The San Francisco tech boom crisis

photo of MUNI bus vs Google bus by defabulous

There’s a lot of talk out there about the changes that the city of San Francisco is going through during the current tech boom. A lot of it is blather, as satirized in Joe Garofoli and Peter Hartlaub’s What Out Of Town Writers Need To Know About SF and A.I. Algorithm’s In a Constantly Changing San Francisco, Change is Constant.

Step 6: Get your adjectives straight. There are decisions to be made. What double-barreled description will you give the Mission? “Gritty and trendy”? “Seedy and hip”? “Vibrant and overpriced”? Is it populated by “Latinos and the technorati”?

These are the articles I regard as actually illuminating:

Google Invades (2013) by Rebecca Solnit is the article which gave us the Google Bus as symbol. I note that it has a much more ambivalent sense of those busses than later protestors have expressed.

Other days I think of them as the company buses by which the coal miners get deposited at the minehead, and the work schedule involved would make a pit owner feel at home. Silicon Valley has long been famous for its endless work hours, for sucking in the young for decades of sixty or seventy-hour weeks ….

Updated to add: I admire Solnit. Her book about how people respond to natural disasters, A Paradise Built In Hell, is an important work. Her touchstone memoir of mansplaining, Men Explain Things To Me, is well-circulated for good reason. She often writes beautifully about the reasons why I fell in love with San Francisco.

But I confess to growing frustration with her as a commentator on the turn San Francisco has taken. She responded to a critic of the Google Invades article the following year with Resisting Monoculture, which is instructive in many ways but rejects building housing as a way to address the city’s housing crisis.

The Brooklyn-based Adler’s proposals for “fixing” San Francisco are not apparently drawn from local knowledge—or reality. “To house more people, which is what San Francisco must do to accommodate the new tech workers and the lower-income immigrant families and artists who live there now, it must build upward.” He blames San Francisco for not being as dense as Manhattan, the densest major urban area in the country. San Francisco is actually pretty dense, more so than any other major city in the West and most cities in the US—and it’s already pretty fully developed: you can’t erase most of what’s there and start over. There’s no practical way to turn it into a land of mega-highrises anytime soon when the unparallelled transit, water, power, and other systems that run under Manhattan would also have to be developed to accommodate such a boom. Finally, a nanosecond of reflection might reveal that Manhattan is not exactly a Shangri-la of affordable housing. Most of the island is exorbitantly expensive.

And the mechanism whereby excellent new housing will be built here for lower-income families? I think it’s called socialism. I’m for it, but it’s not on the horizon, and it’s not what a corporate boom is bringing, especially not one headed by libertarians with little sympathy for the poor.

Returning to the subject in 2024 with In The Shadow Of Silicon Valley, Solnit calls shenanigans on pop narratives of “crime” in San Francisco, but is so eager to place every real ill San Francisco at the feet of the “tech” industry that the only things she has to say about housing names “tech” as the singular cause destructive both through its presence …

Levels of violent crime are actually lower in San Francisco than in many American cities. Theft is a bigger problem, but like homelessness it has been exacerbated by the tech boom, which brought an influx of well-paid workers and a steep rise in housing prices over the past three decades

… and through its absence.

San Francisco is said to be in a ‘doom loop’ because so much office space and so many shops have been abandoned since the pandemic. Tech layoffs drove some of the shutdown, but the industry also enabled a mass white-collar withdrawal from the workplace – employees working from home, sometimes leaving the region to work remotely. More than the shrinkage of the population and the emptying out of downtown, the new mood of the city seems to be influenced by a kind of shrinking from human contact.

I share Solnit’s love for the lost Arcadia of San Francisco and her critique of the worst of the “tech” industry, but leaving things there is irresponsible.

Big Tech Isn’t the Problem With Homelessness. It’s All of Us is a very good overview of the policy failures which produce the bizarre situation in the Bay Area.

The city is turning into a Brechtian horror show where young men wearing Airpods and backpacks emblazoned with the names of gig-economy apps weave e-scooters among people passed out in their own filth.

That’s not even the most frustrating part. This is: Everyone who works on homelessness agrees on the way to fix the problem. Build more homes. Not coincidentally, more places for people to live would help alleviate all sorts of other problems, from climate change to income inequality. But the kinds of housing California needs are not the kinds that get built. The reasons amount to an obstacle course built from policy mistakes, economic vicissitudes, and prejudice. “This is not something like pancreatic cancer, where thousands of scientists are striving to find a solution for a really difficult problem that we literally don’t know what to do about,” says Margot Kushel, a professor of medicine at UCSF who studies homelessness. “We actually know what to do. We just lack the will.”

How Burrowing Owls Lead To Vomiting Anarchists (Or SF’s Housing Crisis Explained) by the reliably illuminating Kim-Mai Cutler is smart about policy and history. Follow her if you are interested in this topic.

San Francisco’s orientation towards growth control has 50 years of history behind it and more than 80 percent of the city’s housing stock is either owner-occupied or rent controlled. The city’s height limits, its rent control and its formidable permitting process are all products of tenant, environmental and preservationist movements that have arisen and fallen over decades.

A tale of two cities: how San Francisco’s tech boom is widening the gap between rich and poor by Laurie Penny does a good job of getting the flavor of the current state of the City right.

There are two things every child knows about bubbles: they are beautiful, and they burst. Time and again, I am told that San Francisco is “a bubble” — referring both to the gorgeous, insular never-neverland where workers in the city’s tech and associated industries live and play and to the localised economic boom that has fuelled the fat years.

Living in a Fool’s Paradise by Mark Hogan provides a look at the complex history and policy failures throughout the Bay Area which have produced the current situation.

Caution is warranted when considering construction projects in such a beautiful place. But the current state of permitting regulations for building and the glacial pace of infrastructure projects in San Francisco benefit very few people and risk turning it into a caricature of its former self for tourists and residents rich enough to live in a fantasy, not a living city. If there was ever a time when San Francisco needed to embrace a dynamic, expansive policy for building housing, offices and transportation, it is now.

Demolishing the California Dream: How San Francisco Planned Its Own Housing Crisis by Hunter Oatman-Stanford takes a very deep dive into the full history of zoning and housing policy in San Francisco.

In July of 1978, the San Francisco Chronicle also reported that even Rai Okamoto, director of the planning department, had reservations about downzoning the city, echoing fears that it would raise housing costs and force middle-income residents out of San Francisco.

It’s clear that many San Franciscans were well aware this rezoning would lead the city toward a housing crisis. The planning commissioners, however, were not moved. Their testimony throughout the hearings made it clear they valued maintaining the city’s predominately suburban layout over affordability. In response to a homeowner who was unhappy that his property would be downzoned to allow fewer units, commissioner Sue Bierman gave a quintessential anti-growth response—countering that San Franciscans were concerned about parking, traffic, and sunlight reaching their backyards, embracing a shift toward zoning that would preserve “more comfortable neighborhoods.” Instead of listening to those folks worried about becoming homeless, the commissioners focused on the single-family homeowners worried about shadows on their yards and parking for their cars.

What’s the Matter With San Francisco? by Eve Bachrach and Jon Christensen is smart about the mechanics of housing and income inequality. (The lead article of a whole collection of good stuff at Boom Magazine.)

Longtime San Francisco residents who fought for so long worry that the city they love is disappearing. They’re too late. That city is gone and they, in some ways, have aided its demise. Cities are like living organisms, not flies trapped in amber. Protestors long fought the “Manhattanization” of San Francisco—not wanting to see their mostly low-rise city dominated by high rises and dark urban canyons. Instead they’re getting the other kind of Manhattanization—a playground for the rich with little room for the artists and regular folk who held down the fort for so long.

Why housing costs keep rising in San Francisco from transit planner Michael Rhodes describes a few economic fundamentals that should be obvious.

• The number of employed residents in San Francisco has grown at almost twice the rate as the number of additional homes since 1990, exacerbating our housing shortage.
• As a result, the cost of renting in San Francisco has doubled since 1995, when a two-bedroom apartment cost $1,700 a month. In the 54 years since 1960, San Francisco has added about as many housing units as we used to add every 15 years, even as the city and region have seen steady job growth.
• Our current housing building boom is the result of a long backlog during the recession, and won’t be enough to catch up to demand unless it is sustained for a long period of time.
• Housing costs will only continue to rise unless we support adding new homes in San Francisco and other transit-oriented areas of the Bay Area. By building near transit, we can accommodate this growth while preserving and enhancing our region’s quality of life.

What's the Matter With San Francisco? from Gabriel Metcalfe at Citylab describes a little history of the politics of San Francisco housing policy.

It’s our own version of What’s the Matter With Kansas?—the 2005 book in which Thomas Frank tries to explain how working-class Americans came to vote for right wing politicians against their own economic self-interest. In San Francisco’s case, many tenants came to vote against new development in an attempt to show their disdain for monied interests. The problem is that this stance happens to result in very expensive rents in the long run.

As the city got more and more expensive, progressive housing policy shifted gradually to a sad, rearguard movement to protect the people already here from being displaced. No longer would San Francisco even try to remain open as a refuge for immigrants and radicals from around the world. The San Francisco Left could never come to terms with its central contradiction of being against the creation of more “places” that would give new people the chance to live in the city. Once San Francisco was no longer open to freaks and dissidents, immigrants and refugees, because it was deemed to be “full,” it could no longer fulfill its progressive values, could no longer do anything for the people who weren’t already here.

Airbnb, Proposition F And The Shared Hypocrisy Of Bay Area Housing from Kim-Mai Cutler at TechCrunch is a discussion of a particular San Francisco ballot measure which provides a lot of great background on the weird politics of housing in San Francisco and the Bay Area at large.

Why Are People Blocking Housing Development?

It varies by jurisdiction. In most of the 101 cities around the Bay Area, tenants are just outnumbered by homeowners, who don’t have a strong reason to add more homes because they’ve already got theirs. In many Californian cities like Palo Alto, there’s almost nothing you can do because you may never mathematically have the votes.

But in San Francisco, it’s different. This is a majority tenant city.

....

Tech founders, are, of course, frustrated. They’d like to hire thousands of engineers over the next several years, but the competition for housing is driving up rents and salary costs higher and higher.

And again, the city can’t coerce land owners into selling their property to non-profit developers. So unless the moratorium is permanent, land owners might sit it out until the end because they don’t want to sell at a discount.

Blame Zoning, Not Tech, for San Francisco’s Housing Crisis from Kriston Capps at Citylab makes some smart observations about NIMBYism and gentrification.

As Rick Jacobus explains for Shelterforce, building new housing units anywhere—whether they’re set-aside affordable units or penthouse condos—goes in the win column from a regional perspective. But when new units mean penthouse condos in a low-end neighborhood, the region may prosper at the potential expense of the neighborhood.

What happened in South of Market and parts of Brooklyn and what people fear in the Mission (and the rest of Brooklyn!) is that high-rise luxury housing was dropped into otherwise distressed neighborhoods. These luxury projects dramatically changed the perception of these neighborhoods—they sent a clear signal to the market that these places were safe—both in the sense that they were safe for wealthier residents to live in and in the sense that they were safe for more investment in residential development. However much these projects decreased rents regionally by increasing supply, they had a larger impact of increasing rents in the immediately surrounding neighborhoods by increasing demand.

Yet this signaling happens with or without the luxury condos. Prohibit new building in the high end, developers turn to the low end. Decline to build new luxury condos, buyers will turn to the existing housing stock. It is, as Jacobus describes, “the new planning dilemma: where to put the rich?”

The new wealthy are ruining everything because the old wealthy decided not to let them live anywhere near them.

Carpetbaggers is a comment on the effect the two tech booms I have seen have had on San Francisco. Forgive me linking a post of my own: as a pre-Boom San Franciscan and a tech professional, I literally embody the split.

The San Francisco I loved was raffish and queer and weird, and it attracted people like me who didn't quite fit anywhere else. But ’99ers weren't moving to San Francisco because it was San Francisco. They were moving here to get rich. And they resented that San Francisco was weird; they wanted it to be like anyplace else and they did their level best to make it that way.

Don’t Say This To A NIMBY is a little example of the weird psychology of longtime residents who want to personalize the causes of change.

This actually happened and is paraphrased to the best of my memory.

Me: Thanks for creating this Facebook group about Palo Alto’s history. Since I’ve only lived here a couple of years, I feel I have a lot to catch up on. How long have you lived here?

Admin: I’ve lived here since the Seventies and it’s crazy now. Did you see this rental ad for a van? Someone actually lives in a van! What if they need a bathroom?

Me: I dunno, bedpan and use the shower at the gym? You’re right that it’s crazy. I blame voters who block development. If it wasn’t for that housing shortage, people could live in proper apartments instead of spilling out into vans, illegally-converted garages, and cardboard boxes.

Admin: It’s those tech workers, is what it is. They raise rents and make mortgages unaffordable for anyone but themselves. Thank goodness we bought our house back when this area was quiet.

Me: Did you grow up here?

Admin: No, we moved here when my husband was hired by IBM.

Me: Oh, so he’s a tech worker like my husband. The only difference is you came here forty years earlier so you lucked into an affordable market while we pay top dollar for a clapboard apartment. You’re just like us!

Admin: *kicks me out of group, blocks me on Facebook*

Me: Whoops.

Unpacking SF’s Moderate / Progressive Divide provides a good description of how housing, tech, politics politics, and cultural politics come together.

There is one policy area where the moderate/progressive divide seems to have sharpened in recent years. Nearly every academic and political insider contacted for this article highlighted housing and land use as the biggest cleavage between the two camps.

“That is the seminal issue in San Francisco that divides all politicians,” says Agnos. “It’s not the environment. It’s not healthcare. It’s not homelessness. It’s not voting rights. It’s not any of the traditional issues that we see in this country that define progressives or moderates. It is land use.”

“The moderates will look to the market more for solutions,” Agnos adds, “whereas the progressives will look to government more for solutions,” emphasizing that it’s not zero sum.

[⋯]

Housing is also where the mutual “strange bedfellows” critique emerges, making it harder to map each sides’ voting bloc. By opposing policies that would allow new housing to be built throughout the city, progressives are accused of allying with wealthy homeowners who don’t want their pristine neighborhoods to change. In their quest to make housing more abundant and, hopefully, more affordable, moderates are accused of running interference for billionaire developers and supporting gentrification.

Nobody says hi in San Francisco by Noah Smith from 2020 calls San Francisco “a great city in decline”.

I wonder — are poor transit and low density an effect of San Francisco’s culture of alienation, or a cause?

In NYC, the high and mighty of the finance and law and publishing industries ride the same subways as checkout clerks and hairdressers. The city is so dense that poor neighborhoods are shoved right up against rich ones; everyone walks past everyone on the street. There is certainly class separation and racial division in New York, but there is an inherent camaraderie to the city itself, a shared feeling that everyone is in the belly of the same vast urban beast. NYC is bigger than any of its industries, bigger than any of its neighborhoods. Its richest and most famous residents are supplicants to its glory, not the conveyers thereof.

Maybe if SF had dense housing and good trains, San Franciscans would be forced, if not to be interested in each other, than at least to recognize each other’s existence. But it’s a chicken-and-egg problem (or as econ dorks like to call it, an inefficient equilibrium). It might be that SF can’t have a sense of civic unity until it has functional urbanism, but can’t build functional urbanism without a sense of civic unity.