San Francisco's New Mayor on Homelessness, Unaffordability, and AI

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1:53Hello and welcome to another episode of the Odd Lots podcast. I'm Jill Weisenthal. And I'm Tracy Alloway. Tracy, we have a mayoral election coming up here in New York City. Very exciting. I think when this comes out, it'll be literally tomorrow. We're recording this October 28th. No one knows for sure what's going to happen, but I think it'll be like the day after this episode comes out. Absolutely. And obviously a very heated mayoral election, I think. One that's kind of taking national attention as well, which, you know, New York is always important, but maybe it's extra important. It's always very important to the media.

2:29That's definitely the case. But you know what? I think there's obvious reasons why there's a lot of national interest besides the fact that as reporters, we like to report on our hometown. A lot of cities are dealing with the same challenges that New York is. New York City is a very expensive city to live in. There are a lot of cities that are very expensive, particularly any city that has some sort of economic dynamism right now. Now, New York City has a number of quality of life issues that frustrate voters, whether it's a crime, which has come down the way a lot. But, you know, safety and public transportation, homelessness, et cetera, public drug use, which, in my opinion, has gotten a lot better over the last few years.

3:09But it was very prevalent. I saw a lot in the parks in twenty one, twenty two. These are not by no means are these issues that are sort of New York dealing with the Trump administration and the tensions they're in. These are not New York City specific issues at all. No, and it's funny, as we sat down to record this particular episode, right when we sat down, I got an email. The data behind Chicago's citywide housing shortage. Chicago is another one. Yeah, and I mean, there are so many commonalities between these cities. It's definitely worth comparing and contrasting. One thing I got to ask, just for the New York election.

3:43Yeah. Are you still a single issue voter on rats? Well, if I were, my candidate would no longer be available. I know, that's what I was thinking. I have to find a number two issue. I'll start to do some research over the weekend. Good idea. Anyway, you know, obviously one of the cities, I've always been more of a Southern California guy, but I'm really coming around on San Francisco. We were there last November. We had a great time. I loved using the Waymos. It's a stunning city. And it's not just the Bay Area. It's San Francisco specific that is the beating heart of the AI boom right now. So the most important industry in the world is there.

4:19It's truly a lovely city, however, has many of the same quality of life and affordability questions that we face anywhere else. In fact, maybe some would say for at least a time, arguably worse. Yeah. I mean, I remember from visiting, it also has some very, very beautiful neighborhoods with historic buildings, very, very cute neighborhoods in many respects. And so you can imagine that efforts to boost housing affordability immediately run into that whole neighborhood vibe. A few years ago, I was visiting a friend and I said, I love this neighborhood. I love where you live. And he's like a yimby.

4:55He's like, Joe, you're not supposed to say that. This is the neighborhood. He's a renter, though. So, of course, he doesn't mind if his house gets torn down for new buildings. Anyway, we really do have the perfect guest to talk about big city governance, all of these things. We are going to be speaking with literally the perfect guest, Daniel Lurie. He is the new mayor of San Francisco, or he came into office earlier this year. So he's been in an office less than a year. So Mayor Lurie, thank you so much for coming on the Odd Lots podcast. Joe, Tracy, it's good to be with you. I feel like you were selling our city better than I could.

5:27So you two can just keep going. And Joe, your love of Southern California will get you going on Northern California and San Francisco by the end of this podcast. Okay, well, that's a good goal for you to fully flip me over to be Northern California pilled. No, I really, I really, I did love it. You know, there's so many different angles that we could start with. People have talked about the homelessness challenge in San Francisco for a long time. Setting aside, solving it, whatever that means. What is it about San Francisco that, in your view, has made the, what are the underlying conditions that the city has faced for a long time, such that it's been a fairly acute problem facing the city?

6:09How should we understand the causes of it? Well, I think it's been going on for three or four decades now. I think we have not built enough housing, not only here in the city, but across the state. So it really is a regional and a state issue. I would argue right now it's not just a homelessness crisis. It's a fentanyl crisis. We have a real crisis on our streets. I go up and talk to people that are suffering on our streets every single day. Most mornings, I spend 45 minutes to an hour talking to people, trying to get people off the street and into shelter, into treatment, into the right kind of beds.

6:49We kind of had a live and let live attitude for a while in this city. And that has changed. We have changed that attitude over the last year. We want to get people off the street and into help. But of course, it is an affordability issue statewide. And we need to build more housing statewide. We're in the midst right now of getting a family zoning plan, a new map passed here because the state has mandated that of all counties in the state. And San Francisco is going to do its part. And we need more housing. Definitely want to talk about the family zoning project for sure. But just on the homeless issue, I guess one area of commonality between New York and San Francisco is you do have this debate over mental health and I guess how to balance compassionate outreach with stricter enforcement or stricter policing.

7:43What are you doing on that front? When you say you need to get people help, what's actually happening? Yeah. First off, I don't believe it's compassionate to allow someone to be passed out on the sidewalk. I don't believe we should allow people to smoke fentanyl in our bus stops. We have to put an end to that, and we have to then get people into the right kind of bed, the right kind of treatment. For example, we opened up a 16-bed center at a place called 822 Geary. It is a place that someone can walk in. It is voluntary. It's police-friendly. It's fire-friendly, so they can bring somebody in.

8:22They can stay for 24 hours. They can get onto medication. They can take a moment to relax, and we have staff there that then gets them out to the right recovery bed, to the right treatment bed, of which we have stood up 400 new beds just this year alone that are 90 -day, six-month treatment programs. That's what we need to do. What we were doing as a city before was we were just building lots of permanent supportive housing, which I believe in. But if you are struggling with a fentanyl addiction and you are put into housing without services, without support, it is not a good fit. And we have really come to understand that in a really important way this year.

9:08And so we are doing a much better job of getting people off the street into a short-term care and then into long-term care. But we have a long way to go. But that 822, Gary, 24 hours is an example of a new approach. One other thing that we've done since I came into office in the first month, we readjusted how we do neighborhood outreach or street outreach. We had seven different departments prior to us, me coming into office. Now those seven different departments are put together in what we call a team of teams. They meet each morning as those seven departments in one mission outreach team, one tenderloin outreach team.

9:51They go out together. They know who their target population is. They know the names of the people and they try to get them off the street and into those right kind of beds. You know, there was an incident in New York City recently. I probably should have looked up the details a little bit more, but I think there was an An influencer took some photos of people selling knockoff bags on Canal Street. Which they've been doing for decades. Which they've been doing for decades. And then I think ICE came in and I was actually on Canal Street two nights ago. They were back, etc. So whatever they supposedly solved looks like it was just for the cameras for one day.

10:30But there is this argument that I've heard, which is like, you know what? if you don't want ICE to come in and, quote, clean up your streets, you should have done it yourself. And I don't really have a strong opinion on like the optimal level of enforcement or the optimal level of like how extreme you want to get to enforce certain quality of life things. But I have some sympathy for this view that like, well, you know, there's all this sort of public disorder, et cetera. And where were the politicians prior to the Trump administration taking some of these things seriously. Do you think it's fair to say that the Democratic Party and a number of big cities have not taken what people call quality of life seriously enough in the past?

11:13I'm not going to speak for the Democratic Party. I'm I was never in politics. I ran because of the disorder on the streets of San Francisco. I ran. My number one issue was public safety. My number two issue was the behavioral health crisis that we were just talking about. And my number three issue was, I want to tell the world and let them know that San Francisco is open for business. We're going to cut the red tape so our small businesses can flourish. And so I've been saying the same thing for about two and a half years now. From the time I ran to right now on this great podcast, I'm going to say, we need police officers walking the beat along commercial corridors.

11:53Our families that are taking their kids to public school and using muni deserve a muni stop that is free of people using drugs. It's unacceptable. And it was two and a half years ago for me. It's unacceptable to me. So local law enforcement can do the job. We are short a number of officers. We have the first net increase in police and sheriff's deputies in 10 years, a net increase for the first time in 10 years. And so we need to get back to full staffing and we can handle it. So just real quick follow up. Like, I agree. I would like to have public transportation stops everywhere where there's not public drug use, public drugs for sale, et cetera.

12:37Where do you encounter the opposition to that? Like, what have you discovered about where the roadblocks are? Because, again, seems very sensible that you shouldn't be using drugs in public. And so where's the opposition? Well, you know, it's funny. Who disagrees with this? There are people, and I talk to them every day. I drop my kid off, my son off in the mission, and I walk the streets from the mission to Hayes Valley most mornings, and there's a bike route, and there was four people, four of whom were either in the midst of using drugs or had used drugs, and I was telling them they needed to move, and we would give them help.

13:14We would give them an offer of support, and someone came by, literally in the bike lane, And someone stopped and said, what are you doing? They live here. And I said, this is a bike lane that parents are taking their kids to school on the back of their bikes. They're walking their kids to school. So there is opposition. But I would also tell you that the vast majority of San Franciscans want public safety. They want clean streets. They want safe sidewalks. And we are delivering on that. Crime is down 30 % in our city. Crime in Union Square, our financial district, because of the staffing increase that we put together through something we call the Hospitality Zone Task Force for Union Square, Moscone, Yerba Buena, which is our downtown hub, crime is down 40%.

14:01Violent crime in our city, we haven't seen these type of rates since the 1950s. So what we are doing is working. And the vast majority of people are very excited. This is the first time in a very long time that San Franciscans, the majority of them, feel like our city is heading in the right direction. And we are a city on the rise. And it's a great time to be here. Well, tell us more about what exactly you're doing. And one thing I'm very curious about is, I guess, the division of labor or division of responsibility between the mayor's office or the police force and things like that. Well, I think the police officers have a responsibility, obviously, to keep safety.

14:41And our district attorney has done a great job prosecuting and really going after these fentanyl dealers. So, you know, I mean, I think your audience, you all told me before coming on, is the smartest audience there is. That's right. So I don't think I need to explain the difference. We always say you're the smartest out there. But, you know, listen, RSFPD, they're incredible. They are driving crime down. We have a great partnership with our DA, with our city attorney, with our sheriffs. Our park rangers are doing a great job in our parks as well. It's a team effort, and we are united in making sure that everyone here in San Francisco knows, every visitor to San Francisco knows, every convention goer knows that public safety is our number one priority.

15:26We pulled off the NBA All-Star Game. We had the Chinese New Year parade on the same weekend. It went off without a hitch. We just had a conference with 50 ,000 people last week in San Francisco. We had a demonstration on a Saturday with 50 ,000 people marching. Zero arrests. We know how to keep people safe, and we're proving it.

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18:18Should San Francisco keep prop C's? So I understand that on big companies with revenue of over$50 million, that there's this tiny gross revenue tax. Some speculate, though it's not confirmed. I don't know if they've said it, but that is one reason that Stripe does not have its headquarters in San Francisco. Should that be revisited so as to bring more corporate activity into the city itself? What I've always said is that we need to be competitive on the tax front. We're out of whack with San Jose and Santa Clara County. So actually every candidate for mayor last year supported what was called Prop M, which kind of realigned our tax structure, got it more competitive.

19:00That was an important step for our city. I think it signaled to everybody that we were serious about being in the ballpark. I think we probably still have more work to do. The thing that I think companies really look at is the quality of life and they look at the street conditions. They look at public safety. I think that is without question the most important thing. And they are seeing that they have a mayor that is delivering on that front, that I am focused on creating the conditions so that they can succeed. That's our mantra. We want to create the conditions so that small businesses can succeed and that big business is welcome back here.

19:38What I always say, though, you two, is I want these companies to be part of the community, though. Like I want them investing in our public transit. I want them investing in our public schools. I want them investing in our arts and cultural institutions. I would say for a long time, and I ran Tipping Point Community, which is similar to Robin Hood in New York City, Tipping Point was always focused on bringing individuals and companies to help support those that were living in poverty, those around job training and housing. But we need to see more. We need to see more of our business community.

20:14We're going to do our part at the administration to create the conditions for their success. But I need them to help us make sure that San Francisco regains its status as the greatest city in the world. We're not far off. We're closer than most people think. We are the most beautiful city in the world right now. And we are soon going to be the greatest city in the world again. I was going to say New York might take issue with the greatest city in the world. Oh, I know who I'm talking to. I know. Okay. Since we are talking about companies, one of the reasons we wanted to talk to you is, as Joe mentioned in the intro, San Francisco, obviously a massive tech hub.

20:50And what we're seeing at the moment in markets and the economy, it's kind of weird because AI-related stocks keep going up. Everyone's very excited. But on the other hand, you have a lot of layoffs happening in the tech industry. So I think more than 100 ,000 job cuts at places like Microsoft and Meta. When you look at San Francisco's labor market right now or overall economy, what are you seeing? Is there a net benefit from AI or are you seeing increased unemployment? No, I mean, right now we're seeing absolutely, we're seeing people from Texas and New York and other parts of the globe buying buildings in San Francisco betting on real estate, understanding that it's not just about AI, though.

21:35It's really about the ecosystem that is growing up around a company like OpenAI or Anthropic or Databricks. These are enabling companies and startups and entrepreneurs in the healthcare space and others. It is booming in that respect. But I also want to create the conditions so that we have a durable trajectory, not one that is just reliant on just tech or on AI. But because, you know, we did that in the 2010s. We were so solely focused just on tech. And I think what you're seeing here is that we are seeing a broad-based recovery, arts and culture. We're seeing new restaurants. We're seeing healthcare really take off also.

22:19And so we want it to be durable. We want it to be broad, but there's no question that AI is driving and is a major force and it's a force for good in terms of jobs. You know, you deal with all these CEOs of startups and they go on Twitter and they yap and they threaten to move to Austin or they threaten to move to Miami, et cetera. I think a bunch of them move back, but they said they're saying the same thing here. Some of them are like, oh, I'm going to, you know, move to Nashville or whatever if so-and-so gets elected. What should the next mayor of New York City know about having a productive relationship with a significant part of the tax base?

22:56Well, I would say to any next mayor of any city, don't listen to me. Don't listen to me. I'm 10 months in. I'm solely focused on San Francisco. I get asked a lot of questions about something. You're asking him to advise his competitors. But you've learned stuff right in 10 months or whatever, nine months since you've been on the job. What have you learned about, yeah, interacting with very powerful, wealthy interests? Well, listen, I think what I've learned throughout my career is that you have to have an open door. You have to have conversations with people. Most importantly, you have to listen to people, whether you're trying to get family zoning, our housing plan passed, and I'm in neighborhoods that you all were describing before who were like, I'm worried and I'm scared.

23:45And there are a lot of people fearful about new housing. And you have to go listen and you have to work with them and you have to invest. And I think the same goes with our immigrant community, goes with our arts and culture communities. It goes with our restauranteurs who I sit down and meet with and listen to the struggles that they have with their power bills going up 30, 40 percent over the last two years. I pride myself on listening to people, working with people, and then getting to the right solution that's going to benefit as many San Franciscans as possible. So on zoning, since it keeps coming up, one thing you hear a lot, especially in the case of San Francisco, is that the housing shortage is mostly about restrictive zoning and regulation and things like that.

24:32Is that it? How restrictive is the regulation? And are there other factors, I suppose, that are playing into this? Absolutely. I mean, listen, it's been restrictive, but the state has loosened those restrictions quite a bit. We are doing everything we can to make it easier to build more affordable housing. I went to three ribbon cuttings last week, three different sites for 100 % affordable in different parts of the city. the cost of labor is really high. The cost of goods is really high. So it is not just about our zoning plan. It involves a lot of other issues as well. And so I'm very hopeful that we pass this family zoning plan, but it does not mean the next day that building will start.

25:16It is, we need to see, you know, interest rates are likely to come down. That's going to be important. We have to work with our friends in labor to make sure that the cost of labor does not continue to be something that makes it so that we don't have people working and building. Specifically, why don't you just give us the quick synopsis of if this passes, what will change from now to after the family zoning proposal? Well, I think it's just going to make it easier. We have lots of amendments still to be worked on, to be quite honest, that's going to protect rent controlled units of three or more that are in a building, it is going to allow for more housing to get built more quickly.

25:57So you won't have to go through as much of a process. But once again, I don't think you're going to see a huge difference during, at least let's say my first term, we have to see those other factors play into it as well. But I really think it's going to allow the children that are growing up in our city to really dream that they can stay in San Francisco. We had an independent analysis that said it's going to drop rents by between$800 and$1 ,500 a month. That's a huge difference for people. So we are very hopeful that it allows our city to become more affordable. There's a pushback often from people that say, this plan will make it unaffordable.

26:41I say, this city is really unaffordable right now. People say this is going to hurt small businesses. I say it's going to provide more customers. What we're going to see with this plan is more density along commercial corridors and along transit lines. That is where the bulk of the height will go up. It'll go up to six to eight stories along commercial corridors. And what I've told everybody in residential neighborhoods, we have basically four stories everywhere. 77 % of our plan, there are no height increases. We're really protecting our residential neighborhoods, our jewels that you all were talking about before.

27:20And it's going to also help us prevent our ocean beach from becoming Miami Beach, which is a real fear that people have. And I understand it. And I don't want that. I want our, you know, sunset enrichment neighborhoods to retain their unique character. You know, Joe, I have yet to experience a rent decrease in New York ever in my life. Well, I heard some people got them in 2020, right? But I wasn't here. So that's a novelty seeing rents go down in a major city if it happens. So what have your conversations actually been like with developers? What are they saying their needs actually are in fulfilling some of this project?