Finding the Downside In San Francisco's Tech Boom

snydeq writes "The NYTimes reports on the San Francisco's shifting socio-economic landscape thanks to a massive influx of tech workers and tax and regulation breaks to big-name startups. 'In a city often regarded as unfriendly to business, Mayor Edwin M. Lee, elected last year with the tech industry's strong backing, has aggressively courted start-ups. But this boom has also raised fears about the tech industry's growing political clout and its spillover economic effects. Apartment rents have soared to record highs as affordable housing advocates warn that a new wave of gentrification will price middle-class residents out of the city. At risk, many say, are the very qualities that have drawn generations of outsiders here, like the city's diversity and creativity. Families, black residents, artists and others will increasingly be forced across the bridge to Oakland, they warn.'"

Comments

Happening for a While, City now favors Yuppies

[Koreantoast]

This has already been happening for quite a while, and among friends who live in the area, San Francisco has already developed a reputation as being a sort of fortress of elite upper middle income people. The city's demographic, according to friends, is most favorable to mid-career types in their late twenties and early thirties: people who have already established their careers and have the money to afford the skyrocketing cost of living in the city but at the same time do not need space for raising children. Lower-middle incomes, poor people and families are being replaced by yuppies. You see similar trends in major cities across the United States, New York, Washington DC, etc., but San Francisco is noteworthy because of the sheer amounts of money being thrown around thanks to the new tech boom.

Is this bad?

[phantomfive]

Wow, now that I've read the article, look at the first two sentences:

Wayne Cooksey joined the flight of African-Americans from this city last year to escape soaring rents and buy a home. Michael Higgenbotham left six years ago for a safer neighborhood and better schools for his three children.

One guy bought a home, and the other guy found a better school? Sounds to me like people are moving up in the world! These are two success stories.

Re:Is this bad?

[geek]

Pretty much this. I moved out of state. I now live in Idaho and make half what I used to. However, my living expenses are about 1/8th of what they used to be. I was paying $2000+ in rent on average when I lived int he bay area. I now pay $300. I'll never go back. In just 2 years I have paid off every bill I had with the exception of one because I'm using it to build credit.

Add to this, the average cost of a house out here is just two years of my salary. My fiance and I will be buying in a few months with 40-50% down. I didn't understand how much better it was in other states until I moved to one.

Re:Is this bad?

[crgrace]

Expenses besides rent really aren't all that much different in the various parts of the country. I moved to San Francisco from North Carolina and my rent shot up to the moon, that's for sure (from $800 to over $2000).

However, food is a bit cheaper, gas is a bit more expense, my electric bill is a bit less, my internet is cheaper, taxes are a bit more (not THAT much more)...

Bottom line is, besides rent, my expenses are within about 10% of what they were in North Carolina.

So, I agree the person who moved to Idaho would have been better off financially in SF.

Re:Complain, complain.....

[clarkkent09]

I don't know, when I was living in (a very nice part of) San Francisco, local liberals did a pretty good job of not allowing chain or fast food restaurants into the area (resulting in "quaint" locally owned establishments charging $15 for a cheeseburger), enacting very high sales taxes and high parking rates and other measures that did an excellent job of ensuring that there were no smelly poor people polluting the main shopping street. All with good intentions of course.

Re:as if they truly care about affordable housing.

[Anonymous Coward]

Yep. Our housing finance system forces the middle class portfolio to be overweighted towards leveraged real estate. If you were constructing a portfolio with liquid assets, no manager in his right mind would recommend: 75% REITs bought on margin, 25% other things. Yet that's where a lot of people are except that it's an illiquid asset instead of a REIT.

Until this situation changes, nobody will really want affordable housing despite what they say.

Affordable housing means falling prices, and the whole system is designed so that falling prices are bad. That's why "affordable housing" requires you to earn the poverty badge. A world where section 8 vouchers provided $100 of your $120/mo rent instead of $800 of your $900 rent would work just as well, if not better for the government. It's the trannsition that's a bitch. We missed a golden opportunity with this crisis. The rallying cry should be "START FORECLOSURES". Yes, "owners" would have to move; but if we let the blood run in the housing market, they'd move into a place where the rent was 25% of the mortgage. They could put the other 75% in CDs earning 8% interest instead of paying it to the banks.

Maybe some day the bank/housing cartel really will collapse. I certainly won't mourn its loss; but for now it continues to be propped up.

It's not just starving artists /welfare recipients

[AtlanticCarbon]

Reading some of the early comments, it seems like people are acting like this just affects artists or poor black people or that this is somehow a reversal of white flight (largely a middle-class phenomenon).

I grew up in San Francisco and still live in the Bay Area. Middle-class and even many (by national standards) upper-middle class people have been and continue to be pushed out of the city. It's not really about racial diversity either. It's a socio-economic and cultural thing. It's also an age thing. To me the quintessential San Francisco resident is a yuppy transplant female in her late 20s or early 30s . She works in tech marketing. She's a foodie and loves visiting all the trendy new brunch places and maybe hitting up a street fair afterwards. She could be white, Asian, hispanic or something else. That doesn't mean it's not monotonous and homogenous. It is homogenous and that's what people are complaining about. And if you want to have a family in San Francisco, you need to be downright wealthy. So there's nothing wrong with being a young professional in itself, but when that's all a city has it's lost a lot of its character.

Anyway, such is life in a market economy. I don't know if there's a right or wrong here and a city like San Francisco has seen waves of demographic changes. But don't think this is like people complaining if white people were to return to inner-city Detroit. This is nothing like that. This is really an entire city becoming like the wealthier parts of Manhattan. I don't expect people from other cities to care, but as a San Francisco native I wish Silicon Valley had been a place in Washington state.

Re:Booms are unsustainable.

[couchslug]

"Cities need all kinds of people working at all income levels to work efficiently. Banishing the working poor to the hinterlands drives up costs (commuting)."

There is a solution to that developed to a high degree of effectiveness before we even had automobiles. It's called suburban light rail.

Rail still interconnects large swathes of the Northeast where it was too necessary to get murdered, er "displaced" by competing interests.

Commuting by train can be relaxing. I did it for years in North Jersey.
Cities don't need the poor to live in them because that CONCENTRATES the poor which exacerbates their problems.

Disperse the poor while facilitating AFFORDABLE commuting so they can work in areas they can't afford to live in. Commuting by rail is much cheaper than trying to maintain a car, much less hassle than driving a car, and when connected to a good subway system is a great way to get around cities.