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Home , July 11, San Francisco

Status of the Re-Opening of the Economy: 2021

CITY & OF SAN FRANCISCO Office of the Controller Office of Economic Analysis , 2021 Highlights of the July Report 2

. As the COVID-19 restrictions have been lifted, the Controller’s Office is tracking the pace of re-opening of the city’s economy. This is the second monthly report examining a variety of local economic indicators. . In , local job growth was the strongest since June 2020, with 17,200 jobs gained in San Francisco and San Mateo . Total employment in the San Francisco division is still 100,000 below the pre- pandemic of 2020. . Hotel occupancy is one of the fastest-improving local indicators. 45% of all pre-COVID rooms in the city were occupied during the week of , though this is well below the pre-pandemic average of close to 80%. . Bay Area weekly office attendance continues to lag other U.S. metro areas, and the city’s office vacancy rate topped 20% over the -June period, indicating continuing weak office demand. . BART ridership to downtown San Francisco continued its slow recovery, while measures of automobile commuting, like bridge traffic, are nearly at pre-COVID levels. List of Economic Indicators 3

1. Time Spent Outside of the Home 2. Office Attendance 3. Office Vacancy 4. Small Business Sentiment: Expected Recovery Index 5. New Business Registrations 6. % Change in Consumer Spending 7. Total Employment in San Francisco & San Mateo Counties 8. San Francisco Unemployment Rate 9. Hotel Occupancy Rate 10. Hotel Average Daily Rate (ADR) per Night 11. Small Business Sentiment: Expected Future Business Travel 12. San Francisco International Airport Enplanements 13. Convention Bookings At 14. PM Freeway Speed 15. Bay Bridge and Golden Bridge Traffic 16. BART Exits at Downtown SF Stations 17. Average Asking Rents for Apartments 18. Building Permits Time Spent Outside Home Approaching Normal 4

% Change in Time Spent Outside Home, San Francisco and , Through 0% California -5% San Francisco

-10%

-15%

-20%

-25%

-30%

-35%

-40% % Change in Time Spent Away from Home from Away Spent Time in Change %

-45% 3/1/20 6/7/20 7/5/20 8/2/20 1/3/21 5/9/21 6/6/21 7/4/21 3/15/20 3/29/20 4/12/20 4/26/20 5/10/20 5/24/20 6/21/20 7/19/20 8/16/20 8/30/20 9/13/20 9/27/20 11/8/20 12/6/20 1/17/21 1/31/21 2/14/21 2/28/21 3/14/21 3/28/21 4/11/21 4/25/21 5/23/21 6/20/21 10/11/20 10/25/20 11/22/20 12/20/20

Change relative to the 2020 index period, not seasonally adjusted.

Source: Mobility, Opportunity Insights, https://tracktherecovery.org https://opportunityinsights.org/wp-content/uploads/2020/05/tracker_paper.pdf Office Workers Slowly Returning; SF Metro Lags 5

Weekly Office Attendance Across Selected Metros,

60% Through Austin Metro Metro 50% San Jose Metro New York Metro San Francisco Metro

40%

30%

20%

Weekly Office Attendance Rate, % Rate, Attendance Office Weekly 10%

0% 4/1/2020 7/8/2020 8/5/2020 9/2/2020 1/6/2021 2/3/2021 3/3/2021 6/9/2021 7/7/2021 4/15/2020 4/29/2020 5/13/2020 5/27/2020 6/10/2020 6/24/2020 7/22/2020 8/19/2020 9/16/2020 9/30/2020 12/9/2020 1/20/2021 2/17/2021 3/17/2021 3/31/2021 4/14/2021 4/28/2021 5/12/2021 5/26/2021 6/23/2021 10/14/2020 10/28/2020 11/11/2020 11/25/2020 12/23/2020 Kastle Back to Work Barometer reflects unique authorized user entries in a market relative to its pre-COVID baseline, averaged weekly. The San Francisco Metro Area includes San Francisco, , Contra Costa, San Mateo, and Marin counties.

Source: Kastle Systems April-June Saw a Further Rise in Office Vacancy 6

Office Vacancy, San Francisco, Through 2021Q2 25%

Office Vacancy Pre-Pandemic Average, 2019 20%

15%

Office % Vacancy, Office 10%

5%

0%

Source: Jones Lang LaSalle Local Business Sentiment Still Lagging U.S. 7

Small Business Expected Recovery Index San Francisco Metro Area and U.S., Through July 11 -0.30 National -0.35 San Francisco-Oakland-Berkeley MSA -0.40

-0.45

-0.50

-0.55

-0.60

-0.65

-0.70

-0.75

-0.80 Small Business Expected Recovery Index Recovery Expected Business Small

Survey Week, Ending The Expected Recovery Index measures the average expected recovery time of businesses. The index ranges from -1 to 0, with 0 indicating normal conditions.

Source: Small Business Pulse Survey, US Census Bureau. New Business Formation Remaining Steady 8

Monthly New Business Registrations, San Francisco, Through ,800 New Business Registrations (Seasonally Adjusted) Pre-Covid Average, 2019 1,600

1,400

1,200

1,000

800

600

Number of New Business Registrations 400

200

0 Jul-20 Jan-21 Jan-20 Jun-20 Jun-21 Oct-20 Apr-21 Apr-20 Feb-21 Feb-20 Sep-20 Dec-20 Aug-20 Nov-20 Mar-21 Mar-20 -20 May-21

Source: Treasurer & Tax Collector, City and County of San Francisco Local Consumer Spending Above Pre-COVID Levels 9

Consumer Spending, San Francisco, Through 20%

10%

0% Day Moving Average - -10%

-20%

-30%

-40%

-50% 4/2/20 7/9/20 8/6/20 9/3/20 1/7/21 2/4/21 3/4/21 4/1/21 4/16/20 4/30/20 5/14/20 5/28/20 6/11/20 6/25/20 7/23/20 8/20/20 9/17/20 10/1/20 1/21/21 2/18/21 3/18/21 4/15/21 4/29/21 5/13/21 5/27/21 6/10/21 % Change in All Consumer% Change Spending, 7 10/15/20 10/29/20 11/12/20 11/26/20 12/10/20 12/24/20 Seasonally adjusted credit/debit card spending relative to baseline spending of -31, 2020.

Source: Affinity, Opportunity Insights, https://tracktherecovery.org https://opportunityinsights.org/wp-content/uploads/2020/05/tracker_paper.pdf Strong Job Growth in June With 17,600 Gained 10

Total Employment, San Francisco Metro Division, Through June 1,300,000 Total Employment 1,250,000 Pre-Covid Average, 2019 1,200,000

1,150,000

1,100,000

1,050,000

1,000,000

Employment 950,000

900,000

850,000

800,000

750,000

700,000 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 The San Francisco Metro Division includes San Francisco and San Mateo counties.

Source: California Employment Development Department (EDD) Unemployment Steady at 5% (Seasonally Adjusted) 11

San Francisco Unemployment Rate, January 2020 – June 2021 14%

Unemployment Rate

12% Pre-Covid Average, 2019

10%

8%

6%

4% Unemployment Rate, % Rate, Unemployment

2%

0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21

Source: California Employment Development Department (EDD) Hotel Occupancy Rate Has Continued to Rise 12

Hotel Occupancy, San Francisco, From 10, 2020 to July 10, 2021 100 Occupancy (TRI) 90 Pre-Covid Average, 2019 80

70

60

50

40 Occupancy (%) Occupancy 30

20

10

0 1/2/2021 1/9/2021 2/6/2021 3/6/2021 4/3/2021 5/1/2021 5/8/2021 6/5/2021 7/3/2021 11/7/2020 12/5/2020 1/16/2021 1/23/2021 1/30/2021 2/13/2021 2/20/2021 2/27/2021 3/13/2021 3/20/2021 3/27/2021 4/10/2021 4/17/2021 4/24/2021 5/15/2021 5/22/2021 5/29/2021 6/12/2021 6/19/2021 6/26/2021 7/10/2021 10/10/2020 10/17/2020 10/24/2020 10/31/2020 11/14/2020 11/21/2020 11/28/2020 12/12/2020 12/19/2020 12/26/2020

TRI (Total Room Inventory) takes in to account all the hotel rooms in the city, whether open or closed.

Source: STR Average Hotel Rates Are Also Rising 13

Hotel Average Daily Rate (ADR) per Night, San Francisco, Through July 10 $400 ADR ($)

$350 Pre-Covid Average, 2019

$300

$250

$200

$150

$100 Average Daily Rate per Night ($) Night per Rate Daily Average

$50

$0 4/4/2020 5/2/2020 8/8/2020 9/5/2020 1/9/2021 2/6/2021 3/6/2021 4/3/2021 5/1/2021 4/18/2020 5/16/2020 5/30/2020 6/13/2020 6/27/2020 7/11/2020 7/25/2020 8/22/2020 9/19/2020 10/3/2020 1/23/2021 2/20/2021 3/20/2021 4/17/2021 5/15/2021 5/29/2021 6/12/2021 6/26/2021 7/10/2021 10/17/2020 10/31/2020 11/14/2020 11/28/2020 12/12/2020 12/26/2020

Source: STR Air Passengers Rising, But Well Below Normal 14

Total Enplanements (Domestic and International), San Francisco International Airport, Through May

110%

100%

90%

80%

70%

60%

50%

40%

30%

20% Total Enplanements as a % of the Same Month in 2019Month Same the of % a as Enplanements Total 10%

0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21

Source: San Francisco International Airport (SFO) Little Change in Moscone Bookings 15

Convention Bookings at Moscone, Through SF Travel 500 Events 450 Pre-Pandemic Average, 2019

400

350 333

300

250

200

Number of Events 150

100 64 65 45 49 50 33 21 24 27 26 24 11 11 14 18 10 11 0 7 5 0

F: Future Confirmed Events The numbers include both Moscone events and Self-Contained events that were booked through SF Travel.

Source: SF Travel Transportation: Pre-COVID Traffic Has Returned 16

Average PM Freeway Speed, San Francisco, Through 70

PM Freeway Speed, MPH (All Segments Combined)

60 Pre-Covid Average Speed, 2019

50

40

30

20 Average Auto Speed, MPH MPH Speed, Auto Average

10

0 3/3/2020 6/9/2020 7/7/2020 8/4/2020 9/1/2020 1/5/2021 2/2/2021 3/2/2021 6/8/2021 7/6/2021 3/17/2020 3/31/2020 4/14/2020 4/28/2020 5/12/2020 5/26/2020 6/23/2020 7/21/2020 8/18/2020 9/15/2020 9/29/2020 12/8/2020 1/19/2021 2/16/2021 3/16/2021 3/30/2021 4/13/2021 4/27/2021 5/11/2021 5/25/2021 6/22/2021 10/13/2020 10/27/2020 11/10/2020 11/24/2020 12/22/2020

Source: San Francisco County Transportation Authority (SFCTA) Monthly Bridge Traffic Now 90% of Normal 17

Bay Bridge and Bridge Monthly Traffic Volume, San Francisco, Through ,000,000 Bay Bridge 6,000,000 Pre-Covid Average, 2019

5,000,000

4,000,000

3,000,000

Total Total Monthly Traffic Volume 2,000,000

1,000,000

0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21

Includes Bay Bridge (Westbound Trips) and Golden Gate Bridge (Southbound

Source: Bay Area Toll Authority (BATA), Golden Gate Bridge Highway & Transportation District BART Ridership Returning, But Still Below Normal 18

BART Exits At Embarcadero, Montgomery, Powell and Civic Center Stations, Through .0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0% Weekly Average Ridership as a % of the Same Month in in 2019 Month the Same % of a as Ridership Average Weekly

0.0% Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21

Source: BART Apartment Rents Continuing Their 2021 Recovery 19

Average Asking Apartment Rent, San Francisco, Through June 0%

-5%

-10%

-15%

-20%

-25%

-30% % Change in Average Asking Rent Since the Same Month in in 2019 Month Same the Since Rent Asking Average in % Change

Source: Apartment List Housing Construction Remains Well Below Normal 20

Number of Housing Units Permitted, 3 Month Moving Average, San Francisco, January 2020 - May 2021

500

Number of Housing Units Permitted 450 Pre-Pandemic Average, 2019

400

350

300

250

200

150

100

50 Number of Housing Units Permitted, 3 Month Moving Average Moving Month 3 Permitted, Units Housing of Number 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21

Source: U.S. Department of Housing and Urban Development (HUD) Staff Contact 21

Ted Egan, Ph.D., Chief Economist [email protected]

Asim Khan, Ph.D., Senior Economist [email protected]