San Francisco’s Mayor London Breed is trying to boost the image of her iconic city.

It makes sense. The city has acquired a well-earned reputation as a declining crime-ridden hellhole where stepping in human feces is a fact of life, and Narcan is necessary fashion equipment for the well-dressed yuppie.

Just last week the city unveiled a first-ever advertising campaign to lure tourists back to the city. It’s a smart move because until recently people had a very positive perception of the city as a somewhat sybaritic yet very attractive place to visit. Reminding people that San Francisco is filled with attractions and is surrounded by natural beauty makes sense, if they want to lure people back.

Unfortunately, San Francisco really is turning into a dump that resembles the worst aspects of a 3rd world city with a touch of Sodom and Gomorrah.

The reality underlying San Francisco’s decline is difficult to hide. The existence of “poop maps,” countless homeless drug addicts, and a looming crime problem is impossible to ignore, and retailers and now hotels can’t ignore that their bottom lines and employee safety have suffered terribly.

“After much thought and consideration, we believe it is in the best interest for Park’s stockholders to materially reduce our current exposure to the San Francisco market… a path to recovery remains clouded and elongated by major challenges, old and new”https://t.co/KcIx2J4fXw

— Michael Shellenberger (@shellenberger) June 6, 2023

Hilton Hotels, the owner of Parc Hotels, has decided to abandon the city, citing the continuing decline of the region.

They represent nearly 10% of the city’s hotel rooms, so obviously the owners are skeptical that there is going to be a huge rebound in visits.

Even worse for the city, Parc owes a staggering $725 million on the buildings, and they have just quit paying. That will sure to sting the real estate market, which has already collapsed dramatically.

SAN FRANCISCO (KRON) — In another apparent blow to San Francisco’s struggling downtown, the investment firm that owns two of the city’s major hotels announced it would cease paying the loans and surrender the properties to the bank. Payments toward the $725 million non-recourse loan ceased in June, according to a news release from Park Hotels & Resorts Inc., which operates the Hilton San Francisco Union Square and the Parc 55 San Francisco.

The hotelier, which operates 46 properties across the country, cited now familiar reasons for surrendering the properties.

“Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges — both old and new,” the press release read. “Record high vacancy; concerns over street conditions; lower return to office than peer cities; and a weaker than expected citywide convention calendar through 2027 that will negatively impact business and leisure demand and will likely significantly reduce compression in the city for the foreseeable future.”

“Unfortunately, the continued burden on our operating results and balance sheet is too significant to warrant continuing to subsidize and own these assets,” the release also said.

To give you an idea of the priorities that California has, in the midst of San Francisco’s crisis the story regarding this disaster on KRON 4 News has this tidbit of a headline inserted:

“City going to hell, but drag queens doing great!” At least San Francisco will retain a profitable export should everything else collapse.

For now, the hotels will remain open for business. The bank will continue to own them, but one has to wonder whether the bank is interested in getting into the hospitality industry. The answer will be no, and somebody will inevitably pick up the properties for pennies on the dollar. San Francisco commercial real estate is currently being sold at a 70% to 80% discount to the assessed value and prior sales prices.

What differentiates a “doom loop” from a natural downturn in an economy is the steady erosion of the value of capital. In hard times capital can lose some value temporarily, but it retains the potential for providing significant returns in the longer run. Doom loops are driven by a decline leading to permanent erosion in capital–for a city that means a downturn leads to lower investment in necessary capital like city services and goodwill (desirability), leading to more decline and more erosion of the value of the capital. Streets get more run down, police are less present, and broken windows begin to abound. It becomes a vicious circle.

Think Detroit, which is a donut hole of decline in a vibrant and prosperous metropolitan community. You can literally cross a street from a suburb into the city and see the difference, the city is so destroyed. Cross 8 Mile Road and you have entered the “Escape from New York” zone, and you better be Snake Plisskin to survive.

Unlike Detroit, whose major selling point is proximity to Lake Michigan Erie, San Francisco has some capital that will be difficult to erode into worthlessness. Its location makes it inherently attractive.

Yet even that may not be enough. Cuba is a good example of a place where poor governance can destroy the value of extraordinary natural gifts. Once communism falls its potential will likely begin a rebound–assuming that communism has not so corrupted the people who remained that they are unemployable. I doubt that is the case, though. Cuba will likely improve dramatically once the shackles of an evil government are removed.

San Francisco, though, will require a population transplant. Experience shows that a politician has to be uniquely destructive to get booted–Chesa Boudin managed it–and it is unlikely that a city so marinated in Leftism will soon recover. The voters are insane.

Still, for all its obvious problems, the city continues to pump out awful politics and export them to the federal level. Gavin Newsom, for instance, was Mayor of San Francisco. Newsom is covertly running for president and is likely the Democrat backup plan for a failing Joe Biden. Kamala Harris was D.A. for the city, and also in the running for president.

Both of them are nuts, and Kamala is both nuts and stupid.

San Francisco is a proving ground for Leftism, and apparently, Democrats like what they see. Go figure. Diane Feinstein is perhaps the last sane San Francisco Democrat to hail from the city and is a metaphor for that bygone time.

How likely is a population transplant? Hard to imagine it when moving there subjects one to this sort of interaction on a daily basis:

San Francisco: it was nice to know you. The doom loop is real.