How Wealthy Techies Ruined the Unique Character of San Francisco
It’s not just the 22 construction cranes dotting the San Francisco skyline and 5,000 pricey condos and apartments under construction. Nor is it the fleet of private buses ferrying 14,000 tech workers to Silicon Valley, or the explosion of restaurants and boutiques, or rents doubling, or the spike in evictions, or home sales now averaging $1 million.
What’s happening to San Francisco goes beyond the accelerating gentrification in multicultural districts like the Mission or Mayor Ed Lee minimizing affordable housing woes. The city that’s been a magnet for free spirits and immigrants and working-class people for decades seems to be losing its famous heart. Or perhaps it’s more accurate to say that its heart is being replaced by a software update.
The best encapsulation of this sea change, which is driven by a booming tech sector, might be this blog from former San Francisco Bay Guardian editor Tim Redmond, who begged the techie beneficiaries to stop treating the city he loves like a “rich kid’s playground.”
“When a 1990s tech-startup guy who admits he was part of the last generation of gentrification is now so fed up with the new arrival of high-paid techies that he’s ready to leave, it’s pretty serious,” he wrote in a piece titled, “The Mission ‘Douchebags.’” He ended, “I know, I’m an old fart who is not rich and never will be... But if you’re lucky enough to be rich in your 20s, show some respect.”
All economic booms bring dislocations, but what San Francisco is undergoing seems deeper because unlike past decades, when hippies arrived in the 1960s and gays came a decade later, locals were not displaced. That distinction has also been noted by longtime San Francisco Chronicle columnist Carl Nolte and by author Rebecca Solnit, another longtime resident, who recently wrote, “The problem is that we understand Silicon Valley’s values all too well, and a lot of us don’t like them.”
Today’s construction cranes and skyrocketing housing costs are merely the most visible signs of a city in transition. There are two ways to look at that boom—from the vantage of the tech elite like Oracle CEO Larry Ellison, who brought the America’s Cup yacht race here but made it so expensive that almost no one can compete, or from the ground up where more of the city’s more pedestrian classes are feeling pressured by the boom.
Websites tracking apartments have declared, “You’re Never Moving Again,” noting that rents in desirable neighborhoods have doubled in less than two years and keep going up. Home prices are not far behind, jumping 35 percent since 2012, one-and-one-half times the rate of the region. Downtown parking spaces are selling for $80,000.
Contrary to the breezy headlines, people are moving in and out. But in the latter case it’s not because they want to. Evictions have hit a 12-year high, in part because investors are using loopholes in otherwise strong tenant laws to buy apartment buildings and convert them to private homes. The business model, the San Francisco Tenants Union said, is targeting rental buildings with long-term tenants—as that makes them cheaper—and evicting everyone for resale as condos, tenancies-in-common or new mansions.
Meanwhile, hundreds more longtime residents have been put on notice for possible eviction. The Tenants Union says that the Mission, Haight-Ashbury, North Beach and Inner Richmond neighborhoods are the hardest hit, with upward of 100 households a month losing their longterm housing through a mix of evictions and paid buyouts, most of which aren’t recorded in city hall statistics.
The newly vulnerable are the outside-the-box and working-class people who always have given this city its character, but like San Francisco’s vanishing African Americans, seem destined for one-way tickets out of town.
“I am a 62-year-old senior living with AIDS. After living in the heart of the Castro district in SF for four decades and in my apartment for over 18 years, I am going through the eviction process brought on by the new owners (real estate speculators) through the use of the Ellis Act and through no fault of my own,” wrote Jeremy on his website.
The Ellis Act is a state law that allows rental apartment owners to evict tenants to go “out of business.” Other longtime city residents feel they are not far behind Jeremy.
“Our building is being painted and we are terrified that our landlord will sell the building to someone who will convert it into condos and evict us all! If I am forced out of my place, I will have to leave SF because I have absolutely been priced out as an arts administrator, non-profit worker, and fundraiser for LGBTQ artists,” Elizabeth wrote on TenantsTogether.org, adding she mistakenly thought she was protected by rent control.
These dislocations are the tip of an iceberg of even more startling negative social metrics. Homelessness in the entire Bay Area is up 20 percent since 2011. Food stamp use is at a 10-year high. Latinos are the hardest hit, the S.F. Examiner reports, in the city and to the south in Silicon Valley where’s there's an educated but struggling tech underclass. Meanwhile, in San Francisco, alcohol-related emergency room visits are up 50 percent compared to five years ago, although it’s mostly people age 45 to 64, not yuppies.
“San Francisco used to be an eclectic city, filled with working-class folks, people of color, lots of artists, and families,” wrote Maria Zamudio, an organizer for Causa Justa, a low-income advocacy group. “But that’s changed dramatically. The black population has dismally plummeted, to 6.3 percent, according to the most recent census. Families of color are streaming out, expensive condos and sky-high rentals are shooting up, and the unique mix that once was the city and made it such a diverse and culturally rich place to live and thrive is changing.”
Zamudio’s comments were in an op-ed in an alternative weekly newpaper urging San Francisco City Hall to take back some of the subsidies given to developers during the Great Recession. Her argument underscores a larger reality about the latest development spree: that it’s been wholeheartedly encouraged by City Hall and business lobbies, despite the city’s rancorous and often ludicrous local politics.
Paving Over Tony Bennett’s Heart
San Francisco’s low-income advocates are well-organized, but most have not focused on development with the persistence of downtown’s business elite and the mayor’s office. The current building boom has been on architects’ drawing boards and in city planning documents for years. Progressive urban non-profits like SPUR have steadily worked to revise city codes to channel development into the neediest zones, but the biggest projects away from downtown have yet to break ground.
SPUR correctly says that nothing in San Francisco development circles is supposed to be fast-tracked. But even their magazine, the Urbanist, becomes breathless when reporting on the scope and speed of the current boom. It’s as if the San Andreas fault exploded from pent-up pressures and released a tsunami of projects flooding the city—starting in desirable areas.
“Twenty-two tower cranes dot the city,” the Urbanist reported. “By year’s end, there will be 26. Many of these cranes are for public projects rather than private development, yet these numbers are staggering by historic standards. Local union halls’ out-of-work lists are empty, and some unions are even calling in workers from other parts of the country.”
The public projects are transit hubs, hospital remodels and new university campuses. But those are not what’s driving longtime San Franciscans from their homes. It's skyrocketing rents and property values. The new cafes with hand-picked coffee beans from around the world, or new bars with European beers on tap and $20 desserts, are following the infusion of new wealth.
“Halfway into 2012, more than 4,200 new residential units were under construction in San Francisco,” the Urbanist reported. Today, that number tops 5,000. “This is 20 times the number of units that were added in 2011... An additional 32,120 new residential units have been approved by the Planning Department, and applications for another 6,940 units have been filed.”
SPUR notes that historically “spikes in permitting activity are echoed by spikes in new construction three-to-five years later.” That means the city will be entering a growing development cycle that will change its face and continue for years, although, as SPUR notes, not every proposal will be built and at some point the factors driving today’s development surge will expire.
But for now the boom is back and is driven by an exploding technology sector. Many of the world’s top firms have campuses 20 miles to the south. Downtown San Francisco is now home for companies including Twitter, Square, Pinterest, Yelp, Airbnb and others.
The city had 44,429 tech jobs as of the third quarter of 2012, the most recent figures from City Hall. The sector has grown by 50 percent since Mayor Ed Lee took office in 2011 and has an annual job growth rate of 20 percent. These kinds of job figures are seen throughout the Bay Area, but one big difference is lots of people who work in Silicon Valley want to live in San Francisco. As a result, Google, Yahoo, Apple, eBay, Genetech and Facebook all have fleets of buses taking 14,000 people to and from the city.
Silicon Valley is a patchwork of upscale surburbs—not where most young techies want to live. They want San Francisco's hipper urban neighborhoods, which has often been where artists, writers, musicians, immigrants and other outsiders living paycheck-to-paycheck have lived. That’s caused a cultural clash, because, beyond the jump in housing costs, today’s tech world has strong libertarian and solipsistic streaks. Its droves flocking to the city are often blissfully unaware of their impact outside their ranks.
That’s the bottom line in former Guardian editor Tim Redmonds’ plea to wake up and stop stepping on the vibrant but fragile cultures that came before them. Redmond was taken to task by readers for editorials saying, “Dear newly arrived tech population — with privilege comes responsibility.” But his complaints are not unique. Rebecca Solnit also notes that the Valley’s tech elite are not known for their charitable ways, saying, “Medici in their machinations, they are not Medici-style patrons.”
Yet apparently, this is the demographic that Mayor Lee and the business community wants. The mayor was unaware of a city rent board report putting evictions at a 12-year high, until questioned by a reporter. He recently said he didn’t think the city had an affordable housing crisis, because SF has strong pro-tenant laws. The Board of Supervisors recently restricted the number of tenancy-in-common units that can be converted into condos. That initiative removed an incentive for one corner of the real estate speculator market, and was seen as a victory by low-income advocates. But it's not the only property play out there.
What’s clear is that the scale of change in the city—the building boom, its dislocations and cultural consequences—is larger than any of the planning efforts and counter measures by local government and activists. Perhaps the most optimistic comment about all this came from a recently arrived New Yorker who works in computer graphics. San Francisco seemed destined to remain hipper than lower Manhattan, he said, where the financial sector has driven almost everyone else away.
Indeed, many San Franciscans are determined to stay put. In the Mission, bar-hopping hipsters and liberal supervisors are trying to save the 'Tamale Lady,' who sells snacks after midnight—apparently violating city codes. But others, like Jeremy, the four-decade Castro resident with AIDS facing eviction after 18 years in a rent-controlled apartment, stopped updating his website. He has to watch his health before preparing for a Ellis Act court date, he said in an e-mail.
It may be that the affordable housing of the future is in the city's outlying blighted corners or in 300-square-foot micro units in trendy neighborhoods, which have also been seen in New York. But San Francisco is undeniably being colonized by a new generation of tech workers, and longtime residents who aren’t part of that workaholic world are seeing their homes and lifestyles imperiled. And there’s little they feel they can do to stop that demise.