Housing, Tech, and Inequality in San Francisco: A Way Forward

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I’m sitting in a Philz coffee in San Francisco on Folsom and 24th street, the heart of the Mission District.  A hodgepodge of tables, chairs, and sofas of different sizes, walls painted with pictures of trees, various portraits of the founder, Phil, baristas who are as hip as they come, the calming slogan of “one cup at a time,” and of course the luscious aroma of fresh coffee – quintessential San Francisco.  It’s a Thursday morning, and I was able to walk right up to the counter and order a delicious cup of their Aromatic Arabic and a breakfast sandwich.  Coming in on a Saturday or Sunday would have been a different story, though, when it’s typical for there to be a line stretching out the door of people who are mostly young, mostly hoodied, and mostly working in some way or another in the tech industry.

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The weekend line of 20-somethings dressed in startup logo apparel habitually checking their smartphones illustrate a truth about contemporary San Francisco – that the city has grown into what most would consider the tech capital of the world. Google, Apple, Facebook, Twitter, and a host of other technology firms, both giant and start-up, all have their headquarters in the Bay Area, if not within the city itself.  San Francisco has become the envy of other metros, playing host to an industry that is constantly growing, and correspondingly possessing one of the lowest unemployment rates in the country at 5.3%.

At the same time, with the influx of highly paid tech workers, San Francisco has become one of the the least affordable cities to live in.  The median rent for a two-bedroom apartment is $3,250, and the median home price as of November was $880,700 (at one point in 2013 it topped $1 million).

San Francisco’s widespread rent control policies provide a bit of a shield, limiting the annual rise in prices for continuing tenants to 60% of the local inflation rate.  However, the Ellis Act, a law on the California books that allows a landlord to evict tenants in order to get out of the residential rental market, has caused a public furor.  With the astronomically high market-value properties, many building owners have decided to cash in – Ellis Act evictions and tenant buy-outs tripled since the beginning of 2013 (see this interactive map of evictions).  In September, the eviction of an elderly Chinese couple and their disabled daughter who had lived in their apartment since the ‘70s brought this subject direct to the fore.

This issue has put SF mayor Ed Lee in the hot seat.  At his State of the City speech a year ago, he only gave token acknowledgement to the housing problem, emphasizing instead the thriving tech industry.  But what was front and center this time around – you guessed it, housing.

And rightfully so, as resentment about the staggering cost of living in the city has resulted in flares of protest, much of which directed at the tech community.  The symbol of the influx of tech, the luxury buses that transport nearly 20,000 employees from the city down to the headquarters of various companies in the Peninsula area, have lately received their fair share of piñata whacking (literally).  In late December, Google and Apple buses were barricaded by protesters angry about rising evictions.  Activists again targeted buses earlier this week, the same day as a Municipal Transit Agency hearing which resulted in officials agreeing to charge corporate buses a fee of $1 per day per stop.  High profile actions by prominent tech leaders haven’t helped with the industry’s image problem, either – see Greg Gopman of AngelHack’s sickeningly elitist comments about the homeless in San Francisco (soon after which an apology was issued).

So in the city hailed as the tech capital of the world, we now see a major backlash.  Many view the tech industry as the spearhead of growing inequality, and as a new generation of young, highly paid tech workers flock to San Francisco, the long term residents find themselves increasingly estranged in their own home.

San Francisco clearly needs to tackle its housing problem head on.  Last Friday, Mayor Lee announced an ambitious goal of increasing production of new housing units in the city by 5,000 every year for the next six years, a large percentage of which to be reserved for middle and lower income families.  But even this is essentially a symptom level cure, and it was pretty slow to come.  There’s a larger, more systemic problem  if it takes a tripling of evictions and a series of forceful protests against the very industry that is propelling San Francisco’s growth to get elected leaders to act. Why didn’t they take a more proactive approach when it was so painfully obvious to those on the ground level that something was wrong?

The bigger problem has to do with the fact that our local, state, and federal governments operate not much differently from your standard vending machine.  Yes, vending machine.  This metaphor has been made by more than one thinker, but Tim O’Reily, founder and CEO of O’Reily Media and Web 2.0 guru, explains the analogy well:

Too often, we think of government as a kind of vending machine. We put in our taxes, and get out services: roads, bridges, hospitals, fire brigades, police protection… And when the vending machine doesn’t give us what we want, we protest. Our idea of citizen engagement has somehow been reduced to shaking the vending machine.

So while our individual lives and the operations of private industry have been revolutionized by technology, the way our government works, and the way we work with government, has remained mostly static.  What is romanticized in our high school civics classes as a way for different members of the community to collectively resolve their differences, through voting and representation, has turned into an automated and thoroughly insulated bureaucratic entity.  Instead, government – according to O’Reily – aught to behave more as a platform that enables genuine and purposeful civic engagement rather than an opaque mechanism that takes your money and sometimes gives you what you want.

Yet even this doesn’t go far enough, because we cannot and should not rely on the government to always play referee. Yes the government can take steps to foster civic engagement, but so can everyday citizens. And this is really the crux of the issue. Rather than having the polarized representatives of each faction put pressure on the government to pursue their interests, i.e. who can shake the vending machine harder, we should work together to create a San Francisco that can work for everyone.

To be fair, the city of San Francisco has already made strides toward this goal of acting more as a platform.  By opening up troves of data for public access, the city allows for developers to create mobile apps that assist people in everything from mapping crime, to finding a good place to eat, to identifying trees in their neighborhoods.

The city has also experimented with websites that allow for crowdsourcing of solutions to public problems.  Unfortunately, many of these suffer from being overly top-down and precautionary in their approach, sabotaging the inherent openness of what can and should be discussed in the interests of political truancy. The ImproveSF website, a civic portal created in partnership with the Mayor’s office, doesn’t even have a topic on housing – really? Thus even if the city has made progress towards this shift, let’s be honest, nothing will change without the bottom-up efforts of regular people, putting forth the genuine effort to tackle an issue that they all have a vested interest in.

So what does bottom up engagement look like? Take a look at this:  In 2009, severe flooding in Kauai took out one of the main access points to the Polihale State Park.  The cost of repairing the road was put at $4 million, money that the state Department of Land and Natural Resources didn’t have, therefore there was little alternative but for the park to close down indefinitely.  This would have been the death knell for many local businesses who rely on tourism dollars from park visitors, therefore local entrepreneurs and residents pooled their resources to repair the bridge themselves.  It took a mere eight days,  says Troy Martin, a business owner who donated machinery and steel:

We shouldn’t have to do this, but when it gets to a state level, it just gets so bureaucratic, something that took us eight days would have taken them years. So we got together — the community — and we got it done.

This is the kind of response that needs to happen here. Having both sides vilify one another through various media channels and outlets accomplishes nothing, and instead seeds more division, putting any reasonable compromise further from reach. The individuals who work in the tech industry aren’t inherently evil and plutocratic, they just want to work and be a part of this amazing city the way others have for generations (an even greater number probably just want to get to work on time). However, they too need to realize that despite their good intentions on an individual level, the systemic pressures that they collectively create are having an adverse effect on the people who already live here, and they need to be willing to admit this, as well as work towards addressing it. Imagine the impact a civil and collaborative approach might have in fostering a stronger feeling of empowerment and community amongst all people.  My guess is that the housing problem, which has been present in people’s minds for years, would have been addressed much sooner and with a myriad of creative solutions arising from a wide range of sources.  I don’t know what the solution to San Francisco’s housing problem is, but I’m sure there is someone who does.

Wrapping up working at Philz I struck up a conversation with a fellow coffee sipper.  Talking about what drew her to the city, she mentioned the infectiously optimistic, can-do attitude of so many people here.  San Franciscans, she said, dive into problems with relish, confident in their ability to leverage resources available to them and find solutions.  As the city addresses housing, inequality more generally, and a host of other (seemingly) daunting problems, the time has come to unleash this collective ingenuity towards solving common challenges.  After all, arguably no other city is as poised to leverage the power of citizens 2.0 and, if done properly, the engine that has fueled San Francisco’s dramatic growth also has the power to both broaden prosperity beyond just a select group of techies, as well as ensure this incredible city’s vibrancy and richness for generations to come.

Again, I am no expert on housing, but I can contribute by offering something of a starting point. Share your thoughts on how to address San Francisco’s housing crisis here.

5 Comments

  1. Chris Nunez says:

    Sorry but the ‘apps’ being provided are not helpful to anybody but those who are already ‘wired up’ and have become part of the problem for residents. This has been the problem since ‘Silicon Valley’s’ products, made the internet accessible primarily to the middle class, and then prepared their children to compete against those children whose families did not have broad access to computers and the internet. This is a thinly disguised form of class warfare and the poor are losing.
    Not even close, and definitely no cigar.

  2. Jim Weller says:

    I agree wholeheartedly with Chris Nunez. What we have here is an ascendent class of Mammon worshippers, whose concupiscence is unbounded, and whose materialistic, individualistic ethic might best be summed up as “More is always better; enough is never enough.” On the contrary, I say no one deserves to accumulate a great deal more than he or she needs to subsist, and everyone deserves to have enough to subsist at a modestly decent standard of living. Those who revel in their riches do so at the expense of the rest of us.

  3. Lynn Gai says:

    I live in Santa Cruz, where we also have a very high cost of living. We do not have a high percentage of high tech jobs in our area however. Many people commute to higher paying jobs.

    Demand for rental housing in our area is strong due to demand for student rentals.The rent paid by students renting per room is much higher than what families typically can pay. The University population growth has outpaced housing construction for decades. Student body grew at about the same pace as the housing built.

    We also have a no-growth policy that interferes with creation of just about anything. Affordable (inclusionary) housing regulations make developments more expensive as well. When the inclusionary housing regulations passed the prices rose over night. At the time we had a building moratorium. Everything becomes a big expensive project by the time the public process is done. Often enough there is a big public protest of some sort. As a result if the project does get built the money is tight for the construction. The construction could have provided good paying jobs.

    What ever we do there are unintended consequences of our actions. What is not typically done is to have objective discussions. To look at all the pluses and minuses for all the ideas. Typically something is promoted with lots of great promises, with little consideration for the negatives. The advocates promote all the good of their ideas. The opposition needs to bring up the down sides. This creates an adversarial relationship. Nobody takes responsibility for the results.

  1. […] Read the original: Housing, Tech, and Inequality in San Francisco: A Way Forward … […]

  2. […] stories of tenants being evicted. We have covered this issue before when discussing the spike in Ellis Act evictions last year, which is a California law that allows property owners to forcibly evict tenets, even in […]

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