Saturday, March 19, 2016

Fear and Loathing in San Francisco

San Francisco and its environs have become one of the most expensive urban areas to live in. They’re slightly behind New York and Honolulu, but the real estate market in the city itself is pretty nasty. The average 800 square foot SF residence, pretty tiny by most standards, will run you a cool million bucks. The ramshackle dot of a house pictured above went for $1.2 million. In terms of rents, SF even tops New York City: “The city is bulging at the seams, adding about 10,000 people a year to a record 852,000 in 2014. A one-bedroom apartment goes for a median $3,500 a month, the highest in the nation.” New York Times, March 8th.
It’s part of the tech industry that has made the Bay Area one of the most successful regions in the country. So with all that money rolling in, with the big regional players having become the largest companies on earth, you’d think that folks in the City by the Bay would be beaming, smiling and laughing all the way to the bank. Not exactly… unless you are one of those tech entrepreneurs (or senior managers of these high-growth entities). The polarization that has infected our overall economy is an open festering wound in SF.
The love-hate relationship between the “ordinary” people and the tech players has moved dramatically more toward the “hate” component. As much as the Silicon Valley was once pretty-much based in and around Stanford University and San Jose to the south, much of that lucrative industry has migrated slightly north into San Francisco area.
Aside from the high cost of living, San Francisco has just plain become tough to live in. Commuting is miserable, and rents are untenable. “For every person who moves to San Francisco, another two start commuting to work here. Traffic is down to a crawl: The average afternoon speed on the roads feeding into the highways has dropped 20 percent in the last two years. And the BART trains are squeezed tight: Since 2012, average morning rush-hour ridership from the East Bay has risen 30 percent.
“Signs of distress are plentiful. The Fraternite Notre Dame’s soup kitchen was facing eviction after a rent increase of nearly 60 percent. (It was saved for a year after its plight received worldwide publicity.) Two eviction-defense groups were evicted in favor of a start-up that intended to lease the space to other start-ups. The real estate site Redfin published a widely read blog post that said the number of teachers in San Francisco who could afford a house was exactly zero.
“‘All the renters I know are living in fear,’ said Derrick Tynan-Connolly, a teacher at a high school for pregnant teenagers and young mothers. ‘If your landlord dies, if your landlord sells the building, if you get evicted under the Ellis Act’ — a controversial law that allows landlords to reclaim a building by taking it off the rental market — ‘and you have to move, you’re gone. There’s no way you can afford to stay in San Francisco.’” NY Times.
The rising sentiment is that the local cities have been all about encouraging the start-up to big-tech business, often at the expense of city budgets. Many in the area think the tech world needs to pay for the disruption they caused. “Two years ago, radicals began delaying and harassing Google and other tech companies’ shuttles as they threaded San Francisco’s narrow streets. Now — after the city officially gave the shuttles free rein to use public bus stops; after the tech elite were accused of trying to buy a crucial local election; after the home-rental company Airbnb spent a fortune to defeat a proposition that would have restricted its business — the discontent is mainstream.
“In December, 39 percent of Bay Area adults said they thought things in California were headed in the wrong direction, up from 29 percent a year earlier, according to surveys by the Public Policy Institute of California. In Los Angeles, by contrast, the percentage expressing general disapproval fell from 37 percent in 2014 to 33 percent in 2015…
“Mr. Tynan-Connolly, 52, first came to San Francisco three decades ago, when its origins as a working-class port were still in evidence. The city was a haven of political and sexual tolerance unlike any in America. Now, he and many others feel, it has become something much narrower: a haven for the wealthy.
“‘The city has the largest budget it ever had,’ he said. ‘But the homeless are still suffering while working-class families, including my students, struggle to find affordable housing and child care. Where are the benefits from the boom that are accruing to the whole city?’
“San Francisco has a budget of $8.6 billion and a deficit of $100 million, according to Mayor Lee, who ordered city departments to cut spending by 1.5 percent. The mayor, who did not face any significant opposition for re-election in November, did not have time to be interviewed, a spokeswoman said.
“Sentiment is difficult to gauge on a citywide scale. The demonstrations against the shuttles got widespread attention, but quickly petered out. Mr. Tynan-Connolly noted that the long history of activism in San Francisco was driven by young people, and now the young people often work for the tech companies.” NY Times.
The subtext here is an issue that the entire country is beginning to face: affordability in rapidly-changing economic demographics. Whether it is the one percenters, “income inequality,” or the ultimate displacement of even educated workers by an increasingly automated substitutions for even sophisticated white collar work, our social systems are simply unprepared for these changes and our politicians seem unable to grasp how difficult it is for too many Americans to survive, much less thrive.
I’m Peter Dekom, and sometimes we simply fail to deal with the obvious until the obvious becomes a very big problem.

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