- The Westfield mall used to be the beating retail heart of San Francisco.
- Westfield stopped paying the mortgage on this shopping mall, the San Francisco Chronicle reported.
- Foot traffic has plunged. The city is so expensive that some people can’t afford to live there anymore.
When a city becomes too expensive for regular people to live in, other things begin to fall apart. It can take years, but it happens. Just look at San Francisco.
The city is regularly at or near the top of rankings of the priciest places to live in the US. Just before the Covid-19 pandemic, the median rent was $4,500, almost 3 times the national average. The list price of homes for sale averaged $1.3 million, 4.4 times the US median list price.
When housing costs this much, and for a multitude of reasons more housing isn’t being built fast enough, life becomes untenable for some residents. They leave, like some did in the pandemic, or they live in RVs or on the street.
There are great things still happening in San Francisco. Generative AI startups are sprouting up. The hottest startup in the world, OpenAI, is headquartered there. There’s a new post-Covid energy in some parts of the city. But that’s at the high-end. For an urban area to truly thrive, you need regular people from all walks of life to embrace the location. For teachers, nurses and a host of other workers in San Francisco, it’s become really hard in recent years.
Now, the cracks are beginning to show. One of the biggest fissures so far was reported by the San Francisco Chronicle on Monday. It broke the news that Westfield stopped paying its $558 million mortgage and is surrendering its namesake shopping mall to lenders.
This is the biggest mall in San Francisco. When tourists come to experience this famous city, they often hang around nearby. It’s the beating retail heart of the area. Or it was anyway.
So what happened? In a nutshell, there are just not enough people living and working in downtown San Francisco anymore. Office vacancies remain high. Nordstrom, an anchor tenant of the Westfield mall, is leaving. Foot traffic in the city has plunged since 2019, according to Roland Li, a reporter at the Chronicle.
Nearby the mall, there are more problems. Here’s a list of retailers pulling out of the city’s downtown area.