How This Bay Area Tech Boom's Different From The Last One
This week, we're exploring the San Francisco Bay Area and the way income inequality is affecting the region. Check out the other pieces of the week, aggregated on this page.
The forces of gentrification and the widening income gap are showing up viscerally in San Francisco, but what makes the situation there different from what happened there in the late 1990s, during an arguably bigger tech bubble? That's a question from one of you — commenter Jeremy Kirsch, who writes, "I don't know why this is news all of a sudden. This article from 1999 comes to mind..."
I put the question to Joe Fitzgerald Rodriguez, a journalist who has been covering the economic change going on in San Francisco for the Bay Guardian, a longtime alt-weekly there. He was at the protest against private buses that shuttle tech workers to Google last week, a flashpoint that drew national headlines. Rodriguez writes:
"Well, to just see the difference, visually, between 1999 and now, watch this for a minute or two. So there's a couple facets that change things/make it worse. Firstly, rental stock in San Francisco has not been replenished at levels to keep up with the rising population. There is essentially finite rental stock in San Francisco. In the first dot-com boom, the 'low hanging fruit' of housing was used by the incoming tech force. "Neighborhoods gentrified, and people were evicted on similar levels, but since rental stock that was converted into condos and housing at the time was not truly 'replaced' in a meaningful way, that means SF has less rental stock than the time. Each wave of evictions reduces the total amount of rental available in the city. With a median housing price of $1,000,000 in SF, it's fair to say that most middle to lower income folks here are renters.
"When rental stock is lost as owners move in, or convert the units to condos for sales of upwards of $500,000 a pop, that's less middle to lower income folks that can live here. It's not replaced. ...
"Also, the burden of housing is huge here. Even if you can stay in the city, which some (like myself) do, the amount of income spent on housing is great.
"So even if you can afford to live here, it's usually at great expense, curtailing the ability to raise a family.
"Lastly, the scariest part of all this is that the newest tech boom is like a 'tech boom 2.0.' People I've interviewed characterize the first boom as filled with true tech geeks with little business savvy, and investors who did not know how to navigate the internet. Fast forward to now, and almost every startup is coming to the fore with at least a stab at a concrete business plan, and the likes of Google, Facebook and Twitter do not look like fledgling companies that will 'burst' in a few years. These techies are here to stay, mostly, and government has to step up and address that. So far, it seems Mayor [Ed] Lee spends more time with techies (meets every Tuesday) than with his middle and lower income constituents. Many in San Francisco feel he is in bed with tech to the detriment of everyone else. He believes he is creating jobs, and maybe he is, but those jobs don't buy housing in San Francisco, and don't offset the rental changes occurring here."
We've reached out to Mayor Lee's office for a response to the claim that he's "in bed" with tech at the expense of other constituents and will update this post when we hear from him.