US residential home values have declined modestly since their 2022 peak, reflecting higher mortgage interest rates. But residential values have plunged in San Francisco, falling by about 16.7%, compared to a decline of just 3.3% in the rest of the country, a difference of about 13.4 percentage points. San Francisco’s housing stock was valued at nearly $2 trillion by real estate valuation firm Zillow before the price plunge. This additional 13.4 percentage-point drop means that San Franciscans have lost an extra $260 billion more in residential real estate value than it would have had it kept pace with the rest of the country.
San Francisco’s housing price decline reflects the fact that the city has lost more than 65,000 residents, roughly 7.5% of its population. San Francisco’s population loss has been the largest among all major cities in recent years.
Departing San Franciscans have on average represented households of very high income. Between 2019 and 2021, San Francisco lost nearly $15 billion of household income, even after accounting for those who moved into the city. Taxpayers who filed 2019 tax returns from San Francisco and 2021 returns from a new location reported an average annual adjusted gross income (AGI) to the IRS of nearly $196,000 per household.
Teton County, Wyoming—home to Jackson Hole and other well-known ski resorts—attracted the wealthiest ex-San Franciscans, with an average annual income of nearly $600,000. Washoe County, Nevada, site of Lake Tahoe, another ski resort, brought in 333 San Franciscans, with an average AGI of well over $300,000. Just behind these ski resorts in terms of high-income SF expats is Palm Beach, Florida (where there is no state income tax), which attracted San Franciscans with an average income of about $300,000.
Home values in some of the most expensive San Francisco neighborhoods have been significantly affected. The median home price in the Pacific Heights neighborhood, home to former Speaker of the House Nancy Pelosi and actress Julia Roberts, declined more than 20%, from a peak of $2.05 million to $1.6 million, a loss of over $400,000. The median value in the Nob Hill neighborhood, home of film director John Waters, declined nearly 33%, from a peak of $1,662,500 to $1,170,000, a loss of nearly $500,000.
Quality of life and crime have worsened in San Francisco, even in these expensive neighborhoods. Nearly 90 percent of Nob Hill sidewalks and streets were recently found to be soiled with feces. Unacceptable street and sidewalk sanitation, including human feces and used hypodermic needles, have been an issue for San Francisco for years. In 2018, the city created a pooper scooper team, each member of which received annual compensation of about $211,000 that year. Given the inflation that has occurred since that time, scooper compensation may be close to $250,000 per year today. San Francisco spends nearly five times as much on street sanitation than comparable cities, but despite this high level of spending, city streets remain dirty.
Compared with the national average, the overall crime rate is 37% higher in Pacific Heights and 43% higher in Nob Hill. Compare these statistics to those of other expensive California locations, such as Montecito, which is adjacent to Santa Barbara (60% lower than the national average), and the Bel Air district of Los Angeles (52% lower). But the Pacific Heights and Nob Hill neighborhoods are safe compared to the rest of San Francisco. The city’s crime rate, including these two relatively safe neighborhoods, is 111% higher than the national average.
San Francisco’s crime and sanitation issues reflect the city’s tacit acceptance of illegal drug use. San Franciscans are paying an extremely high price for this, and so are drug users. Drug overdose deaths in the city jumped to 200 in the first three months of this year, representing a rate about 3.8 times higher than the national proportion of deaths to population.
San Francisco mayor London Breed, who lost her younger sister to a drug overdose death, is advocating an alternative strategy to the city’s long-standing policy of accepting and facilitating open drug use: “Compassion is killing people. And we have to push forth some tough love to change what’s happening on the streets of San Francisco.”
Some of the city’s supervisors, however, are unwilling to consider Breed’s ideas, including Supervisor Dean Preston, who stated that Breed “is preparing to start arresting people for public drug use. Arresting people for drug addiction is not ‘moderate’ nor ‘commonsense.’ It’s reactionary, cruel, and counterproductive.”
Breed’s relationship with the Board of Supervisors has deteriorated since she appointed tougher-on-crime prosecutor Brooke Jenkins as city district attorney following the 2022 voter recall of progressive DA Chesa Boudin. If Preston and like-minded supervisors won’t listen to Breed, they should listen to Jacqui Berlinn, who has been trying to save her son from drug addiction for years: “My son is stuck with politicians who just hand addicts free drug paraphernalia and double down on the same failed policies. We finally have a new DA who wants to bring real change but she can’t do it until the rest of the city’s political leaders start working toward a real solution instead of making the crisis worse.”
There are tens of thousands of mothers, fathers, brothers, sisters, sons, and daughters of San Francisco drug addicts who likely feel the same way as Berlinn. They should be heard, and new policies should be implemented to get drug use off the streets, provide support for those struggling with addiction, and return functionality to a city that lost its bearings so many years ago.