San Francisco’s “doom loop” story has impacted real estate market

“Absolutely unfair” characterizations are “definitely making tenants think”

San Francisco Doom Loop animation
(Illustration by Kevin Rebong for The Real Deal)

Even if the narrative around San Francisco’s “doom loop” is overblown, the bad press brings consequences to the real estate market as the city struggles to recover from the pandemic, city boosters and agents say. 

In interviews with the San Francisco Chronicle, civic leaders and real estate professionals admitted that the city has real problems but that the rhetoric describing San Francisco as a hellscape filled with drug zombies and rampant crime is, in the words of Rodney Fong, CEO of the San Francisco Chamber of Commerce, “absolutely unfair.”  

“They’re making up stuff,” Fong said. 

The negative stories began with an Atlantic feature last summer that described SF as a “failed city” and centered on the recall of then-District Attorney Chesa Boudin. The stories have grown to include everything from a 45-minute CNN report called “What happened to San Francisco?” to derogatory tweets from Elon Musk that have amassed millions of views. Just this month, presidential candidate Ron DeSantis made a video linking the city’s “leftist policies” to its issues with drug addiction and homelessness.

The city’s troubles are “blown out of proportion,” according to Kazuko Morgan of Cushman & Wakefield. But “it’s definitely making prospective tenants think,” she said. 

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“Negative news makes potential tenants unfamiliar with the market somewhat jittery about San Francisco,” Karin Flood, president of the Flood Building, agreed. “It’s really disheartening to read so many negative articles. Enough is enough.”

Marisa Rodriguez, executive director of the Union Square Alliance, said getting cold feet about signing a lease in a place with such negative publicity is “human nature.” She said the city gets more than its fair share of scary news stories, while few concentrate on the funding and new ideas the city is putting in place to turn things around

“Those stories aren’t being told. I haven’t seen this kind of energy (for revitalizing San Francisco) in a long time and it’s really hopeful,” Rodriguez said.

The city could use this opportunity to create a new narrative about innovation and stability, marketing experts said. Some may not even need that much convincing. Stephen Kraus, an assistant professor of marketing at the University of San Francisco, said the graduate students he teaches have not been deterred by the bad press. 

“A lot of young people from all over the country, all over the world, still want to come to San Francisco, between the physical beauty, all of the job opportunities,” he said. Riffing on former SF resident Mark Twain’s famous quote, he added: “Rumors of San Francisco’s death are greatly exaggerated.”—Emily Landes

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