The bubble is back - Page 4

City policies are encouraging a new tech boom — but have we learned any lessons from the last one?

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Yet when asked why the city doesn't consider its costs or the impacts of rising rents and living costs, Chiu spoke only in generalities, saying that he's been engaged in many recent meetings "to make sure we do heed the lessons of the last tech boom and make sure a rising tide lifts all boats."

 

RISING TIDE

One of the most obvious negative impacts of the last tech boom was residents, nonprofits, and small businesses being hurt by rising rents and other costs, and there are some indications that's already happening again.

The director of a venerable local nonprofit in the mid-Market area that is in the process of renewing its office lease told us their landlord is trying to nearly double the rent of $18 a square foot. "There's all this venture capital now and people are willing to pay $33 per square foot, so landlords are just seeing green," said the director, who asked not to be identified because negotiations are ongoing. "The speculation is hitting us big time. The neighborhood is all aTwitter, and they're treating us like junk mail."

Egan said he predicted those rising rents, but he didn't think they would happen so quickly. "In principle, it doesn't surprise me, but it does surprise me that it's happened that far and that fast," Egan said. "The idea was to create employment, rather than rising rents."

Chiu said he was also surprised. "Jane Kim and I very much want to monitor the situation. We will look into city policies that will mitigate this trend," he said. When asked what the city can do, he made several vague statements before saying, "If we're serious about diversity, we may want to talk about rent subsidies at some point."

That would be one more cost to the city, adding to a toll that Donohue and others say is being ignored. Chiu, Egan, and other city officials seem to think growth is the only way forward. As Egan said, "If we don't do development in a city like San Francisco, what happens?"

But others say San Francisco should take care of its own first to maintain the city's diversity. Asked what the city's approach to economic development should be, Donohue said, "I'd presume you want to serve the people who live here already."

It was an idea echoed by Chris Daly, who was a housing activist during the last dot-com bubble before being part of wave of progressive politicians its backlash propelled onto the Board of Supervisors. He is now political director for SEIU Local 1021, which represents city workers.

"If your priority is to care for the fabric of the city as it's been built, you invest in what's here now," Daly told us. "My view is when the city courts the high-tech industry to try to jumpstart the city's economy, there are significant ramifications to what kind of city you're building."

Local progressive activists, people who often work to counter the impacts of those who see San Francisco as simply a place to make money, agree that there is a perverse logic at play these days.

"We already have more jobs than people," said Marc Salomon, a computer programmer and longtime community activist, noting that the city has about 800,000 residents and about 1.3 million people who work here. "And we have lots of unemployed San Franciscans, and we have a budget deficit."

Tom Radulovich, executive director of Livable City, said the simplistic rhetoric coming out of City Hall masks the more complex realities that the city faces. "When they say 'jobs,' everyone's critical thinking sensibilities are supposed to shut off," Radulovich said

Rather than focusing solely on whether a proposal creates private sector jobs, he said that a more complete analysis involves what he calls the "three Es: equity, environment, and economy." In other words, does the proposal have broad, leveling benefits (equity), what are its impacts to the natural and built worlds (environment), and what are its fiscal implications (economy).

Comments

Is it more feasible to build in an already dense environment? Or is it more feasible to expect all of the less dense cities ringing the bay to build more densely.
These are cities which have no interest in being as densely populated as San Francisco, and are places which are often populated by people who enjoy the relative density of their chosen home.
To expect other cities to densify to the degree SF has - even in places like the outer richmond, is an extreme pipe dream.

To the other poster who thinks that if we build some housing then we should build for 5 million people because thats what will happen:
It's nice to think that everyone in the US wants to live in SF, but thats just not reality. Not everyone wants to live here. We can do a better job with housing both the people who already are here, as well as a portion of the people who want to move here than what we are doing now. There is no valid reason to leave development lots undeveloped in prime SF other than peoples irrational need to control their environments.

Posted by Greg on Feb. 16, 2012 @ 11:45 am

Is this some kind of bizarre over-long troll? You don't want Stanford, Cal and UCSF because they lead to an educated successful population?

You are the one who should move, hopefully to someplace like Cleveland, so you can see what kind of economy your madness creates.

Posted by Guest on Feb. 20, 2012 @ 9:42 am

But of course the NIMBY's and activists don't really want affordable housing, because then they'd be out of a "job".

Posted by Guest on Feb. 15, 2012 @ 4:08 pm

who don't rent out their properties. Progressives are always opposed to the tyranny of the judicial system - except when they want to use it for their own means.

Posted by Guest on Feb. 15, 2012 @ 7:00 pm

Guest wrote: "And the city's economist is surprised rents would rise so quickly? Wow, apparently anyone can be an economist, no matter how dim-witted."

So funny and so true.

I heard someone from the city's economic department (I think it was Mr. Egan) testify in front of the BOS last year that a rent tax would cause rents to increase. What?? Where did he make that up?

Apparently Mr.Egan studied economics in Soviet Russia where they tried - and failed miserably - to match prices to costs. If he knew about the real world in the US and other capitalist countries, he would have learned that rents are already as high as the market will pay because - guess what - landlords are profit maximizers and costs have NOTHING to do with the rents landlords charge.

Anyone - including even a "trained economist" - who can't compare two reasonably similar apartment or commercial buildings - one with a low Prop 13 value and no mortgage, and one with a high Prop 13 value and huge mortgage - and not see that the rents charged are EXACTLY THE SAME, obviously is not very well-versed in the way economics works in the real world.

He sounds like a perfect hire for SF, a city famous for its mayors and BOS who give great soundbites about an "inclusive, progressive city," while in reality the city rapidly morphs into a place where only millionaires and multi-millionaires (and a few token poor people) can afford to live. Hell yeah Mr. Mayor and (most) BOS members: we need more high-paying technology jobs, more millionaires, and ever more multi-millionaire transplants from India and China. There's $3 Billion of "free" real estate money" for landlords and property speculators just by getting rid of the lower and middle income "off-brand" San Franciscans and replacing them with shiny new million dollar "brand name" replacements. The politicians and city bureaucrats are doing a great job, so please keep up the good work.

Posted by Guest on Feb. 15, 2012 @ 9:46 pm