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

New York City is about to elect a new mayor, and whoever it is will have to address growing challenges like unaffordability, homelessness, and other basic quality-of-life challenges. Very few of these challenges are distinct to NYC. San Francisco, in particular, has also faced this weird tension, where it's incredibly dynamic and wealthy, and also famous for its obvious symptoms of dysfunction. The city is one year into the new Daniel Lurie administration, and many of the quality-of-life statistics have been improving (which is the case in other cities as well). The city is ground zero for the world's AI industry, which is heavily concentrated in SF, rather than the Bay Area writ large. So we spoke with Lurie about his approach to city management, what he's learned in his first year on the job, his vision for improving zoning, and what, if any, advice he'd offer to the next NYC mayor. Read more:Uber to Take on Waymo in San Francisco With Lucid, Nuro RobotaxisTrump Cancels San Francisco Raids After Benioff, Huang Calls Only Bloomberg - Business News, Stock Markets, Finance, Breaking & World News subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Tracy Alloway?

  There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

• 0:26Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 1:08Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 1:49Speaker 02

  For big business, AI opened up a world of promise, but that world of promise turned into a world of pain. Costs spiraling, data trapped, security and governance risks multiplying, and ROI out of reach. That's why enterprises turn to Boomi to connect data, apps, and AI, helping them operate securely, efficiently, and at scale. Boomi turns a world of AI pain into a world of AI gain. As Boomi says, "We got you." Head to boomi.com. That's B-O-O-M-I dot com.

• 2:24Speaker 03

  Bloomberg Audio Studios, podcasts, radio, news.

• 2:40Joe Weisenthal?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

• 2:45Tracy Alloway?

  And I'm Tracy Alloway.

• 2:46Joe Weisenthal?

  Tracy, we have a mayoral election coming up here in New York City.

• 2:50Tracy Alloway?

  Very exciting.

• 2:51Joe Weisenthal?

  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.

• 3:00Tracy Alloway?

  Absolutely. And obviously, a very heated mayoral election.

• 3:04Joe Weisenthal?

  Yes.

• 3:05Tracy Alloway?

  I think, one that's kind of taking national attention as well, which, you know, New York is always important, but maybe, maybe it's extra important.

• 3:14Joe Weisenthal?

  It's always very important to the media.

• 3:16Tracy Alloway?

  That's right.

• 3:16Joe Weisenthal?

  That'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. New York City has a number of quality of life issues that frustrate voters, whether it's crime, which has come down a lot, but you know, safety on public transportation, homelessness, et cetera, public drug use, which in my opinion, has gotten a lot better over the last few years, but it was very prevalent. I saw it a lot in the parks in

• 3:58Joe Weisenthal?

  21, 22. These are not, by no means are these issues that are sort of New York, oh, dealing with the Trump administration and the tensions therein. These are not New York City's specific issues at all.

• 4:09Tracy Alloway?

  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."

• 4:19Joe Weisenthal?

  Chicago's another one.

• 4:20Tracy Alloway?

  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.

• 4:29Joe Weisenthal?

  Yeah.

• 4:30Tracy Alloway?

  Are you still a single-issue voter on rats?

• 4:34Joe Weisenthal?

  Well, if I were, my candidate would no longer be

• 4:36Tracy Alloway?

  I know, that's what I was thinking.

• 4:37Joe Weisenthal?

  I have to find a number two issue. I'll do, I'll start to do some research over the weekend.

• 4:42Tracy Alloway?

  Good idea.

• 4:43Joe Weisenthal?

  Anyway, you know, when, obviously, one of the cities, I've always been more 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. It'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, and some would say, for at least a time, arguably worse.

• 5:17Tracy Alloway?

  Yeah. I mean, I remember from visiting, it also has some very, very beautiful neighborhoods.

• 5:22Joe Weisenthal?

  Incredible.

• 5:23Tracy Alloway?

  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.

• 5:35Joe Weisenthal?

  A few years ago, I was visiting a friend and I said, I love this neighborhood. I love where you live. And he was like a yinbi. He'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 builds. 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, in an office less than a year. So Mayor Lurie, thank you so much for coming on the Odd Lots Podcast.

• 6:08Speaker 05

  Joe, Tracy, it's good to be with you. I feel like you were selling our city better than I could. So you, you two can just keep going. And Joe, your love of Southern California, will get you, will get you going on Northern California and San Francisco by the end of this podcast.

• 6:23Joe Weisenthal?

  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? How should we understand the causes of it?

• 6:57Speaker 05

  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.

• 7:35Speaker 05

  We 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.

• 8:09Tracy Alloway?

  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. What are you doing on that front? When you say you need to get people help, what's actually happening?

• 8:35Speaker 05

  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, they can stay for 24 hours. They can get on to medication. They can take a moment to relax and we have staff there than then gets them out to the right recovery bed,

• 9:20Speaker 05

  to the right treatment bed of which we have stood up 400 new beds just this year alone. That are, you know, 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. And 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.

• 10:04Speaker 05

  But that 822 Gary 24 hours is an example of a new approach. One other thing that we've done is since I came into office in the first month, we readjusted how we do neighborhood outreach or a 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, they 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.

• 10:47Joe Weisenthal?

  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 a some sort, an influencer took some photos of people selling knockoff bags on Canal Street.

• 11:00Tracy Alloway?

  Which they've been doing.

• 11:01Joe Weisenthal?

  Which they've been doing. 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're back, et cetera. So whatever they supposedly saw, looks like it was just for the cameras for one day. But there is this. 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.

• 11:43Joe Weisenthal?

  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 in a number of big cities have not taken what people call quality of life seriously enough in the past?

• 11:59Speaker 05

  I'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, Thank you.

• 12:35Joe Weisenthal?

  Thank you.

• 12:35Speaker 05

  We need police officers walking the beat along commercial corridors. Our 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.

• 13:13Joe Weisenthal?

  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. Where do you encounter the opposition to that? Like, what have you discovered about where the roadblocks are? Because again, seems really sensible that you shouldn't be using drugs in public. And so where's the opposition?

• 13:35Speaker 05

  Well, I, you know, it's funny.

• 13:37Joe Weisenthal?

  Who disagrees with this?

• 13:38Speaker 05

  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 they, we would give them help, we would give them 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

• 14:18Speaker 05

  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, Muscone, Yerba Buena, which is our downtown hub, crime is down 40%. Violent 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

• 15:00Speaker 05

  time in a very long time that San Franciscans, the majority of them, feel like our city's heading in the right direction. And we are a city on the rise, and it's a great time to be here.

• 15:09Tracy Alloway?

  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.

• 15:23Speaker 05

  Well, I think the police officers have a responsibility, obviously, to keep safety. And 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 correct.

• 15:41Tracy Alloway?

  That's right.

• 15:42Speaker 05

  So I don't think I need to explain the difference.

• 15:43Tracy Alloway?

  Listeners, we always say you're the smartest out there.

• 15:45Speaker 05

  But, you know, listen, our SFPD, 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. We 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.

• 16:29Speaker 05

  We know how to keep people safe, and we're proving it.

• 16:47Tracy Alloway?

  There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

• 17:14Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 17:56Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 18:37Joe Weisenthal?

  You mentioned that you want to be a dynamic place for business. We're also talking about homelessness. Should San Francisco keep Prop C? 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, that 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?

• 19:08Speaker 05

  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. That 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,

• 19:51Speaker 05

  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. What 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.

• 20:35Speaker 05

  But we need to see more. We need to see more of our business community. We'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.

• 20:59Tracy Alloway?

  I was going to say, New York might take issue with the greatest city in the world.

• 21:02Speaker 05

  Oh, I know who I'm talking to.

• 21:05Tracy Alloway?

  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. And 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.

• 21:34Tracy Alloway?

  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?

• 21:46Speaker 05

  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. It'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. Like, 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.

• 22:31Speaker 05

  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. And 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.

• 22:55Joe Weisenthal?

  You know, you can 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 moved back. But they said, they're saying the same thing here. Some of them are like, oh, I'm gonna, 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?

• 23:21Speaker 05

  Well, 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-

• 23:34Joe Weisenthal?

  But you must have learned something. That's what I'm saying. I'm asking you-

• 23:36Tracy Alloway?

  But you're asking him to advise his competitors, too.

• 23:38Joe Weisenthal?

  No, but you've learned stuff, right? In the 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?

• 23:48Speaker 05

  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 are like, I'm worried and I'm scared. And 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 restaurateurs, who I sit down and meet with and listen to the struggles that they have with their power bills going up 30, 40% over the last two years. I pride

• 24:33Speaker 05

  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.

• 24:43Tracy Alloway?

  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. Is that it? How restrictive is the regulation? And are there other factors, I suppose, that are playing into this?

• 25:04Speaker 05

  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.

• 25:41Tracy Alloway?

  Right.

• 25:41Speaker 05

  It is, we need to see, you know, interest rates are likely to come down. Yeah. 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.

• 25:58Joe Weisenthal?

  Specific, why don't you just give us the quick synopsis of if this passes, what will change from now to after your family, the family zoning proposal?

• 26:07Speaker 05

  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. So 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, 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

• 26:51Speaker 05

  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. I 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.

• 27:35Speaker 05

  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. And 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 sunset and Richmond neighborhoods to retain their unique character.

• 28:01Tracy Alloway?

  You know, Joe, I have yet to experience a rent decrease in New York ever in my life.

• 28:06Joe Weisenthal?

  You're never going to go.

• 28:08Tracy Alloway?

  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?

• 28:26Speaker 05

  To be quite honest, I haven't had that many conversations with developers. And when I have, it's really around interest rates, the cost of labor, the cost of construction. I've had a lot more conversations with people out in the West Side and the North Side, which is predominantly where this family zoning plan is focused. Because we are building in other parts of the city and the state is mandating in high-resourced neighborhoods. And so we haven't had a zoning change on the West Side of San Francisco since the 1970s. That's important for people to know. So I'm really speaking to people that are understandably anxious, fearful, and really trying to explain to them that we have really listened to them over this

• 29:10Speaker 05

  past year, really making sure that height increases. You won't see many of those, but allowing people, if they own a home, to divide it into two units so that their kids could stay there long term. This plan meets the requirements of the state, and I think it's a really thoughtful, well-laid-out plan.

• 29:28Joe Weisenthal?

  A lot of Democratic Party politicians, it's like, we're opposing Trump's agenda. Whatever that means, opposing Trump's agenda, protecting the city or the state against Trump's agenda. You mentioned immigrants. Do you feel that you have a responsibility to protect San Francisco's undocumented residents against Trump's agenda? Is that a useful thing?

• 29:52Speaker 05

  I have a responsibility to take care of San Franciscans and everybody here in San Francisco. I have a responsibility to protect people coming in for a convention. I have a responsibility to take care of our communities. And so I don't think about it in the micro term, but we have our policies in place here in San Francisco that have kept us safe. They've kept us safe for decades. When you have the policies that we have in place... That makes sure that local law enforcement are not tasked with federal immigration enforcement. That allows people to report crime. That allows people to take their kids to the hospital. It allows people, it allows our city to stay safe. And the numbers are bearing it out.

• 30:35Speaker 05

  And I just keep reiterating that my focus is on keeping San Francisco safe, and it's working. We have the lowest homicide rate on record in terms of, we haven't seen these numbers since the 1950s. Crime in our downtown is down 40%. Crime citywide is down 30%. So what we are doing is protecting the people of San Francisco. We're protecting our visitors and businesses. Everyone is seeing that it is working. And so that's how I answer that question.

• 31:06Tracy Alloway?

  What advice do you have for the incoming New York City mayor, whoever it may be?

• 31:13Speaker 05

  That's the second time you two have asked me that question.

• 31:16Tracy Alloway?

  Not on tax, though. Not on tax, something cooperative.

• 31:20Speaker 05

  I think, you know, listen, I've, I've talked to mayors across this country. And many of us have discussed that staying focused on your people, staying focused on your small businesses, focused on your public schools is the way to go. Like, but once again, I don't think other people in other cities should be taking my advice. I think they should be doing what works for them. I'm doing what I believe works best for San Francisco. And right now I am feeling like, and I think the vast majority of San Franciscans are feeling like we're heading in the right direction. And I'm just going to keep my head down and keep striving and getting results for the people of San Francisco.

• 32:02Joe Weisenthal?

  I'd love to end it on a very big picture, nice note about your results. I'm sure you'd like to end it there, too. But I have one last question that's a little bit more specific. A significant chunk of San Francisco's budget operates through nonprofits. And I think there's a significant amount in New York and other cities as well. How do taxpayers know that that money is being well spent? What is, how do we know that that is a good allocation? These sort of private enterprises that do services, whether it's related to housing, whether it's related to homelessness, how do you establish accountability such that we know that these are, these are good allocations?

• 32:37Speaker 05

  Yeah, I think people should want answers on that front and we are working on it. So I came into office in January, we had an $870 million budget deficit, the largest budget deficit in our city's history. We closed that with a mix of many things, including a hiring freeze that we put into place immediately. We cut 25% of the discretionary funding that was available to cut to nonprofits, which was incredibly difficult. We are putting in metrics. This is what we prided ourselves on at Tipping Point, was holding organizations accountable, getting results, and so we are working on that now. So I came in in January, the budget was due in June. So it was a sprint, essentially.

• 33:21Speaker 05

  Most administrations wait until January to start planning. We put our budget before the Board of Supervisors in late June. It got passed on August 1st. August 2nd, we were planning for this upcoming budget. And we are putting accountability measures into place on our contracts to nonprofits. But one thing I would say is that the nonprofits need to be held accountable, but so do my departments. I have some departments that don't pay those nonprofit providers for 12 months. We have small nonprofits floating, city government that has a $16 billion budget, we are floating them money.

• 34:03Speaker 05

  So we need to hold everyone accountable, and it starts with me. We have a tremendous budget in San Francisco. We all know that it has not been spent as well as it could be. I was frustrated by that for years, working at Tipping Point. I saw it up close. And now I want everybody to hold me accountable in the years ahead, but we're going to put metrics in place, we're going to hold nonprofits accountable, and I'm going to hold my department heads accountable as well.

• 34:29Joe Weisenthal?

  Mayor Lurie, thank you so much for coming on Odd Lots. I hope to chat with you again at some point.

• 34:34Speaker 05

  Thank you very much. And just so you two know, we end everything in San Francisco because we're on the rise. We gotta just share how great San Francisco is going with a "Let's Go San Francisco."

• 34:50Joe Weisenthal?

  I love it. It is a great city. I still, it's the climate part of Southern California that for me, I can't, you know, it's still my favorite, but.

• 34:58Speaker 05

  It's 75 degrees outside right here, right now. It is a gorgeous day here outside your studios, along our, near our ferry building.

• 35:07Tracy Alloway?

  Definitely better than New York right now.

• 35:08Speaker 05

  Yeah. Let's go. That's what I'm talking about. All right, you two. Thank you so much for having me.

• 35:13Tracy Alloway?

  Thank you.

• 35:26Joe Weisenthal?

  Tracy, I would like to believe that with many of the sort of, you know, challenges, I guess, that big cities face, I would like to believe it's just a matter of will. You know what I'm saying? I would like to believe that all it takes is someone saying, you know what? We're going to be accountable. We're committed to addressing these things, whether it's homelessness, whether it's crime, whether it's public drug use, et cetera. It would be nice if the issue's just resolved to like wanting to do it. You know what I'm saying?

• 35:54Tracy Alloway?

  Mm hmm.

• 35:54Joe Weisenthal?

  I'm not sure. Like the way it sounds, you know, talking to Mayor Lurie, it sounds like one of the big changes, like, oh, as he put it, we used to have a live and let live attitude.

• 36:07Tracy Alloway?

  Yeah.

• 36:07Joe Weisenthal?

  And now that's not the case. I would like to believe that that really is the difference, that it's just like an attitude change.

• 36:14Tracy Alloway?

  I feel like there's a but coming. But you would like to believe, but?

• 36:19Joe Weisenthal?

  No, it's just like, if it's that simple of an attitude change, then a lot of these things could be solved. I guess my but is, no, there's no but. I just like, I'm not sure if that's the case. Like, I guess it's a but. But he certainly presents a compelling argument. I mean, I think like crime is down in a lot of cities. There, we know that it spiked in 21, 2022, the whole chaos post pandemic, et cetera. It's been coming down everywhere. I think there are a lot of mayors that can point to a decline. So what I'm saying is, I would like to believe that the decline in crime in San Francisco can be pointed to. It's like, oh, we have a mayor who now decided to tackle these things as

• 37:04Joe Weisenthal?

  opposed to just sort of general trends.

• 37:06Tracy Alloway?

  Mm hmm.

• 37:07Joe Weisenthal?

  Does that make sense?

• 37:08Tracy Alloway?

  That makes sense. One thing I will say that I found very interesting was, you know, he talked about that ecosystem of tech companies.

• 37:15Joe Weisenthal?

  Yeah.

• 37:16Tracy Alloway?

  And it kind of reminded me of some of the conversations we've had about tech development or even manufacturing development in China. And the idea that, you know, you can have a competitive advantage because you know that when you move to a certain place, you're going to find like an engineer around the corner, you're going to find that particular programmer. So I don't, it was interesting to hear that sort of echoed in San Francisco.

• 37:39Joe Weisenthal?

  It's interesting that there's a lot to do. I mean, it's interesting that we used to talk more about the Bay Area in general.

• 37:48Tracy Alloway?

  Oh, yeah.

• 37:48Joe Weisenthal?

  You know, and now it's really becoming a San Francisco story. And a lot of these AI companies, you know, you don't hear about like, what are those random mountains, Sunnyvale or Mount, what's the one that Cupertino, et cetera? All these, you know, like all of the, and that's its own fascinating thing, which is that AI does not strike me as a Bay Area story. We didn't have any time to get into this, but AI does not strike me as a Bay Area story so much as it's a San Francisco story. These are San Francisco companies and they're not just like somewhere like down the peninsula or whatever.

• 38:22Tracy Alloway?

  It's funny, now that you mention that.

• 38:23Joe Weisenthal?

  Yeah.

• 38:24Tracy Alloway?

  I'm thinking like, Bay Area, seriously, a term I have not heard for a very long time.

• 38:29Joe Weisenthal?

  Isn't that interesting? The Bay Area is, or even Silicon Valley.

• 38:33Tracy Alloway?

  Yeah.

• 38:34Joe Weisenthal?

  Is like, it's really about San Francisco, which I think is sort of an interesting phenomenon, and I don't really know why, because.

• 38:40Tracy Alloway?

  Wait, interesting phenomenon.

• 38:42Joe Weisenthal?

  Interesting phenomenon. It's an interesting phenomenon because when it comes to hard tech, when it comes to manufacturing, I have a very intuitive understanding of why agglomeration matters, right? You want to be able to like, get this provider and this really matters. It's not intuitive to me in the same way, why would something like any software, let alone AI, that there would be such a tight cluster? And yet it does seem to be a very tight cluster there.

• 39:12Tracy Alloway?

  Well, there seems to be a network effect of some sort at play here.

• 39:16Joe Weisenthal?

  And I don't totally know why that is in the same way the network effects exist with say, manufacturing, because we remember 2020, work from home, work from anywhere. Slack exists, IB exists, et cetera. And yet everyone's together there. We didn't get too much into this, but I do think that's an interesting reason to be interested in San Francisco right now.

• 39:37Tracy Alloway?

  For sure. Um, shall we leave it there?

• 39:38Joe Weisenthal?

  Let's leave it there.

• 39:39Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 39:44Joe Weisenthal?

  And I'm Jill Weisenthal. You can follow me at theStalwart. Follow our guest, San Francisco Mayor Daniel Lurie. He's at Daniel Lurie. Follow our producers, Carmen Rodriguez at Carmen Armand, Dashell Bennett at Dashbot, and Kel Brooks at Kel Brooks. For more Odd Lots content, go to Bloomberg.com/oddlots, where the daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.

• 40:10Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we talk to city mayors, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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