HOW DOES REMOTE WORKING IMPACT THE SAN FRANCISCO HOUSING MARKET? San Francisco Property Management Advice

For a while, it looked like the San Francisco housing market was going to be a victim of the remote work trend which has been growing for a few years and really took hold during the pandemic. 

People can live anywhere and still keep their jobs, so why stay in an expensive city like San Francisco? 

Housing prices in San Francisco might have felt lower than they should have been for a while, but things are rebounding quite nicely. Thanks to rising values, higher prices, and low mortgage rates, San Francisco’s housing market is about where you’d expect it to be. So despite the early panic, the news is not so bad. While remote working doesn’t always benefit San Francisco rental property owners, there are still opportunities to be found when attracting remote workers to your rental unit.

IT DOESN’T HAVE TO BE ALL OR NOTHING 

Remote work is pretty popular, and lots of workers have remained 100 percent outside of the office. 

Even more popular, however, is the flexible remote/office model that allows employees to work at home or remotely part of the week but still come into the office one or two days a week. Generally, employees and employers seem to prefer this. 

That’s good news for workers who have jobs in San Francisco. They’ll enjoy working from wherever for half the week, but also want to be within commuting distance of their office when they need to show up for in-person meetings and strategy sessions. 

1. WHAT DO THE NUMBERS SAY ABOUT REMOTE WORK

The shift to remote working for eligible professionals has really had an impact economically and in housing markets like San Francisco. 

Years ago, it was called telecommuting. Some people did it, but generally, work was done in the office, and overtime was occasionally taken home. If you were sick or a child was sick, maybe you’d work from home one day every now and then. It wasn’t the norm.

Now, it is. 

According to the Pew Research Center, 1 in 5 remote workers across the country said they were working from home full time before the pandemic. But by the end of 2021, around 38 percent of the American workforce found they could do all or part of their jobs remotely. More than half of those employees want to continue working remotely, even though some companies have called their employees back to the office. 

In San Francisco, there’s an even higher percentage of the population who is eligible to work remotely. It’s still the cradle of tech companies, start-ups, and entrepreneurs. Most of the jobs that are offered by San Francisco companies are remote. So, local workers are even more likely to be able to work remotely. Nearly half (48%) of San Francisco workers told Pew that they could do their jobs from home. Among workers in tech fields, 72 percent said they could do their jobs remotely. 

This does not mean that those remote workers are in a hurry to leave San Francisco. That may have been the case early in the pandemic when staying in a city seemed silly if other options were available. But, people are returning. And, a lot of San Francisco’s remote talent will remain here - in San Francisco.

2. SAN FRANCISCO ATTRACTS REMOTE WORKERS, TOO

Not all remote workers are fleeing San Francisco. Some of them are staying and even moving into the area. 

Now that restrictions have been lifted and vaccination rates have risen, people can enjoy living in a thriving, energetic city like San Francisco again. We’re attracting renters because it’s fun to be here. While working remotely in a smaller town elsewhere might work for a while, there’s nothing that matches the restaurants, entertainment, recreation, shopping, and quality of life that’s available in a place like San Francisco.

Remember, too, that there’s a large population of workers who cannot work remotely. First responders, healthcare professionals, many teachers, and those who are finally getting back to full-time schedules in tourism and hospitality have to be present in their San Francisco job locations in order to pursue their careers and earn an income. 

Early in the pandemic, there was a shift in the rental market and the entire housing market in San Francisco. People did leave. But it wasn’t the mass exodus that it could have been, and plenty of people stayed. 

Remote workers are here too, and they’re likely not just here because of the work they do. There is a lot to love about living in San Francisco.

3. MAKE YOUR SAN FRANCISCO RENTAL ATTRACTIVE TO REMOTE WORKERS

Instead of mourning the loss of remote workers in your rental market, see what you can do to attract them. 

Remote workers have a few specific requirements. Fast internet is absolutely one of them. Make sure your building is wired to provide the best possible Wi-Fi. You can provide it yourself and roll it into the rental amount. If your tenants are responsible for setting up their own internet services, make some recommendations about which service providers have great reputations for fast speeds and good customer service. 

Workers are also looking for dedicated office space. Advertise your second bedroom or den as a home office. Highlight flex space in your marketing. If you don’t have a dedicated room, see what you can do about creating a nook or a specific space in the unit that offers a great window view or extra quiet. If your building has a business center, that’s another big advantage. 

Your remote workers appreciate properties that help them balance their work life and their personal life, even if those worlds are held in the same space. Small details like lighting, windows, cozy bathrooms and sheltered workspaces can make a big difference.

4. FOCUS ON TENANT RETENTION IN SAN FRANCISCO

San Francisco has always been a competitive rental market. Remote working has made it slightly less competitive for tenants, who may be moving or looking elsewhere. 

Tenant retention is more important than ever. Make sure you’re doing everything you can to hold onto your good tenants, especially when they’re paying rent on time and helping you take care of the property. Some great retention tips:

• Respond promptly to maintenance
• Be available and accessible - communicate openly
• Be reasonable with rental increases at renewal time
• Offer incentives to sign another lease agreement

Good landlords who are communicative and available have an easier time retaining tenants than landlords who are non-responsive or difficult. Make sure you’re communicating with your tenants and helpful whenever they have questions or come to you with problems. 

Provide resources and keep in touch without being overbearing. Tenants have a right to quiet enjoyment of the property. They’re looking for privacy. You don’t need to be calling or sending messages every week. But, if there’s something happening in the city that you think might interest them or you know road construction is planned for the neighborhood, send a quick update. Tell them if there’s any new information coming out of the HOA. They’ll appreciate that you thought of them. 

Sometimes it’s as simple as being courteous. Do you say thank you when rent is paid on time? Do you demonstrate gratitude when your tenant is accommodating to vendors, pest control people, or neighbors who need help? You don’t want your tenants only to hear from you when something’s wrong. Keep your interactions positive and professional. 

Don’t be afraid to reward good tenants as well. If rent is paid on time six months in a row, consider sending them a gift card for a local coffee shop. It’s the opposite of a late fee; they’re getting positive reinforcement and they’ll remember that you appreciate them. 

Retaining tenants during periods of higher vacancy is incredibly important to your ROI. When remote workers don’t have to live in San Francisco, you want to make sure you give your good tenants plenty of reasons to stay. 

San Francisco’s housing market is strong and competitive.

Things aren’t as bad as some experts feared they would be at the start of the pandemic. While remote work has not helped the San Francisco housing market, it hasn’t done the damage that some investors feared. The rebound will be strong, and while remote working is likely here to stay, San Francisco will continue to draw a strong pool of tenants to its rental homes. 

The overall housing market is strong. Prices are up 14 percent than they were a year ago, and the median sales price for a San Francisco home was $1.2 million in January 2022. Demand is high and inventory is low. The remote work trend is not causing the negative upheaval that others would have you believe. 

SAN FRANCISCO PROPERTY MANAGEMENT ADVICE

We’re pretty good at attracting and retaining San Francisco tenants. At BanCal Property Management, we’ve been in business since 1987, so we’ve seen a lot of market ups and downs. We’re prepared and we’re adaptable. We’d be happy to help.   

To hear more about our leasing and management services, please contact us at BanCal Property Management. We also welcome your comments, questions, and suggestions for topics you want to learn about, so please share those too. What kind of impact has remote working had on you personally and professionally?