Tuesday, July 15, 2014


A very condensed and generalized take on the current economic situation in the Bay Area by an outsider who spends too much time reading online news articles…

  • There is a class war going on in San Francisco. 

  • Hyper-gentrification caused by the recent Tech boom is pushing out the middle class. 

  • There just aren’t enough apartments and houses in San Francisco to accommodate the influx of Tech workers, who make more than $100,000 a year on average, without displacing regular working class citizens like teachers, firemen and city workers, as well as senior citizens and the disabled. 

  • The lack of housing, affordable or otherwise, is due to the San Francisco city council prohibiting new construction in the city over the past few decades. This created a static housing market. And now, with the latest tech boom, basic supply and demand has caused rents to skyrocket and led to widespread evictions. 

  • The median rent for a one-bedroom apartment in SF is $3500. Even finding a room for $1000 is increasingly difficult. These insane prices encourage landlords to take advantage of the Ellis Act, a state law that allows landlords who want to “get out of the rental market” to evict tenants. Of course, most landlords aren’t getting out of the market. They are selling their properties for outrageous prices to speculators who renovate and flip the properties to new owners who can charge whatever rents the market will bear. 

  • In the past year, there has been a 115 percent increase in total evictions. 

  • Ellis Act evictions have increased by 175 percent in 2013.

  • From 1997 to 2013, there have been over 11,000 no-fault evictions. 

  • The population of San Francisco in 2010 was 805,235. The population in 2013 was 837,442. That’s a 4 percent increase, higher than both Los Angeles and New York. 

  • With the population increase, the income inequality in San Francisco is growing faster than in any other US city. 

  • Due to the mass evictions, the influx of well-paid young tech workers, the income disparity and the loss of the general atmosphere of San Francisco, there is rampant animosity among those who are being displaced. Most of this anger is directed at real estate brokers and developers, who take advantage of the situation, the city government, which isn’t doing enough to resolve the crisis, and the tech companies who do very little for the city while their employees reap the benefits of living and playing San Francisco. 

  • In reaction, people are protesting in the streets, marching on city hall and attacking “Google buses.” 

  • Rather than helping improve public transportation (Muni), which would benefit all San Francisco residents, tech companies like Google, Facebook, Apple, etc. hire private shuttles that offer luxurious seating and free Wi-Fi to transport workers to and from Silicon Valley, using Muni stops to pick up and drop off their passengers, even if that means blocking the city buses. 

  • While many tech companies use shuttles, the white Google buses have become the most visible symbol of this income disparity and the forced migration of San Franciscans out of their homes and neighborhoods. 

  • Statistics show that evictions around the vicinity of these shuttle stops have increased. 

  • Due to these protests, the city eventually forced the Tech companies to pay a measly $1 per stop. Though it’s just a pilot program and may not be permanent.

  • The fare to ride the Muni is $2. 

  • Many people wonder why these tech workers don’t live in Silicon Valley. There have been studies to show that these workers would most likely move closer to work or use their own cars if the Tech companies didn’t offer the shuttles as a job perk. But unfortunately, there isn’t even enough housing in Santa Clara County, home to many of the tech campuses. The city leaders there want the jobs be there so they can reap the tax benefits, but they don’t want these companies to build housing because they don’t want the crowds and they want to protect their environment. So the major burden of housing the tech workers lies on San Francisco.

  • It’s obvious that city hall, at least under the direction of Mayor Lee, isn’t going to curb the tech companies. Instead the city is offering them tax breaks to move into the previously, and still very much, impoverished Mid-Market and SoMa neighborhoods. This is where most of the homeless people in SF sleep and spend their days (though there are numerous encampments under the raised freeways along the edges of the Mission, Potrero Hill and Mission Bay). Twitter, Airbnb, Yelp, and countless other startups are now located in these areas of the city. Former warehouses have been converted into live/work loft spaces. New high-end boutiques and restaurants, clubs and bars have sprung up to accommodate the burgeoning youth culture. 

  • And yet the street people are still very much present, a constant reminder of the massive disparity between the haves and the have-nots. Very little is done to help the homeless. In fact, it seems more likely that those in powers would be more than happy to get rid of the SROs and other affordable housing that exists in SoMa and the Tenderloin. Fortunately, HUD funds many of these properties. And powerful special-interest groups with their own teams of lawyers preserve the rights of the impoverished. So it’s unlikely that the Tenderloin will change any time soon, no matter how many apartment listings refer to it as “Tender-Nob,” trying to affiliate with the affluent Nob Hill neighborhood that borders it. 

  • People of color are increasingly forced out of the city. In 1970, African-Americans made up 13.4 percent of the population. Today, they make up only 6 percent. (The majority of the population is 48 percent white and 33 percent Asian.) The rich Latino culture of the Mission is being threatened almost daily, but the street protests and marches have done much to publicize their plight. 

  • Of course, San Francisco has always been a relatively expensive place to live. The city is only 47 square miles, surrounded by the Pacific Ocean and the Bay. The density is mind-boggling. Even in the outer neighborhoods, such as the Richmond and Sunset districts to the west, and Ingleside and Sunnyside to the South, homes and apartment buildings are pushed up against each other, without even a strip of concrete between them to designate property lines. There is only one direction left to build, and that is up. And that’s what the previous city government had tried to prevent. Building apartment towers along the waterfront will forever alter the city’s skyline. It will bring even more people into what is already a congested city. But the real problem is that these units will cater mostly to the wealthy. The city always tries to include some affordable housing in these new developments, but there is never enough to satisfy the need. As with any business, the rich come first. 

  • It’s not just the poor and the middle-class who are no longer welcome in San Francisco: artists, musicians, writers and other creative types are being pushed out as well. Soon, San Francisco will be a playground for the rich. Everybody else, the service workers, teachers, firemen, city employees and any other person who can’t afford to own property will have to live outside the city, relying on what’s left of the Muni system to get to their jobs catering to their tech overlords. 

  • There doesn’t seem to be anyway to stop these changes. San Francisco is doomed. This recent tech boom is not going to burst anytime soon. And if it did, the results would be disastrous for not only the Bay Area’s economy but the nation’s as well. We are all dependent on tech. Tech has us by the balls. Yet, it’s still the responsibility of government to regulate tech’s development. Tech companies shouldn’t be allowed to run roughshod over the rights of everyday citizens. Regulate them like any other business. Just because they claim to mean no harm, and regardless of how much we may want the shiny gadgets they manufacture, tech companies are just like any other corporation. They exist to make money. Pure and simple. And right now, as everybody knows, tech is big business. It’s the wave of the future. But a reasonable government should protect its citizens from the machinations of capitalism run amok.

No comments:

Post a Comment