News & Research Archive

How to Address San Francisco's Growing Pains

May 21, 2015

 

San FranciscoSan Francisco was once again included in fDi Intelligence's American Cities of the Future list. The biennial list, published by a magazine owned by the Financial Times, highlights the top destinations for foreign direct investment. San Francisco followed the Big Apple in second place. San Francisco has received a lot of attention from this study, highlighting that the core strength for our city is unsurprisingly our technology development. There are many who see San Francisco eventually becoming the "New York City of the west coast." However, there are many native San Franciscans, including myself, who have already felt this transition.

San Francisco's growing pains are very apparent today. Traffic congestion throughout the city is a real issue, housing shortages and the cost of living increases are serious, and gentrification along with the changing of our diversity is persistent.

Supervisor Campos is pulling the plug on a new development in the Mission District in order to slow down gentrification. The reality is that this will only increase our cost of living by reducing potential housing stock. The old adage, "You can't stop progress" rings true for San Francisco. We have to realize that the city's boom means more people wanting to move here and live where the action is.

So how can we address our growing pains?

1) Housing: Right now our pipeline to create new housing is inflamed. However, we have a major bottleneck because San Francisco has not addressed the need to hire enough new city planners and checkers to address the huge backlog of permits, which would help address the housing shortage sooner.

With each new housing project completed, the city benefits from new property tax revenue. City Hall must figure out a way to man the permit desks with more people based upon added revenue we will be seeing.

2) Retail: There is a great need for more retail opportunities in order to better serve our growing population. Much like housing permits, retail permits are bogged down at the city's permit department. Both local mom and pop stores and large retail chains face the same problems– higher costs to open due to delays in securing the necessary permits to complete build outs faster.

3) Transportation: The plan to create a second BART tunnel is a great, long-term strategy. However, there is not enough money and planning such a development is years in the making.

What we can do is add more buses and MUNI trains. Again, we have additional revenue from property tax increases due to new development. We could spend that money to increase the efficiency of our current system and add more public transportation options such as buses and trains. We may also look to private enterprise ideas such as private buses and more ride-sharing concepts, such as Chariot.

4) Education: We need to look into our local community colleges and make sure that we are investing enough money and resources into math and sciences. We need to encourage our students to enter these programs and eventually enter these career paths. Math and sciences have seen a 25 percent decline in student enrollment over the last five years, even though programmers and engineers make up the largest growth sectors and have the best paying jobs. Yet, our local community colleges are failing to deliver enough future applicants for these high-paying and highly valued careers. For years, community colleges supported classes that helped students find jobs in the trades. We need to shift our efforts back to this education model.

We can address our growing pains with effective government leadership in place who not only react to the city's needs, but also proactively addresses new solutions. I appreciate Supervisor Campos' concerns, but he is trying to put brakes to a fast moving freight train. Instead, he could look at the areas of improvements listed above and figure out better ways to address these problems to find solutions. "Just say no" is not the right answer.

Photo Credit: ShutterRunner via Compfight cc

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Written by: Hans Hansson

E-mail: hans@starboardnet.com


Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 30 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email hans@starboardnet.com or call him at (415) 765-6897. You may also check out his website, www.commercialspacefinder.com.

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