Why SF business leaders and voters reject the doom loop narrative
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Pedestrians cross a downtown San Francisco intersection. Photo: Loren Elliott/Bloomberg via Getty Images
Is it time to put the doom loop narrative behind us? San Francisco-based businesses and voters say yes.
Why it matters: San Francisco has been dogged by perceptions of a downward economic spiral and widespread crime since the start of the pandemic. But people who live and work here appear to believe otherwise.
Driving the news: A new study by audit, tax and advisory firm KPMG found that 96% of San Francisco business leaders believe the city is well positioned to attract new talent and businesses, including startups, over the next 12 to 18 months.
- 91% expressed confidence in the city's economic growth prospects, and 75% said they plan to increase their commercial real estate footprint in the next 12 to 18 months.
- 88% of survey respondents said San Francisco's talent pool is superior to other regions across the U.S., while 68% plan to up their headcount this year.
The fine print: KPMG surveyed 100 executives whose companies have annual revenues of more than $50 million.
- Smaller businesses, which are often more directly affected by declines in foot traffic and crime incidents, may have different things to say.
What they're saying: Last fall marked a shift in attitudes as momentum associated with generative AI progressed to increases in hiring, new leases, and more companies calling employees back into the office, according to Chris Cimino, managing partner of KPMG's San Francisco office.
- "Then you see more people on the street, which helps the small businesses, the restaurants," Cimino told Axios. "What the data is telling us is that it will continue to build on itself."
Between the lines: The findings also revealed many companies' plans for long-term investments, including mergers and acquisitions, that would reverse San Francisco's "relatively quiet market" of the last few years, Cimino noted.
- "It feels like the spiral [of the doom loop] is going in the other direction," he said. "San Francisco has had its ups and downs, but in my 25 years [here] it's come back stronger every time. That's that optimism we see in the study."
The intrigue: The KPMG data reflects a similar optimism among San Francisco voters, per new polling released by the San Francisco Chamber of Commerce.
State of play: Compared with last year, 28% more San Franciscans rate their overall quality of life positively, and there was a five-year high in the number of people who rate the quality of life in their neighborhood as better than the past few years.
- While voters remain critical on issues like homelessness and public safety, the number of people who say crime has gotten better increased five times compared with 2022. The number of people who say homelessness and street behavior have improved increased by four times.
- 66% of San Franciscans who report visiting downtown at least monthly say they enjoy visiting downtown, which respondents overwhelmingly want the city to invest in.
What we're watching: City government officials have made several moves to address downtown revitalization and public safety, though it's still too early to assess their impact.
- Those moves include incentivizing office-to-housing conversions downtown, helping restaurants and bars access "low-cost" liquor licenses, cutting some city regulations to combat the fentanyl crisis, and streamlining the permitting process for housing and small businesses.
For the record: Preliminary data shows that homicides in San Francisco fell by 31% from 2023 to 2024 amid a drop in overall violent crime.