Can downtown San Francisco emerge from its slump before the Apec summit?
- The work-from-home trend and tourist downturn during the pandemic fuelled business closures, exacerbating urban decay in an area already struggling with crime and homelessness
- The mayor has plans to revitalise the once-prestigious district and, hopefully, progress can be seen before the city hosts world leaders for the Apec summit in November
As someone with many close friends in the United States, particularly in the state of California, I am saddened by recent media reports of the deterioration of San Francisco’s once-prestigious downtown district. I have a personal interest in the area and have maintained a home there for many years. Before pursuing my career in Hong Kong, I completed university in Los Angeles county and before that I attended high school in Pennsylvania. I have also remained closely involved with my alma mater.
It seems the problems in downtown San Francisco were exacerbated by factors that combined to create a perfect storm. The catalyst was the Covid-19 pandemic. Lockdowns, social-distancing measures and work-from-home policies kept people away, forcing many businesses to close or dramatically reduce their operations.
Their sustained absence from the area has hindered its recovery and fuelled an escalation in office and retail vacancies, while poor transport infrastructure has resulted in serious traffic congestion, as residents opt to use their cars rather than take public transport, making the area even more unpleasant. A sluggish tourist market has also compounded the problems.
The impact on the area’s hotels, restaurants and other businesses that rely on pedestrian traffic and tourism has been immense. The recent announcement by Park Hotels and Resorts that it has stopped making mortgage repayments on its Hilton San Francisco Union Square and Parc 55 San Francisco – in effect pulling out of the two hotels – is a major blow and a reflection of a lack of confidence in the tourism sector. Combined, the properties account for almost 3,000 rooms.
Homelessness has long been a major factor underpinning the urban decay in downtown San Francisco; the city has one of the highest homeless rates in the country. Downtown San Francisco is the epicentre and the sight of people sleeping rough or living in makeshift structures is, sadly, far too common. Drug abuse is often visible and residents simply do not leave any items inside their cars for fear of theft.
Many people believe the introduction of Proposition 47, also known as the Safe Neighbourhoods and Schools Act and passed by referendum in 2014, paved the way for an increase in petty and organised crime. Certain felony offences were recategorised as misdemeanours, which were less severely punished.
The divide between the haves and have-nots appears to be increasing and high crime rates have propelled an exodus of commercial and retail tenants, along with major shopping centre operator Westfield, exacerbating the urban decay. Many retailers are citing local conditions and employee safety as primary reasons for closure after a spate of attacks on staff by shoplifters, and decreasing footfall. It is widely believed that many smaller tenants are waiting for their leases to expire and are unlikely to renew. The neighbourhood seems set to continue on its downward spiral.
But we must not lose sight of the fact that San Francisco has a history of reinventing itself, and economic recovery is under way in most parts of the city. Mayor London Breed has acknowledged downtown’s challenges. Earlier this year, she outlined her five priorities to redefine, reimagine and revitalise the area: to provide an economically diverse and resilient job engine, a welcoming, clean and safe environment, a dynamic destination active at all hours, every day, a world-class transport experience, and an equitable economy that supports full participation by all.
Bernard Chan is a Hong Kong businessman and a former Executive Council convenor
