Zach Coelius Profile picture
May 5, 2023 20 tweets 4 min read Read on X
As I have traveled around the world over the last year a lot of folks from other countries have been asking me what the hell went wrong in San Francisco.

The city so many called their favorite city in the US has become obviously broken.

Here is what I have been telling them:
SF & California is a case study in the danger of a single political party in control.

The loudest voices at the extremes invariably win arguments as their supporters are the most motivated, insane policies are enacted without push back.

Those policies have broken SF.
First and foremost is the push to reform the justice system. The US clearly has an unfair and broken justice system badly in need of reform.

SF & CA have enthusiastically rushed into changing the way we enforce crimes and how policing works.
Sadly, instead of thinking systematically they decided to simply stop enforcing “small” crimes. For instance shoplifting is decriminalized.

This had led to an incredible explosion of property crime and escalating criminality across the city. Everyone in the city is victimized.
These small crimes have not only made the daily environment miserable, but they are quickly escalating.

Professional criminal gangs now operate with impunity and guns have become very common.

Stores are closing across the city unable to afford loses.
Drugs. SF decided to simply stop enforcing the law. As super powerful new synthetic drugs are raging, SF has the cheapest and easiest drugs in the country. Coupled with generous handouts, and the ability to take freely from stores, addicts across the country gravitate here.
In Portugal they coupled decriminalization with a robust treatment program and a system where those whose addiction causes them to damage their community could choose treatment or jail.

SF (and the rest of the west coast) chose not to do that and the destruction is immense.
Mental health.

Our streets are full of untreated mentally ill.

We don’t have a system for forcing people whose illness causes them to damage their community into confined care. We simply let them to terrorize others and trash public spaces.

Horrible for them and us.
Housing.

SF has going through an incredible tech boom for 20 years. Innumerable new jobs led to a huge influx.

SF leaders decided they wanted to keep the city a museum and simply refused to build enough housing. Obviously costs exploded and so many folks were priced out.
A broken political system.

Instead of having a mayor who can be held accountable, here committees run everything.

The board of supervisors runs the city and independent committees of appointed cronies run each department.

Inevitable dysfunction has resulted.
This disfunction has led to out of control spending and a focus on political signaling for these cronies to exhibit their idealogical bonafides to position themselves for their next appointment.

Corruption and ineptitude is rampant.
Now, SF is in an inevitable doom loop. The tourists have stopped coming for fear of being robbed, the offices are empty as everyone would rather work from home and stores are closing with no customers and daily looting. Those who can leave are leaving.
Moreover the downtown of SF is a huge source of tax revenue and it is simply empty as many do not want to commuted every day through the crime and filth.

This huge hole in the budget is going to lead to more taxes and decreased services
The progressives who run the city are in a state of denial and are simply ideologically incapable of making the changes to reverse course. Moreover, because of the highly distributed nature of power in SF it will take years to push them out and replace them with rational actors.
I have found reading about urban decline in the 70’s and 80s has been very helpful. It is amazing how much history rhymes in this case. I also recommend the book Dreamland to understand the danger of this new class of drugs and San Fransicko for a polemic on the broken policies.
SF has incredible geography, amazing smart people, world class food, a very real new AI boom happening and an extraordinarily spirit.

This city will rebound and emerge stronger. How long that will take and what will happen in the interim remains a very open question.
I plan to stay and fight for the city I have called home for nearly 20 years.

But I as you can see I think it is going to be a very bumpy ride for the next few years.
Some folks have DMed asking if I know of a single high impact fix.

While I don't think there is a magic bullet, I do think the commission system where unelected political cronies run each department is a disaster. It needs to be abolished and the power returned to the Mayor.
If you are looking for an example of the toxic impediments the commissions constantly throw in the way of having effective departments this is a good example.

missionlocal.org/2023/05/police…
The incredible bias of the journalist is a nice bonus exhibit.

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More from @zachcoelius

Oct 9, 2024
My good buddy Jay Seiden from Cushman & Wakefield just released his always very popular SF office market report.

Since he is not on X, I post it for him (last time he got mad I called him a boomer-he is not that old-just acts like he's 80 :)

Report below. His words not mine
Owners & brokers get giddy at new back-to-the-office mandates. We don’t hear about the "or else" policies - because there are none. Attendance is unchanged over the past 3 years 50% of pre-2020 levels.  Only magical thinking would suggest office workers are on their way back
The City’s overall average Q3 asking rate $67.79/sqft/yr – down slightly from the previous quarter and 20% below its peak in Q1 2020.

The rent stats don’t tell the full story as strike rates are much lower and landlord concessions are much higher.
Read 9 tweets
Sep 19, 2024
10 years ago, I was a washed up entrepreneur, a lost-wet puppy unsure what to do next.

I am now a solo GP, having invested over $100m and currently deploying a new $100m.

This is a thread on how to hack your way into VC.

Or at least how I did it.
Lots and lots of folks want to get in VC. It seems like a cushy job (its actually not, but I will let you figure that out on your own) and its high status makes it very popular

This means tons and tons of competition with every job opening being swamped by amazing applicants
The path of breaking into venture via getting a job with a VC firm is a viable strategy, but it is long, hard, and incredibly competitive.

The path I took followed another vector and I am actually surprised how few folks are taking it.
Read 22 tweets
Jul 7, 2024
My buddy Jay Seiden from Cushman & Wakefield always popular SF commercial real estate q2 report is out.

He is a stubborn boomer and not on here so I repost it.

TLDR: We have settled in a trough at 34.5% vacancy and 45% office attendence.

Shit is ugly if you own a building.
Office attendance hovers at ~45% of pre-pandemic levels – feels like the new norm as we’ve been at this level for 2.5 years. I feel like a broken record (round thing that spins and emits music), only magical thinking suggests office workers are on their way back to the office.
Overall average Q2 asking rate $68.27/sqft/yr – down 1.4% from the previous quarter. Rates last here 8.5 years ago.  Rent stats don’t tell the full story as strike rates are much lower and landlord concessions are much (much) higher. The market is even softer than it appears.
Read 6 tweets
Aug 20, 2023
Anyone who has spent time in SF recently is shocked to see thousands of addicts strewn across the streets slowly rotting.

Every day two more die and we pick up the bodies off the concrete.

My friends who visit always ask how it go this way.

An attempted explanation Image
TLDR: The boomers who vote and run the west coast incompetently instituted their drug legalization fantasy at the same moment a new class of 10x more powerful synthetic drugs hit the market.

Unmitigated disaster has unfolded.
In the 60s and 70s, our current generation of leaders were coming of age in an explosion of joyous creativity, rebellion and drugs.

Their much more conservative parents reacted by attempting to squash everything and criminalized possession and consumption.
Read 29 tweets
Aug 6, 2023
The best short of the AI trend are all these private equity owned software companies.

Obviously hard to short private companies but they are going to get slaughtered.

Couple a disincentivized product & eng team with underinvestment in r&d and they are struggling to keep up
AI is clearly a platform shift that dramatically improves the customer outcomes, but that requires a lot more product iteration and development than these companies are prepared to fund as they are operated like cash cows.
The biggest tech companies know exactly what is happening and they are leading the wave.

The paranoia around platform shifts runs deep in their culture and they have seen this movie before.
Read 4 tweets
Mar 15, 2022
7 years ago I syndicated my first deal on @AngelList. Since then there have been 90 more syndicates, $30m deployed into 55 companies, 4k LPs, 50% IRR, 10 exits, ~$15m distributed and over $100m in current positions in awesome high growth companies. What a ride.

Some lessons.
By far the most powerful part of @AngelList is the LP community. My 4,000 backers are founders, vc's, execs at every major company, finance pros, doctors, lawyers, engineers and every other role you can imagine. Together they are a superpower. I have 4000 people on my team
Every day they send me deals, help with diligence and point out when I am being stupid (they are really good at that...)

They are also a super power for our companies. In any deal up to 250 of them can join and become huge advocates for the company with real skin in the game.
Read 12 tweets

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