Think Tank, CBRE Rank San Francisco at Bottom for Recovery

A study released this week by the Bay Area Council Economic Institute and CBRE’s Tech Insights Center found that two Bay Area cities—San Francisco and San Jose—are close to the bottom of 25 US metros the group ranked for their economic recovery from the pandemic.

The Economic Institute, a public policy think tank focused on economic issues facing San Francisco and Silicon Valley, compared the 25 largest metros, evaluating their recoveries based on 15 metrics, including jobs, investment, economic activity—and affordability—as well as the number of people who migrated out of the metro during the pandemic.

In what it is calling a Regional Economic Recovery Index, the think tank ranked Austin, Dallas, Denver, Tampa and Miami as the top five metros, respectively, with the strongest recoveries.

San Francisco ranked 24^th and San Jose ranked 16^th in the index, with the data evaluated for San Francisco inclusive of Oakland and Berkeley, and the data for San Jose including Sunnyvale and Santa Clara.

On a scale of 0 to 100, Austin and Dallas received scores of 85.8 and 78.4, respectively. Baltimore, with a score of 22.1, was the only metro that fared worse than San Francisco, which came in at 25.8, in the recovery survey. New York City (32.5), Los Angeles (32.8) and Washington DC (34.5) also were in the bottom five in the new index.

According to the Institute, housing costs make San Francisco the least affordable metro, and combined data from San Francisco and San Jose shows that 147K people moved away from the Bay Area during the pandemic—joining Los Angeles, San Diego and Miami as the only metros with comparable GDPs that experienced population losses since 2019.

Austin, which according to the index has had the strongest recovery, experienced the highest rates of population growth and labor force growth during the pandemic, the index showed.

The survey said the number of residents working remotely in the Bay area increased five times from 2019 to 2021, with 38% of the region’s employers consolidating their office space, and another 31% planning to do so.

“Because office and tech work drive much of the Bay Area economy, our region is more susceptible to longer-lasting effects of remote work than its peers,” the Institute said, in its index report.

The index ranked San Francisco worst among the metros surveyed in economic activity and said the city’s lagging hotel and air travel revenue trailed “competing tourist destinations.” The survey also reported that sales tax revenue in San Francisco was $91M less in 2021 than 2019, the largest drop of any West Coast city.

While San Jose also fared badly in the index, the heart of Silicon Valley ranked first in investment, with San Francisco eighth in this metric.

On Feb. 28, San Francisco officially declared an end to the city’s COVID-19 public health emergency, coinciding with California’s declaration ending the emergency as well.