By Tim Redmond

SAN FRANCISCO HAS a long, somewhat strange relationship with recessions. In this gold rush town, booms and busts have always been a part of life – but on balance, the bad times aren't always entirely bad. The good times are often a whole lot worse.

I remember the late, great Herb Caen writing once about the depression, when he first arrived in San Francisco as a kid from Sacramento, hired to write a radio column for the San Francisco Chronicle. Caen was hardly wealthy in those days (he'd gone to work to support his family after "Dear Old Dad" lost his job), and he was a big critic of Hoover and a fan of FDR. But his memories of that era weren't totally bleak:

"There weren't a lot of dollars going around," he wrote, "but everyone seemed to have one."

In an odd way, recessions can be something of a social equalizer in this notoriously socially stratified town. Sure, the very rich stay rich – that always happens, everywhere – and the poor and nearly poor get squeezed even worse. I'm talking about what economists call the "middle quintiles" – not the wealthiest 20 percent or the most-impoverished 20 percent but the 60 percent in between.

Compared to the boom years – when the vast majority of the money heads upward, mostly to property owners – recessions may actually help the folks in the middle. And they may also iron out some of the disparities between the upper and the lower end of what's left of San Francisco's working class and middle class.

That's because so much of the classic San Francisco boom (and the one that ended last year was a very classic boom) involves fast money coming into town, which quickly drives up the cost of housing and low-end office space. And that means the artists, the longtime renters, the arts groups, the small businesses – all of us who aren't part of the speculative game – are forced to spend a much larger percentage of our income on rent (which, in this town, is already the largest single chunk out of almost everyone's budget). Or we get forced out of town altogether.

As long-term, middle- or low-income residents, small businesses, and nonprofits get driven out, they're replaced by wealthier people and better-funded companies. In the late 1990s the middle class (if that's even an appropriate term) became younger, richer, and whiter. The people who used to be middle class suddenly dropped down several notches on the scale, because they could no longer afford to pay rent, eat, go out to the occasional show, make car payments, send their kids to a decent day care program, and have a couple of dollars left at the end of the month.

Since the dot-com bubble burst, the unemployment rate has soared in San Francisco, and it's still high: according to the San Francisco Business Times, unemployment here in January 2002 was at 7 percent, second in the Bay Area only to Santa Clara County's 7.5 percent (and significantly above the national average).

A lot of those newly unemployed people, of course, were high-tech workers. Quite a few of them have left town (many for San Diego, if U-Haul truck rental records cited in a recent Chronicle article are any indication). Of those who are left, some have simply downsized their lifestyles – sold the SUV, moved in with friends, or taken a job that doesn't pay quite as well. Some are truly struggling.

Unemployment checks pay for almost nothing in this expensive town, and the effects of the recession have gone far beyond the relatively upscale dot-com set. A lot of local businesses are barely making it. Contributions to charities that serve the needy have fallen. The homeless shelters are full, and so are the doorways. This isn't the best of times, and I don't want to suggest that the pain and suffering – particularly at the low end of the economic spectrum – isn't real and brutal.

The boom was ugly (marked by widespread displacement, with very little of the urban planning controls or limits that could have tempered it); the bust is ugly (with very little of the social safety net that could have made it more humane and tolerable). The reason we're in this situation is simple: the people running the show in Washington, Sacramento, and even San Francisco have refused to use the economic policy tools at their disposal to make the booms a little less reckless – and the busts a little more gentle.

Still, the effect of the current recession on San Francisco's renting class has been rather dramatic – and almost entirely positive. High-end rents – the two-bedroom apartments going for $3,500 a month two years ago – have plummeted, in some cases dropping by 50 percent. At the more moderate levels, rents have fallen an average of at least 15 percent, Ted Gullicksen of the San Francisco Tenants Union estimates. "We're seeing rents now that we haven't seen in five years," he told me.

Equally important, evictions have dropped drastically, according to Gullicksen. In December 2001 there were 31 owner-move-in evictions filed with the San Francisco Rent Board – down from 187 a month in 1998.

Meanwhile, small, local arts groups are doing better; performance spaces are booming. Unemployed dot-commers with money left over are taking advantage of bargain-basement real estate prices to set up new venues (see "Space to Grow," 3/6/02).

Cheap rent (and to be honest, a certain degree of urban bleakness) attracts the exact sorts of people and enterprises that have made San Francisco such a wonderful city. The problem is, those people and that atmosphere inevitably attract the investors and gentrifiers, and the cycle begins anew.

Cheer up: it could be a lot worse. Right now there are bargains to be had all over town, ways to survive the recession, strategies for life in a busted town that have their own sort of appeal.