California to make it illegal for stores to stop thieves

It feeds the coffers of the drug cartels. You know the groups that have largely destroyed Mexico, largely funded with money from the US.

I often shook my head as we were involved in two different wars, yet the deadliest city in the world was literally across a river from where I lived. With an annual death rate higher than wars in two different countries. Almost entirely fueled by drugs.

 

And no, they would not have because not once in any of the multiple cases where I was assaulted or had weapons pulled on me were they ever prosecuted for it.

There is a reason why my wife was more scared of me doing that in California than she ever was when I was deployed in a combat zone in the Middle East.

And the very fact that the guy had over a dozen violent felony strikes is exactly why he should have been prosecuted. Literally, they told him to go ahead and attack the security, they were not going to do anything to him even if he was caught. I even had one that was caught on video running me over with her car after I had gotten off work an hour or so after she was stopped. Once again, not a damned thing was done about it. The Police turned the case over for prosecution (and had clearly identified her from both earlier surveillance and the attack), but the DA refused to prosecute.

One of the worst stores I had to work at was in Vallejo in the North Bay area. There I had knives and guns pulled on me, was pepper sprayed, and was gang jumped on two different occasions. Once again, not a single person charged by the DA for it. Vallejo was particularly bad because the cops refused to ever respond to a call for "petty theft". One even told me it was because by not citing people it kept their crime rates on paper artificially low. The statistics are tabulated from citations and arrests. With none of those given the official crime rate appears much lower than it actually is.

The same goes for reduced prosecution. Do not prosecute them for violent crimes, and it actually lowers the statistics for the community involving violent crimes. I often looked through our own records, and saw we had arrests many times higher than the "official statistics" of a community. And no, that is not a joke.

"Officially", the Larceny rate for Vallejo in 2019 was 1,148 for the year. That according to statistics is below the national average. However, the stores I worked at in that town were among the 5 most active I ever worked at, averaging between 6 and 10 arrests in a single 8 hour shift. One of them held my personal record of 18 stops in a single day. Yet, we would be lucky if the cops would even respond once a week, meaning that if we had an average week of around 80 stops, only a single incident would go into their official statistics.

And it was the same thing for the times by car was broken into there. It happened 5 times in a year in a city owned parking facility in 6 months. I finally just stopped locking my truck, as it was costing me more to replace the broken windows than anything else. And of course the cops were of no use, the one time I called them I waited for 3 hours for them to show up and they did not even take a report. I just never bothered to call after that.

 

I'm not surprised. Seems ever thus in CA. When a friend was paying his way through Long Beach State, he had a liquor store clerk job in downtown Long Beach and was held up twice in his first month. After the second time, he locked up and called the owner. Handed him the keys... A long circuitous route had him finishing his working days as a deputy prison warden.

They never even bothered prosecuting the guy.

The insane car chases where the criminal risks a lot of lives and not much happens. We're challenging them to try to get away.

I used to live in Napa, my final stop in California. Vallejo, of course, is about 15 miles down Highway 29. It may as well be on a different planet from the Napa Valley north of Napa.

 

If a drug is legal and free or cheap for registered addicts, the cartels wouldn't exist in this country. Of course, if we don't fully legalize the drug, we'll end with the cartels and an incentive for black marketeers to hook people.

We need to end the black market.

 

Laws like this will push the next “white flight” and California will turn into the next Detroit and Chicago

 

I worked in Napa also. And while not as violent as those in Vallejo, there was a big problem with theft there also. Primarily people from Napa State. But those were what we called "traditional shoplifters". Not professionals, and not violent. Quite often patients out for the day stealing snacks or alcohol. They were far more likely to simply drop what they had and try to run, not fight us for what they were trying to steal like Vallejo.

 

A huge percentage of those drugs are not even grown or made in the US, and they are illegal there also. Sorry, that is a logical fallacy, and the kind of thing that has been plaguing Columbia for decades.

 

As I said, we make the drugs available to registered addicts

 

It's already heading that way.

Detroit had been having problems for decades, but the crash came when the auto industry pulled out. And they still can't recover because there is a 20-35% vacancy rate between commercial, industrial, and residential properties. I remember passing through there in the early 1980s, and things have barely changed since. All those vacant units pay no taxes, and bring down the value of the nearby units. Causing a vicious cycle that lowers tax revenue even more, so they raise taxes to compensate. Rinse and repeat.

LA now has a commercial vacancy rate of over 22%, and that is climbing. SF is at over 31%, and is now expecting a $488 million budget shortfall because of that next year. As high as $1.3 billion in 2027 if the trend continues. And insanely, next year an "occupancy tax" is going into effect, that will charge landlords even more if their units are not rented. There are already real estate companies simply walking away from units because the occupancy rate is so low they can not make a profit. And many are expecting that to become a flood when that tax comes into effect, as many will be unwilling or unable to pay an extra tax on units they are unable to rent.

They are already at the starting stage of a "death spiral" like Detroit was in over 4 decades ago, and unless they try to correct in some way other than raising taxes (which happened in Detroit and only made it worse), in another few decades California may be the new Rust Belt.

 

By supporting the cartels that are destroying other nations?

 

Nice to see someone who actually understands the economics of it all. All too often people blame the hardships in those areas on the fictional phenomenon of “white flight”. When in reality the politics that follow low income areas will always push out the job creators.

 

Napa itself has lower income folks, but once you get past the Rural Urban Limit you're in a different world.

 

We don't obtain the legal supply from the cartels.

 

As you pointed out, Detroit fell on hard times when the auto industry moved out. The city will have difficulty recovering until the overpaid-worker auto industry is replaced by other types of businesses. Covid work-at-home changes impacting big cities like Los Angeles and San Francisco make things worse.

I suspect that will change as business coaxes or pressures some employees into returning to the office.

Why do you think an occupancy tax is 'insane?' It cuts commercial property values and rents. I won't get into the ethics of occupancy taxes.

They don't "walk away" without selling their asset.

If California stumbles, it won't be for the same reasons as Detroit and other "rust belt" cities. California is cooking up its own reasons.

 

Oh yes, because there is a large supply of legal cocaine and marijuana out there.

 

*Laughs*

*looks up*

*laughs again even harder*

Oh, my sweet summer child, they are doing exactly that!

https://sfist.com/2023/06/05/owner-...re-is-walking-away-surrendering-it-to-lender/

They are not selling it, because that will cost them money and there is simply nobody to buy it. So they are simply "walking away" without selling it. With a loss of hundreds of millions of dollars, because trying to hold onto the property will cost even more.

https://www.foxbusiness.com/markets...ner-hands-property-back-bank-exodus-continues

https://therealdeal.com/sanfrancisc...s-downtown-sf-buildings-with-defaulted-loans/

What, did you think I was making it up, or being melodramatic? I still have friends that work in the city, and I still get regular news feeds from multiple sources about the state of the city. I was not making that up, they are indeed just walking away.

https://www.investopedia.com/more-owners-walk-away-from-distressed-office-property-7552844

And the part I placed in bold should sound familiar to many, that is a critical cause of the 2007-2010 Crisis. Huge numbers of people realizing they were upside down in their mortgage, and that they owed more on their house than it was worth. So they simply walked away from it, over 4 million people during that time made the decision to simply walk away from their houses. Primarily not because they could not afford the payments, but because the mortgages were more than the property was worth.

I still remember that era very well, as in 2012 I moved back to California. And that was the state hit worst by that crisis because it came on the heels of a housing bubble. In Alabama and Texas it was rare to see foreclosed houses. In California, they were freaking everywhere. The place we moved to had about a dozen of them within a block of our house. Two of them across the street next door to each other were both foreclosed. And things did not really start to turn around again until 2014 when yet another bubble started.

If somebody took a mortgage on a commercial property in 2018 and today sees that the property is worth far less than their loan, the only real solution is to simply walk away from it. And they have no choice, because like in 2008, there was nobody buying. Nobody is going around SF buying up all these properties at "fire sale" prices, if they were these would not be returning to the bank.

And expect that "walk away" to become a flood next year, as that is when the "vacancy tax" that the city created will come into play. There is already such a tax on commercial property, at $250 per linear foot of frontage property. Next year, that jumps to $1,000 per linear foot. And at this time, there have been companies willing to try and wait this out, but at a grand per storefront foot, expect a hell of a lot of the owners of now vacant buildings to join that crowd.

I already showed a video of Market between City Hall and the Ferry Terminal. Something like 90% of the storefronts vacant and for rent. How many of the owners will be there at this time next year? I bet by them most of those will have been defaulted on, and the banks will be trying to sell them. Which will make things even worse, because the banks will have no interest in renting them like the current owners are, they will only want to sell them. Which will drive out even more storefronts.

But the real flood will be in the area that will be impacted hard. The housing market. Where once landlords had a waiting list for people to get apartments in SF, now they have large number of vacant units that nobody wants. And next year, each unit 1,000 square feet or less will be surcharged an additional $2,500 by the city. And this tax will go up with the size of the unit, up to $5,000 per year for units 2,000 square feet or more. They passed that last year as a way to make money, the city claims that will add over $15 million to city coffers. But as it is coming during a period of crashing property values in the city, it will likely just add to the exodus and bring in far less while at the same time causing values to plummet even more.

And as I stated earlier, Detroit tried the exact same thing, and we all know how that turned out, don't we?

 

I actually have quite an interest in how "Urban Development" happens in this country. It started in the 1970s when I moved to Boise and saw the attempts of the "Boise Redevelopment Agency" to revitalize their downtown. And the result was huge areas of the historic downtown bulldozed, and it is still vacant lots to this day. Other buildings were shuttered for years as they intended to redevelop them, but were tied up in courts because the city wanted to destroy them but they were trapped because they were on the National Historic Register.

Even decades later, I am pissed about them for the Eastman Building. A classic Renaissance Revival office building, when I moved there it and many others like it from the turn of the century were still open but in the process of shutting down. And they then sat there as eyesores for over a decade! Then finally in 1987 the building burned to the ground. And several other of the shuttered buildings they had taken possession of had to be demolished because of a decade or more of neglect.





And at about this time I became aware of issues like NIMBY, and started seeing how cities could influence the values of the property in their community. I have seen it in large cities like LA, I have seen it in smaller rural areas in Alabama. The city makes some kind of "grand vision for the future", and the result is often prices actually crashing and areas being abandoned. And then the city itself often steps in the way because they have their own vision of "redevelopment", and they will actively resist the attempts of the actual owners to use the property in any way other than their vision.

I saw that first hand in Alabama, where a doctor I worked with owned several buildings in the downtown area that had been vacant for years. He decided to turn several into night clubs, and from day one ran into problems with the city as they had this vision that the area should become high end boutique stores.

High end boutique stores, in a largely rural community in the Wiregrass that had a population of 60,000! Doc spent a fortune on two clubs, one actually a higher end dining establishment and club, the other a more industrial themed club next door. One he was able to open for an entire month (and could never get the kitchen open), the other he never was able to open. And after sinking a bundle into the project he just walked away. He died a few years ago, and all of his property was just shuttered. Including the oldest theater in town, which he intended to use as a live music venue. Same thing, it did not fit the city's vision so it was never allowed to open.

One thing I did learn decades ago, most attempts by cities to "redevelop" an area almost always end in total failure. It is almost a Stalinist attempt most times for force property owners to do what the city wants, rather than what the actual owners of the property want. That is what happened in Bunker Hill, that saw tens of thousands evicted from their homes so they could be redeveloped into expensive apartment units and commercial property.

 

That was a typo, as should be obvious when I stated it was for "property not rented". I meant to say "vacancy tax". But my bad, I should have been more careful when I typed that.

I actually have no problem with reasonable occupancy taxes, the government and services do have to be funded after all. But punishing landlords for unrented property is crazy, and idiotic when it is a time of already crashing values and historic vacancy rates.

 

The assets have value--they're being surrendered to lenders.

Not every downtown San Francisco asset is being surrendered to creditors. We don't know the marketability of the particular hotel in the situation facing the area.

As your last source above said:

"Combined with remote work, layoffs, departing companies and a growing list of shuttering major retail stores, this can depress the overall value of real estate in Downtown. One out of three offices in the market are now vacant."​

We're seeing highly leveraged assets being potentially repurposed or refinanced once money is cheaper.

Some properties, yes. San Francisco is still a primo tourist destination and it will make a comeback.

It happened starting in 2007 when property values collapsed. I went through finished new neighborhoods in Las Vegas that were almost empty. It happens when asset values collapse.

A worse version of this...



Real estate prices have gone up even more in Miami, Florida.



and San Francisco, California...

There were plenty of suckers buying AAA commercial paper composed of trenches of promises to pay by people who took out NINJA loans.

They run the very real risk of filling commercial space with a lot of low-quality retail. The space won't fall into misuse because the government can take over the property. (Remember, I said I'm not commenting on the ethics of vacancy taxes.

Someone will end up owning the buildings and will rent the space out rather than pay the tax or write off the asset. Now, if they walk away, the city can run the action, or decide to write it off.

There's no tax bill if you live in it or lease it. People won't walk away.

The problem in Detroit was different.

 

They are upside down, and the mortgage is more than the value of the building because prices in the area are plummeting.

Like in Detroit? Where the values never recovered?

Will it? Numbers are markedly down from pre-pandemic, where most areas have already recovered to or beyond pre-pandemic numbers.

And other areas of the country are not facing not only a tourism crash, but also crashes in almost every economic sector. Rentals in housing, commercial, and office is down significantly. San Francisco consistently ranked in the top 5 travel destination in the US. This year, it plummeted to number 10. Before COVID it had almost 26 million per year visit the city. In 2023? If the current trend remains the total number is going to be around 5 million. That is why there is so much retail, hotel, and other vacancies. Nobody wants to go there anymore, they would rather to to Vegas, Orlando, New York, or dozens of other cities that do not have those problems.

The main venue in the city is the Moscone Center, and that had 40 events in 2019. This year, it the total number is 35. And traditionally the Moscone Center is reserved well over a year in advance. The forecast for 2024?

At this time, only 22 events are scheduled there. And the most recent big pullouts for 2024 are the IBM Red Hat Summit was moved from San Francisco to Denver. Another huge loss was the Google Conference, which is now going to be held in Las Vegas. Those were all huge events and normally were good for 20-45,000 hotel rooms a night. Now, nothing is taking their place. So obviously, there is far less demand for hotel rooms than before.

And a lot of the predictions of SF recovery are failing in their expectations. A lot of them were predicting Moscone Center numbers to return to pre-pandemic levels. But in fact, the numbers even over 2 years later are only about half of what they were before and actually falling. When you have a decline of about 30% from 2023 and 2024, that is staggering.

Prices matter little, that should be obvious. Heck, the entire state is in a perpetual real estate bubble, that has been known for decades. Where the price is normally out of touch with the actual value. But fine, we will go with that for a moment. Prices are going up?

https://wolfstreet.com/2023/08/17/s... Francisco, the median,by $600,000 (red line).

Oh yes, "prices are up". No, it is the exact opposite, they are crashing. Prices may be "going up", but nobody is buying at those prices.

[

And what happens when nobody rents it? Simple, they turn it over to the bank where it will sit vacant until somebody buys it. Because banks are not interested in being landlords, they want to sell the property and move on. And as can be seen, stores and businesses are fleeing the city, nobody is looking to move into the city.

Heck, I used to walk through the Embarcadero Center which one of your videos shows twice a day. I even had lunch at "Melt" a few times, it was a specialty place that made dozens of different grilled cheese sandwiches. We also had business meeting in the theater there about once a month. And it literally was the path from the Ferry Terminal to where I worked. And it was sad to see another walking

And yes, the city is in a spiral. The question is, what are they going to do to try and recover from it? Eliminate the vacancy tax, and try to give incentives to owners to return and bring new business back? Or double down and continue with policies that make things worse? Knowing Baghdad by the Bay, I am actually betting on the latter.

And the skyrocketing crime rates are only adding to the problem. Who wants to visit a city where many suggest not locking your car, because your window will get smashed? Where there are needles all over the place, human crap, and homeless everywhere? Where most of the stores, restaurants, and clubs have closed? Remember, I worked in that city and I remember a decade ago it was thriving and hanging on, even with many of those problems. But now those problems are even worse, and the businesses have all gone.

It can recover, but I am doubtful because of the way that city is run. They likely will continue to make the wrong decisions and cause even more to close.

 

A lot of highly leveraged assets... creditors aren't going to toss away their security. My father refinanced his house before the 2007 housing crash with a reverse mortgage. The property itself was the only security. Financial Freedom sold the loan right away and then serviced the loan for the new creditor. My father had an extra $400k to spend on a lot of then $30/hour home care. When he died, the house was still under water from his loan, so my sister who had been living in it simply handed them the keys.

The creditors didn't sell the property until they recouped their money. Today, the house is worth more than it was when my father refinanced.

in economic terms, the fixed cost of the business can go quite low before the interest on that cost and the variable cost of being a landlord is far less than the rent they can earn.

Properties are abandoned when no one wants to live in the property even at very low rent as was the case in Detroit. That's not true of San Francisco if they deal with the idle, criminal and/or mentally ill. Homeless will be a problem in any state where you can live outside year round.

No, not like Detroit.


San Francisco population

Detroit and San Francisco don't have the same problem.

San Francisco needs to clean up the homeless problem. Tourists will come back, just like they did in NYC. The city may have to repurpose some of it's office space to housing. But that's true for other big cities. Because of the high tech sector, working from home may be more prevalent.

All id not lost...

https://realestate.usnews.com/real-estate/housing-market-index/articles/bay-area-housing-market-forecast#:~:text=Median%20Home%20Price%20in%20the,a%20still%2Dstratospheric%20%241.45%20million.

Prices are up from 2020.

The city is telling property owners they have to rent, live in the property or pay an occupancy tax.

This is the problem San Francisco has to overcome. If it does, tourists will return.

 

Creditors are not business owners. Neither are they landlords. Those properties will remain shuttered until they can finally manage to offload them.

You seem to be confusing creditors (banks) with the companies they loan money to. They are two very different things.

You are confusing "value" with "selling price". As I already said, San Francisco like most of California is in a bubble. Where the "value" is in excess of the actual worth and the actual selling prices. The value or list price is meaningless, the actual sale prices are crashing.

Not in an area that has among the highest taxes in the nation, and that tax is drastically increasing next year.

You ignore that tremendous drop in population from three years ago, and say it is not a problem.

Here, let's use a chart that goes forward another year, shall we?



How about another 2 years?



That is the funny thing when you cherry pick figures. People like me that notice your chart only covered 2020 can see that is not the reflective of the trend.

https://socketsite.com/wp-content/u...a-Population-Change-by-County-2011-2022-1.png
San Francisco needs to clean up the homeless problem. Tourists will come back, just like they did in NYC. [/QUOTE]

Oh my, people never stayed away from the Big Apple because of homelessness. Never, that was never a serious factor. They stayed away because of the horrible crime.

Look, I have no idea how old you are, but I clearly remember the 1970s and early 1980s when nobody wanted to go there. That is one of the funny things about watching "Joker" a few years ago, because that was an accurate depiction of New York in that time period. Times Square was disgusting, with porn theaters everywhere. The parks were not safe to go into, muggings were a real and constant threat, organizations like the Guardian Angles formed along with other kinds of vigilantes to try and take the streets back.



Welcome to Time's Square, circa 1978.

https://allthatsinteresting.com/vintage-times-square-pictures

See a lot of homeless there? No, the problem is that it was dirty and nasty, and not safe to be in most of the city. Gang attacks, gang rapes, muggings and one of the highest murder rates in the nation did that. Not the homeless. San Francisco has always had a huge homeless problem, it was like that the first time I lived there over 3 decades ago, and was like that in the early 1970s when I first visited there. However, what it did not have was an out of control crime problem.

Probably the last time crime was close to this bad in the city, the people actually did something about it. You might want to look up the history of Fort Gunnybags and the Vigilance Committee. Yet another famous place in Baghdad by the Bay I used to work next door to.

 

No, they won't if there's a vacancy tax high enough to push them into renting.

No, I'm telling you how business operates.

No, I'm not. Econ 100 ... production proceeds where marginal revenue exceeds marginal cost.

I gave you evidence of the selling prices of residential property in SF and Napa.

Why live in SF if you're working from home?

I attribute most of the drop to people moving to the suburbs. SF has to look to the future with revived tourism and perhaps some of the commercial space converted to residential. Obviously, they have to get the homeless problem under control.

<Rule 3> My graphs were addressing your comparison of San Francisco with Detroit. Detroit lost 2/3 of its population while San Francisco County lost a number of people in 2021 and much fewer people in 2022.

<Mod Edit>

San Francisco needs to clean up the homeless problem. Tourists will come back, just like they did in NYC.

I didn't say NYC had a homeless problem. It had a crime problem. Rudy wanted welfare recipients to work for benefits. There was an exodus of bad guys.

San Francisco, Los Angeles, San Diego, Portland, Seattle ... they all need to send the human exports from Red States back to where they came from.

 

There is nobody that wants to rent!

Look, I am done here because you just do not get it.



The owners of all of that property where there used to be stores is now vacant. Nobody wants to move into the city or set up a business there because of all the problems. What, you think the owners of those buildings do not want to rent them out?

Apparently you missed the wave of companies handing the keys back to the bank. Because they do not want to get stuck with the taxes on properties they can not rent out because nobody wants to rent there anymore.

 

Did you? Gee, what exactly did you say?

There, that is exactly what you said. Now please, where exactly did you say it had a crime problem? Nowhere, that's where. Now you may have intended that, but you actually never said a damned thing about crime, you talked about homelessness.

And yes, people leaving the city decreased in 2021, but there were still far more people leaving the city than moving to it. And that exodus increased in 2022.

And thank you for making it all clear to me, to you this is all political.

Actually very few leaving the states are actually from other states. I was born in California and spent over half my life there. The same with my aunt, my father and mother, and most of those leaving the state. They were not people who moved to California, the vast majority are California natives that had spent most or all of their lives there.

My oldest son wants to leave, but he is trapped because of the custody agreement his wife has with her ex. And granted he was born in North Carolina, but we took him with us when we returned to California when he was 2 and he has lived all of his life other than that period in California.

In fact, the only one I can honestly say that I know who finally left California and was not born there was my ex-wife. She was not even born in the US, she is from Argentina. But she spent most of her life in California, and she also finally had enough and left. Tell me, have you ever actually lived in California? Or know anybody who actually left the state? Because it is clearly obvious you do not have a clue and speaking entirely from ignorance and your own political beliefs.

And your claim is even more hilarious in that the state that most Californians are moving to is a Blue State. The destinations change, but Nevada has long been where most move to, New York tends to be second. Both of those states are very blue.