Sacramento joins San Francisco as California’s slowest cities to recover from the pandemic

8th Street, where Sacramento Regional Transit light rail buses arrive at the 8th and O Street light rail station in Sacramento on July 31, 2023. |

By Dan Walters | | 

Much has been said in the media – and rightfully so – about the deterioration of San Francisco’s downtown in the aftermath of the COVID-19 pandemic.

Some call the dearth of onsite employment and the closure of dozens of stores and other businesses a “doom loop” which feeds on itself. Mayor London Breed and other officials are desperately trying to stanch the hemorrhage of workers, shoppers and businesses while coping with the heavy impact on the city’s budget.

The pandemic’s inordinate impact on San Francisco was confirmed in a new study by the University of Toronto on how well the downtowns of major U.S. and Canadian cities have recovered by examining mobile phone data. Only one of the 66 major cities studied – Las Vegas – has recaptured 100% of its pre-pandemic foot traffic, while others were as low as 53% in St. Louis, the study found.

San Francisco is among the lowest-ranked cities at 67%.

However, San Francisco has only the second-lowest recovery rank among California cities. Sacramento, the state capital, is slightly lower at 66% and, ironically, a major reason for that dismal fact is the state government itself.

Prior to the pandemic, downtown Sacramento was showing signs of a renaissance after decades of efforts by city officials to make it more attractive as a place to live, work and be entertained. The construction of a new arena for the Sacramento Kings and other entertainment events, the development of new rental housing and the opening of new hotels and restaurants indicated that, at long last, downtown Sacramento was a happening place.

However, state government is Sacramento’s biggest employer and its workers are largely concentrated in and around the city’s downtown. When state agencies sent thousands of workers home, the retail businesses and restaurants that depended on their patronage were clobbered.

The shutdown also meant a sharp decline in conventions and lobbying activity which had supported hotels and eating places. A coalition of downtown businesses sent a letter to Mayor Darrell Steinberg in October 2020 saying, “there is widespread anxiety over public safety, cleanliness and other issues that are contributing to severe and worsening conditions in Sacramento’s downtown core.”

It only got worse.

A few months after the shutdown, a peaceful demonstration against police violence morphed into a violent clash in the downtown area that defaced or damaged stores and offices.

Two years later, in 2022, members of rival gangs staged a gun battle just a block from the Capitol that left six people dead – mostly bystanders who had just left a nightclub as it closed.

The killings and the street violence sent a negative message to Sacramento-area residents about visiting downtown. As foot traffic and business waned, downtown became a campground for the city’s homeless population.

As with San Francisco, the erosion of Sacramento’s downtown core has had a negative effect on the city’s budget. Sacramento had counted on parking lot revenues to service bonds it issued to help finance the new basketball arena, as well as hotel taxes to underwrite a massive expansion of the city-owned convention center. Both sources of revenue have shriveled and the city now faces a hefty budget deficit.

Other California cities have fared much better. San Jose, the University of Toronto study found, has restored 96% of its pre-pandemic human activity, the third highest of the 66 cities studied. Bakersfield is No. 4 at 95%. Even Oakland has recovered 74%.

The state is now telling its workers to return to their offices. But it’s still unclear whether San Francisco and Sacramento have plummeted so deeply into the abyss that recovery will even be possible.

 Photo by Rahul Lal for CalMatters

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