't miss the pungent odor of men who refuse the courtesy flush after lunch each day. I definitely don't miss the silent keyboards of adjacent eavesdroppers everyday. I also don't miss the morning commute or race for a close parking space everyday. I sure don't miss the overpriced cafeteria food that made me feel financially irresponsible, sleepy and grumpy from 2 to 4 each day. Then there's the commute after work, which almost always incentivized an immediate detour to happy hour EVERYDAY 💸Thank you Jesus for this remote job
And if I feel like it, I can take a 59 minute nap at lunchtime.
lol, that's some picture you painted for us.
That AAA office to residential building was magnificent! They created a masterpiece out of a 1970's brutal architect eyesore.
Yeah, although, the rooftop views at that place are pretty great.
70s brutalism is misunderstood. It will soon get the respect mid century modern sees now.
@@Humandriver5280 brutalism is a globalists wet dream and needs to be abolished
@@Humandriver5280 Yeah, they said the same thing about medieval Gothic ;-)
@@Humandriver5280No it won't. Brutalism looks hideous and no one will miss it.
People invested in home offices - and found that was a big improvement in their productivity and ability to achieve more. Home offices can be very expensive to setup - but once you get one, it is VERY nice.
The big companies in SF have shifted to the hotel plan. You don't even have an assigned table, much less a cube.
Notice that this is mostly only a "problem" in cities that are propped up by a massive overvalued real estate bubble.
I live in the Bay area all my life and you couldn't pay me to live in San Francisco and right now as we speak you can't pay me to work in San Francisco the commute is ridiculous I have to pay for parking the gas is high you don't know if your car will be broken into you don't know if you have a car when you get off work.
Let's keep voting for Blue 🔵🔵 so we can keep making life harder.
you're not wrong
Whats your name?
take bart or caltrain instead its cheaper and easier
@@user-pg4jw2qd3h because you have children
Also the homeless issue in fidi is very present especially during days when weather is bad. Really sad. Definitely should be a key concern over empty offices
Add to that the decay from wildlife(bugs, rodents, and birds) and humidity... vacancy is downright hazardous.
The offices can be turned into apartments
@Lzzzzzzzzz they won't do it, though, because some property management team won't make billions doing that. It's easier to charge businesses crazy amounts of money. When you rent to regular people it can end up costing the management company. It's greed plain and simple.
@@CLRY198586 with the rise of work from home will they have a choice
@@CLRY198586 the office building and land cost a lot . The problem is that housing rent per sq ft is lower than office rent per sq ft
Plus the builing will have to be converted or rebuilt (at least the interior) , so it will cost a lot for little or no gains
I started working 99% from home (an occasional office meeting) in 2004, and honestly I was far more productive... Plus it was easy for me to justify working a few extra hours late at night, etc, to get things done off hours (IT) since I was saving 1-1/2hrs per day commute - and reality, why would I drive 45min to the office to work on servers in main datacenters 800 & 1200 miles away (not counting in the UK & several other countries)? Besides which, in the office, I was constantly interrupted - more so than from home - and honestly it's easy to show 4 hours of 20minute stints constantly interrupted all day is not the same productivity wise as a full 4 hours, or even two 2hr stints uninterrupted.
I like what she said about “affordable housing sounds good” but in practice is very hard when you apply for it. She is absolutely correct. San Francisco is not affordable for lower middle class people, however, they also don’t qualify for affordable housing so they must move to the East Bay.
From what the mayor was saying it seems like they have a major fee problem, will she change and address this, I doubt it! They also need to address the serious crime and theft issues, San Francisco has a lot of vacant store fronts due to the extreme shop lifting taking place, it has become impossible to be profitable for many retailers.
That is what I understood as well...they want affordable housing yet load the project up with fees.
It's not in her power to change or address that. She's the mayor not the emperor.
@@outerspaceisalie She directs the DA (even the new one) to not pursue prosecuting most repeat offenders. Criminal revolving door. SF is the mecca of criminal "reform" - you need to commit murder to even end up with the possibility of arrest there.
@@outerspaceisalie I don't know the details on prosecuting crime in SF, but if they're not...then they should start. Give small and large business the opportunity to invest in the area.
Robbery
I've lived in SF for over 20 years. It's a really lovely place to live in most respects. It seems like many of these landlords are getting some sweet tax write offs or something to keep places endlessly vacant. If they lowered the prices, it would bring a whole new generation of mom and pop places and young startups that would be wonderful for the local residents and very welcome. I think converting some of these big buildings into housing is also a great idea.
Why I would suggest doubling the property taxes on rental properties left empty over 60% of the time. Use electric meter and water usage as proof. Use the extra funds to purchase homes and house teachers, students, Dr, firefighter, vets, etc first. tax would be exempt to people who own less then 3 homes.
I’m not sure about SF specifically but in NY people can’t lower rents because then the value of the property goes down, the LTV ratio goes up on the mortgage and then the bank requires extra collateral. I imagine it’s something similar here
You must be delusional, unless you like stepping on poop and needles throughout the City. California especially San Francisco is anti business and pro criminals.
@@ashvinnihalani what is "LTV" mean?
Only if they will eliminate the stupid rent control laws. It's all about present and future numbers. Landlords worry about renting to someone today at a low price and then got locked in that low price till that person dies (or they further modify the law to allow rental inheritance). There are many rentals in SF and New York where tenants are only paying a few hundreds per month. No one will be crying for the landlord in those cases. IMHO, instead of rent control. Let it be a free market but instead tax the landlords for their income and then have government subsided programs. Oh wait, that already exist, it's call Section 8. China and the Soviet Union has proven that centralized planning economy won't work. Yet California is happy to repeat the experiment. Let's see how that goes.
This has become an issue of unused space in many cities around the world and what’s ironic is that they are all happening in cities with outrageous rents and home prices due to their desirability in their respective countries.
I saw my old office building where I use to have to report to. It was a great experience 2 years before covid. Market st miss it sometimes.
I miss the energy that SF downtown/financial district used to have before COVID. I work for the passenger ferry boat system and a lot of our passengers are office commuters.
yeah the energy of a city is hard to quantify but its easy to feel. I miss it too but a lot of cities in the US have had the energy sucked out of them with the pandi
There was no need to go to the circus when you could just eat your lunch sitting on a curb on Market street and people-watch. My kids have no idea what that was like--now it's just zombies on a street with no traffic.
Imagine the energy downtown would have if people could actually live there instead of just commuting in and out every day.
I miss it so much too, although let's be honest - it has been on a decline for at least 5-8 years before the lockdowns.
That was not energy, that was corruption
Apparently there is a correlation between vacant office buildings and human feces on the sidewalk. WHO WOULDA THUNK????
That was there before the offices were empty.
Drove around downtown SF yesterday, its pretty disgusting theres homeless on every block shooting meth, defecating peeing. Outdoor parking lots has so much broken glass we couldn’t leave the car anywhere. Went up to Coit Tower where a black Mercedes pulled up to a lady and snatched her purse. We left utterly disgusted.
Let the homeless set up their tents in those empty offices.
I mean...why not?
I didn't see corporations complaint about exorbitant amount of rent they have charged people over all those years. It is not a common person's problem, it is the corporate problem. I'm actually happy that their greed has come to an end.
If corporations make so much extra money, start one yourself.
Then, two things will happen.
1. You will find out just how hard it is to make a business profitable.
2. You can be the first one to do it "the right way"
After that, tell the rest of us how it's done.
@@ersinc9080 I would have started one too had I gotten a filthy inheritance.
Point is, Bruce: these corporations charge insanely high rents because they know the supply is very limited and there’re people willing to pay these prices. The only way to avoid them from charging insane amounts of money on rent is not controlling what they charge. If you do that, you’ll basically create a terrible environment and no one is going to invest in the city. The way is: bringing more units to the market.
@@ersinc9080 you have zero clue how power dynamics work. Bless your little heart buddy.
@Ryan my resume includes:
State police
Vice President Zoning Board of Appeals
Vice president planning commission.
Pastor of an urban church
Firearms instructor
Founder and president of an Engineering Firm.
I assure you I have seen more "power dynamics" than most.
In my downtown Manhattan area, several office to residential conversions have been taking place. 180 Water Street stands at 29 stories with 574 units. The joint building next door at 160 Water Street is currently being transformed into 586 market rate rental apartments. Right across the street from both of these buildings is the former AIG headquarters on 175 Water that's currently sitting in development limbo, will be converted into residential too.
sad. Sad!
@@brianlacroix822 how tf is that sad? That's what needed to happen
@@certifiedhater4414 it is solving the symptoms not the problem
just goes to show that the folks in NYC are not overly bright
Yes more housing for the rich just what america needs!
I live in the Bay Area and I avoid SF as much as possible, EVERYTHING is overpriced, traffic is a headache, parking a headache, public paying parking is way too expensive, homelessness/car break in’s are a everyday thing…
There is plenty of office space, but the sidewalks are full of tents, used needles and poop. People leave the trunks of their cars open so thieves can see there isn't anything to steal
I'm honestly surprised to hear London Breed talking about the importance of removing the red tape. SF has way too much red tape, and the vast majority of city politicians will not lean in any favor of reducing red tape. Unfortunately not gonna happen. I'm surprised developers still bother with the hassle of renting in SF.
Real estate prices are too high and the market is saying either go down in price or perish.
This is the first time a San Francisco mayor has been willing to say that all of the affordable housing programs are a negative. San Francisco has such a housing crises if they removed fees and restriction tons so much housing would become economically viable.
What?!? I can’t believe people don’t want to step over feces, dodge syringes and get their car broken into just to go to the office🤣
exactly!
It's more about the time to get there...SF is a very traffic congested city during the workdays which can make commuting 2-3x longer let alone there is only really BART as the alternative to that.
@@CannabisTechLife Is it because there's tents pitched in the middle of the road?
1. Provide programs to help the destitute get back on their feet instead of giving them handouts.
2. Remove the bureaucracy in building multi-family home/apartments.
3. Convert office buildings into affordable living spaces.
4. Profit???
I am an artist. Midcentury San Francisco 1945 - 1990 was affordable for artists. So there was a surge of creativity. Today most artists can’t afford to live in San Francisco.
The San Francisco Art Institute (SFAI) is closed after more than a century and a half. The city should revive that institution as well.
>empty offices
>lack of affordable housing
Do we really need to spell this out?
In CA and FL, even a door on a small wooden backyard shed takes an architect and 5 lawyers, especially in Charlotte county, FL.
There's a good reason why we have traditionally separated commercial building use from residential building use. And then mixing "affordable housing" with inner city commercial use just seems like a recipe for seeing commercial tenants move out
Just looked it up, and a 439 square foot studio apartment at 100 van ness costs between $2900-3400 monthly without parking. A 2 bedroom unit starts at $5000. The developer states that construction costs have gone up significantly since he converted this building from office to residential in 2015. So how is this trend going to produce affordable housing?
It won't until a recession hits and all those construction firms drop their wages and get desperate or go under. THEN construction costs will drop. They have a long way to go down from here.
@@r2dad282 considering the massive shortage of skilled workers in the trades and it is only going to get worse with all the Boomers retiring now, I don't see wages going down in this sector at all.
@@_morgoth_ So housing will continue to be massively unaffordable? This is going to be a very long decade, at this rate.
@@r2dad282 there are other pressures than just worker wages. higher interest rates are here to stay for a while to battle inflation which is also here to stay. that will put downward pressure on housing prices to where people can afford them. of course, every city/region will behave differently. CA has great weather, so there is always going to be a desire for people to live here. So prices will always be higher than elsewhere. But if a lot of the high paid tech workers are working remotely, the number of people competing for expensive housing will go down and should lower prices a little too.
It's all Democrat talks. It's a single party state. Don't take it seriously.
It means you are charging too much for the rent/lease.
Lower the price and fill the slots. Is it better to get 100% filled at a rate of 50% price?
Or
20% filled at a rate of 100% current price?
Investors are happy to leave them empty. They do not care.
@@maynardewm Clearly they aren't or there wouldn't have been a national news story on how to get more people into SF office buildings 😂😂
The problem is you can't lower the rate of one major sector of the economy(real estate prices) without the others. Everything has to become less expensive.
It would basically require San Fran to become a literal socialist city with the gov't controlling the economy...not only is that likely illegal, it also doesn't work.
@@maynardewm Lazy comment.
Loans have to be repaid.
Empty office space is a major cost.
Investors are never happy to have vacant property.
The regulations in California make it impossible to do that, and a landlord or developer make a profit
My 439 ft2 outside a city in the Midwest is $700 with parking and water +heating. I couldn't move to huge cities unless my income stream was affordable to make mortgage/rent.
All the rich and poor live in cities. The rich are from all over the world... how does one compete with a rich billionaire from overseas for housing.
The laws need to change... specifically tax codes. Real estate being an investment is the issue.
Id like to see a study of converting a semi-modern office building into condos from a cost perspective. You may keep the shell of the structure but there would not be much else. All of the plumbing and HVAC would need to be replaced and that is very expensive. Also, if you wanted certain amenities like a pool or clubhouse there would need to be space and design for that. A better use for these buildings would be a jail. Think about it, place some bars in the doors and windows, guard station in the hall, bunks and tables in the open space, and pretty much good to go.
Solve the homeless problem
Solving it isn't fiscally smart. It will never happen.
Too much money to be made with it; won't happen
Homelessness is already solved. The issue is that non-profits are banking from it with annual funds.
Why else do you think they're enabling the fentanyl crisis?
They started the video saying that they had high occupancy before the pandemic. Do you think homeless people started living on the streets in SF in 2020?
It’s not just building more housing that’s the problem. You’ve gotta stop investors from buying up everything and leaving it vacant. At only 10k units a year, investors could easily just buy all of that up.
This is a myth. Yes there are people who invest in SF real estate, but no more so than NYC or any other desirable community. If we build enough housing, prices will stabilize regardless of such investments. In fact, the more prices stabilize, the less incentive to invest in SF real estate which became attractive because investors saw the policies prevented most new development and thus prices would remain high.
@@andrewlayton6728 ban the sale of residential units to be used for short term rentals. Ban foreign nationals from buying housing real estate (they use it to launder and park money here).
There’s 20% of the world’s population that can afford to own every house/apartment. It doesn’t matter if they build more homes if the average person can’t afford to rent and certainly not buy a place! The Chinese and Russians are buying everything! It’s sad
SF has lots of very expensive, empty apartments. Because of rent control, it makes more financial sense to keep the unit vacant and wait for the market to catch up again then to rent it out at sub-market and be stuck in a contract that will last the life of the tenant with no way of getting them out. My solution, eliminate rent control and replace it with a vacancy tax.
@@andrewlayton6728 it’s not investors… it’s foreign billionaires who buy the buildings as a store of value in case their own governments seize their assets. It’s more trouble having people in the buildings than leaving them vacant. They also need to keep the prices artificially high so they can sell high. The percentage of US real estate that is owned by foreign nationals is staggering.. it should be illegal. These buildings should be inhabited and used by people that actually live here… not owned by some corrupt Chinese billionaire.
I really like the way this reporter did her story. Great job and thanks!
There are 3 main reasons people/businesses are fleeing SF. It's quite simple but bureaucrats don't want to admit or solve the problems: Homeless, Taxes, and regulations. You can't solve any of the issues discussed in this video until you get a handle on those three things. For example, no business or family is going to buy extremely expensive property or pay high rents when they have to step over homeless living in their doorways or having drug users and their trash and needles outside on the sidewalk. Businesses are fleeing because every year, SF imposes new and more outrageous taxes while at the same time squandering what they already bring in. The third part is the enormous hurdles one has to go through to even operate a business (large, small, or family) in the city. I tried once and just gave up because the red tape, hoops, and costs were just not worth it compared to going outside SF. These people aren't stupid, they know this stuff, but are unwilling to address or change it and just pay lip service for votes.
Vancouver Canada is the most left-wing jurisdiction in all of Canada and it is also the most thriving and livable downtown in all of Canada. It's not perfect, they still have some problems. But you pretending that regulation or taxes or left wing politics are the problem is comical and reveals your bias.
@@Ryan-093 You left out the homeless problem. How convenient.
@jeffw1267 That is why I said it isn't perfect. Vancouver has a homeless problem just like Calgary, the most conservative city in Canada, also has a homeless problem. The homeless problem everywhere never gets addressed mostly due to classist bias. The people in power are almost always part of the upper classes and the homeless are at the bottom so they are always disregarded by those in power. However, the left wing is far more likely to care about the homeless than the right wing.
@@Ryan-093 Caring alone can't solve the homeless problems. If that were the case SF wouldn't be in this situation. Virtue signaling never solved a single problem. Practical solutions solve problems, but that won't make upper class white people feel good about themselves so they refuse to vote for practical solutions.
I lived there in the 80''s it was a beautiful and fun place to live and work. Considering the condition it is in now I won't even visit.
I wonder when SF office vacancy rate is so high, does it translate directly into "smooth" traffic (aka no bumper-to-bumper traffic) during rush hours - in particular on the Golden Gate Bridge?
It's not a question of what needs to be done, its a question of will it happen?
I don't know if office conversions are the answer to San Fran's housing problem, but they either need to lure businesses back into the city or increase the housing density or that budget hole is going to persist for a long time. NIMBYs want to keep their land values high, but they will be in for a rude awakening when their ridiculous housing restrictions handicap the city budget and force the city into a steady decline.
Wait until they complain about property taxes. They will either pay up or leave.
Let us be frank. They do not want poor people. Particulary poor brown and black people.
Even to this day. If a decent brown and black people move into a prodominately white area. The area is marked down. LOL, yet governments will work to screw them over in property taxes.
San Francisco needs to completely fail for anyone to tackle the wage gap.
well for the last 10 years all ive seen on tv and everywhere was "USE YOUR HOME TO BUILD WEALTH" and thats pretty much been it for ANYONE that isnt already rich to gain any sort of any large amount of wealth so everyone has been buying homes on debt they cant afford. so wait for these interest rate rises to hit their pocketbooks and these NIMBYS will all of a sudden be singing a different tune.
eliminating land use regulations is the answer, but remember this is cnbc so they consult government officials first and eliminating land use = less government.
There will not be many rude awakenings for that crowd. They'll be dead.
Interesting that people see the empty office as a stand alone problem. I think the city should address homeless problem, high crime rate, and then help employees to get back to office.
Bingo - people don't want to live in San Francisco and deal with the homeless problem and the state of California's passive approach to the problem.
Ding, ding, ding. Sadly, few in SF can see this clearly.
All these things are interrelated. Improving the supply of housing should reduce rent. Crime and homelessness is related to the gap in income. You can try to move them around and arrest them but at the end of the day they will still cost a lot of tax payer money. Very hard problem to tackle.
@@rewazzu Yeah, your logic fails.
Top down approaches like the way you see the issue, are exactly why things do not work.
@@bobSeigar why
I used to be against working from home, but now I find it's just more productive working from home comparing to going into the office. Though I do believe we should go in once per week to have face to face meetings.
This is a bad idea. Office buildings do not make good housing. Their floorplan and plumbing is not conducive to residential purposes, and their environmental and electrical systems are not built in such a way as to permit separate utility metering by tenants. Retrofitting these structures into high-rise apartments can be prohibitively expensive, and result in units that are very difficult to sell. Another problem is that there really aren't any appropriate supporting businesses to make a walkable neighborhood, nor is there adequate parking or transit to make such a lifestyle viable.
And then there's the uncertainty that even housing will be in such high demand in San Francisco. With such a high telecommute rate, tech workers can live almost anywhere. Why would they choose such a painfully overpriced market as San Francisco?
Empty office for some reason more of a priority over crime and homelessness? These people just don’t want to take responsibility for the policies they vote into action. You have empty offices because of the latter issues by the way.
And who exactly do you think they should vote in to solve this issue mainly caused by American Capitalism?
@@PoolGyall5441 Accualy what caused this was the shift to China's Mixed market of Social-Capitalism . As you see it's not working?? Regulated Laissez-Faire always works but during the Carter years and deeper into the cold war we went to a Neoliberal Centralized Economy . Which is almost the same as Social-Capitalism . Corporations get huge handouts. Under regulated Laissez-Faire this never would have happened. The Real Estate owners of those Buildings that are empty get write offs- . They basically get the Money of they were full so they don't care. That's Neo-liberalism Social-Capitalism. Were Corporations get paid no matter what. Socialism for Corporations and slave economy for you and me.
@@roboparks When I refer to American capitalism im really just referring to Americas full throttle dependency on corporations. Look at the rust belt now that car manufacturing has declined and now they can’t afford services the federal government should be paying for. Also it’s weird that you mention China because they are not even a true democracy and their economy is still heavily government controlled, although ironically before covid they were the fastest growing economy on earth with their quality of life being on par and sometimes better than Americans in some areas. The current best system is Social democracy where the government doesn’t rely on corporations to do everything and every country it’s active in is working fine, with them at times not even caring about entering recession because they can still maintain their quality of life barely interrupted. America currently has no significant party that wants this system with the closest being a corner of democrats like Bernie Sanders democratic socialism which is different from social democracy.
@@roboparks and I do agree social democracy still allows corporations to control a lot about people’s lives and get government assistance in doing so but it’s a much better system than having corporations and organizations literally pave our roads and control the life saving service everyone needs at-least once in their life so it’s definitely a small leap forward no matter how you look at it.
The entire state of California, especially this city has legislated itself to a grinding halt in terms of productivity, efficiency. Ridiculous.
Yet people there keep voting for the status quo. 🤡🤡🤡
Yet its the top state in terms of GDP by miles. 🤡
@@tde2019 status quo is conservatism so you're saying California is not liberal enough which I agree with
@Cristian also top state in:
-outward migration
-homelessness
-welfare recipients
California's legacy industries like agriculture and natural resources are in massive decline.
@@dutchybag a higher population "overall" will lead to being top contributors in those areas you just listed. You should look into the "percentage" of a population instead to judge with those areas. Once you look those statistics up, you will see Republican states take the top spots in welfare recipients.
I can't believe any business would think of doing business there. I live nearby and the everytime I go there it's full of homeless, graffiti, and dirty streets. The property owners and businesses pay huge taxes to support the drug addicts.
With the current problem around the world today I think it's best everyone invest more in digital asset than Saving in banks, anyone you can manage don't live a life with no investment . Just my thoughts
Things you can invest In
👇👇
Real estate
Stock
Crypto
Bonds
@@terfastarik9698 Stocks, bitcoin are falling and bond yields are rising, but markets still don't seem convinced, the Federal Reserve will pursue plans to keep increasing interest rates until inflation is under control. I'm still at a crossroads deciding if to liquidate my $117k stock portfolio, what's the best way to take advantage of this bear market?
@@simonethomas9393 you just spoke my mind, all stocks are crashing, bitcoin and others are falling, how can one take advantage of you this time
@@simonethomas9393 Focus on two key objectives. First, stay protected by learning when to sell stocks to cut losses and capture profits. Second, prepare to profit when the market turns around.I recommend you seek the guidance a broker or financial advisor.
@@simonethomas9393 Typically a financial adviser will just put you into standard/tried and true products that are mostly just index funds and ETFs. This has been a down year to invest. If I were you I'd be investing broadly into the S&P 500 and broader index funds, that way you're instantly diversified and you don't have to worry about it too much. Over time, your investment shall grow, just don't get too focused on the short-term.
Cost to convert and Zoning restrictions make this tough to implement.
That's the biggest problem with California - regulation
The second tallest office building in Downtown Norfolk, Virginia was just converted from office to housing. Throughout the city, empty older building like historic warehouses are being converted to housing. In the 1970's, there was a huge exodus from the city. The trend now is to live closer to work or be near cultural spaces. Empty lots are getting new larger homes in some areas and others are getting new 4 story apartment buildings.
I lived in the Icon, it was great!
San Francisco and San Jose created the software to work from home. We are never coming back! Thank you Microsoft Teams, Zendesk, Workday, SalesForce, Google, Apple, Adobe, Oracle, IBM, SAP and Amazon....We love being home!!!
Just hope they make these micro apartments affordable. For my own part, I'm going the tiny home route. Makes the most sense to me.
If they'd lower the cost per Sqft to make it accessible to new businesses and startups they'd fill the space, as of now, they make nothing, if they lower the price they'll make something long-term.
Consider this: the value of offices in cities has collapsed now that employers are mostly accepting the Work at Home conversion. What value is there to an office in the city? You can have a virtual office for cheap, accept mail in a box, and tech is sufficient to provide excellent communication over long distances.
Even if it was half the price I wouldn't bother having an office in the first place if I don't need it. Retail it's dying so the retail space isn't as valuable. What is the actual value return of a physical office location to modern small businesses?
that's a slow process. all the current owners have to default and lose the properties and they'll be resold at a new, lower market price.
Converting to residential will be expensive but I think it’s a good choice for the city. The city has gone so downhill recently it’s so sad. Always a chance to turn it around though!
I doubt it. With a single party system it's a matter of when not ifs.
If I lived in SF I’d be thinking “I want a new mayor!”
We visited SF and it's absolutely amazing. I would live there IF I could afford it, which I cannot.
This whole video has me cracking up. Remotely of course 😂😂😂
CA fails to address the very basic reason why they oppose more affordable housing. People use their house as a source of income. If more affordable modern housing comes in, then their homes value plummets. If they oppose it, then the value of their property goes up. This will lead to a major failure in the market at some point, but that point isn't visible at the moment.
Yup too expensive this is what happens
And under California's Prop 13, their property taxes don't go up in proportion to the increase in their home value. So for a homeowner, blocking housing gets them free money without making them contribute any more to funding our city services. Older homeowners freeload, younger renters and prospective homebuyers suffer.
The laws are set up exactly how the current home owners want them. Under the current circumstances, this won't last
Housing as an investment should be limited. Housing prices rising to insane levels will make buying a house impossible and at the end everybody will loose
That and also they don’t want “certain” people moving in. That’s why they especially oppose affordable housing.
I think half the problem is that these property companies can write off the empty buildings as a loss. Therefore, leaving no incentive to fill it by lowering the rent, since they have other properties making money. If there is a way to fix that or lessen how much you can write off for vacant buildings, then we might see prices go down. But I think a lot of these companies are content with taking the loss for tax write off purposes. I hope SF can cut out the notoriously bad red tape and stupid activists blocking every single housing project and get their city back on track.
As a native of SF Bay Area, I can tell you quality of life in San Francisco is terrible nowadays! People live here because 1) their jobs are here and commute was horrible, and 2) it was a livable city. Now with anchoring tech and financial jobs are remote or WFH, and crime is through the roof, why the heck would people want to live here? Most people I know that still live in SF because they can't afford to move and take a hit on their home devaluation or that they are in rent-controlled units. Step 1 to this problem is stop the liberal policies that are making the city unsafe and make the city livable again... and then the jobs and office occupants will return.
SF residents: So there’s tons of empty rooms?
SF landlords: Yes! Please rent them!
SF residents: For an affordable price?
SF landlords: For your firstborn child.
Literally. These SF landlords need to face the music and get real.
Did you know, you can't live in the office building?
Lol, nice drone shot of the tent city by Civic Center @0:30. That's why I'm moving out of SF in January.
How did you even see that?
Collapse of the high costs of working in SF. It is time we start decentralizing work places.
It is expensive. Companies pay 6000-10000 a year for office space per employee not counting common shared area. This is a waste of money.
Love how Haney says SF is most vibrant over the shot of "tent city" at City Hall! What a politician.
Solve crime issues and homeless issues first, TBH many developing countries have less such issues compared to SF...
I though offices were a thing of the past in 2003. I don't even know why they keep building more office space
I'm sorry. But I don't believe there was any mention of the massive crime problem facing the city today. Yes, the Pandemic hit the office market very hard. However, the crime situation is also discouraging businesses from staying in the city's core. Not one mention of fixing the crime problem. Amazing.
Homeless camps, feces everywhere. And they are surprised that no one wants to be there?
I am glad it is happening...they raised the prices abnormally high for a common man to live. I got two offers for 150k job in SFO and So Cal, I chose So Cal because 150k is not good enough for a family SFO...
I live in S.F., but I don't know who is to blame for the amount of dysfunction here. Near me, at the prime location of Castro and Market, there's an old Pottery Barn store that's sat empty for twenty years. This would make a great hostel and bring many tourists to the area, but nothing gets done. At the corner of Haight and Stanyan, near GG park, they tore down a McDonald's to build affordable housing many years ago. Now, it's just an empty, fenced off lot.
It's literally the leadership. It's not a hard problem to identify.
Was supposed to be a 7 story mixed size bldg with 2 and 3 bdrm units. Bldg height, inside parking, and realistic transit factors stalled the project. Units were going to be AMI and some BMR which were going still be expensive for SF. First time buyer with strict seller limits were offered. Could not flip the unit easily...
Too much regulations and hurdles to jump just to get any business done. It's not just SF, this business unfriendly big government beauracracy is killing and driving businesses out.