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SF job growth steadily climbs, but housing demand can’t keep up

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In 2016, construction jobs were the second-fastest growing employment sector in San Francisco, according to The City’s “2016 Commerce and Industry Inventory” report. (Jessica Christian/S.F. Examiner)

San Francisco continued to enjoy a strong economy last year, growing both in population and jobs faster than the Bay Area as a whole in 2016, according to a recent economic report.

The City’s population increased to 866,600 residents in 2016, a 2.5 percent bump from the previous year and a 6.9 percent increase over the past decade. Employment also continued to grow for the seventh-straight year in 2016, reaching a record-breaking 703,230 jobs — an increase of 28,730 jobs from 2015.

That’s according to The City’s “2016 Commerce and Industry Inventory” report, which was presented at the Planning Commission meeting Thursday. The report is meant to provide a consistent set of data points for community groups, businesses and public and private agencies.

But the reality of creating more jobs continues to be evident in San Francisco, where about 154,000 jobs were added the market between 2009 and 2016. During a similar time — between 2007 and 2016 — 25,660 new homes were added to The City’s housing stock, according to the Planning Department’s Housing Balance report that was published in May.

Dennis Richards, vice president of the Planning Commission, told the San Francisco Examiner on Monday that meeting the demand for housing and transit infrastructure created by job growth continues to elude The City.

“It’s pretty much, much of the same that’s happened every year this decade,” Richards said of the report’s findings. “We’ve added so many more jobs than we have built homes for the workers.”

He added, “It’s so easy to add a job. It’s much harder to add a house.”

Overall, however, the report painted a rosy picture of San Francisco’s economy, which, in addition to population and job growth, saw a boost in new business establishments, workers’ earnings and city revenue both from 2015 to 2016, and in the past decade.

Similar to a decade ago, office work continued to dominate the types of employment in 2016, at 42 percent — a 37 percent increase since 2007. Retail jobs accounted for 18 percent of employment — the same percent as in 2007 — while production/distribution/repair jobs were at 13 percent in 2016 and 15 percent in 2007. Cultural/industrial/educational jobs maintained 24 percent of jobs, also the same as 2007. But hotel jobs dropped 4 percent between 2015 and 2016, and declined 13 percent since 2007.

Among the notable employment changes was in construction jobs, the second-fastest growing employment sector in The City in 2016. Commissioner Joel Koppel credited Mayor Ed Lee with the recent rebound in construction jobs after a moment of silence was observed at the start of Thursday’s meeting in honor of Lee, who died unexpectedly Tuesday.

“Between 2008 to 2011, there was the worst economic downturn that the construction industries have ever seen,” Koppel said. “Mayor Ed Lee came in and [boosted the] industry and promoted companies coming into this city, which created a lot of work for a lot of people and literally allowed people to survive.”

There were 59,302 business establishments in San Francisco in 2016, an increase of 1.4 percent from 2015 and a 35 percent increase since 2006. Based on the land-use category, 45 percent of those business establishments were in the cultural/industrial/educational sector.

The second-highest category for business establishments was office space, at 23 percent, followed by retail space at 14 percent and production/distribution/repair at 8 percent.

Workers in San Francisco continued to earn more money in 2016 than in previous years, particularly in the office sector. Approximately 62 percent of the $71.5 billion that workers earned in 2016 went to office employees, followed by 15 percent for workers in the cultural/industrial/educational category, 14 percent for production/distribution/repair workers and 7 percent for retail employees.

City revenues for the 2016 fiscal year (July 1, 2015, to June 30, 2016) increased 8 percent over the 2015 fiscal year, reaching $5.8 billion. The largest revenue source came from property taxes, at 31 percent.

Expenditures in 2016 grew 7 percent over 2015, to $5.1 billion, but remained lower than revenues. The highest spending category was for public protection, at 25 percent.

In 2015, San Francisco received 29,800 building permit applications, an all-time high for the past decade. That number dropped by 4 percent, to 28,750, in 2016, with the majority of active permits for residential purposes — 68 percent. The second-highest were for office use, at 16 percent, followed by 8 percent for retail use.

Richards attributed that dip in building permit applications likely to the uncertainty surrounding Proposition C on the June 2016 ballot, in which San Francisco voters returned the power to adjust affordable housing requirements in new developments to the Board of Supervisors.

“[Developers] were just waiting to see what was coming down the pipeline,” Richards said.

Transit-wise, driving alone, bicycling or walking to work decreased slightly in popularity among San Francisco residents in 2016. About 40 percent of workers took public transit to work, while driving alone amounted to 33.2 percent, bicycling was 2.7 percent and walking was 7.4 percent.

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