Elon Musk stakes claim to San Francisco for ‘X’ HQ, but says city is in ‘doom spiral’

In a tweet on Saturday Musk said that many have offered incentives for the newly bought company to move out of San Francisco, California. He said that there is a "doom spiral with one company after another left or leaving."

Musk continued saying the company, unlike others, will not be moving. He concluded, saying, "San Francisco, beautiful San Francisco, though others forsake you, we will always be your friend."

Loops like the one Musk describes happens when businesses and workers no longer occupy a city to the degree they once did. Remote work contributes to this by keeping people away from office. Restaurants and other local businesses close, real estate demand drops, and tax revenues decline. One negative outcome leads to another in a "spiral" fashion to hollow out the city.

This makes it harder for local governments to fund public services and law enforcement. The decline of San Francisco in particular has made it a "case study" of this trend, according to Fox Business.

Crime in the city has also contributed to different business sectors hit by the spiral. Retail stores, in particular, have been hit hard. Some clothing stores such as Old Navy, Nordstrom, and Saks OFF 5th have shuttered store doors in the city.

In an interview about the phenomenon, one store worker from Old Navy said, "They're (shoplifters) there every day. When I'm on the floor walking around I would say at least 12, 14 during the day."

"I recognize a lot of them and they're just super comfortable, sometimes they'll take two or three mesh bags at a time, and that sometimes is $2,000 worth of stuff," the Old Navy employee said.

Some of the posts in reply to Musk's tweet were positive.

One user, Tara Bull, said in response, "With new leadership, San Francisco could be great again."

Others tried to persuade Musk into leaving the city. Brandon Fugal, a prominent commercial real estate businessman in Utah, tweeted, "You should seriously consider Utah, Elon Musk. #1 for Economic Development, strong work ethic, quality of life, values."

Other companies that are fleeing the city include X rival, Meta, as well as others in tech. PayPal, Slack, Salesforce, and others are just a start.