Editorial: Glad tidings in S.F., Peninsula economy

’Tis the season for year-end economic statistical reports and projections. And in consecutive Examiner front-page stories last Thursday and Friday, headlines trumpeted that San Francisco is on the “path to recovery” while adjacent San Mateo County is “on the mend,” according to the official 2006 municipal wrap-ups.

Both counties have now tallied two consecutive years of rising economic tides, indicating a steady if not-quite-spectacular climb back to the heady days of circa-2000 Bay Area prior to Sept. 11 and the dot-com bust.

In San Mateo County, the 4 percent unemployment rate is a three-year low, and hotel tax revenues are at a three-year high. Property tax revenues have grown 36 percent in three years, and the 17 percent vacancy rate in commercial real estate ias the lowest in five years. Average personal income grew from $52,103 to $54,807 during 2004, the latest figure available.

Meanwhile, San Francisco is showing healthy improvement in job growth, the all-important tourism revenues and commercial office occupancy. In mid-2003, the office vacancy rate hit an all-time high of 23 percent, while in this year’s third quarter the vacancy rate was down by more than 10 points.

This lower office vacancy rate indicates that San Francisco’s not-yet-tallied 2006 job total will show a second consecutive annual gain. During 2005, The City added 6,300 new jobs, mostly in the professional and business services sectors. This is pleasant news, but it must be seen in the context that San Francisco lost a total of 100,000 jobs between 2000 and 2004.

Tourism, San Francisco’s No. 1 industry, has been on an upswing for the last two years. Cruise ships brought 223,000 passengers to The City in 2006, some 100,000 more than docked here in 2003

San Francisco International Airport continues to be a powerful economic engine for both counties. The 33.6 million people flying into SFO in 2006 are about as many as last year. But now the number of international passengers has increased by 4.5 percent, as more people worldwide seem willing to fly again.

Last year, San Francisco saw 15.7 million visitors, a 4 percent boost from 2004. They spent $7.37 billion in The City, a 9.5 percent increase. The 2006 numbers are not compiled yet, but it is encouraging that San Francisco booked 925 conventions during 2004-05 and a heftier 1,035 in 2005-06.

Hotel occupancy rates increased slightly, while average daily room rates went up nearly $15 this year to $167. San Francisco collects 14 percent of all room charges, which brought in $174 million in 2005. Retail sales also improved 7.5 percent in 2006.

San Mateo County hotels, mostly clustered around San Francisco International Airport, have delivered 39 consecutive months of room tax increases. This contributed some $772,000 to county government coffers alone in 2006, as average hotel room prices increased more than 19 percent to $117 a room.

If there is anything resembling a cloud on the horizon for San Francisco and the Peninsula, it is that residential real estate values are starting to flatten. Property taxes provide the lion’s share of San Mateo County’s $371 million total revenue. However, with all these other positive indicators in place, the overall Bay Area trend is looking better than it has in years.

editorialsOpinion

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Harlan Kelly, head of the SFPUC and husband to City Administrator Naomi Kelly (right), faces federal charges for allegedly trading inside information on a city contract in return for a paid family vacation. (Courtesy photo)
Harlan Kelly, head of SFPUC, charged with fraud in widening Nuru scandal

Kelly accused of engaging in corrupt partnership with permit expediter

Jeff Tumlin, director of transportation for the San Francisco Municipal Transportation Agency, said the agency’s fiscal situation is “far worse” than the worse case scenarios projected back in April. (Kevin N. Hume/S.F. Examiner)
SFMTA prepares for massive potential layoffs as budget crisis continues to build

More than 1,200 full-time jobs on the line as agency struggles to close deficit

California Gov. Gavin Newsom is weighing further restrictions as COVID-19 cases rise. (Genaro Molina/Pool/Los Angeles Times/TNS)
Newsom considering new shelter-in-place order as COVID-19 cases rise

Gov. Gavin Newsom on Monday warned that he may need to reinstate… Continue reading

Nicole Canedo looks at her City-issued Medical Reimbursement Account page on her computer outside her Berkeley apartment on Tuesday, Nov. 24, 2020. Canedo has worked numerous retail jobs in The City and the MRA has helped her with health costs. (Kevin N. Hume/S.F. Examiner)
Millions left sitting in medical reimbursement accounts by city workers

Health officials looking at how to improve access, outreach as untapped funds reach $409M

Andrew Faulk wrote "My Epidemic." (Courtesy photo)
Doctor’s memoir a fitting remembrance for World AIDS Day

‘My Epidemic’ tells personal stories of men who died

Most Read