 What I thought I would do just to start out the discussion on San Francisco and its current state of affairs would be just to ask if there are any volunteers in the audience who would be willing to share their experience coming to San Francisco for this conference and how they've experienced the city. So if you're willing to share your point of view, good or bad, would love to hear from you. She's out, she's on the go. Okay, he's going to do it. All right, thanks Chris. Hi, my name is Elise. So I came here from Vancouver, Canada. So West Coast Port City, right now my hotel is the BEI which is in the mission. So the walk from the hotel to the conference, you walk through the mission and so confronted with issues that are similar to home, a lot of addiction issues, a lot of unhoused people. But the one thing that was very distinct for me despite some familiarity with that and like the being kind of comfortable with being uncomfortable in a way was that there's a difference between a Canadian coming to a US city, you see a lot of medical poverty and it's very stark. It's a very different thing. And the uncomfortable part of my experience is also being a Canadian and not knowing necessarily how guns play into what I'm seeing on the street. So while seeing addiction and seeing unhoused people is not something that I'm like stoked to see, there is differences, there's nuances between our cities that are actually very close to one another. Thank you, we appreciate your sharing that perspective. Anyone else have some thoughts? Okay, great. Hi everyone. My name is Twana Harris, I'm from Atlanta. So I'm bringing that perspective into like coming here. The last time I came here was pre-COVID and I would say that on a daily basis I felt very comfortable and safe walking the streets at both during the day and at night. And when I say walking the streets I don't know San Francisco that well but in terms of this inner square area it was very comfortable. The other night I had a reception after this and I literally realized that nobody would pick me up because I was only three blocks away. And when I walked it was the most terrifying walk that I've done in a long time. I say that to say that the reason why I came to this conversation was to not only hear about San Francisco but I really want to understand where does impact investing stand when it comes to all of these major cities. Because I do believe that Atlanta if it continues to go the direction that it's going it will be one of the next San Francisco's. Appreciate that perspective as well. We are going to talk about some other cities like Newark. So thank you for sharing that. I appreciate this discussion. My name is Lisa. I came to this conference from Boston and I'm originally from Philadelphia. I think I arrived in San Francisco just with a lot of curiosity because I think I've just seen a lot of headlines about cities trying to recover for the pandemic and really wasn't sure how much of it was maybe exaggerated how much wasn't like others have mentioned I definitely saw a difference in the homelessness level and poverty level between visiting the last time I was here was 2018. And I think that I don't know if it's been in the news as much but my family still lives in downtown Philadelphia and I think a very similar process is happening and very influenced by gun violence. So far I haven't seen as much in Boston but I will say that my company did a volunteer day at a homeless shelter recently and I was struck by how in the downtown area of Boston I felt like I saw significantly less homelessness than in other cities but when we volunteered at the shelter the line was out the door so overwhelming how large the need was. So it just made me question what am I not seeing? What am I not aware of if you're not in a particular sector and just questioning why is it more visible in certain cities? What are we not seeing those kind of themes? So I appreciate this session. Okay, great, maybe we'll take one more and then we'll go to the panel. Hi, thank you for the opportunity to just provide some perspective. I'm not here on behalf of my day job it's my volunteer board position but my day job is with one of the largest operating foundations in the nation focused on reducing the need for foster care and San Francisco County City fantastic partner and so pre-pandemic was here once or twice a month navigated and I'm from the East Coast navigated almost like I lived here like I knew where to go and pretty easy felt safe knew where not to go because that happens wherever you are, right? And I think San Francisco's issues pre-pandemic were already complex as far as poverty, homelessness, the exodus of families or families that had the means to leave and then the specific neighborhoods where underrepresented populations and families like you knew where to go if you worked in child welfare to find those families, addiction, mental health issues and then the pandemic hit and being familiar with the community-based organizations it was amazing to see them rally it was amazing to see business and industry come together to ensure that groceries got to the families who couldn't get out and didn't have resources and so now coming last time I was here was January 2020 it seems there, it seems to have intensified which I think is what we're hearing people say and we saw people rally so I'm hoping what we're gonna hear today is there's another round of rallying so thank you for being here today. Thank you, thank you appreciate that so maybe now we'll turn to the experts I don't consider myself an expert I'm very much like those folks who just commented in the audience and I live in Washington DC coming to San Francisco I very much felt a little bit heartbroken to see what's going on in the streets and we, so I lead the sustainable investing team for PGIM alternative assets which is Prudentials asset management platform and we have a mandate to invest a billion dollars of Prudentials general account capital into impact strategies and about half of that is invested in real estate and that would be in affordable housing and urban redevelopment so we've been doing a lot of this work for many, many years so we just wanted to have a discussion around some of the things that we've seen and also learn from against Julie and from Ada about their experience and perspective so maybe I'll turn the floor over to Ada maybe you could just start by talking about what in your professional experience connects you to the problems in San Francisco or your personal experience? Thank you, thank you, good morning and thank you all for being here thank you all for caring taking your 9 a.m. day to join us so my name is Ada Revolo and I'm the founder of I Impact Capital and we're a purpose driven ecosystem leveraging real estate funds to change the fact that commercial real estate is a 20 trillion dollar industry where women own and manage 1.7% and women of color are immaterial participants so now that that's out of the way let's talk about the very important conversations first and foremost I'm not a native to San Francisco I don't currently live in San Francisco but I do live in LA which is very similar and complex to San Francisco my area of expertise has been affordable housing for the last 13 to 15 years and I come from a perspective of it all starts with housing right housing affords a security to an infrastructure and to a community that yields better health outcomes that yields less crime, less mental health issues so my perspective today will definitely be from the affordable housing aspect of where San Francisco could do better thank you it's a privilege to have you here Julie thanks everyone for being here my name is Julie I'm the co-founder and managing partner of the Urban Innovation Fund we're a venture capital firm that invests in the future of cities exactly what we're talking about today you know it's interesting during COVID we were asked a lot is your firm even relevant because cities are dead right? I am a big no on that I think cities are at a really interesting inflection point I think COVID revealed a lot of the vulnerabilities in cities and a lot of the inequities in cities and now is a rebuilding time and no city is a better example of that than my now home city of San Francisco I've lived here for the last 20 years personally I'm extremely bullish and long on San Francisco and all the Fox News coverage that paints us as this deplorable doom loop is very upsetting to me because I love this place I love living here that said I think cities in general and certainly San Francisco have their share of problems and I'd love to have a productive discussion as opposed to one that you know we're a failed liberal state with a bunch of do-gooders who just messed it all up thanks Julie and over to Ruben hey I'm Ruben I'm not here to say that this is a failed liberal state I worked for PGM as well and I've been working managing our impact investment real estate portfolio since 2013 and there are sort of two things that came to mind as I was thinking about what I could add to this conversation and one is that as Andrew was saying we've invested in our home city of Newark pretty extensively well over a billion dollars in the last decade in order to try to change the dynamics in Newark Newark, New Jersey through a lot of different reasons but many of them related to structural racism and then poor urban planning had a really hard run in the second half of the 20th century and the downtown essentially was converted into a large office complex for suburban commuters who entered the city at 9 a.m. in their car did everything they could to never set foot on a sidewalk and then exited at 5 p.m. to go home and that model was not unique to Newark and there are analogies between that and San Francisco's downtown as well I think as well as some other cities and I think that the message that we should be getting from this crisis about that is that that is a deeply unhealthy way to construct an urban environment it is a short-sighted vision and it's also one that leaves you extremely vulnerable the second thing I would say is that I got here on Thursday and I spent the weekend with my family we were here for a bar mitzvah and we went all over the city we went to a whole bunch of different parts of the city and there are areas of San Francisco where you would not know that anything had changed since pre-pandemic that are just as beautiful and vibrant and interesting and diverse and safe as they were before and I think one thing that we need to think about is there's a concentration of a problem that is the 4,000 or so unhoused people in the city and where they are and what that feels like we're all simple hominids we look around with our eyes and we determine whether our environment is safe based on which other hominids are there and what they're doing and that kind of sensation I think can create a sense that there's something wrong with the whole city when in fact it's really just a relatively small fraction of it where the crisis is so acute and so I think I just wanna kind of add that little perspective to it which was good for me to see over the weekend it felt actually quite good and hopeful But Ruben to your point I think one of the big differences is the downtown area because the downtown is what's been hollowed out and that's the part that's changed the most drastically and so when people come here for a conference like this one we're right in downtown it's a shell of its former self and I think a lot of folks see that and see that as a sign of failure Yeah, I agree I mean if you look at the statistics they're bad, right? The downtown San Francisco right now has an office vacancy rate at the end of the third quarter of 33% for those of you who are not in commercial real estate you don't really wanna get above high single digits and so and I think the actual occupancy and usage rate hasn't yet made it back up above 50% since the pandemic that's those are real numbers that's just kind of where things are right now so 100% true and the effects of that ripple out So sorry, Andrea So I wholeheartedly agree but my biggest concern is that the challenges that downtown San Francisco and most large metros to your point it's not a problem exclusive to San Francisco it's like a cancer, right? So when you're diagnosed with pancreatic cancer your pancreas is not the only organ that has cancer your entire body has cancer and the problem with alienating specific spots is that then you try to do radiation treatment that only makes the cancer and I'm so sorry for giving that analogy but it only makes you vulnerable to have the cancer return and then be metastatic or just be completely damaging to the entire body causing an entire collapse of the system so that's my concern not just with San Francisco but with every market that if we don't look at it as a whole, then we will do spot treatments What a vivid analogy It's a horrible one, I guess I thought about it and I'm talking I'm like I should probably not have gone to cancer But I wanna say one thing which is I think for a long time Ruben painted the picture of these commuters coming in and a downtown for a long time was considered around mostly its commercial tenants, right? And what we're seeing now is the way that we're working the future of work has changed it's never gonna be the same and especially in a very tech forward city like this one and so I think there's this question of what is reimagining the downtown area look like and I think that's the important thing because if we're going to go back to business as usual and trying to flood a bunch of offices with the latest tech company, that's not going to happen but what is happening is we are seeing some conversions of commercial to residential real estate it's happening very slowly and there are a lot of mechanisms for why it's happening slowly and there's also this push for new companies maybe the big companies are doing hybrid work they're only forcing folks to come in a couple of days a week but now there are a lot of new startups artificial intelligence is coming in there coming into the Hayes Valley a traditional residential neighborhood so there are sparks of creativity but it's causing us to look at the way we think about a city in a very different way than what we had traditionally looked at it. Yeah, so maybe just to follow up on that what do you all view as some of the specific positive attributes of the city that could create some longevity and durability through what feels like a crisis right now are there pillars that we can rely on whether it relates to the people of San Francisco or the infrastructure in San Francisco that will really help us to move forward and then related to that, you know I'm calling it a crisis and we're all identifying some very specific problems that the city is facing but is that really sort of simplifying the story and is there a different story to tell about the city rather than we are in a crisis? So I'm happy to start you know I don't like the word crisis only because people that use the word crisis use it to either sell well actually just to sell they're either selling news or selling a story right the reality is that this is a problem that has been lurking for a long time and again not just in San Francisco New York City, LA, San Diego like you name any large metro and there's a affordability crisis there is the pandemic change the way that we view office space right so there's a crisis on that too so I'm less inclined to use the word crisis there are specific issues that need to be addressed in order for the community to move forward but I think San Francisco has with so many other metros don't has amazing infrastructure aging like many but has the infrastructure to build upon the amazing city that it has been the people here I have never met more conscious individuals than the residents of San Francisco look around right you have people guarding kind of the compost trash recycle bins where do you see that level of sustainability across the country in unisum the way that you see it in San Francisco I mean unfortunately because the word crisis sells so much more than any other word in our vocabulary I think we do focus on the negative things and we should rightfully so but we forget about all the positives that come with a city an amazing city like San Francisco yeah I definitely would echo that but I would also say what happened during COVID reversed a trend that had been happening for basically a century which was that we were urbanizing at an extreme rate especially here in the US and you know even still 81% of Americans live in and around cities and that's a pretty staggering amount then you get into the pandemic and suddenly people are moving out to you know the middle of nowhere they're really trying to get out into the air they're trying to you know do something to enjoy their lives because we can't be around people in the same way and so it became kind of vogue to not be urbanizing it was actually the only years that we've reversed the urbanization trend and that's pretty staggering and so the question I think we get asked a lot is urbanization going to come back or are people going to stay in you know the outskirts of Idaho enjoying their low you know a cost of living and tax rates and all of that I think the answer is that cities always pull people back in and that's really one of the advantages that all cities have there is an economic vibrancy that comes from having clusters of people together creatively working to solve problems and that's my bet on San Francisco that's why I'm long San Francisco but to answer Andrea's question what's not going to save the city is I think sometimes people hear about tech and you know how this is you know kind of the heart of Silicon Valley and people are like oh what's the next startup that's going to solve homelessness and I'm like if you're waiting for that we are screwed and I think that's one of the you know balances that we have to walk which is we have to recognize that there are some entrenched really challenged problems here and we're not going to have a simple app or tech solution to solve it it's going to take a concerted effort across government public policy and it's just really hard period yeah I as someone who moved not that long ago to Idaho and lives in Boise now which is a place that a lot of Californians have chosen to move to during the pandemic driving up housing prices for Idahoans well beyond what they can afford I actually when I introduced myself to someone as a newcomer I frequently let them know that I moved there from Louisiana so that I can kind of lower the pressure in the room and you know the the fact is that they're not moving to rural Idaho you can't go live out that's for like the bears and the wolverines and stuff you got to live where you can get a grocery store and where your kids can go to a school and where you can go to a job because Idahoans for the most part didn't really leave the office in the same way that Californians did and so they're moving maybe not into Boise proper but they're moving into an adjacent suburb that is kind of part of the sprawling growth of the Treasure Valley and so to Julie's point like we're not we're not disaggregating as a species I think we are in the pandemic kind of gave people some ideas about what they might live that isn't where they live that day and the fact is the reason a lot of people thought about leaving California was because and leaving the house they were in and going someplace far away was because they couldn't buy the next house here housing costs were so high that that just wasn't even plausible for them to sell their three-bedroom bungalow and move into something that was had a bigger backyard so the you know the challenge that it is talking about around housing is one where I think to answer Andrea's question I think the recognition that that is a problem that requires a broad policy solution at state and local levels is I think long run the transformation that is going to be one of the solutions to the challenges of today like so moving from crisis into transformation you know what you see now is state legislation getting passed on a regular basis that removes some of the obstacles to real estate development in particular development of housing that have really held the city and the region back I sit on the board of the regional plan association which looks at the New York metro area and that they've started looking at the costs of under production of housing there and the estimate is that you know somewhere between half a million to a million jobs is going to be lost in future the future decade because there isn't enough housing to support those workers and so those jobs and we're talking about tech jobs we're talking about bioscience jobs they're going to go to North Carolina or someplace where it's a lot easier to just get a permit and build a new multifamily complex so I think looking at this moment here that's one I think one pillar I think I see of hope and activity that is going to help kind of guide the way out of this So Ruben just following up on that can you talk about what are the obstacles that we face when we try to do office conversions that that seems to be a solution that's thrown around quite a bit and you know what's the word thrown around and what's really what's the reality of those conversions The reality of converting office to residential is that it's very hard and that it is not economically feasible in most cases for most post-war office buildings today so we have invested in office to residential conversions and the reason that some buildings work and some buildings don't has a lot to do with the shape of the building and so so those of you who know this you know that floor plate shape is what you know kind of if you look straight down at the building with a bird's eye view that gives you your square or your rectangle and then you divide that up into a bunch of apartments and people don't want to live in sort of like long narrow sort of railroad train shaped apartments they want to live in a box and a box is a much more efficient space but many office buildings have you know an elevator core at the middle and then a lot of distance from that elevator core to where the window is and every apartment's got to have a window so you've got to sort of run apartments out like the like the petals of a flower from the center of the building and those aren't really great shapes for for an apartment building so you end up with a lot of wasted space but you've still spent a ton of money to sort of convert that pre-war buildings tend to have a floor plate that's actually a little bit more compact they just weren't building them quite as wide back then for a variety of reasons and so there are some historic buildings and then that you can that you can convert and you also get the advantage of being able to use historic tax credits on those which helps with the financing you may also be able to do some commercial within the building and then you can use new market tax credits etc so there are incentives that you can stack up that make those conversions work but when you look around at the office towers that are around us right now I would guess that today under today's sort of math and today's cost of construction and what you could get for apartments you wouldn't find more than a handful of candidates for a successful conversion so we may just say goodbye to some of these buildings you know the like the transformation may have to be at the level of the dirt not necessarily within the existing tower and it may be about land use rather than building use which I know feels sort of wasteful and at some level it is on the other hand like a vacant office tower that sits for decades can become a real problem for a downtown and I think we should we should be willing to you know let go of our attachment to some of these to out to your point room and as we're while we're in the conversation about affordable housing so I wholeheartedly agree some of these buildings will just have to be raised the problem that I see that I would like us to find a solution to is the cost to raise these buildings and then redevelop them where does private equity play a role in that and I'm talking as someone that is in private equity right so you mentioned something that was so key and that there's gonna have to be a lot of policy to be able to allow for more affordable housing to be developed wholeheartedly agree I don't think there's any doubt on that but I would love to see private equity also step up and do the right thing and I'll give you an example I'll give you a story right when I started in capital markets 20 13 years ago the conversation with institutional investors was you're gonna be in San Francisco right you're gonna acquire property in the Bay Area because there's a lot of value there and we did in my previous firm we did and guess what the top five performers were all in the Bay Area or around the Bay Area this is coming out of the GFC once the value started to dwindle away I say once the value was extracted other people say once the opportunity was captured whatever lens you want to use investors change their tune the conversation from private equity real estate investors now is you're not gonna be in San Francisco right you're not gonna be in the area because there's no value there so what I would love to see is for private public partnerships and private equity investors like ourselves to analyze unintended consequences of the returns that we expect be realistic about the value that we extract from a community or the opportunity that we capture and truly invest with a lens that will help that community thrive and as investors it's in our best interest right we should maintain affordable housing as a plausible investment so that we can continue to generate returns from it otherwise we will just fracture the entire affordable housing system leave it to philanthropy and government to clean up after ourselves only to come back when it's cleaned up and do it all over again I want to just quickly jump in give an example of a startup that I think is doing it right not surprisingly it comes from the Urban Innovation Fund portfolio but I've got to plug one of our companies that I think is really interesting they're a company called Codi CODI and basically what they're doing is they're trying to reimagine workspace as flexible so their premise is that right now companies don't want to get a big headquarters with a 10-year lease because it's very expensive impractical and it's also hard to say that you're going to you know keep one specific area in the city and so what they've done is they've created a flex work model where they can spin up in an office space anywhere in the city they'll do a revenue share model with the landlord and essentially they'll bring companies in they can spin up your office space in a matter of days and they'll bring companies in and you could do a lease as short as a couple months to however long you want and what's really interesting is they now have a bunch of spaces around San Francisco and New York not surprising that those are the two cities that have caught up caught on the most quickly because there's the most vacancies there so landlords are actually incentivized to do something a little bit different and what they're doing is they're activating all of these spaces and it's not it's happening in downtown for sure but it's also happening in Hayes Valley The Mission Marina Percidio places that are traditionally seen as residential areas and so I think for a long time zoning regulation really put things in either a commercial or residential box and what they're doing is they're kind of blurring the lines between the two because what they're saying is hey you're a company you may not want just one office space you may want a couple of flex spaces where some of your resident or some of your employees come in a couple days a week and so I think Cody has done a really great job we actually supported them when they had a totally different business model pre-COVID their whole thing was they wanted to help people work out of residential homes because most of the times those homes sat vacant and then COVID hit and we were all in our homes and so I think you know they're a really good example of trying to follow the pattern of where flex work is going where the future work is going and it's going to be interesting to see especially because I think we work gets a lot of shade for I think deserved reasons but we work has transformed the way people think about getting an office space they may go out of business soon we'll see there's bankruptcy looming there but I do think that there's still really high potential for companies that are reimagining the way that we're working and so I'm hoping to see the proliferation of Cody beyond San Francisco and New York and I think there's a lot of application there sounds like a fantastic company so we've been talking a lot about remote work vacancy and office space but what the audience really reflected when we started this conversation is what they're seeing about San Francisco which is homelessness and drug addiction and the perception that that creates for visitors to the city as well as you know the real problems that homeless people face and drug addicted people face and so Rubin I thought I would ask you if you could just talk about some of the connectivity between affordable housing and those two issues sure I can offer the high level headline which is the title of a great book that everyone should read and it's homelessness is a housing problem and the book does a wonderful job basically going through all the reasons people think that people become homeless that they are addicted to drugs that they have mental illness that they've made boneheaded life choices that they enjoy living on the street that they are living there because the climate is so lovely and it's just great to sleep under a bridge it goes through and looks at all of those and I'll just give you one example there's no there's no evidence that there's a higher rate of opioid use in northern California than there is in Cincinnati, Ohio but the level of homelessness is considerably higher here Detroit which is a poor city has lower levels of homelessness than the Bay Area or Los Angeles why is that? well if you live in Detroit and you make a modest income you can probably afford a one-bedroom apartment maybe with a spare bedroom so when your brother loses his job and needs a place to crash for a month till he figures things out you can offer that to him in San Francisco if you make a hundred thousand dollars you are median income and you may have trouble finding an apartment you can afford let alone one that would give you space to help somebody else out when they fall on hard times that problem causes people to trip they trip and stumble we all do in our lives they trip and stumble and they fall down and there's no way to get back up or it's much much much harder in places where the cost of renting a studio apartment is considerably higher and so you know when I see that there's 4,000 unhoused people in San Francisco which is a small number relative to the overall population of the city small number relative to the population of the metro but you look at like the residential real estate pipeline and how long it would take to add 4,000 units historically you can kind of see some of the scale of the problem and the moves that need to be made to deal with it I think the other thing is that we're not particularly great as a society at figuring out how to provide temporary shelter resources as well you know temporary shelter is extremely politically contentious and it takes a long time to kind of put those resources together and the crisis that we're facing right now has moved much faster than than that ability of those systems to respond to it Thank you I thought maybe now we could talk about San Francisco relative to some other cities and if anyone wants to share their experience and I'll start with the panel this time but then maybe I'll ask the audience as well if there's a city that you would hold up as a model that's faced some of these same problems or has not faced them because they've been able to avoid them maybe as a model for what we could look to Happy to start So I think Germany and the Nordic countries have done the most phenomenal job in the world eliminating or limiting lowering homelessness for sure but one of the most significant reads that I went through recently was how Germany and I don't know if you guys heard so a couple of years Germany's residents went up and raised real concerns to government officials about their inability to afford the rents right and these are professionals MBA professionals so very similar to the conversation that we're having here the response from the German government was to change some of the policies where now they provide zero interest debt in order to develop affordable housing in and around the major city that's one of the most massive changes that they did the second and I don't mean to go back to private equity and holding our burden but the second was to limit private equity's returns on affordable housing because the reality is that San Francisco is the second most unaffordable city in the country only second to San Diego which I was shocked about but only second to San Diego the current villain of choice is high interest rates so in every panel that we go in that that I go into we always talk about how high interest rates are really the corporate or one of the major corporates for why we have the housing crisis that we have now but the reality is that over 10 years ago we have the same interest rates and San Francisco did not have the issues that it has today so what happened right and the reality was that there was a lot of value that was created between the GFC and now and there was a lot of value that was extracted without any oversight to when that value is extracted how does that change the community how does that affect the community even in affordable housing there's still value to be extracted and there's some oversight but the so the biggest takeaway for me when reading about how the German government went about this and how now they limit the returns that private equity can can take from their housing not just affordable housing from all housing and how they're now able to provide zero percent interest to develop over 38,000 units a year of affordable housing I thought that was something remarkable I think Europe is a great place to look because they have a real social safety net but I think we need to be clairvoyant here which is that given the state of where the US is and how we can't get anything done from a legislative perspective it's not going to happen we're not going to be able to move the needle nationally at least in the near term on anything that resembles more of a social safety net so I think we're going to be out of luck there the other element that we also need to be clear right about is exactly what Ruben was talking about which is when it comes to the unhoused population which is the most visible challenge in san francisco for sure and I want to note that it's also visible because it's happening in the center of the city many of you spoke about like I walked a couple blocks in the wrong direction whoops here I was that is by design because a lot of the social services happen in and around city hall the civic center area and you basically have to drive through there to get anywhere it is dead center in the city and so you will see it and it doesn't feel good I I know it because driving through it makes my heart hurt but the other element to this is historically san francisco in california when you look at our overall population our unhoused population has always been about 2x maybe even more what our general population is unhoused people like being here and not just like being here because the weather is good and all of that but the structural issue that Ruben talked about which is housing here is so expensive so more people end up unhoused I don't know what the like give and take maybe the book that you recommended will shed light on it but we've always had a historically high rate of unhoused people and so it becomes a question a lot of at least leaders in the city have suggested like other states we have a bunch of people moving from other states to come here because being homeless here is better than being homeless in Detroit or Cincinnati I don't know if that's true Ruben says no no I mean the evidence is that almost all unhoused people became unhoused in the city where they currently are interesting and I think the same is true with san francisco it's probably between 80 and 90 percent of the people you see the last place they had a house was in the bay area might not have been in san francisco proper there's there's definitely regional movement intra regional movement where people who become unhoused in a suburban location or in a location that doesn't have any services for that population will go to a place where they can get those services but the the housing phenomenon and the regional housing market is kind of the determinant so so we're not having bus loads of people who are homeless shipped from well not unless from florida well I think he's trying he hasn't even said some flights out I mean there are there are notorious cases of that of people sending in and newark has experienced that actually of people giving their unhoused individuals bus tickets and letting them get to newark Penn station and and because that's an easier solution for them but but the individuals themselves do not choose that that's not like part of their their MO well it's interesting because there were definitely state legislators here that were like hey we experienced double the rate of all these other places other places should be paying us I'm like good luck getting that to happen political moves so ribbon just back to my earlier question can you talk about a city or a number of cities that have weathered this type of crisis or have avoided it yeah I mean I think every city in the United States has some version of this happening any city of size but the ones I think that are that are healthier today are the ones that have more diverse economies so I think as Julie pointed out you know San Francisco's dependent on tech became a blessing and a curse because those workers could go remote overnight but cities like Boston for example actually someone from the audience said they were from Boston you know that have a lot of bioscience that is actually close to downtown you know you can't move your lab to somebody's extra room so those kinds of cities cities that have got institutions of higher education close to their downtown area those have done a little bit better cities where there was a mixed use downtown have done better so some of the do we haven't really talked about the dynamics of the doom loop at all but like the the the phenomenon that people describe is like the office workers stop coming the retail businesses lost their customers the storefronts became vacant the streetscape became you know sort of quiet and that allowed people or created space where people felt like they could put up their tents right and so in cities where you didn't have the first thing happened quite as much because you already had people living there you ended up with a better outcome so New York's financial district actually 25 years ago was not unlike San Francisco's downtown it was just a bunch of office towers and it was not a fun place to be you know like I went to college and graduated in the 90s and we used to go into New York and if you were down there after hours there was nobody around it actually was kind of a scary place after about 8 p.m. it they went through a process of converting some of those pre-war buildings into residential allowing for grocery stores and other kind of needed neighborhood amenities to open and it now is a neighborhood it's a place where you see people pushing strollers around it's weird to see it but it's real and because of that that area has done much better than San Francisco's downtown it doesn't have that same kind of like recursive problem that's that's going on so I think those are those are kind of two big lessons is like the mixed use in terms of the workforce and then also kind of mixed use in terms of the use of all of the all of the land in those spaces and those are those are two examples I can know about but I could you know there's some others as well that's helpful Ruben so maybe now we'll go to the audience and I'll give you a slightly different question which is if you had let's say a billion dollars how would you use it to fix the issues that San Francisco is facing any takers on that one you've got a billion dollars Hi my name is Desi I actually live in San Francisco and I run an economic development nonprofit one block away so I have lots of ideas of what I would do with the billion dollars I would spend the first couple of million dollars electing government officials who can actually run government step one we like that one I would actually enroll a lot of the government bureaucrats in some kind of culture shifting coaching to make them really think about outcomes instead of covering their asses so we'd have government work properly number two I would spend some money on office to housing conversion but focus the conversions not just to fill these vacant towers with more rich people but actually make it accessible for middle-class small business owners people who work in hospitality the artists the creators the people of color who actually make the city vibrant and attractive for people to want to come here and I would actually take Ruben's suggestion and I would actually demolish some of these high rises so we can create more public spaces and then take some of that money and reinvest that into public education I think that would be about a billion dollars right there we love that are you thinking about running for mayor anyone else yeah I have I can't really follow that but I think I'd frame my solution maybe even as a question which comes from sort of I've been spending a lot of time thinking about the accelerating rate of climate driven disasters and seeing that we now experience sort of a billion dollar or more climate driven disaster in the United States every 18 days that are sort of decimating housing stock around the United States so I'm curious if you all have thought about or have suggestions on sort of how impact investors might think about also preserving existing housing and helping communities develop more resilience to be able to navigate climate driven hazards it's not really a solution so feel free to move on to the next one instead but so my quick reaction it was around preservation of housing I think it was kind of the question so I really appreciate everyone's suggestions but I I want to push back against this notion of demolishing the buildings here building in San Francisco is almost fucking impossible it's like disgustingly impossible and that's a real problem here and I think every time you look at like the mechanics of why there are so many problems and the number one thing that I would do is get rid of all the discretionary review bullshit and all of this other stuff that takes like it takes years to get housing approved here it is literally immoral given how challenging it is and how this exacerbates the homelessness problem the affordability crisis etc etc so I think we need to do whatever we can to build build build and preservation is certainly part of that but it's I think it's become a little bit of a lightning rod issue because there are places where they were like you know in the mission before COVID they were like oh we're going to put a moratorium on creating new housing because we want to preserve the existing housing stock for residents and I'm like that makes no sense if you look at supply and demand laws but I think there became this notion of hey you've got a bunch of rich people who are pushing out you know the historically you know entrenched groups here and so if we put a housing moratorium then there we're going to preserve their housing and I just don't think it works that way and so I would say like the much bigger focus if we really want to move the needle on getting this housing built we've had a lot of legislators push push push for us to build more but the dynamics are it's so expensive here and it's still really hard to go through all the various approvals we need to get rid of discretionary review that's a great point to your to your point about preservation I'm so glad you brought that up because the reality is that a lot of studies show that it would take close to 70 years for us to develop our way out of the housing crisis right 70 close to 70 70 years for us to develop our way out of the that's depressing it's horrible so but the reality is that do we know or did we know that we lose millions of naturally occurring affordable housing units and and regulated units as well every year to either obsolescence or conversion to market so the reality is that we need to be more creative than just development right development is an absolute critical piece of a solution but the solution is multifaceted preservation of affordable housing of naturally occurring affordable housing is so dire to to the solution that we're trying to come up with so I'm glad you brought that up and shed some light on it I'll just add to that and I'll take Andrew's bait like I think if I had a billion dollars and I could apply it anywhere you know I would think about I would think a little bit about what Jigar Shah is doing at Department of Energy around all of our other responses to the carbon transition and making big bets and big investments on future technologies carbon storage lots of new ways of capturing energy and retaining energy for use when you need it and we don't really have something similar going on in the real estate space but we should and we need to start developing new models of construction and preservation of existing buildings that future-proof them against the carbon transition you know there's going to come a day where San Francisco has the same climate as Los Angeles what are we doing about that are we ready for that probably not are buildings ready for that absolutely not and should we be investing now in helping the entrepreneurs of the future or the entrepreneurs of today put money behind really promising technology that can retrofit existing buildings and or build new ones I think there definitely needs to be a mix in order to reduce the overall cost of living in that warmer world and the impact in my view that we have an ethical responsibility to think about is the impact on the poorest people rich people will probably find a way somehow but for the rest of us that's going to need to be something that we invest in societally and so I think that billion dollars that's where I'd want to go with it just because that's where my gut takes me okay I'm coming back again first of all let me apologize earlier for saying that every other city is going to be another San Francisco without proper providing proper contact when I came here I started to notice that there were some communities that I would never ever see that ironically looked like me right and then when I would see the homeless people in the community in the community was a completely different dynamic and so the first problem that I would say and where we need to put money is is changing rooms like this we need people who are proximate to the problems to be a part of the solution so this guy what he said I he gets my first vote for mayor right because the cultural strategy piece is huge I used to lead all the storytelling for the biggest redevelopment project in the southeast and in every time we would actually talk about we wanted to provide more affordable housing for low-income people that equate it to black when we said we wanted to provide housing for workforce development people that equate it to black and so it constantly got voted down if we don't address the real issue the real elephant in the room that it is really a problem about race we're good we're never going to get anywhere we have to address what's happening in every major city across the nation there is a major systemic issue and this is not a housing issue it is a workforce issue it is all the things the years and years and years of redlining and all of the different environmental injustices that exist in some of these communities we have to address all of that stuff we can provide housing all day long if we're still being seen as a group of people who are not capable of delivering the ingenuity and the genius that comes from our lived experiences to keep a job we're right back where we started so it's a bigger conversation around a cultural strategy that is literally embedded with narrative that we have to start with that before we also start putting in all of this money and all other things and I will just say one thing and this is what I've kind of held the torch on with our local government in Atlanta we can talk all day about preserving houses and places I mean preserving spaces but we never ever ever have a conversation about preserving the people that created those communities to see to come back into the city and to see what happened to mission was devastating for me because it was such a beautiful space and that same beauty is some of it's there but it's very minimal so I would just say that I think we need to have a holistic perspective and it needs to be very human centered thank you thank you so we have 10 minutes left I would like to answer the billion dollar question oh I'm sorry please go ahead so to your point and to your point and and I'm gonna be idealistic here instead of investing it in things I would invest it in people so I would I would use it to educate and I'll tell you why most people even educated people don't realize that the housing problem is a bipartisan issue it's not about politics a lot of it is about race most people don't understand how it affects them right most of us go about life in in our own bubble most people don't understand how one issue will affect them for the rest of their life will affect the next generation coming forward and even more important most people don't know how much power they have well how do you think Germany changed the the loss that I talked about a minute ago when they had people marching in the streets and saying I will not pay my rent people have a lot of power a lot of power we just don't unify it right we don't we don't work together to change something and I think that's a huge opportunity for us to educate because the reality is that if more of us were educated on how our surroundings are affecting our well-being in the many aspects that they do we would march together in unison and ask and seek out and find the solution to the problems that we have so I'm a huge proponent of education because without education a nicer building more housing to your point a nicer building more housing better cars better work won't change anything we will continue to work divided right and thinking that the housing crisis is somebody else's problem and it's not so for our last question I'm going to ask the panelists to put on their futurist hats and looking out to a decade from now talk about what your vision for San Francisco would be and what's changed Reuben maybe we'll start with you all right I'll I'll try it you know so taking Julie's point that like demolishing buildings may or may not happen I don't know whether and and what the economic conditions will be for that I think I think more about the vision for life on the ground for all of the people moving around the city and I think that when I think about what I would want to see in 10 years I would want to you know be able to look down any block during you know the 12 to 15 hour window when the sun is up and a fair number of hours when the sun is not up and see people see other humans living their lives going about their business going to and from their homes and what does it take for them to do that it takes both places for them to live as well as connectivity for people to just move about the city on foot and I think transition away from vehicular infrastructure into pedestrian infrastructure transition away from private transit into public transit you know downscaling the ways in which we move about and then creating safe spaces for those those movements to happen I think are going to be like the critical moves to facilitate any adaptive reuse demolition and repurposing of space creation of new public spaces I mean I think all of those moves kind of just rely on the ability of people to do things in a much lower cost and you know kind of more communal way for lack of a better word so that's the kind of that would be the vision that would drive me as a if I were if they gave me all the powers thank you Julie oh this is a hard question so I think the utopian version for me would be one that had a more economically diverse fabric for San Francisco so one where it's not just about tech and sure there was a tech boom that I think accelerated the city but I think folks that have lived here for a long time recognize that there has been like a creative artistry we talked about like there are so many people who make San Francisco great and finding ways and platforms to uplift those folks and show that we have economic vibrancy that is built outside of tech I think is a really important part of that then the other part for me is I also want to see more of a car-free world ironically this is where the tech piece comes into play I don't know how many of you have ridden in a driverless car since you've been here but Waymo and Cruz have been operational for about a year Cruz is no longer because they just had an accident so avoid them but I will tell you if you haven't taken a driverless car ride around the city it's actually phenomenal and I'm not just saying that I've now taken a couple dozen of them they drive really well I mean when I say driverless there's definitely someone like tele-operating it there's no doubt about that but you could see this world where we don't have to have so much of our city clogged up and eaten up with traffic and a bunch of cars around you could just pick up a Waymo or Cruz the same way you pick up a Lyft or Uber and I do think that would be really exciting also marrying it with some of the like you know we're seeing a lot of electric bikes around it's it's so exciting to see a transit future that's not just so car heavy I'm not a car owner and I would love to see more and more people go that direction and then finally I'm gonna say housing again I know we kind of have waved in and out of like housing is important then this part is important housing is in my mind like the underpinning of everything when it comes to homelessness when it comes to everything we need to create more housing and more dense housing and about 90 percent of the city currently does not allow density higher than a couple stories and that's a problem and so that is going to be an important part of seeing a better San Francisco thank you those are great answers I honestly don't have anything amazing to to follow that the only thing I would say is San Francisco it's known for being an innovation hub so what I hope to see in the next decade it's San Francisco do what it does best right lead the country in so many different ways from car you know what is it drivers list car that's awesome like self-driving cars to less cars on the road altogether to being you know the most sustainable city in our country to just having its people flourish and doubling down on what you just said everything starts with housing when people have safe secure and affordable housing everybody thrives I think that's a great place to wrap up and I just want to thank this terrific audience for your participation I really do think it added to the conversation and then huge thank you to my panelists incredible insights and I think we've made some progress at tackling the issues that are facing San Francisco so thank you everyone