The San Francisco labor market strengthened more than expected in Q3. The metro area’s unemployment rate ended the quarter at 4.0 percent. This is the lowest reading since April 2001. Area nonfarm payrolls were up 3.3 percent from a year ago in September.
The Bay Area tourism industry has benefitted from the vibrant local economy. According to STR Inc., hotel occupancy for the San Francisco market remained strong at 90.2 percent and the average daily rate climbed by 7.2 percent from a year ago in September. San Francisco International Airport also experienced gains this year. Calendar year-to-date total airport passengers have grown by 5.4 percent from the previous year as of September. International total enplanement and deplanements made up around a quarter of the overall airport passengers. A slowdown in some international markets and the strengthening of the U.S. dollar will be a headwind for the San Francisco economy heading into 2016. However, the tech industry remains strong. This will continue to support business demand and the area’s tourism industry.
San Francisco developers benefitted from the local elections in early November. Proposition A, a ballot regarding housing bonds, was approved. The proposition approved the issuance of $310 million in bonds for funding affordable housing projects. Voters also approved Proposition D, the development of multi-use space in Mission Rock. The development plans include between 1,000 to 1,950 residential units of which at least 33 percent will be affordable housing units. It also increased building height limits ranging between 40 to 240 feet on portions of the site. Finally, Proposition I failed. The ordinance would have put an 18-month moratorium on market-rate housing development in the Mission district and required an affordable housing plan.
Click here for the complete San Francisco MSA Economic Update: San Francisco 2015Q4.