Crime: Oakland Vs. San Francisco

Contrasting Crime Narratives in the Bay Area & What It Means For Real Estate

This year we got a doom loop narrative and a lot of speculative explanations along politically polarized lines: among many accused culprits, the right blames soft-on-crime liberal policies in America’s inner cities, the center blames economic conditions and the left blames systemic backlash to police oversight policies.?

Notice these each describe a type of systemic failure - although some would not blame the system for the economy, spiking crime due to economic conditions is an issue an effective system addresses effectively.

Regardless of where on the political spectrum the reader is, we should be able to agree that surging crime needs to be addressed, and concede a willingness to accept a correct analysis- at least to some extent.

At least, from our perspective in real estate we attempt to understand crime along with all the other elements influencing our market. To do this correctly we have to become agnostic with regards to the political implications of all the possible explanations and seek the truth.

I wrote an article earlier in 2023 challenging the Doom Loop narrative in San Francisco.? It is important to note that crime rates in the Bay Area are not uniform.

Crime is down in San Francisco, per the data.

Crime surges in Oakland, particularly auto theft and violent crime are noteworthy.? Stories about pirates and highway robberies out of a Mad Max movie are colorful but the rising crime rates are the real issue.

Baron Rothschild once said, "The time to buy is when there's blood in the streets."

We are not kidding here; some think Oakland is the hottest market in the United States.? Crime, and high interest rates repress this market.? The likelihood these will both be resolved is high. Focusing on crime, property values being up means increased tax revenue for the town. There is support coming from the State and Federal level to address crime in Oakland, provided the Town doesn't drop the ball again. There is a lot of attention to the current deficiencies in Oakland with regards to law enforcement as well as administrative lapses.? All the possible culprits are being challenged at the same time, with more resources and wealthier stakeholders involved.

I expect to see a reduction of crime in Oakland (eventually), which despite the Doom Loop narrative is the overall trend on the national level. I also expect Oakland investors to outperform most of the rest of the country as a result of settling issues like crime as well as?the massive eviction wave that has lowered rents in Oakland more than anywhere else in the country:? buyers who came in recently or even right now paying high prices at high interest rates will be looked back on as having gotten great prices if we achieve both lowered interest rates and lowered crime rates.

While I expect price increases in the short and mid-term, even without such lowered rates, we have strong employment and a housing shortage. The housing crisis itself is a motivating factor for a lot of crime. Affordability is getting worse, making more people desperate.??

The contrast between San Francisco’s decreasing crime and Oakland’s increasing crime invites scrutiny.? My personal perspective is that Oakland has local law enforcement deficiencies that have not been addressed for years.? They have had a hard time keeping a police chief on the job as well as uniformed officers.? Officers do not come out in person to address many crimes that would see a physical police presence as a response in functional law enforcement jurisdictions. The 911 dispatch service is notoriously understaffed, the automated system has broken down on more than one occasion.? There have been? budget cuts to crime prevention programs. The downtown Oakland jail closing in 2019 is also a factor because that makes arresting and incarcerating people in Oakland that much more inconvenient for law enforcement as well as the affected members of the community. The law enforcement (and crime prevention) footprint and presence in the city was reduced, creating more space for crime.

Despite my bullish sentiment on crime reduction, we need to be aware that crime can go either way. Oakland has had dramatically worse crime than most of the rest of the bay area for a long time. Growing up, I noted that it often appears to have about twice the crime and half the population of San Jose on an annual basis. At this time, the dramatic market appreciation creates unprecedented pressure, as well as more tax revenue for crime reduction.?

Uche Nchekwube is a full service real estate broker active throughout the Bay Area. Text or call (415)322-0774 or send an email to [email protected] to get help to buy/sell real estate or more information on affordable housing. Information here is not legal advice, for information purposes only, deemed reliable at time of posting subject to errors, omissions and change at any time. DRE Lic no 01750107

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