The recovery as it were, after everything went to heck but didnt.ByWolf RichterforWOLF STREET.

San Francisco is one of the most touristy cities in the US both for leisure and for business and it is also a tech and social-media center, a startup Petri dish, and the epicenter of working from home. During the Pandemic, the city has lost large chunk of jobs and a significant number of its residents. So here is an anatomy of the San Francisco economy where it currently stands, based on a report by the City of San Franciscos Office of Economic Analysis and based on some data from other sources that I added to the mix.

Despite the loss of jobs and population, the remaining residents in the city are doing what theyre supposed to do as good consumers: Theyre spending money. By May, credit card spending had fully recovered and was up 5% from the pre-Covid baseline in January 2020, according to credit card spending data, seasonally adjusted (Chart via the Office of Economic Analysis, citing data from the nonprofit Opportunity Insights and Affinity):

So locals spent 5% more with their credit cards than they did before the pandemic and this was just inflation since CPI jumped 5% year-over-year in May. And theyre spending less in brick-and-mortar retail stores, many of which remain shuttered, and more online, and theyre also spending at restaurants and other leisure activities.

There is now a thriving restaurant scene. Indoor dining is back, and now there are about 1,500 parklets where restaurants have created outside-dining areas on curbside parking spots, wide sidewalks, back patios, and public areas. Some restaurant streets are closed to traffic at night, and there have never been so many people visible on the street, milling around and sitting around in these parklets, as now. The whole ambiance has changed.

Restaurants with parklets now have more tables than they did before they built the parklets, and they can accommodate more business than before. And all kinds of new restaurants have sprung up.

But brick and mortar retail stores are in deep trouble. The sight of shuttered stores and for lease signs are everywhere. Nail salons and other services-based businesses are sprouting, but brick-and-mortar retail was already in trouble before the Pandemic, and so many stores were vacant and forming a blight that the city imposed a vacancy tax to incentivize landlords to find tenants.

As of June 2, 43% of San Franciscos small businesses remain closed, compared to the already beaten down baseline of January 2020 (green line), based on payment and payroll data from Opportunity Insights, cited by the Citys report.

Working from home is huge in the San Francisco metro, and office attendance is still minuscule. According to data from Kastle, which provides electronic access systems for office buildings, office attendance as measured by people entering offices in the five-county San Francisco metro (red line) was at 18% of the level in January 2020, meaning office attendance was still down 82%, but creeping up. For comparison, in Austin, TX (blue line), attendance is at about half the level compared to January 2020.

The number of residents in San Francisco who are working took a massive dive in April 2020 and has only partially recovered. In May, the number of working people was still down by 9.5%, or by 54,500 people, from February 2020, according to data from the California Employment Development Department (EDD). And as well see in a moment, some of those people have left San Francisco:

In early May, the California Department of Finance released its annual population estimate. By the end of 2020, the state of California had lost 182,000 people compared to a year earlier, the first population loss since the data had been tracked. San Francisco lost 14,800 people or 1.7% of its population (red column), now down to 875,000 (red line), the lowest since 2015:

Traffic across the Golden Gate Bridge into San Francisco in May was down only 15% from the 2019 average. Traffic congestion on the freeways is back, and average speeds have slowed to pre-Covid averages of 31 mph, down from 60 mph in March and early April 2020. Lots of people are driving who had been taking mass-transit. And plenty of tourists from other parts of California or the US are driving into San Francisco. The weekend congestion is back. We live on a busy street, and its busy as heck, especially on weekends:

The Cable Cars are still shut down. Buses and streetcar lines operate at reduced levels. Ridership on the Bay Area Rapid Transit (BART) system, the train system that links the East Bay to San Francisco and Silicon Valley, was still down 84% in May from May 2019. When people do go to work, theyre driving:

Despite the prevalence of working from home for office workers, and the near ghost-town atmosphere of the Financial District though its much less so now than last August when I documented the ghost town Financial District with photos many businesses are open and require workers to be there, from restaurants and repair shops to construction sites.

In addition, locals have discovered the beauty of outdoor areas, the parks and shore line while tourists were largely gone. I have never seen so many people swim in the Bay while pools were closed. Locals were doing lots of stuff and getting out. But many of them were just not going to work, but were working at home or were not working at all. Now the swim teams have returned to heated pools. But people are still not going to the office (chart via the Office of Economic Analysis, based on data from Google Mobility and Opportunity Insights):

Tourism, a huge industry in San Francisco, is still way down. The crucial tourism from Asia is still dead, and business tourism is also still dead. But domestic tourism is thriving, and these people drive from other places in California and from other states into San Francisco, as demonstrated by the traffic jams on weekends. But far fewer people are flying in.

According to data from the San Francisco International Airport, the number of people getting on a plane in April such as business and leisure tourists going home, and locals heading out was still at 31% from the 2019 average. Part of this is the collapse in traffic between San Francisco and Asia (chart via the Office of Economic Analysis):

The average daily room rate has risen to $160 per night. But thats only about half the average rate in 2019 of around $319 a night.

And hotel occupancy, which in 2019 averaged around 79%, was still only 35% in May. This is figured of total room inventory (TRI), which counts all hotel rooms whether or not the hotel had re-opened (chart via the Office of Economic Analysis):

So there are fewer people living in San Francisco and fewer people have jobs, and apartment vacancy rates are high, and there is a huge amount of churn, with tenants trying to get better deals and nicer apartments. This has been going on for over a year.

In June, the median asking rent for one-bedroom apartments was $2,790, according to Zumper, down 25% from July 2019, after having been down as much as 30%.

But these are asking rents. Theyre a way for landlords to find out what the market will bear. If the unit sits vacant long enough, theyll drop the asking rent or offer other inducements, such as two months free. Asking rents are not actual rents or effective rents. Theyre advertised rents; theyre the rents at which a landlord is trying to make a deal; theyre a form of price discovery, and in uncertain times like these, they can be all over the place.

So this is the economy of San Francisco. Fewer residents, fewer tourists, fewer jobs, fewer businesses, a still dead Financial District, lower rents, lower hotel room rates, near-empty BART trains, and lots of closed stores, but busy restaurants and lots of spending by the people that hung on.

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Anatomy of San Francisco Now: Fewer People, Jobs, Tourists, & Businesses, But More Spending by the Hangers-on (But that Was Inflation) - WOLF...