[HN Gopher] Nearly 12M Square Feet of Vacant Office Space in S.F
___________________________________________________________________
Nearly 12M Square Feet of Vacant Office Space in S.F
Author : kyleblarson
Score : 131 points
Date : 2020-10-25 21:18 UTC (1 hours ago)
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| softwaredoug wrote:
| On the flipside, I wonder how much of a market there will be to
| rent individual offices?
|
| Many like working at home, but a lot of us have rather ad-hoc
| situations. Even with a perfect home office, kids etc at home can
| make concentration tough. And the space separation and seeing
| other adults is very valuable.
| paul_f wrote:
| That is 275 acres! Hard to even visualize
| mancerayder wrote:
| Are Progressive mayorships in places like SF and New York the
| right mentality at the right time when it's an economic
| catastrophe to be averted?
|
| The Mayor of NYC said a few days ago, 'Midtown is not the center
| of the universe' when asked about sudden new squalor and economic
| catastrophe. Unfortunately it is the center of jobs for the
| region. Is SF run like this as well?
| Aeolun wrote:
| > sudden new squalor and economic catastrophe
|
| Billionaires suddenly losing their tenants is now economic
| catastrophe?
|
| Is this another variant of 'too big to fail'?
|
| Those buildings won't be going anywhere regardless of anything
| else.
| mancerayder wrote:
| What do you mean, billionaires? What about all the small
| businesses who used to get daily business from those office
| workers who bought coffee, lunch, drinks, and so forth?
|
| The hubris and myopia of the 'eat the rich' mentality is
| galling and a little depressing.
| Aeolun wrote:
| > What about all the small businesses who used to get daily
| business from those office workers who bought coffee,
| lunch, drinks, and so forth
|
| My expectation is that they're pretty much dead already
| (after 6 months of this).
|
| Even if not, while it sucks for them, I don't think it will
| necessarily kill them, more vacancy may mean less
| customers, but it also means lower prices.
|
| Presumably there were shops before SF became juppy heaven,
| so it will have them after.
| [deleted]
| rsynnott wrote:
| ... Wait, what would you expect the mayors to do about it? Use
| their dictatorial mayoral powers to force people to extend
| leases or the city's infinite funds for a stimulus or bailout?
|
| The federal government and to some extent the states have the
| money and power; expecting a mayor to wave a magic wand and fix
| it is, well... optimistic.
| mancerayder wrote:
| Seriously? How about do what mayors have done for centuries:
| find ways to encourage investment and movement into the city.
|
| Business seems to be moving to places like Austin. Why do you
| think that is?
| [deleted]
| momokoko wrote:
| You seriously do not think San Francisco and New York have
| attracted business development?
|
| This is yet another version of the classic "No one goes
| there anymore, it's too crowded"
| rsynnott wrote:
| Honestly, I can't imagine that commercial real estate or
| cafes and restaurants and similar are doing so great in
| Austin right now, either. For the moment, commercial real
| estate and businesses dependent on office workers will be
| suffering pretty much everywhere.
| christiansakai wrote:
| How relevant is this to average people? I.e., seems this only
| affect the rich?
| Aeolun wrote:
| I like how most of HN is probably comfortably within the 1%,
| but as soon as we start talking about 'owners of real estate in
| SF', we are easily able to call them 'the rich', because the
| wealth is on a completely different level.
| Texasian wrote:
| Most? You've gotta be earning more than 400k to get into the
| 1%.
|
| Top 10% maybe, since that's around 125-150k.
| nemothekid wrote:
| Most of HN is in the 1%? Maybe globally, but I doubt most of
| HN is in the 1% of America.
|
| A couple of two, both making $200k/year is outside the 1%.
| quickthrower2 wrote:
| It might be a canary for the general state of the economy. It
| might not though!
| patrickthebold wrote:
| Depends on if it totally crashes the economy or not. It's not
| like 2007 recession only affected mortgage lenders.
| justchilly wrote:
| Typical office leases are 3-5 years. This is just the tip of the
| iceberg. So far <20% have been up for renewal since the pandemic
| started, and even fewer since it became clear that things were
| not going back to normal within a few months.
| donclark wrote:
| Related: NYC commercial mortgage backed securities are going to
| crash
|
| https://www.youtube.com/watch?v=RX1uzbAOnXc
|
| Is it possible to short mortgage backed securities?
| sebmellen wrote:
| A close relative of mine is a top real estate appraiser based in
| San Francisco, and she's terrified about what happens in Q2 2021,
| when leases will start terminating en masse. She's had a call
| with the St. Louis Fed, as they're trying to get an idea of what
| this will look like. She thinks it will be a bloodbath, and deal
| a death blow to corporate real estate (and other capital markets
| by extension).
| hogFeast wrote:
| This has happened every few years in corporate real estate for
| the past half century (Sam Zell's biography is a good take).
|
| Every. Single. Time. Valuations too high. Debt too high. Equity
| too low.
|
| I am pretty cynical because I have read a bit too much history
| and seen this so many times working in investment management
| but...so what? Some rich people lose a ton of money...okay?
| Capitalism has losers. You lose.
|
| Also, in the last crisis, a ton of people (particularly
| Blackstone) made a ton of money buying huge deals at the very
| top of the market. None of this excess came out of the market.
| Lots of people who borrowed tons of money were just able to
| take their paper to the Fed, and keep playing.
| sebmellen wrote:
| Point taken, but I don't think you're taking into account the
| monumental impact of COVID-19. We've never had such a large,
| immediate, and impactful shift to work culture.
|
| Working remote was still a niche idea at the beginning of
| 2020, now it's ubiquitous. _That_ has never happened before.
| hogFeast wrote:
| Agreed. Very hard to estimate that effect. With corporate
| real estate, it is inherently local (you cannot export an
| office) so the question is about the swings in vacancies.
|
| Have some markets seen ~15% vacancies before? Yes,
| corporate real estate is very cyclical, no-one builds for
| years, and then the market adds 40-50% in a few years. But
| when it gets to 30-40% then you are probably looking for
| examples outside the US...and SF will be the worst-hit
| market, others should be less.
|
| But...the world will move on, write down the value of
| property, assign losses, pay off remaining creditors, the
| world moves on...I don't think anyone could say a fault of
| the last ten years has been that shareholders/creditors
| were forced to swallow too many losses. The strength of a
| capitalist economy is that losses can be assigned quickly,
| and everyone moves on...in theory.
| sebmellen wrote:
| You're right, things will move on, and I am not
| (personally) all that worried. Nor are the creditors who
| can afford to eat a loss.
|
| My concern is more about the ripple effects. Many low-
| skilled workers rely on service work, and servicing
| corporate real estate is a real industry (janitorial
| services, managerial duties, parking lot attendants,
| plumbers, even construction). They are already having a
| pretty hard time of it, and if this industry vanishes,
| "moving on" may mean going out on the streets. San
| Francisco, Los Angeles, New York, and San Diego have
| enough homeless already.
| AdamJacobMuller wrote:
| The same effects which will drop commercial office real
| estate prices will drop commercial residential prices and
| thus their rents.
|
| And, if it doesn't, in the absence of work they always
| have the option of moving somewhere with a more
| attractive income to cost of living ratio.
|
| Much harder for a company to up and move than an
| individual or a family.
| sidlls wrote:
| I think the shift to remote work is temporary. There will
| almost certainly be a relatively large crash in commercial
| real estate, but it will recover, probably within a year or
| maybe two.
| threeqhan wrote:
| The cause is always different, the effect is usually the
| same. SF experiences boom and bust cycles, this is just the
| catalyst of the next bust.
| marinhero wrote:
| My friend who's also a realtor in The Bay says the exact same
| thing. I hope they are wrong and just being fatalists!
| api wrote:
| There is a mass exodus of people from HCOL cities as jobs go
| virtual as well as a massive amount of office downsizing.
|
| Residential real estate may be okay in the cities receiving
| this exodus in the South, Midwest, Texas, Idaho, etc. but as
| for HCOL cities I'm just not sure. There may be enough demand
| to at least cushion it.
|
| Commercial will definitely be a bloodbath of epic proportions,
| especially in formerly hot markets.
|
| Edit: too early for good stats but here are some cities that
| seem to be receiving HCOL expats as determined by the highly
| scientific process of observing anecdotes:
|
| Phoenix, Santa Fe, Boise, Denver, Dallas, San Antonio, Austin,
| Atlanta, Cincinnati, Pittsburgh, Chicago... I'm sure that list
| is not exhaustive. Those are just some I have seen.
|
| Those vary in terms of how not-HCOL they are but all of them
| are much less expensive than California, NYC, or the Seattle
| area. Much better places to live if you don't have to live
| somewhere with $500k to $1.5m "starter homes" and other
| absurdities. Now that we are discovering that we can actually
| use this Internet thing, good riddance to that madness.
| ChuckMcM wrote:
| This is a good point. I explained it to my mother with an
| analogy to a cruise ship heading toward shore at full speed.
| Everyone knows this means the ship will run aground, but few
| appreciate that given the mass (and thus momentum) the ship
| would travel far inland just scraping across the ground.
|
| The coming economic response to the pandemic has the potential
| to be like that, basically 10x the 2009 "great recession" and a
| lot of second and third order effects.
|
| Hard to predict what to do and it's nice to hear the Fed doing
| their research. The TARP program in 2009 was pretty creative
| and managed a pretty big thwack without nearly as much pain as
| their could have been.
| sebmellen wrote:
| Great analogy. And yes, from all I can tell, the Fed is
| trying to prepare as best as possible. You can read this
| article co-authored by my aforementioned relative which led
| to a call from the Fed here:
| https://www.hvs.com/article/8745-the-impact-of-
| covid-19-on-h....
| erosenbe0 wrote:
| In terms of suffering, I'm more worried about the loss of
| support workers and supporting businesses over the long-term.
| Especially in a place like Chicago where the installed base of
| offices is much much larger than SF, and where portions of the
| future sales tax revenue has already been securitized and sold
| to investors.
| antognini wrote:
| Why will leases be terminating in Q2 2021 in particular?
| sebmellen wrote:
| This is mainly a concern for one year leases that were
| renewed this March/April/May, which won't be renewed in 2021.
| There are many companies which budgeted for a few weeks or
| months of work from home, now they're transitioning
| permanently and the office space they were using is no longer
| needed.
| gruez wrote:
| >This is mainly a concern for one year leases that were
| renewed this March/April/May, which won't be renewed in
| 2021
|
| Do leases tend to get renewed in Q2?
| sebmellen wrote:
| It depends on when the lease was signed. AFAIK there's a
| pretty even distribution between quarters. Here's an
| article from this year (2020) about notable leases signed
| in Q2:
| https://www.bizjournals.com/sanjose/news/2020/07/10/six-
| nota....
| freehunter wrote:
| If they signed a 12 month lease in Q2, then yes.
| bobbyi_settv wrote:
| A 12 month lease for commercial real estate in SF?
| enigmo wrote:
| the scope of the pandemic wasn't yet clear in Q1
| CamperBob2 wrote:
| Because that's when businesses stopped signing new ones, I
| imagine.
| Spooky23 wrote:
| I wouldn't.
|
| Better to run it into the ground -- this stuff will get bailed
| out to protect the banks.
| _Microft wrote:
| That's 1.1M m^2, so a bit over 1 km^2.
| andrewxdiamond wrote:
| If this trend continues, I wonder if these office spaces can be
| converted to apartments. SF is in desperate need of living space
| supernova87a wrote:
| Right now it isn't -- if you look on Zillow, apartments are in
| places about 10 deep trying to be rented. There are also a
| bunch of new apartment buildings that came online, and are
| sitting basically empty.
|
| But yes, your statement is true. What SF needs is a revamp of
| its zoning and "neighborhood preservation" policies that are
| not setting it up for resilience against things like this.
| tialaramex wrote:
| The UK authorised this, years ago, because it's obvious that
| our economy is transforming so that fewer shops and offices are
| needed but the population is still growing.
|
| The homes built under these rules are generally poorer quality,
| they tend to be smaller and more expensive to run than an
| otherwise equivalent new build home. But they are homes, and
| it's not as though San Francisco has too many of those.
|
| At the extreme of what can be done, Birmingham is a British
| industrial city, and once upon a time as it began to take off
| there was enormous pressure to build homes so they constructed
| what were called "Back to backs". These were groups of homes
| packed together "back to back" so that you only had windows
| facing out one way, the other three sides of your home were
| walled in by other housing. They were squalid and almost all of
| them were torn down, although the World Wars diverted resources
| so that the last of them ceased to be homes only in the
| mid-20th century.
|
| But historical preservation means Birmingham still has one set
| of Back to Backs, most of which is a museum you can tour to see
| how they were lived in during different periods, but one home
| was instead converted into a fairly nice two person overnight
| apartment you can hire. They plumbed a modern bathroom with
| shower and toilet, kitchen and so on, and of course in the 21st
| century we can light interior spaces cheaply and easily so it
| doesn't feel permanently gloomy, also of course it's just one
| couple in a double bed for one or two nights, whereas these
| would have been homes for families of eight people for a
| lifetime...
|
| So yes, if there's money you can add everything. A Back to Back
| as constructed has zero running water, let alone sewage, unlike
| an office building so they'll have had to use modern narrow
| bore sewage pumping and other expensive tricks to make it work,
| but if the building would otherwise sit empty...
| diebeforei485 wrote:
| Many of them can't because they don't have sufficient plumbing
| everywhere (apartments would have far more bathrooms and
| kitchens) and most buildings can't be retrofitted.
|
| Plus, land-use laws would have to change, which is also
| extremely difficult.
| 908B64B197 wrote:
| I guess they could make bigger apartments if they are
| bottlenecked on plumbing.
|
| But I wonder what people could do with commercial office
| space so cheap? For startups that can't really go 100% remote
| (mostly hardware) that's a dream come true!
| VectorLock wrote:
| I wonder what it would be like to live in a 10k SF open-
| plan office with a single bathroom.
| sjg007 wrote:
| You can reconfigure the more modern ones.
| Aeolun wrote:
| > extremely difficult
|
| Right up until 50% of the city center is empty. You'll see
| those laws changing real soon.
| swiley wrote:
| SF: shared bathrooms aren't ok, we'd rather have people use
| the sidewalk.
| Redsquare wrote:
| Where would be the demand for thousands of extra apartments if
| folk are mostly remote?
| idoh wrote:
| Before covid rents in SF were among the highest in the world,
| which implies very high demand. I'm confident that many
| people still want to live in SF, e.g. single people like to
| cluster next to other single people. In other words working
| in tech is a draw but not the only draw for living in SF or
| any other urban area.
| tlear wrote:
| Money a lot of money,networking opportunities etc was THE
| draw.
|
| There are dozens of cities that have everything else that
| SF has. If $$ goes away it will crash so hard it will make
| Detroit look like a model city.
|
| My hope that after election hysteria is over and Vaccines
| get approved we will be back to something resembling normal
| by next summer. SF has a huge value as a place for tech
| with all its other faults it would suck to loose it
| SpicyLemonZest wrote:
| San Francisco was a popular city before the tech boom,
| and remains popular for much more than just software
| engineer networking. That doesn't mean losing the tech
| industry can't cause problems, of course, but saying that
| software is the only thing special about SF is like
| saying banking is the only thing special about Manhattan.
| meddlepal wrote:
| Ive been told in a lot if cases this is virtually impossible
| due to cost and structural constraints of office construction
| vs residential... notably ceiling heights, plumbing and floor
| plans are poorly designed for residential conversion.
| OpticalWindows wrote:
| Im suddenly having a vision of a corporate housing commune.
| Starting a hydroponics lab in the middle of office space /s
| javajosh wrote:
| So, I know you were joking but this idea has more than a
| little validity. In my vision, it would be a small group of
| families that would meditate daily together, and
| collaborate on chores and child-raising, and (this part I
| haven't figured out yet) work on the same project, or
| perhaps WFH on software-like things. Ideally there would be
| daycare, gardening, and some sort of exercise (yoga)
| involved. I mean, yeah its easy to imagine how such a thing
| could go horribly wrong - bad actors taking advantage,
| cult-like groupthink, etc - but its also easy to imagine
| what it would be like with the right mix of people being
| good to each other. Maybe call it a "Sci Fi Kibbutz" or
| something.
| [deleted]
| treis wrote:
| Eh, we converted factories and warehouses. I'm sure we can
| convert office space as well. It's just a matter of
| cost/benefit.
| idoh wrote:
| Good idea but sadly impossible for San Francisco because San
| Francisco cannot even convert places that are zoned for housing
| into housing.
| 77pt77 wrote:
| > San Francisco cannot even convert places that are zoned for
| housing into housing
|
| You missed a "not" there.
|
| You talk about that like it's a law of Physics.
|
| It's not.
| hogFeast wrote:
| I think you would see this occur. As inflexible as local
| government tends to be, they get the idea pretty quick when
| rich people start losing money. Where I am, tbf I am in the
| UK and the rules are likely nowhere as inflexible, but
| property is being rezoned (and green zones are being built
| in, all the apparently immovable shibboleths of local govt
| are tumbling).
| InTheArena wrote:
| Won't. Not Can't.
|
| This problem is entirely of the Bay Area's own making. They
| have been pursuing exclusionary housing policies while
| cranking up taxes and spending for a long long time. Now the
| revenue base for those taxes are collapsing at the exact time
| they need the revenue to weather the storm.
| ashtonkem wrote:
| SF literally created the first zoning laws in America.
| Nothing that's happened there in terms of zoning and real
| estate cost is an accident, it's a natural result of
| politicians and citizens valuing real estate value above
| pretty much anything else.
| nrp wrote:
| It has actually happened before in San Francisco. 100 Van Ness
| was reskinned and renovated into a 400+ unit apartment building
| from its previous use as an office tower:
| https://socketsite.com/archives/tag/100-van-ness
| CommanderData wrote:
| Is this the answer though? I don't think the current is the
| norm. Wfh for many is unsuitable.
|
| It's a temporary shift and things will balance out in a few
| years.
| aeternum wrote:
| It's likely only partially temporary. Many companies were
| already decreasing hiring in the bay area pre-pandemic. That
| will only continue as other places are much cheaper.
|
| Between the high tax corporate rates of SF & California along
| with increased salary due to cost of living, an SF-based
| engineer must produce 2x as much output as an engineer based
| elsewhere and 3x as one based on Canada.
| jahewson wrote:
| The trend in SF right now is people leaving the city - demand
| for apartments is in free-fall.
| mrb wrote:
| At about 150 sq.ft per employee
| (https://robinpowered.com/blog/new-office-determine-right-
| off....) that means 80,000 employees vacated office space.
| [deleted]
| InTheArena wrote:
| I live in a state where we are suddenly inundated with
| California's refugees, fleeing the state now that they don't have
| to physically live there. Reasonable taxes, a much less stressful
| work-life balance, bigger homes all make it very appealing to
| ditch the once0golden state.
|
| Our company has decided not to reopen a majority of it's office
| space. Ironically, the Bay Area office is remaining open while
| other offices are being closed, but even there it will be a
| shadow of it's former self
|
| I would like local and federal governments to come up with a plan
| for the inevitable bail out that transforms some of this space
| into more livable space, more community access, and more on-
| demand office space.
|
| Apple's HQ has turned into the worlds largest set piece for a
| iPhone ad.
|
| San Fran is going to come out of COVID dramatically weaker.
| That's been inevitable for a while, the pandemic just accelerated
| it.
| nicktrocado wrote:
| Which state? I thinking of moving and would like to know good
| states to move into
| [deleted]
| jacobolus wrote:
| The "reasonable taxes" in many places depend on large-scale
| transfers at the state/federal level from places like SF.
|
| But this pandemic is going to be crushing state and municipal
| budgets across the country, and many of the worst-hit places
| will be rural and exurban.
| flurben wrote:
| You seriously think that everywhere in America with
| reasonable tax rates is just getting fiscal transfers from
| SF?
| jacobolus wrote:
| Personally I don't think "low taxes" are "reasonable". We
| live in a complicated society and we all benefit when we
| collectively pay people to do a huge variety of essential
| jobs which are hard to fit into a pure-profit system.
| Cutting funding for those exposes us to a wide variety of
| risks and eliminates many future opportunities, in the long
| term harming us all. The Covid pandemic is a perfect case
| study in the way that e.g. public health infrastructure,
| expertise, and political support can save hundreds of
| thousands of lives. (While we are talking about San
| Francisco here, it's worth noting that SF and the Bay Area
| has done by far the best of any US city / metro area at
| containing Covid and preventing needless deaths of
| residents, despite some failure especially early to
| properly target testing resources toward poor/minority
| areas full of essential workers.) But infectious diseases
| are only one of the many risks that individual people
| cannot adequately understand and fund on a personal basis,
| for which it helps to have collectively funded public
| institutions.
|
| Some places raise money via sales taxes instead, or other
| regressive schemes. Some places raise money by questionable
| fines on their own residents. Some places make money off
| the back of wanton environmental destruction.
|
| Some just accept shoddy local services. (When you compare
| the US to other wealthy nations, it's really shocking how
| poor our basic infrastructure and public services are, even
| in the richest US states and cities.)
|
| But most low-tax areas of the US are substantially
| supported by federal-level transfers, for example from
| federal highway budget, from military bases and defense
| contracting located there, from federal agriculture
| subsidies, ...
| nimish wrote:
| Nah, the spending power of the federal government, and the
| tax collection of the federal government are not linked.
|
| So long as the fed can print money the federal government can
| spend. It cares not about the states or how much income tax
| flows in. Hence, it can run up structural deficits until
| faith is lost in the $ (inflation).
|
| State governments, on the other hand, cannot print money.
| They must operate in a zero-sum mode.
| jacobolus wrote:
| Yes, the federal government _could_ bail out state and
| local governments (and indeed that's some of what the
| Heroes Act does - passed by the House in May).
|
| But the GOP (e.g. the Senate) intransigently refuses to act
| or even negotiate, and so state/local governments are
| getting crushed.
| digitaltrees wrote:
| It takes some time to get a feel of the culture of a new place,
| but trust me as someone that has lived in a few other states,
| it eventually makes a big difference. California has
| dramatically out performed other states, and is more expensive
| because it was working, in part because of the culture that is
| unique to California.
| jelling wrote:
| I live in NYC and lots of friends have left town for upstate
| New York or similar places. But I'm waiting to see how great
| they think these places are after they have eaten at the same
| 5 restaurants for a year. And once live culture returns to
| NYC and other places, how will they feel then?
|
| Of course, the other way to look at the de-campers is that
| they were going to move to the burbs inevitably. Which good
| for them, but cities are injured, not dead.
| [deleted]
| OpticalWindows wrote:
| We haven't even seen the extent of the depression yet. Combined
| with congressional inaction on social spending a lot of people
| are going to be in very deep finanical issues. This is a systemic
| problem that we needed fixed 3 months ago.
| dang wrote:
| (We detached this subthread from
| https://news.ycombinator.com/item?id=24890196.)
| sebmellen wrote:
| How do subthreads work? I assume they're just hidden due to
| divisiveness / flamewar risk?
| dang wrote:
| Mostly it's offtopicness, especially generic tangents: http
| s://hn.algolia.com/?query=generic%20discussion%20by:dang...
| sebmellen wrote:
| The lack of continued large-scale stimulus is tragic. We need a
| strong stimulus package with direct monetary relief (one $1200
| check is not enough), and a program of structured financial
| relief / rent forgiveness. Unfortunately, I don't see it
| happening.
| pessimizer wrote:
| We should have explicitly been paying people to stay home,
| but somehow the $1200 + the $600 unemployment bump became
| welfare payments, and morons were giving speeches about how
| they were incentivizing people to stay home. No shit.
|
| Once we had things under control, we could loosen up
| quarantine, then when it got shitty again, tighten it up
| again and pay people to stay home. It would have goddamn paid
| for itself. If people could quarantine and know their
| livelihoods were secure, they wouldn't be so upset about it.
|
| edit: this is a rehearsal for when the next coronavirus comes
| around that has an infection rate like covid-19 but a death
| rate like MURS. It's going to whip through the world like the
| plague.
| xienze wrote:
| The problem is that one stimulus check cost $2 trillion
| dollars. Doing that every single month for an indefinite
| period of time is, quite expensive to put it mildly. And
| that's not even taking into consideration that there's a
| lot of people with monthly expenses in excess of $1200 per
| month.
| altdatathrow wrote:
| I know these are large numbers, but the 159 million
| economic impact payments cost $267 billion [1]. This
| article [2] gives a pretty good overview of the $4T spent
| in total so far
|
| [1] https://www.irs.gov/newsroom/159-million-economic-
| impact-pay...
|
| [2] https://www.washingtonpost.com/graphics/2020/business
| /corona...
| quickthrower2 wrote:
| Where does that money come from? QE & more government debt?
| nicoburns wrote:
| I think it's instructive to set aside money for a minute
| and think about things in real terms: if we shut things
| down, then which parts of the economy won't be functioning
| and what is the cost of that.
|
| For example: suppose hospitality workers are paid to stay
| at home. How is that paid for? Well actually it's entiely
| paid for by people having fewer of the hospitality
| experiences that they are used to. It is obvious when you
| take money out of the equation that hospitality workers
| staying at home will not cause there to be any less of
| essentials such as food and shelter to go around.
|
| There are other sectors like manufacturing where there is a
| real cost to be paid. But that could be as small as
| delaying the purchase of the manufactured goods by _period
| of lockdown_. No so bad.
|
| Whem you look at it like this way, QE seems entirely
| justified. All it really does is spread the effects accross
| the economy to people who can bear them, and avoids
| financially ruining people which will be a primaey cause of
| long term economic damage once things reopen.
| quickthrower2 wrote:
| I'm not concerned about justification for QE, but more
| about where is the limit of debt you can take on to
| provide cash to a vast population, and is there a better
| way to fix things?
|
| I see the problem as a lack of agility of the economy.
| The hospitality works could have another job, but those
| jobs can't get created fast enough. How can they get paid
| by other people rather than the government.
|
| Another question is post-covid do we want to ramp up
| consumption again. Do we need people flying to hotels to
| meet up, or will Zoom do? And if Zoom will do, what of
| the hospitality industry (already taking a stab wound
| from Airbnb etc.).
| erosenbe0 wrote:
| Mostly deficit spending. QE and the like is for increasing
| the money supply, not really spending. Though it can have a
| knock on effect in terms of the rate the govt borrows at.
| sjg007 wrote:
| Yep and it doesn't matter.
| OpticalWindows wrote:
| We should be reciving our 3rd and onto our 4th right now.
| sebmellen wrote:
| Really, it's an infrastructure problem. We don't have
| direct payment rails set up for something like UBI, and the
| political will to build this infrastructure is next to
| zero.
|
| Most of the companies receiving relief were badly managed
| before the pandemic, and they should be allowed to fail.
| But it's very hard to structure relief in a fair and
| effective way.
| waheoo wrote:
| In WW2 we transformed every industry overnight to be
| geared for war.
|
| I think we can handle setting up a payment system...
|
| Like what kind of weak ass excuse is that? You can't
| figure out how to pay everyone?
|
| Please. Give me a break.
|
| Ubi is the effective and fair way to stimulate the
| economy btw.
|
| All this stimulus aimed at businesses is absolutely
| moronic.
|
| If people know they have secure pay coming in they will
| spend the money. Its the uncertainty that causes people
| to hard cash.
|
| Businesses don't need the cash, if they can't stay afloat
| during this they shouldn't be allowed to make it through.
|
| I do believe they deserve some help,aybe tax breaks,
| maybe short term allowance to make people redundant /
| reduce so they can equalise the books but there is no
| fair way to give them money and not the people.
| OpticalWindows wrote:
| I agree its very difficult and in making decisions like
| this we will incidentally help pick winners and losers.
|
| I dont think temporary relief will make or break a
| business model effected by the pandemic. On some of those
| edge cases we will need to decide whether the government
| will get their money back or accept losses.
| perardi wrote:
| An excellent point.
|
| How many people are/were barely attached to the banking
| system? Especially if you're working, well, a bit under
| the table, in day labor situations like construction or
| office cleaning.
|
| I got my stimulus check. Basically immediately. Because I
| have a standard 9-5 salaried job with direct deposit, so
| the government knew exactly where to send the money. But
| that seems to _obviously_ not have the force multiplier
| effect of sending it to someone who just got fired from a
| movie theater.
| sjg007 wrote:
| It's based on IRS direct deposit.
| perardi wrote:
| ...yes, and? I said that. Quote:
|
| _"salaried job with direct deposit"_
| paulgb wrote:
| I'm not the above poster, but I took your comment to mean
| direct deposit from your employer to your account, not
| direct deposit from the IRS to your account (for tax
| refunds, which is what I assume the above poster means).
| redisman wrote:
| > Really, it's an infrastructure problem.
|
| No it's not. Seemed to work fine in July didn't it? It's
| obviously a political problem. Why can't we just use the
| same mechanism again?
|
| edit: Maybe you're talking about the business/paycheck
| replacement relief and not the individual checks like the
| parent was?
| meerita wrote:
| Keynesian economy never worked. Redistributing money will
| just make it worthless.
| drxzcl wrote:
| I love your certainty. I'm not sure it's warranted though.
| dasil003 wrote:
| This is too reductive and unclear what you are saying.
|
| If we do no redistribution and simply allow people to
| starve in the streets then revolution is coming.
|
| On the other hand, if we prioritize helping people, and
| stop propping up failing businesses then we can maintain
| social stability long enough for the economy to restructure
| according to natural economic forces.
| digitaltrees wrote:
| In an economy with 80% consumer spending, your assertion
| should be supported because it is fundamentally at odds
| with the economic context and make up of economic activity.
|
| Supporting consumers obviously worked this year, the fact
| that a 30% drop in economic activity has been as mild
| systematically as it has is direct counter evidence to your
| statement.
| nostromo wrote:
| Yes, we need at least another 6 trillion. Maybe 20 trillion.
| Why stop there? We should quadruple the money supply maybe,
| we need to protect commercial real estate investors, after
| all.
|
| ... and then in 2021 we can all scratch our heads and wonder
| why income inequality is worse than ever, and despite all
| this spending, we didn't even make an appreciable dent in the
| impact of Covid-19 on public health.
| sebmellen wrote:
| I think a quote from Bernie Sanders encapsulates the
| problem: "in the US, we have socialism for the rich, and
| rugged individualism for the poor".
|
| Corporate lobbyists know the government is a cash cow, and
| they take advantage of this. They will always get relief if
| they ask for it.
|
| Direct payments are the opposite of this.
| nostromo wrote:
| When you dramatically expand the money supply you make
| the rich richer. It doesn't matter how the money is
| distributed, it tends to inflate asset prices, and the
| people who own the most assets (the rich) reap the
| rewards in the end.
|
| If you wanted to stop that, you'd have to actually pay
| for your spending, perhaps by implement some sort of
| wealth tax or dramatically increasing income taxes. Of
| course, nobody wants to increase taxes, so we just keep
| printing money to try and fix every problem.
| flurben wrote:
| What you just said is factually incorrect. Expanding the
| monetary supply does not "make the rich richer."
| sebmellen wrote:
| The number of people who are homeless, in medical debt,
| and unable to work or make any money due to limited
| skillsets and COVID is astounding. These people need some
| type of immediate help, and if they don't receive it, the
| effects will be _far_ more detrimental than the effects
| of fiscal stimulus.
|
| And I think you're confusing monetary stimulus with
| fiscal stimulus.
|
| > _It doesn 't matter how the money is distributed, it
| tends to inflate asset prices_
|
| For the US, that's not true. The US Dollar is the world's
| reserve currency, and the Fed isn't worried about
| inflation, but a lack of money supply. The pandemic has
| led to a huge demand for safe assets, including Treasury
| bonds, which has led to incredibly low interest rates on
| Treasury bonds, and a stronger dollar. See, for example,
| this article: https://www.washingtonpost.com/business/202
| 0/04/05/what-2-tr....
| [deleted]
| grey-area wrote:
| Monetary stimulus (QE, Low interest rates) is not fiscal
| stimulus (spending). Maybe we need to do a lot less buying
| assets, and a bit more spending on people and jobs. The
| parent is recommending the latter (spending), not the
| former.
| [deleted]
| umvi wrote:
| Why not just print 1 million dollars per person and end
| poverty in one fell swoop? If there are no consequences for
| printing 3 trillion, why not print 300 trillion?
| sebmellen wrote:
| This is the worst strawman argument I've ever seen. The
| problem is precisely that corporations (especially badly
| managed ones) have been able to bleed the stimulus
| coffers dry, and they will continue to do so, because we
| have a system of government which caters to them.
|
| Direct payments and rent forgiveness are not "printing
| money", they are limited, specific relief packages
| targeted at people in need. These are people who are
| about to be evicted, homeless, in medical debt, etc.
| These people need help, or the consequences will wreak
| havoc on a colossal scale.
| sjg007 wrote:
| Pretty easy solution on November 3rd. Vote Democrat down
| ticket.
| chrismcb wrote:
| Democrats are part of the problem. The solution isn't to vote
| democrat or republican, it is to vote for people that care.
| Term limits would go a long way to solving that problem.
| throw_away wrote:
| Getting rid of First Past the Post with something like Star
| Voting (https://www.starvoting.us) would go much further
| without imposing arbitrary limits.
| karmelapple wrote:
| Do you have a suggestion for who to vote for who "cares"?
|
| And as my sibling comment mentioned, eliminating first past
| the post would, in my opinion, be a gigantic improvement.
| If you're in Massachusetts, please vote Yes on 2 this
| election so we can have ranked choice voting statewide.
| xienze wrote:
| > Combined with congressional inaction on social spending a lot
| of people are going to be in very deep finanical issues.
|
| I would imagine people are experiencing such things already
| seeing as how it's been seven months with nothing but a single
| $1200 check.
| chrismcb wrote:
| We should never have sent a 1200 check at all. The people who
| need help were the ones who lost their job. And they got it
| through extra unemployment benefits. I do realize there is an
| issue with some people who don't qualify for unemployment
| either because they still work part time or because they were
| self employed. That group should have been targeted and or
| given benefits as well
| OpticalWindows wrote:
| Yes and states have run out of funding. They literally cant
| pay people the services they promised them when taking taxes.
| stellar678 wrote:
| In other news, water is wet.
|
| Is it surprising to people who are working from home, that the
| office they used to work in and cannot yet return to is now
| vacant?
|
| People have been calling the collapse of San Francisco since the
| gold rush. It's clearly had its ups and downs, but the overall
| trend is clear too.
| rightbyte wrote:
| I guess this number doesn't include vacant as in barely anyone
| actually using the office space but still leased. In that case
| 14% vacancy rate sounds low.
| quickthrower2 wrote:
| Well this isn't the collapse of San Fransisco - but rather the
| office rental market. Also interesting that people let go of
| the office space. Companies making a lot of money wouldn't do
| that they'd keep it for a year or so simply to have the
| continuity. They are too busy making money to worry about their
| rent.
|
| But if they are looking to cut back on rent costs it makes me
| think times are tough. That paying attention to cutting this
| cost (and the hassle it will cause now and when things return
| to normal), and taking that attention away from growth means
| that there is an issue.
|
| Obviously this isn't the permanent collapse of SF but it might
| be a nail in it's long term coffin. I can't imagine in 50 years
| time, with globalisation, with global currencies, remote
| working, VR etc. that you'd need to be tied to a physical
| location to innovate or get investment.
| danpeddle wrote:
| Is this a worldwide trend? Wonder what it means for city tax
| incomes.
| gruez wrote:
| Why would it matter? Do you not have to pay property taxes if
| the space isn't leased out?
| perardi wrote:
| Meanwhile, in Canada...
|
| http://trreb.ca/index.php/market-news/market-stats#commercia...
|
| If leasing activity and sales volume are good indicators, it's
| down. Though prices are up slightly...
|
| Also that data is nation-wide, and not specifically for
| Toronto, which is reasonable to assume would be the hardest
| hit. _(Biggest city, and Ontario has not controlled this as
| well as British Columbia.)_
| tlear wrote:
| I think aggregate for the country is almost meaningless,
| these things are very local.
|
| Toronto residential rentals are dropping but not that
| quickly. Construction has not slowed and condos are popping
| up like mushrooms. Prices seem stable for now
|
| There is A LOT of hiring by US companies. Canadian labor is
| so cheap compared to CA. Every startup past series A seems to
| be opening a Toronto branch. This is awesome news as it will
| drive salaries up.
|
| On another positive side we do not have homeless shitting on
| every corner. Drug addict camps are pretty small and
| localized and Winter is Coming. Plus courts are actually
| letting city clear the encampments.
| perardi wrote:
| Fiiiine, I am projecting, I admit it.
|
| I still can't believe people are paying $600,000+ CAD for a
| 533 square-foot condo, and yet, condo prices are even
| headed up a bit.
| jeffbee wrote:
| Keep in mind that the denominator is about 88 million square feet
| of total office capacity.
| pdx6 wrote:
| For those that think this is the end of San Francisco, take a
| deep breath. The empty office space and worries about expiring
| leases only applies to companies that can't work remote. SF has a
| huge service industry, swaths of culture, and some pretty nice
| weather.
|
| A bunch of chair warmers and button pushers moved to Tahoe or
| Mazzula, so what? It is nice to have a huge house and some land,
| but city living is are a tradeoff. Living around a bunch of
| people means food, entertainment, and social options that simply
| can't be had from a Zoom room.
|
| If CRE prices drop, the offices will still get filled to the brim
| with new companies in a couple of years. Will there be some CRE
| bankruptcies? Certainly. But has anyone looked at on time
| payments of office REITs? Keep an eye on those for dividend cuts
| as a predictor.
|
| Thinking of starting a business here? I'll beat my drum once
| again -- it has never been a better time to setup shop here. Take
| risks when others panic.
| dannyw wrote:
| I don't think everyone who lives in San Fran wants do _life_ in
| San Fran. They're here because that's where the jobs are.
| anonAndOn wrote:
| I _really_ hope the creatives and studio types are taking
| advantage of this once-in-a-generation type opportunity to film
| in deserted SF neighborhoods. Post-apocalyptic, zombie or killer-
| virus* films could all be shot on location instead of some studio
| lot.
|
| *that may be a little too close to the truth
| albacur wrote:
| I'm excited by the idea of permanent remote work and moving
| somewhere more affordable. I moved to SF relatively late in my
| career, and only realized afterwards that I have nowhere near
| enough savings to own a decent home here.
|
| But most of my coworkers seem eager to return to the office. They
| miss the office environment, the perks and catered meals, and the
| social aspect. And the managers, who thrive on meetings and in-
| person interaction, seem even more anxious to get everyone back
| in their desks. The powers that be probably have personal
| motivations for keeping everyone here (e.g., many millions of
| dollars tied up in their homes, which could be a disaster if the
| housing market deflates).
|
| All this is to say, I'm skeptical that workers won't be called
| back into the office as soon as leadership gets the chance.
| steelframe wrote:
| > And the managers, who subsist on meetings and in-person
| interaction, seem even more anxious to get everyone back in
| their desks.
|
| I recently quit my job so I could stop being a manager and
| return to IC, exactly because of this. In a WFH climate
| managers have to work twice as hard to stay competitive in the
| political games.
| pbuzbee wrote:
| I agree. The people with the power have far more incentive to
| return to the old model than to try a different one.
| rossdavidh wrote:
| I agree, but with a caveat. The _very_ top execs of large
| organizations (Google, Facebook, etc.) may be anxious to get to
| a lower-salary environment, and remote work may be a necessary
| part of that. If they are determined to move to a structure
| where they don't have to pay SV salaries, they might overrule
| their middle-management and extend remote work in order to
| facilitate that.
| vmception wrote:
| Still not moving back.
|
| Seeing those empty Walgreens shelves was it for me.
|
| Even the social programs and tolerance of the squalor is not
| _that_ real, it is simply that the transient population is not
| affected: students and programmers. The same population that just
| left.
|
| I appreciate all the optimism for San Francisco but it just seems
| to lack context from the mid-atlantic cities that are carcasses
| of an industrial era which never returned.
|
| The brick and mortar boutiques were struggling there during the
| best market in the history of man kind.
|
| This is more obvious to see when you leave. Its harder to see
| when your life is built around never acknowledging it and
| pouncing on everyone that says what they observe, on Nextdoor.
| digitaltrees wrote:
| You seem to be hinting at interesting things here but its hard
| to follow, the writing feels like a disjointed short hand with
| unstated context that requires experience to unpack. What are
| "those empty Walgreens shelves", not having been there I don't
| know what you mean. Further, SF was not unique in experiencing
| that. I experienced it in North Carolina and Utah. What do you
| mean "squalor that is not that real?", what is the "context
| from mid-atlantic cities" and how is that relevant or
| informative to SF in particular? What is obvious when you
| leave? Where did you go and what did you experience?
| albacur wrote:
| It might require the added context of living here. San
| Francisco has one of the highest property crime rates in the
| United States [1], and Walgreens is a popular target of
| shoplifters, who regularly clear out entire shelves of
| merchandise. The company hasn't come out and said it, but
| some believe that rampant shoplifting is a reason why eight
| Walgreens locations in the city have been permanently closed
| [2].
|
| [1]
| https://www.sfchronicle.com/bayarea/philmatier/article/SF-
| ra... [2] https://www.sfchronicle.com/bayarea/philmatier/arti
| cle/Rampa...
| flurben wrote:
| I agree, linguistically that comment borders on gibberish.
| dang wrote:
| Please don't be rude in comments here, and please don't
| pile on.
|
| digitaltrees' reply gives vmception a nice invitation to
| expand, which would benefit all of us. Swipes like the one
| in your comment unfortunately have the opposite effect on
| conversation.
|
| https://news.ycombinator.com/newsguidelines.html
| [deleted]
| brian_cunnie wrote:
| The empty Walgreen's shelves can be seen at the Walgreen's
| on the corner of Eddy and Van Ness Streets.
|
| People come in & take whatever they want because they know
| Walgreen's has a "no contact" policy (they won't stop you).
| They shoplift everything. And Walgreen's doesn't rush to
| re-stock.
|
| There are a lot of homeless and drug addicts in that area,
| but I don't know firsthand if they're the shoplifters.
|
| I spoke to a police sergeant at the Walgreen's at Broadway
| and Polk, and he said it's pretty bad, and that even he has
| a hard time getting the shoplifters to stop.
| drdeadringer wrote:
| > NextDoor
|
| That place was a nice idea just like Facebook, Twitter, and
| LinkedIn were.
|
| NextDoor worked out just as well as the rest of them.
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