7 ms·

Right now, being a landlord in SF is looking pretty grim given that tech workers who used to rent are fleeing in droves and those that are not are negotiating t

Right now, being a landlord in SF is looking pretty grim given that tech workers who used to rent are fleeing in droves and those that are not are negotiating their rents. I wonder whether this trend will reverse in the next 1-3 years or this is the new permanent dynamic of the SF rental market.

nimish 6y ago
Wild that landlords having to deal with their investments losing value and having to negotiate a commercial transaction is "grim" The market dynamics shifted. No big deal.
- throwanem 6y ago
  Yeah, no shit. You were careless with your capital and lost some or all of it? My heart bleeds.
  - nimish 6y ago
    They don't lose any capital until it's re-valued or sold. It's purely a short-term loss in income. Eat the loss, move on -- that's what most landlords would tell their tenants in the opposite situation. I am playing the world's smallest violin for them as a class.
- refurb 6y ago
  You have the same attitude when prices go up? “Wild that tenants having to deal with rent going up and having to negotiate a commercial transaction is “grim””. “The market dynamics shifted. No big deal.”
  - techsupporter 6y ago
    > You have the same attitude when prices go up? No, but the people on the opposite side of the transaction (the landlords) for damn sure do. "Market price has gone up, what can you do" is something I've been told when trying to negotiate lease renewals, and I'm outside the Bay Area. Landlords could, as a group, have pushed to help make pricing stable and make their investment a long-term, very secure asset. Instead, just like virtually every other part of this fire-encrusted economy, they grabbed for the short-term gains at the expense of plodding consistency. Landlord groups are pushing back on the idea that tenants should do anything except blithely pay whatever duly-increased price is passed onto us and we should thank them for the privilege besides. My heart bleeds.
    - refurb 6y ago
      They could have pushed to stabilize the market? The only reason it’s dropping is because of Covid. How could they have avoided a mass exodus due to a pandemic?
      - techsupporter 6y ago
        If the cost/benefit ratio was more in line with "reasonable living" versus "I'm putting up with this for three years to make bank and then getting the fuck out," that's one way. Could landlords have completely forestalled people leaving? No. Could they, as a group, have done a lot more to actually agitate for--versus opposing--things like new housing to keep market prices stable (rather than a hockey stick) and worked with tenant groups to aim for a tenancy system that balances each group's needs more directly, rather than "rent consumes almost all available resources?" Yes. Had landlords tried to work in concert with the people who provide the source of income for landlords, rather the opposing them at almost every turn, the "exodus" might be a rather expected "trickle." They made their bed of housing scarcity in these possibly-former-hot markets...they can lie in it.
  - 8note 6y ago
    I think there's a difference between needing a roof over your head vs needing to protect your investment portfolio.
    - refurb 6y ago
      Well, my landlord in SF was an old lady whose husband died suddenly at 50 and their retirement portfolio was their apartment building. But screw her right?
      - pkaye 6y ago
        A retirement portfolio should be more diversified. It would be like investing all your 401k on company stock.
      - fleshdaddy 6y ago
        I'm sorry but most Americans retirement portfolio isn't an apartment complex in the most expensive city in the country. I'll find a bit more sympathy for them.
        koolba 6y ago
        When it comes to human interest stories “most“ doesn’t matter. It’s all about the individual.
      - ABCLAW 6y ago
        How exactly is she screwed? She owns an apartment building. She can likely liquidate for multiple millions even in a down market and live in luxury for the remainder of her life AND pass on a ton of money to her heirs.
  - pkaye 6y ago
    Landlords are investing so they have to accept some risk and downturns. I have much more sympathy for the tenants.
  - bobthepanda 6y ago
    The landlords have used this kind of rhetoric for years, but now it's bad because landlords have gotten entitled to a market on the up and up.
nordsieck 6y ago
> I wonder whether this trend will reverse in the next 1-3 years or this is the new permanent dynamic of the SF rental market. IMO, that's completely dependent on how much SF tech companies embrace remote work.
- ghaff 6y ago
  And others, like in finance. It also depends on whether those who move away from (or would potentially have moved to) the Bay Area come back, especially if prices are a bit less eye-watering. Which to some degree depends on how badly restaurants, bars, retail, etc. are ultimately hit. And just what the attitude towards urban living generally is. (This applies more specifically to SF than the Bay Area as a whole.) The urban inflow among college educated young professionals is only about 20 years old. No reason it couldn't reverse again.
  - cinquemb 6y ago
    > And others, like in finance. The thing is though, there are huge shifts going on in how finance operates today and how it will be going forward in the future… A lot of things that most people in various societies have not questioned for long time are being brought into the forefront of awareness because of the pandemic, but arguably have developing for many years now and have become the reality for people at the margins of various societies.
- refurb 6y ago
  What confuses me is the home buying far outside urban areas. I understand that people will be working from home for 12 months, but buying a home an expensive transaction. If forced to go back to the office, these folks are looking at very long commute. I assume they: 1) know for sure they can wfh permanently, 2) are betting they will be able to wfh permanently or 3) are willing to quit when asked to come back to the office.
  - rsynnott 6y ago
    I think a lot of people _are_ assuming that the dynamic has permanently changed, and that WFH will be the default, or at least way more common, in their sector from now on. I suspect that they may be incorrect, here.
vmception 6y ago
The midatlantic region is filled with cities that are carcasses of an industrial era that doesn't exist anymore. It's not "doom and gloom" to say that when there are examples of it happening before. San Francisco's tax base is leaving. What do you think is going to happen? Rent wise, San Francisco will just be Anytown, USA with a little bit of scarcity due to plethora of rent control and old tenants with grandfathered in low property tax due to state law. City better balance its budget.
- fortran77 6y ago
  > San Francisco's tax base is leaving. What do you think is going to happen? For one thing, they'll tax the remaining taxpayers until they move or die.
- dmode 6y ago
  I moved to SF in 2009 and there were very few tech companies in town and it was in the middle of recession. Even then good places had a bidding war. If you read this Bay Area housing market report[1], you will see that it still showing strength in SFH market. My guess is SF will continue to do fine [1] https://www.bayareamarketreports.com/trend/san-francisco-home-prices-market-trends-news https://www.bayareamarketreports.com/trend/san-francisco-hom...
  - vmception 6y ago
    I can't believe you are still trusting real estate agents and mortgage underwriters when half of the market signals are completely missing..... yes, to them it seems like a lot of business evictions and foreclosures have barely started in San Francisco and will be completely backlogged nationwide: a few hundred thousand people playing around with low interests rates, millions of people pending default like I said, scarcity and views will continue to help San Francisco prices as it has for the last 170 years, but it can also become like those midatlantic satires of civilization.
    - dmode 6y ago
      I don't know what are data sources to look for real estate demand other than real estate transactions. Anyways, that's not the broader point I am making. The broader point I am making is that it was a thriving City with or without tech and continue to be one. The Golden Gate bridge, GG park, the ocean, the bay, the museums, the charming hills, and train cars is not going to vanish when all tech workers leave. I fell in love with SF even before I started working in SF.
rsynnott 6y ago
I would assume most sensible landlords had not assumed that prices would magically go up forever, and were aware that sometimes housing prices fall! Of course, sensible landlords are in short supply; a lot of amateur landlords do seem to see it as a magic money tree.

nimish 6y ago

Wild that landlords having to deal with their investments losing value and having to negotiate a commercial transaction is "grim" The market dynamics shifted. No big deal.

throwanem 6y ago
Yeah, no shit. You were careless with your capital and lost some or all of it? My heart bleeds.
- nimish 6y ago
  They don't lose any capital until it's re-valued or sold. It's purely a short-term loss in income. Eat the loss, move on -- that's what most landlords would tell their tenants in the opposite situation. I am playing the world's smallest violin for them as a class.
refurb 6y ago
You have the same attitude when prices go up? “Wild that tenants having to deal with rent going up and having to negotiate a commercial transaction is “grim””. “The market dynamics shifted. No big deal.”
- techsupporter 6y ago
  > You have the same attitude when prices go up? No, but the people on the opposite side of the transaction (the landlords) for damn sure do. "Market price has gone up, what can you do" is something I've been told when trying to negotiate lease renewals, and I'm outside the Bay Area. Landlords could, as a group, have pushed to help make pricing stable and make their investment a long-term, very secure asset. Instead, just like virtually every other part of this fire-encrusted economy, they grabbed for the short-term gains at the expense of plodding consistency. Landlord groups are pushing back on the idea that tenants should do anything except blithely pay whatever duly-increased price is passed onto us and we should thank them for the privilege besides. My heart bleeds.
  - refurb 6y ago
    They could have pushed to stabilize the market? The only reason it’s dropping is because of Covid. How could they have avoided a mass exodus due to a pandemic?
    - techsupporter 6y ago
      If the cost/benefit ratio was more in line with "reasonable living" versus "I'm putting up with this for three years to make bank and then getting the fuck out," that's one way. Could landlords have completely forestalled people leaving? No. Could they, as a group, have done a lot more to actually agitate for--versus opposing--things like new housing to keep market prices stable (rather than a hockey stick) and worked with tenant groups to aim for a tenancy system that balances each group's needs more directly, rather than "rent consumes almost all available resources?" Yes. Had landlords tried to work in concert with the people who provide the source of income for landlords, rather the opposing them at almost every turn, the "exodus" might be a rather expected "trickle." They made their bed of housing scarcity in these possibly-former-hot markets...they can lie in it.
- 8note 6y ago
  I think there's a difference between needing a roof over your head vs needing to protect your investment portfolio.
  - refurb 6y ago
    Well, my landlord in SF was an old lady whose husband died suddenly at 50 and their retirement portfolio was their apartment building. But screw her right?
    - pkaye 6y ago
      A retirement portfolio should be more diversified. It would be like investing all your 401k on company stock.
    - fleshdaddy 6y ago
      I'm sorry but most Americans retirement portfolio isn't an apartment complex in the most expensive city in the country. I'll find a bit more sympathy for them.
      - koolba 6y ago
        When it comes to human interest stories “most“ doesn’t matter. It’s all about the individual.
    - ABCLAW 6y ago
      How exactly is she screwed? She owns an apartment building. She can likely liquidate for multiple millions even in a down market and live in luxury for the remainder of her life AND pass on a ton of money to her heirs.
- pkaye 6y ago
  Landlords are investing so they have to accept some risk and downturns. I have much more sympathy for the tenants.
- bobthepanda 6y ago
  The landlords have used this kind of rhetoric for years, but now it's bad because landlords have gotten entitled to a market on the up and up.

nordsieck 6y ago

> I wonder whether this trend will reverse in the next 1-3 years or this is the new permanent dynamic of the SF rental market. IMO, that's completely dependent on how much SF tech companies embrace remote work.

ghaff 6y ago
And others, like in finance. It also depends on whether those who move away from (or would potentially have moved to) the Bay Area come back, especially if prices are a bit less eye-watering. Which to some degree depends on how badly restaurants, bars, retail, etc. are ultimately hit. And just what the attitude towards urban living generally is. (This applies more specifically to SF than the Bay Area as a whole.) The urban inflow among college educated young professionals is only about 20 years old. No reason it couldn't reverse again.
- cinquemb 6y ago
  > And others, like in finance. The thing is though, there are huge shifts going on in how finance operates today and how it will be going forward in the future… A lot of things that most people in various societies have not questioned for long time are being brought into the forefront of awareness because of the pandemic, but arguably have developing for many years now and have become the reality for people at the margins of various societies.
refurb 6y ago
What confuses me is the home buying far outside urban areas. I understand that people will be working from home for 12 months, but buying a home an expensive transaction. If forced to go back to the office, these folks are looking at very long commute. I assume they: 1) know for sure they can wfh permanently, 2) are betting they will be able to wfh permanently or 3) are willing to quit when asked to come back to the office.
- rsynnott 6y ago
  I think a lot of people _are_ assuming that the dynamic has permanently changed, and that WFH will be the default, or at least way more common, in their sector from now on. I suspect that they may be incorrect, here.

vmception 6y ago

The midatlantic region is filled with cities that are carcasses of an industrial era that doesn't exist anymore. It's not "doom and gloom" to say that when there are examples of it happening before. San Francisco's tax base is leaving. What do you think is going to happen? Rent wise, San Francisco will just be Anytown, USA with a little bit of scarcity due to plethora of rent control and old tenants with grandfathered in low property tax due to state law. City better balance its budget.

fortran77 6y ago
> San Francisco's tax base is leaving. What do you think is going to happen? For one thing, they'll tax the remaining taxpayers until they move or die.
dmode 6y ago
I moved to SF in 2009 and there were very few tech companies in town and it was in the middle of recession. Even then good places had a bidding war. If you read this Bay Area housing market report[1], you will see that it still showing strength in SFH market. My guess is SF will continue to do fine [1] https://www.bayareamarketreports.com/trend/san-francisco-home-prices-market-trends-news https://www.bayareamarketreports.com/trend/san-francisco-hom...
- vmception 6y ago
  I can't believe you are still trusting real estate agents and mortgage underwriters when half of the market signals are completely missing..... yes, to them it seems like a lot of business evictions and foreclosures have barely started in San Francisco and will be completely backlogged nationwide: a few hundred thousand people playing around with low interests rates, millions of people pending default like I said, scarcity and views will continue to help San Francisco prices as it has for the last 170 years, but it can also become like those midatlantic satires of civilization.
  - dmode 6y ago
    I don't know what are data sources to look for real estate demand other than real estate transactions. Anyways, that's not the broader point I am making. The broader point I am making is that it was a thriving City with or without tech and continue to be one. The Golden Gate bridge, GG park, the ocean, the bay, the museums, the charming hills, and train cars is not going to vanish when all tech workers leave. I fell in love with SF even before I started working in SF.

rsynnott 6y ago

I would assume most sensible landlords had not assumed that prices would magically go up forever, and were aware that sometimes housing prices fall! Of course, sensible landlords are in short supply; a lot of amateur landlords do seem to see it as a magic money tree.