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SAN FRANCISCO (CBS SF/AP) — With new cases of COVID-19 plunging, San Francisco health officials announced that the city was moving into the state’s Red Tier, allowing struggling restaurants to offer indoor dining for the first time in months.

At a Tuesday news conference, Mayor London Breed called the reopenings the “beginning of a great time for San Francisco.”

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“We’re here, we are in the Red,” Breed said. “Now I know being in the Red doesn’t sound that great but it is great compared to where we were…It means this is just the beginning. This is the beginning of a new day for San Francisco.”

She said that the city within the next three weeks would move into the even more lenient Orange Tier. Breed also promised that San Francisco’s iconic cable cars would return to operation before the end of the year.

With some exceptions, San Francisco’s reopenings are in alignment with the activities allowed by the state. Napa County and Santa Clara County also announced Tuesday that they were moving into the Red Tier.

Additionally, San Francisco will now allow groups of up to six people from three households to eat together outdoors and the city has lifted the 10 p.m. curfew.

Businesses can begin with indoor reopenings at 8 a.m. Several restaurants including Waterbar and EPIC Steak on San Francisco’s Embarcadero have already announced they would be open for indoor dining on Wednesday.

For counties in the Red Tier, indoor restaurant dining rooms and movie theaters can reopen at 25% capacity or up to 100 people, whichever is fewer. Gyms and dance and yoga studios can open at 10% capacity. Museums, zoos and aquariums can open indoor activities at 25% capacity.

The last time the city moved into the Red Tier was in the fall. Then came the post-Thanksgiving surge of new cases, forcing many reopened businesses to shut down indoor operations in December, January and February.

“Nearly a year after our shelter in place order, thanks to our collective actions and commitment to following the health guidelines, we have come through our worst surge since the beginning of the pandemic,” said Dr. Grant Colfax, the city’s health director. “We know how to slow the spread and save lives.”

The move to the Red Tier comes as the CDC is asking states not to reopen. Recent health metrics in San Francisco have allowed the county to move into the less restrictive tier, but nationwide, the clear downward trajectory in case rates and COVID deaths in recent weeks has plateaued.

That is prompting the Centers for Disease Control and Prevention to issue a warning not to loosen restrictions yet.

The concern is another surge. Health experts are warning states not to ease restrictions too much over the possibility cases could rise again due to variants, wiping out the gains the gains that have been made.

“San Francisco was the first major city to shut down, and we’ve been extremely conservative about every decision we make,” said Breed.

Scientists say one of the COVID-19 variants, B.1.1.7. is about 50% more transmissible.

“”Nationally, cases have started to rise slightly. This is why we need to double down on prevention measures,” Colfax admitted. “There is a growing presence of more variants in our region.”

Outdoor gatherings can continue past 10 p.m. Indoor dining will limit tables to one household with a maximum of 4 people. If dining outdoors in San Francisco, 6 people are allowed from 3 households in a group.

“Be aware there are going to be different restrictions for indoor and outdoors,” said Laurie Thomas of the Golden Gate Restaurant Association.

“We have to balance the risk of reopening and where we are with the fact we’ve been in this for a year. I think we are in a place where we can engage safely in some of these activities,” said Colfax.

Several counties in the San Francisco Bay Area issued a strict-stay-at-home order nearly a year ago, in advance of a statewide shutdown. Public health officials for the most part have been more cautious than peers in southern California and in other states about reopening the economy.

Business activity in San Francisco shut down in early December after several Bay Area counties pre-emptively went into lockdown as the positivity rate surged and the rate of cases climbed. Outdoor dining, outdoor museums and some indoor and outdoor personal services reopened in late January after the state called off its regional stay-home order.

The economic toll has been grim, with rents for apartments and offices plummeting as downtown eateries that once fed throngs of hungry office-workers and tourists at lunch struggled.

A majority of California’s 58 counties remain in the state’s most restricted Purple Tier of a four-tier color-coded system, although San Francisco, Napa and Santa Clara counties moved into the less restrictive Red Tier on Tuesday.

READ MORE: Bay Area COVID-19 Roundup: San Francisco, Santa Clara, Napa Counties In The Red; Indoor Dining Resumes; Newsom Visits Reopened Palo Alto School

The following activities may be reopened:

Indoor dining and food courts
Indoor dining at restaurants, bars serving meals, cafes and coffee shops, hotels, museums, and food courts in shopping malls may open at up to the lesser of 25% maximum occupancy or 100 people. San Francisco will limit indoor dining tables to members of one household up to a maximum of four people and require indoor service to end by 10:00pm.

Indoor and outdoor personal services
Personal services that require mask removal can take place outdoors and the service provider wears an N95 or other well-fitted mask. Personal services that require mask removal can occur indoors if the service is provided at least 6 feet away from others and preferably in a separate room and the service provider wears an N95 or other well-fitted mask.

Indoor fitness
Gyms and climbing walls may reopen indoors at up to 10% capacity.
Gentle indoor fitness classes such as stretching, yoga and meditation may operate within indoor fitness guidelines. Indoor locker rooms and showers remain closed at this time. Indoor saunas, steam rooms and hot tubs remain closed per State rules.

Indoor museums, zoos, and aquariums
Indoor museums, zoos and aquariums can open at up to 25% capacity with an approved safety plan.

Indoor funerals
Funerals may take place indoors up to up to 25% capacity. Simultaneous indoor and outdoor services may not take place.

Indoor political demonstrations
Political demonstrations may take place indoors up to 25% of maximum capacity.

Schools
Middle schools and high schools that had not yet reopened may resume reopening for in-person instruction with a COVID-19 Safety Plan approved by the Health Officer. Elementary schools may continue to reopen, as has been the case.

Outdoor stand-alone amusement rides
Outdoor stand-alone amusement rides like Ferris wheels, carousels, and train rides will open. Only one household can inhabit each separate space, such as a Ferris wheel cabin or train car.

Indoor movie theaters
Indoor movie theaters may open at up to the lesser of 25% or 100 people capacity, but without food or beverage concessions. If there are multiple auditoriums, each auditorium is limited to the lesser of 25% or 100 people provided the complex as a whole does not exceed 25% capacity.

Indoor pools
Indoor swimming pools may open up to 25% capacity but only for basic swimming and drowning-prevention classes for children. Outdoor pools remain open for broader uses.

The following activities may expand their operating capacity:

Outdoor gatherings
Small outdoor gatherings of up to 12 people from three households can continue. Outdoor gatherings that involve food and drink may expand to up to six people from three households.

Outdoor dining
Outdoor dining will expand from members of two households up to six people, to members of three households up to six people per table, and will remove the requirement that service end by10:00 pm.

Additionally, for those businesses that had constructed barriers between tables in lieu of distancing before December 6, those barriers can remain. New barriers intended to replace the required 6 feet of distancing may not be constructed.

Hotels and other lodging facilities
Hotels and lodging facilities can open dining and fitness facilities in accordance with guidelines. Though San Francisco’s travel quarantine for travelers from outside the Bay Area has lifted, the State’s travel advisory requiring that non-essential travelers from out of state or beyond 120 miles quarantine for 10 days remains.

Drive-in venues
Live entertainment with up to six performers can open in a drive in context of up to 100 cars, with one household per car. In-person ordering or pick up of concessions may open if in a designated area with customer metering and eating or drinking in vehicles only.

Real estate
Real estate showings must occur virtually or, if a virtual viewing is not feasible, by appointment without limits to the number of people viewing or showing the property. Open houses are not permitted at this time.

Outdoor youth programs and out of school time programs
Out of school time programs for school-aged children and youth such as Community Hubs, youth sports, and afterschool programs, may increase outdoor cohorts to 25 children or youth. Youth may only participate in one program at a time.

Higher education and adult education
In-person classes at institutes of higher education, vocational education and adult education can take place outdoors up to 25 students. If specialized equipment is required, classes can take place indoors at 25% capacity or if for a core essential service, without a capacity limit as long as 6-foot physical distancing can be maintained. No indoor lecture classes may take place.

Outdoor recreation
Doubles tennis and doubles pickleball can resume with members of up to four households. Up to 12 people from three households may pursue outdoor low, moderate, or high contact sports. If part of a supervised youth or adult league or club, outdoor moderate and high contact sports such as softball, field hockey, and gymnastics, as well as football, basketball, and soccer may resume for stable groups of up to 25 per team, following DPH safety precautions.

Competitions may only occur in county or with teams from adjacent counties (Marin, San Mateo, and Alameda) in an equal or less restrictive tier. Consistent with State guidelines, travel for out-of-state tournaments may not take place.

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Kenny Choi contributed to this story.

Article source: https://sanfrancisco.cbslocal.com/2021/03/02/covid-19-san-francisco-red-tier-reopening-restaurants/

Even on a foggy San Francisco morning, the view from Scott Simmons’ 25th-floor apartment stretches from downtown to Golden Gate Park. The home of the 42-year-old tech worker is also spacious for a one-bedroom, featuring hardwood floors, new appliances and granite countertops.

A year ago, when he was sharing a two-bedroom place with his brother, Simmons couldn’t have imagined living in an apartment like this one. But last fall, when Simmons heard about big rent declines during the COVID-19 pandemic, he discovered he could get way more for his money in the heart of San Francisco than in the neighborhood where he was doubling up in Oakland.

“It’s bananas,” Simmons said. “I never thought I was going to be someone who was going to have a nice view. It’s a luxury.”

Since March, when government stay-at-home orders began emptying downtowns of workers and shoppers, the average rent for a one-bedroom apartment in San Francisco has dropped nearly 30%, the largest decrease in the country. The tech capital has hundreds of thousands of employees well positioned to work remotely, and they have. Outside the city.

The pandemic’s toll on San Francisco has created a scenario long unthinkable in the Bay Area. For some renters — mostly middle- and upper-income earners — it’s now more affordable to live in the famously expensive city than in its bluer-collar neighbor, Oakland.

“If you would have told 15-year-old me that 15, 16 years down the road that Oakland was going to become more expensive it would have been literally shocking,” said Amar Saini, 32, an Oakland native who moved into a 12-story apartment building near the Bay Bridge this month to save money. “I just don’t believe it.”

San Francisco, even as rents decrease, remains the nation’s costliest big city. A one-bedroom apartment still typically rents for almost $2,000 a month, putting it far out of reach for many residents. But the steep drop in prices has surprised real estate watchers for both its depth and scale. Even landlords in tony neighborhoods like Pacific Heights and Russian Hill, who once were charging $4,000 a month for one-bedroom apartments, are lowering their prices and offering incentives like months of free rent to get tenants in the door.

The rent declines are a direct result of the pandemic. More than half the city’s employees are able to work remotely, according to the Bay Area Council Economic Institute, and tech firms like Twitter and Salesforce — the city’s largest private employer with more than 9,000 workers — have said employees can stay away from the office even after the pandemic ends.

Additionally, the pandemic has closed restaurants, bars and museums, while putting a premium on locales that offer people more space to work or their kids to attend school virtually. For San Francisco, a dense city that long has had some of the nation’s highest rents, all the changes have taken away many of the amenities that make city life vibrant. Data from the U.S. Postal Service show that 56,000 more people requested address changes out of San Francisco in 2020 than those moving in.

“Every man, woman and their dog is saying there’s no point living in downtown San Francisco if you’re not going into work,” said Nicholas Bloom, an economics professor at Stanford University who is studying remote work during the pandemic.

The stillness of once-bustling San Francisco neighborhoods can be jarring. In Union Square on a recent weekday, a handful of masked pedestrians and homeless residents roamed silently amid hotel lobbies, restaurants and luxury stores largely empty of customers. Closed businesses along Market Street, one of the city’s main commercial boulevards, were boarded up with plywood. Shops that remained open had signs displaying reduced hours.

A year ago, only about 1% of the units managed by members of the San Francisco Apartment Assn., the city’s largest landlord group, were vacant, said Janan New, its executive director. Now, she said, nearly a quarter are empty.

At a new, upscale apartment building across from Twitter’s headquarters on Market Street, the sales office is offering up to three months of free rent. If that’s not enough incentive, new arrivals can also get a year of free cable and internet, several personal training and massage sessions or have the landlord donate $1,000 to a local charity on the tenant’s behalf.

Such efforts to attract middle- and upper-income residents reflect the pandemic’s uneven economic impact. White-collar employees who are able to work from home have been far less affected than lower-income workers in service and hospitality industries.

Maria Marin and her husband, Francisco Rodriguez, were once able to crowd into a one-bedroom apartment near Bayview with their three young daughters. But after the pandemic hit, Marin lost her job as a housecleaner, and then her husband got COVID-19 and lost his warehouse job.

Unable to pay the $2,000 monthly rent, the family moved in with Marin’s mother near Potrero Hill. Ten people now share the three-bedroom home while Marin and her husband seek employment.

“In my situation, it’s not true that the rent is down,” said Marin, 35. “They ask you to make two or three times the rent to qualify for an apartment. And when you don’t have it, they hang up the phone.”

Rents have decreased in Oakland as well with the average one-bedroom now going for $1,625, according to Apartment List. But the 18% gap between Oakland and San Francisco prices is the narrowest since the real estate firm began tracking rents in 2017.

Before his move, Simmons enjoyed living in Oakland’s Uptown, a walkable community not far from the Fox Theater, and first looked for a new place around there.

But he found nicer apartments in San Francisco, and living there meant he could ditch his car. Simmons signed a lease for $2,800 a month in a 29-story building also across the street from Twitter. The landlord gave him $2,000 in debit cards as a bonus.

“I like walking places. I like meeting people. I like the busyness,” Simmons said. “This is the life I want.”

Soon after last spring’s stay-at-home orders went into effect, Armand Domalewski and his girlfriend decided to leave their roommates and look for an apartment together. They searched around Oakland’s Lake Merritt in the hopes of living near open space.

“Then we looked in San Francisco,” said Domalewski, 31, a data analyst. “Not only were the prices lower than I ever expected, they kept getting lower.”

The couple found a bright, second-floor apartment on a narrow, red brick street near Duboce Triangle for just under $3,000. “I walked in and said, ‘There’s a dishwasher, my God,’” he said.

A few months into their lease, another tenant in their building moved out and they got a call from their landlord. Domalewski feared the worst.

“You’re so conditioned to think, ‘Oh, my God, am I getting evicted?’” he said. “And then she was like, ‘I’m unilaterally lowering your rent.’ And we’re like, ‘This is crazy.’”

Rents have even become affordable for recent college graduates.

A few months after graduating from UC Berkeley, Sarah Abdeshahian got a job as an organizer with the Tenderloin Housing Clinic in San Francisco. She was astounded to be able to find her own one-bedroom apartment near the top of Nob Hill for $1,900 a month, a price that had been reduced by $400.

“The idea of an entire apartment to myself is an insane luxury to me,” said Abdeshahian, 22. “I thought of San Francisco as a place where only wealthy tech people could live, not someone working at a nonprofit just out of college.”

Even though rents have plummeted, they could bounce back. Tenants with long memories plan ahead.

Simmons said he could have moved into a newer apartment complex for the same money.

But he opted for an older building. It came with rent control.

Article source: https://www.latimes.com/homeless-housing/story/2021-02-22/cheaper-rent-bay-area-tenants-moving-oakland-san-francisco

In contrast, 72% of changes resulted in moves to other Bay Area counties and about a fifth of the 115,243 address changes went elsewhere in California. USPS didn’t provide batches of address changes from a ZIP code totaling 10 or fewer, citing privacy concerns. The data covers Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara counties.

The migration doesn’t add up to an exodus, said Jeff Bellisario, executive director of the Bay Area Council Economic Institute, a business-backed think tank. But it still represents a significant population shift, pushing apartment rents and future tax revenue down, he said. “Some of the data points we’re tracking do imply greater movement than in the past.”

The most popular out-of-state destination was Washington state, followed by Texas, Oregon, Nevada, Colorado, Idaho and New York.

The majority of the 1,227 households that moved to Washington went to King County, which includes Seattle. The coastal tech hub has been a popular destination for tech workers for years and has satellite offices from numerous Bay Area tech giants like Google and Facebook. Salesforce, San Francisco’s largest private employer, has a significant Seattle division after buying local software company Tableau. Amazon and Microsoft are also hiring rapidly.

But Seattle housing prices remain substantially lower. A median one-bedroom apartment is $1,500, much less than San Francisco’s $2,650, according to real estate firm Zumper.

Housing costs remain a huge disparity between the Bay Area and the rest of the country and often cited as the main reason to move.

Mark Glaser, a longtime homeowner in San Francisco’s Excelsior, moved to Santa Fe, N.M., during the pandemic, drawn by the substantially cheaper cost of living and more peaceful atmosphere.

“It’s been great. I really enjoy being here,” said Glaser, who is an innovation consultant for the New Mexico Local News Fund.

His family found a $2,500-per-month three bedroom home in Sante Fe. Similar San Francisco listings can easily top $5,000 a month, even after major rent declines last year.

“The expense of the Bay Area was just a little crazy,” he said, comparing it to a hamster wheel “where you’re just trying to survive.”

Glaser and his wife are able to work remotely. He misses his Bay Area friends, but given the ongoing pandemic, wouldn’t be seeing them much anyways.

Buying a house in New Mexico is getting more difficult, with low supply, rising demand and low interest rates creating a competitive marketplace. That’s happening across the country. Home prices in Boise, Idaho, have jumped to a record $433,250, up 22% in the past year. Idaho was the fifth-most popular state for outmigration among the five Bay Area counties.

The second-most popular destination for people leaving the Bay Area was Texas, which had 749 change-of-address records from the Bay Area, mostly for Houston, Austin and its northern neighbor Williamson County.

Major Silicon Valley and San Francisco companies, including Hewlett Packard Enterprise and Oracle, have also moved headquarters to Texas in recent months, where there are lower taxes, cheaper real estate, fewer regulations and no personal income tax. But companies are maintaining some offices in the Bay Area and it’s unclear how many workers will leave with top executives.

“We’re certainly seeing a wave of companies seeking to cut their costs and locating to an area where they’re going to see better profit margins,” said Chuck DeVore, vice president of national initiatives at the Texas Public Policy Foundation and a former California state assembly member.

The movement of these companies brings to mind memories of previous shifts.

DeVore points out that California has lost the bulk of a tech-focused industry before: aerospace. Companies like Boeing shuttered their California factories in recent decades due to high labor, land and compliance costs.

The message from companies was, “We can’t run an industry based on nostalgia. We’ve got to get out of here,” DeVore said. “Maybe that’s beginning to happen right now in high tech.”

Alarm bells are ringing in Silicon Valley.

“If we continue not making changes, we will truly be facing an exodus,” said Ahmad Thomas, CEO of the Silicon Valley Leadership Group, a business advocacy coalition whose members include the biggest tech giants.

The group is urging state and local officials to tell businesses that taxes won’t increase further as the economy recovers from the pandemic. California’s tax policy is more volatile because anyone can attempt to raise taxes through a ballot measure.

“We’re never going to win an affordability contest,” Thomas said. “No one comes to California because it’s cheap.”

He wants to see a better regional strategy around highlighting the Bay Area’s advantages, like its highly qualified labor force and culture of innovation.

“We still have a high quality talent pool,” Bellisario said. “We’ve got great world-class universities. This venture capital ecosystem has not disappeared.” But the rise of remote work represents a new threat as workers can collect California-level wages while living in far less expensive regions.

Femi Ajayi used to live near his job at Univfy, a Los Altos technology company that supports fertility counseling. After the pandemic erupted, the company closed its office and Ajayi returned to his hometown of Atlanta.

He had a relatively good deal in Silicon Valley, paying $1,300 a month for a unit he shared with one roommate. But now his condo mortgage is $1,100 per month and he’s close to family.

“I do love California and the weather and the hiking, but it was just too expensive,” he said. “I would come back if I got another job opportunity and it was just too good to pass up.”

Roland Li and Susie Neilson are San Francisco Chronicle staff writers. Email: roland.li@sfchronicle.com, susan.neilson@sfchronicle.com Twitter: @rolandlisf, @susieneilson

The present economic slump is hardly the first time that dirge compositions have been readied by those wanting to be the first to predict the demise of the San Francisco Bay Area and its star child, Silicon Valley.

The region has been through many volatile economic cycles in its history and every time seems to rise like a phoenix from the ashes. However, the current episode is singular in nature. Bay Area Council President and CEO Jim Wunderman called the shift to remote work a “wild card” and said that the situation presents an opportunity to strategically remake the region into an even more attractive place to live and work than before.

“This one is totally different — the housing market has remained strong,” Santa Clara County Assessor Larry Stone said. “It’s not a recession of commercial properties because the economy turned down. It was because these companies were ordered to close and people were ordered to stay home.”

Unlike the more recent dot-com bust and Great Recession caused by human decision-making sending market fundamentals into discord, the coronavirus pandemic hit as a natural disaster following years of economic expansion. The theory is that in the absence of the virus’s hold on society, the underlying fundamentals should still be healthy. Among other metrics alluding to this, the median Bay Area home price went up by 20% during the pandemic, according to Wunderman. 

“This is the deepest recession we’ve seen in the U.S. It’s also the shortest,” Beacon Economics founding partner Christopher Thornberg said at a Colliers International Silicon Valley Trends 2021 event on Feb. 24.

Thornberg pushed back on the notion that we are in the middle of economic Armageddon, saying that the recession actually ended in April, though the recovery was stalled by an enormous surge in infections during the holiday season. As of Feb. 24, it would take about 145 days until everyone in the U.S. receives their first vaccine shot, according to Colliers National Director of Research Steig Seaward. Although development of the Johnson Johnson single-shot vaccine could speed things up, mutations of the virus popping up around the globe could result in further delays to a full recovery. Yet, there are some promising signs for commercial real estate, especially in Silicon Valley, which showed resiliency in 2020.

“It’s going to be the tech-led cities that are going to not only be the first ones to pull out of this but are going to be the ones driving the economy going forward, and we’re projecting that not only GDP growth but employment growth as well is going to be driven by these tech-led markets through 2025,” Seaward said.

Last year, the Bay Area accounted for over 40% of venture capital spending in the U.S, the second-highest amount on record behind 2018, according to data presented by Colliers Executive Managing Director Reed Payne. Colliers’ research also showed that overall vacancy in Silicon Valley ticked up mildly from 5% in 2019 to 6.5% in 2020. Much of the resiliency is attributed to Google, Apple, Facebook and Amazon, which collectively occupy more than 51M SF in Silicon Valley. Those tech giants remained hungry for space throughout the pandemic.

Things haven’t been entirely bright for the region. The pandemic’s shuttering of urban amenities like retail and entertainment venues makes cities less attractive alongside the shift to remote work, allowing employees to live in cheaper locales. Postal service change-of-address data indicates a net migration of 53,000 households out of S.F. from March to November in 2020 compared to 17,000 in 2019, S.F. Chronicle reported. The migration resulted in steep drops in apartment rents in S.F. Yet the data also shows the majority of the departures were to other parts of the Bay Area.

Some companies such as Oracle, Hewlett Packard and Digital Realty have moved their headquarters to other cities. Still, as Colliers Executive Vice President Dave Sandlin pointed out, despite the talk of exodus, HP is not actually giving up space in Silicon Valley and will have more employees in the subregion post-exit than prior.

“Oracle is going, HP Enterprise is going, but at the same time, we’ve had several IPOs,” JLL Senior Vice President Sofi Choi said. “We’ve had record-breaking venture capital investments, and so nobody would know that we had COVID if you just looked at the amount of money that was invested in the Bay Area from a venture capital perspective and the number of IPOs that we had and the amount of net valuation that we added to the Bay Area.”

Although continued remote work has shrouded the short-term outlook with uncertainty, Choi expressed confidence that Silicon Valley will continue to be an economic leader in the nation, as the present climate is just another opportunity for renewal. She chronicled the valley’s tech cycles beginning with the dot-com bust resulting in over 40% vacancy rates, but that ultimately made room for subsequent innovations from social media to shared economies and, more recently, autonomous vehicles. Today there is a biotech boom spreading from the S.F. Peninsula to Silicon Valley and into the East Bay.

Even remote work itself, which has resulted in population loss for the region, particularly S.F., has been enabled by technologies like Zoom and Cisco Webex, both born in Silicon Valley. The numbers point to the notion that the region could continue to be an economic giant. Silicon Valley leads West Coast markets with 69M SF in the construction pipeline, with about 10M SF under construction currently 70% pre-leased, according to data presented by Colliers Senior Research Manager Lena Tutko.

“As far as VC funding, California is definitely in the lead,” Tutko said. “Even if we double the amount of VC funding in Texas, it would still be just 10% of what we’re seeing in California. And what’s really important to recognize is Silicon Valley remains the epicenter of innovation. We have a deep talent pool, proximity to VC funding and this is very difficult to replicate in other markets. We’ve seen them try. It remains a very competitive place. So some displacement of companies to lower-cost markets is natural.”

One main reason Silicon Valley has shown more pandemic resilience than S.F. proper is the larger presence of Big Tech companies, according to Cushman Wakefield Senior Director of Research Robert Sammons. Another reason is that S.F. and Oakland are more reliant on mass transit than Silicon Valley, he said. Workers who had previously relied on public transportation to get to offices in S.F. and Oakland were wary due to the threat of infection. Sammons warned that workers would have to get comfortable taking transit again for things to open up fully.

“It’s less of a concern down in the valley because what you’ll recognize is that more people drive, there’s more parking obviously available in those markets,” Sammons said. “A lot of the Big Tech players have these large corporate campuses, whereas, of course, San Francisco is much more dense. The same thing goes for downtown Oakland. The CBD of Oakland is very dependent on BART.”

Transportation is at the heart of the main challenges facing the region that existed well before the pandemic. During much of 2020, relatively empty freeways created an ease of travel around the region that was previously a distant memory for many. It also facilitated migration to Bay Area cities farther from core markets. Yet, it has been a thorny issue for years when rents and housing prices in core areas skyrocketed in the recovery from the Great Recession, leading to some lamenting the population growth. Many had to choose between paying exorbitant rents and braving formidable traffic congestion commuting from outlying areas. With the median home price in San Jose at $1.4M, according to Thornberg, homeownership continues to be out of reach for most.

“I think a region is successful when it’s a popular destination,” said Wunderman. “The solution isn’t to put a cake plate over it. I think the solution is to solve the challenges by normal approaches to building housing and infrastructure that are common to great regions of the world.”

Wunderman cited the housing and homelessness crises and the lack of adequate transportation infrastructure as the Bay Area’s most significant issues. He said that lack of high-speed rail that could connect with other parts of the state and short housing supply lower the quality of life and hinder sustainable growth. Stone, who said that Silicon Valley is still the world’s entrepreneurial capital, echoed the warnings.

“The threat is — and it’s a serious one — if we don’t solve the housing problem, affordable and worker housing, I believe we are headed toward becoming a Detroit,” Stone said.

While the transit issue is in part dependent on the success of vaccinations, the drop in apartment rents could add points to S.F.’s current desirability rating. Simultaneously, there is much multifamily product being delivered now in the region, which Sammons said could be advantageous in the short term with people taking advantage of discounted rates.

Part of the sustainable growth outlook depends on funding from the federal and state governments and relevant policies at the local and regional levels. One possible outcome is that more live-work housing units could be built along with flexible buildings that could be used for either housing or offices, depending on demand, Wunderman said.

“There is an opportunity to get it more right this time,” Sammons said. “We’ll see if the city and the state are up to the challenge. It remains to be seen. There is no crystal ball, but we all hope that we learn from past mistakes. Our forecast is tempered, but it is for improvement.”

Related Topics:
Robert Sammons,
Christopher Thornberg,
Bay Area Council,
Beacon Economics,
Jim Wunderman,
Larry Stone,
Dave Sandlin,
Steig Seaward,
Santa Clara County Office of the Assessor,
Colliers International Silicon Valley,
Reed Payne,
Sofi Choi,
JLL Silicon Valley,
Lena Tutko

Article source: https://www.bisnow.com/silicon-valley/news/state-of-market/golden-opportunity-for-sf-bay-area-to-hit-refresh-on-growth-strategy-107906

SAN FRANCISCO (KRON) — Yelp says its presence in San Francisco is changing as work from home plans become more permanent.

The company on Friday said it will have “a significant portion” of their employees work remotely full-time. Some will be coming in just a few days per week.

As for their headquarters in downtown San Francisco, Yelp says they’re not leaving it behind — but it won’t be the same.

“In 2020, we demonstrated that we can successfully operate with a distributed workforce. Once it’s safe to return to our offices, we plan to continue to operate with a significant portion of our team working remotely on a full-time basis, or for part of the week,” a Yelp spokesperson told KRON4. “This enables us to reduce our real estate footprint and expand our presence in lower cost markets across the United States, Canada and Europe.”

Yelp’s Chief People Officer Carolyn Patterson said they will cut down office space as leases come up for renewal, and also sublease some of their existing office space.

The idea of their new hybrid model prioritizes employees, Patterson says, “so they can live where they want to live, and work where they’ll feel most effective.”

The company will also be seeking “a lot of promising talent outside of the San Francisco Bay Area and New York,” without the requirement of moving to these expensive job hubs.

Yelp, which gives businesses a platform to advertise and users a platform to review them, is not quite following a ‘San Francisco exodus’ as seen in the last few months — although permanent work from home plans across huge companies are keeping potential newcomers out of the Bay Area once it’s safe again.

The Public Policy Director of the San Francisco Chamber of Commerce said a growing number of businesses are shutting their doors during the COVID-19 pandemic as swaths of Bay Area residents started working from home for almost a year now.

According to Zillow, house values in the city have been on a downward trajectory since shutdowns began in March 2020.

“San Francisco home values have declined -2.7% over the past year,” Zillow reports as of Jan. 31, 2021.

Back in December, Zillow said average rent rates in the city were just under $3,000, but the actual listings reflect much lower prices for top areas like the Marina and North Beach.

In the latest market report released Feb. 19, Zillow said San Francisco rent is down by 9.2%.

But it’s not just employees leaving the Bay Area. Unlike Yelp, several major companies are choosing to completely take their business elsewhere.

Tesla CEO Elon Musk criticized California as a whole, calling it ‘entitled.’

“California has been winning for a long time, and I think they’re taking it for granted,” Musk said in December.

He relocated Tesla to Texas, and other tech companies have been attracted to it as well. Oracle and Hewlett Packard also announced their moves to the the Lone Star state in the last year, citing cost savings and business needs.

Article source: https://www.kron4.com/news/bay-area/yelp-gives-up-some-sf-office-space-after-employee-work-changes/