Apparently economists hired by the city are wondering if San Francisco is headed for another tech bubble. In the meantime, they’ve also documented how dramatically the cost of housing has increased – even though wages in almost every sector except tech have failed to keep pace with the higher rents and housing prices.
According to a set of slides presented at a recent meeting of the city’s Workforce Investment San Francisco board, “there are reasons for concern in the local economy.” From the city's own analysis:
But so far, there have not been any signs of a technology bubble reflected in stock market data, the presentation noted.
The Office of Economic Analysis and the Controller’s Office prepared the slides, which were presented during an Oct. 2 meeting as part of an update on the city’s economy. The presentation also noted that San Francisco is the fastest-growing county in the United States in terms of private-sector employment.
It also linked the growth in tech with a rise in housing prices. Here’s a slide on how San Francisco’s housing market ranks in comparison with 15 other U.S. cities. It has the highest median home value and the prices went up more than 20 percent in 2011-12.
The slides also show that while the employment rate has bounced back from the dip experienced during the recession, that recovery has largely been fueled by jobs created in tech, which accounted for more than one out of four new jobs in 2011-12.
San Francisco's economy, in a nutshell. "The recovery has been largely driven by employment in the Technology Sector. Demand for housing has driven up housing and rental prices. Wages in most sectors have not kept up with housing costs. No sign of a technology bubble yet ... However, there are reasons for concern in the local Tech Sector," the matter-of-fact presentation concludes. It also notes that rent control has helped soften the blow, by preventing property owners from raising rents sky-high just because they can.
The city's own experts consider rising housing costs to be a defining aspect of our local economy -- so why isn't finding a solution to the affordability crisis a top priority for Mayor Ed Lee and other local elected officials?