Hip or Declining?

My wife and I always enjoy visiting San Francisco. It is one of our favorite cities but after our recent visit and interviews with several local residents, I can understand why it is losing population.

My wife and I walked from the farmers market on the waterfront to Union Square, a distance of about ten blocks. If all we did was look up as we walked, San Francisco is a marvelous city with wonderful buildings, great views and tremendous ambiance. However, both of us commented in our walk that we encountered over 20 panhandlers, more than we would have found in many 3rd world countries. The streets were dirty and there was a smell of urine in several spots.

We learned later that San Francisco incentivated the homeless, offering them $490/month, until about a year ago. Today there are still 6,200 homeless, down from over 10,000 last year.

There is an exodus of the middle class from “hip cities” like San Francisco, because of an extremely high cost of living and a deteriorating quality of life. People with children are fleeing places like San Francisco. The city is losing 1,000+ school age children/year and only 9.4% of its population are school age (ages 5-17) compared to the national average of 17.9%.

Normal people can’t afford to live in the city. Adam Dauny, a cab driver told me, “The cheapest new 2 bedroom condo, without any parking privileges, is over $900,000.” It is no wonder that 61.8% of residents rent compared to a national average or 30.8%.

From 2000 to 2004, San Francisco lost almost 40,000 in population, falling from 786,733 to 739,426, a loss of 6%. After visiting the city and talking with a number of residents, I can understand why there is an outflow. I’m convinced that more will follow.