JP Morgan Chase CEO Declares San Francisco ‘In worse shape than New York’ as City’s Population Loss is Having Devastating Consequences
During the pandemic, between 2020 and 2022, San Francisco’s population fell by over 7%. When commenting on the city’s recent decline in an interview, JP Morgan Chase CEO Jamie Dimon said, “San Francisco is in far worse shape than New York.”
Dimon diagnosed the situation as a problem by the local government. “Any city who doesn’t do a good job, it will lose its population.” California’s Department of Finance predicts small population growth numbers through 2060. This low population growth in light of residents leaving could be a dire threat to the future of the city.
New York’s Problems Are Fiscal
Dimon emphasized the difference between the two cities by declaring New York’s problems as primarily fiscal.
“New York’s got to worry about fiscal. You can’t have a fiscal deficit that high where you think that constantly taxing individuals and companies more and more, where, you know, the bulk of the tax is paid by a handful of people, it’s driving people out.” When asked for a solution to the problem, Dimon suggested the city needs to spend more time and the press needs to be more demanding.
Affordable Housing is a High Concern for San Francisco
Dimon listed affordable housing as one of the key qualities that make an attractive city and a big reason why people are leaving San Francisco.
Axios reported that in just a year, the cost to own a median home in San Francisco increased by 25%. The city government has been putting in efforts to increase the affordability of housing. However, regulations and the inflated costs related to construction have made progress slow.
Increase in Homeless Encampments
The difficulty for San Francisco residents to afford a place to stay has contributed to an increased number of homeless campsites.
The homeless population has increased the number of camps, which obstruct public areas and bring safety hazards. A federal judge ruled that the city cannot clear these encampments unless they offer the people living there a suitable place to go to. This has caused progress in clearing these dangerous areas to slow.
San Francisco’s Declining Rate of Pregnancy
California estimates that the number of births will decline drastically in San Francisco from 7,000 to 6,000 annually by 2060.
By 2025, there will likely be more residents dying from old age than new babies being born. San Francisco is not unique in this regard. A similar story is playing out across the state of California. The birth rate in California has dropped 31% from 2007 to 2022.
An Aging Population Will Strain Resources
Without new children to replace aging residents naturally, the average age of people living in San Francisco will increase.
An aging population means there will be fewer people in prime working age to support the local economy. This can result in a strain on resources for retired adults who need more access to healthcare and community support.
The state’s projections predict that the migration rate will be positive in the near future, which will somewhat offset the population decline.
However, demographers expect the net migration to be so low that it will do little to change the direction the birth rate is heading. The result of this two-hit combo of low migration numbers and birth rate is a stagnant population in San Francisco.
Businesses Struggle Under a Weaker Economy
Businesses in San Francisco report numerous struggles that have come with the rapid decrease in the local population.
With fewer residents, businesses naturally have fewer customers and opportunities to make sales, leading to a depressed economy. Some retailers have decided to close their shops and move somewhere else. The San Francisco Chronicle recently reported a string of store closures of major brands in the downtown area.
It is Hard to Hire More Workers
Businesses are also having problems hiring and replacing their workforces despite numerous vacancies.
According to KRON4, the city is in the middle of a hiring crisis. The city’s vacant job rate has doubled, with the average time to replace a worker being 255 days. Tech workers who got laid off were encouraged to apply for city jobs, but so far, only 16 workers have been hired to fill the more than 4,500 empty positions.
Violent Crime Rates
One reason for residents not returning to San Francisco is the perception of rising crime rates in recent years.
Despite the population dropping in the city, there has been an increase in some types of violent crimes. ABC7 San Francisco reports that young people committing violent felonies have seen an increase in 2023, but the number of arrests has been going down.
The Future of San Francisco
City leaders and business owners are in talks to figure out drastic strategies to address the spiraling problems stemming from the recent population exodus of residents and businesses.
Advocacy groups like TogetherSF have proposed reforming the city government to combat the depressed economy and homelessness, according to the San Francisco Chronicle. One of their proposed ideas is to eliminate half of city commissions and give the mayor more authority to make changes.