San Francisco, the cultural, commercial, and financial heart of Northern California, has long been seen as a shining beacon of innovation, creativity, and opportunity. It’s home to the Golden Gate Bridge, the vibrant LGBTQ+ community, and a booming tech industry that draws talent from across the globe.
However, recent years have brought forth a narrative that’s far less flattering, encapsulated in the term “San Francisco Doom Loop.”
This blog post aims to unpack the essence of this phrase, scrutinize the evidence, and ultimately, determine whether the so-called Doom Loop is a reality or an exaggeration.
What is the “San Francisco Doom Loop”?
The term “Doom Loop” typically refers to a situation where a series of negative events reinforce each other, leading to a downward spiral.
In the context of San Francisco, the term is often used to describe an interplay of socio-economic factors including high costs of living, rising crime rates, growing income inequality, and significant homelessness issues.
The loop suggests that these problems exacerbate each other, creating a self-perpetuating cycle of decline that will ultimately lead to the city’s downfall. It’s a grim picture, but is it a correct one?
To assess the reality of the San Francisco Doom Loop, we must examine the key issues it encompasses. Let’s break down these factors:
- Declining Job and Property Market/Everyone Leaving: A common argument is that SF real estate is crashing and people are fleeing the city.
- Rising Crime Rates: Media reports often cite growing crime rates in San Francisco. While some crime rates have increased, it is important to note that crime trends can be complex and can fluctuate based on a range of factors. Therefore, a comprehensive and nuanced view is essential.
- Homelessness: San Francisco’s homeless population is a visible issue. The city has one of the highest rates of homelessness in the U.S. This crisis is multifaceted, fueled by factors like housing affordability, mental health issues, and substance abuse.
The Doom Loop in Perspective; What the Data Says
How does this narrative stand up to reality?
The Job Market: Signs of Strength
Data from the U.S. Bureau of Labor Statistics (BLS) as of April 2023 indicates a strong job market in San Francisco, with around 559,000 people employed in the city, an increase of about 8,000 from the same month in 2022, and not far from the 563,000 employed in 2019, despite a population decline of about 70,000 from 2019 to 20221.
Job growth in the San Francisco metropolitan division, which includes Redwood City and South San Francisco, surpassed pre-pandemic levels with 1,204,900 jobs in April 2023, compared to 1,174,700 in April 20191.
Though the tech sector has seen significant layoffs with over 140,000 jobs cut by U.S.-based tech companies so far in 2023, the number of tech jobs in San Francisco has actually grown since the start of the pandemic1.
The city’s unemployment rate stands at 2.7%, below average for the last several decades though slightly higher than the 2% from April 20191.
The Housing Market: A Cooling Trend
The Bay Area real estate market is in a transitional phase, with housing prices beginning to stabilize and even decline in some areas. The median existing home price for the Bay Area as of October 2022 was $1,250,000, a decline of 2% year-over-year2. However, this varies by county, with some areas seeing price increases while others are experiencing decreases2.
Inventory remains low, with 2.4 months of unsold inventory in the Bay Area as of October 2022, contributing to a seller-friendly market despite the cooling trend2. A decrease in new listings and a 37.3% year-over-year decrease in existing home sales in 2022 indicates that supply is not keeping up with demand2.
The luxury home and condominium sectors are seeing lower prices first, with high-end home sales significantly decreasing and condos likely to sell at or below list price2.
So housing has declined in value somewhat. But if anything, this might make San Francisco more affordable and livable in the long run, even if it hurts property owners in the short term. And overall, it’s happening more with high-end residential and commercial properties (like high-profile closures of expensive properties in Union Square), rather than being spread through the city.
Crime and Homelessness in San Francisco
The “doom loop” theory also alludes to an increase in crime rates and homelessness, which are key factors impacting the quality of life in any city. Let’s delve into the situation in San Francisco.
San Francisco’s homeless population has shown a significant increase over the past 10 years, making it one of the cities with the highest rates of homelessness in the United States. In the last two years, though, the rate actually decreased.
In many cases, homelessness is simply more visible in San Francisco than in other cities. As the SF Chronicle points out, New York has a higher homeless rate than San Francisco, but fewer unsheltered people. That means their problem is just as acute–it’s just less visible.
In 2023, the commercial burglary rate in San Francisco increased substantially compared to the previous year. However, violent crime remains way down versus previous periods.
Overall, violent crime in San Francisco is far lower than in most large cities. Although businesses are hurting, and the property crime issues need to be fixed, the city remains largely safe for visitors and residents.
That meshes with data The Bay Area Telegraph gathered in a recent survey. We found that Bay Area residents feel property crime is a major issue, but most said that they feel safe walking around the city.
Petty crime and drug use is often is more visible in SF, too. That means if you walk around the city, you’re more likely to see something unsettling or unsavory than in many major American cities. But as the data shows, you’re actually statistically far less likely to become a crime victim yourself than in many places.
Again, it’s more an issue of visibility. If drug use is happening on San Francisco’s streets, you’re more likely to see photos of it in news reports, even if it happens at comparable or greater rates behind closed doors in other cities.
The San Francisco Doom Loop is a provocative narrative that draws attention to the real and pressing challenges that the city faces.
However, to declare the city as locked in an inescapable cycle of decline might be a hyperbolic oversimplification. It’s essential to recognize the city’s resilience and ongoing efforts to address its problems.
Indeed, the future of San Francisco will be shaped not by a predetermined doom loop, but by the collective actions of its policymakers, businesses, and residents. It’s a story that’s still being written, demanding more than just passive observers, but active participants in creating a better future for the city.