Bay Area tech boom not cause of region's problems

http://www.sfgate.com/opinion/openforum/article/Bay-Area-tech-boom-not-cause-of-region-s-problems-5080195.php

by kunle • 13 years ago

39 70 13 years ago

kunle3• 13 years ago

The most striking figure in here is this one:

"The hard truth is that the Bay Area's housing and transit systems are bursting at the seams. According to the San Francisco Apartment Association, last year the city added 68,000 new jobs and just 120 new housing units. Silicon Valley's rental vacancy rates are even lower than the city's."

That's math that just undeniable.

nb132• 13 years ago

This one really jumped out at me too. I haven't read this anywhere before:

"research from the Bay Area Council Economic Institute showed that each of these tech jobs had an astounding effect of creating an additional 4.3 jobs in the local economy."

kunle3• 13 years ago

Yeah I thought that was striking as well. I'm generally skeptical of stats like this but I'd love to see the paper and see the structure of those gigs (eg which industries, where geographically are they concentrated etc)

rayiner5• 13 years ago

For comparison, Chicago, a city that isn't growing like SF, added 1,150 housing units in 2012 and had 3,050 units under construction for delivery in 2013-2014 as of September 2012: http://articles.chicagotribune.com/2012-09-13/classified/ct-....

epicureanideal8• 13 years ago

Although I generally agree with the sentiment of the article, I strongly disagree that we need specifically "affordable" housing. State-subsidized "below market rate" housing that enables people with low salaries to occupy highly-demanded space is incredibly inefficient and also likely doesn't serve the interests of the people it is supposed to help.

I don't see why the ability to live in San Francisco is any different than the ability to afford a BMW or a Tesla. Should the government subsidize "below market rate" luxury cars too? What would be the incentive to get an education or work hard? Personally I feel somewhat offended when there are dozens of below market rate units available and I'm actually excluded from attempting to buy them because I earn too much money. Meanwhile there are hardly any homes available for people who can afford the houses without subsidies and we bid up the houses to obscene prices due to lack of supply.

Also, if the people who work in SF or other high income areas cannot afford to live there at current wages, there should be pressure on them to leave and work elsewhere. This would increase demand for their labor and drive prices up, all else being equal. (I know, there are other factors here, but those should be dealt with separately, not by adding more layers of complexity to the problem.)

Further, if those workers cannot afford to rent or buy, lowering the cost of renting or buying also reduces the pressure on employers to raise their wages.

TheEzEzz2• 13 years ago

Should the government subsidize "below market rate" luxury cars too?

People have families and lives built around geographic locations, not cars. I'm not saying we should or shouldn't subsidize housing (I lean libertarian personally), but it's disingenuous to suggest this is like the car market. What's at stake for many people is a foundational part of their lives.

epicureanideal8• 13 years ago

They can build families and lives somewhere else if they can't afford to live here, right? Do people have a fundamental right to raise a family in San Francisco rather than Omaha or Austin? Are other places so horrible that we should use taxpayer money to ensure that the largest number of people possible can live in SF? And we should make it easier for the moderately low income to live here rather than people with higher income because ... why? Because people who work in technology don't deserve to raise their families here? Because despite education and hard work we really should make the ability to raise a family in a great area a random selection?

I actually think the car analogy is useful. Not subsidizing housing in San Francisco does not deny people the ability to start families. They can still start them in many other fine places that they can afford. Not driving a BMW or Tesla doesn't deny people the ability to get to work. A Honda or Toyota does that just as well.

NOTE: "Affordable housing" does not apply exclusively to people who have lived in the area for N years previously as far as I know, and even if it did I don't see why that would be fair. If you rent, you rent. When your lease is up, if the price goes up, that's how rent works. Also, there are already rent control policies that would serve this purpose.

scoofy3• 13 years ago

As a recent nyc -> sf transplant, i think the best short term solution to making living in the bay area more affordable is to run one track of bart back and forth from 12am - 4am. SF needs a brooklyn, a real brooklyn, that you can get to when your shift at the restaurant/bar/other-service-job ends at 1am.

Public infrastructure is a public good, and service industry workers can't be expected to cab it to oakland when their shifts end. Heck, the bikelane on the new bay bridge segment ends before treasure island. I could NEVER have lived in brooklyn if the non-auto infrastructure was the way it is between sf and oakland.

lsc• 13 years ago

As a recent nyc -> sf transplant, i think the best short term solution to making living in the bay area more affordable is to run one track of bart back and forth from 12am - 4am. SF needs a brooklyn, a real brooklyn, that you can get to when your shift at the restaurant/bar/other-service-job ends at 1am.

That... sounds pretty great. As a bonus, it would make public transit usable for recreational use, and probably keep a bunch of drunks off the road.

epicureanideal8• 13 years ago

I also wouldn't mind if they would add some extra cars so it isn't standing room only during commute hours. How hard is it to add an extra car to an existing train? Raise my fare, I'll pay not to have to be packed in like cattle.

lukejduncan• 13 years ago

I'm really interested in the NYC comparison.

I don't know anything about city planning or the history of it, but places like New York must have gone through similar transitions. What worked, what didn't? I feel like there has to be a lot of history to learn from on the topic.

alexeisadeski32• 13 years ago

Alternatively, SF could just legalize privately owned buses.

fishtoaster• 13 years ago

From what I understand, Bart needs that 12-4 timeslot for track maintenance.

Unlike some public transit systems with multiple sets of tracks on the same routes, BART doesn't have the duplication that would allow us to run trains on one set while performing maintenance on another. Third-rail power has to be shut down for maintenance crews to be able to operate safely and do the work that keeps the system safe and reliable. And the trains can’t run when the power is down.

- http://www.bart.gov/guide/latenight

silencio• 13 years ago

The biggest reason why I avoided buying a restaurant in SF is because there is no answer to the problem you outline, yet. Hiring and keeping employees was a clusterfuck. A lot of them lived in East Bay or Daly City, and this was a problem I saw something like 2-3 years ago. It's probably worse now.

I have a restaurant in East Bay and I have employees on the same side of the bay that will walk 15 more minutes to save 35 cents on BART fares. I pay them more than minimum wage plus overtime and meals, and I offer to pay the 70 cent difference every day since I don't want any of them walking alone too late at night. They just pocket the 70 cents and keep on walking. Compared to my day job and my fiancé's day job and how we'll uber instead of walking 15 minutes...

It's not just improving BART service, it's also about improving public transit in general I think - including to the point that fares drop. My cousin from Seoul completely flipped out on me shortly after coming to the US. He realized that he was spending ~$10 and a couple of hours every day to get to his school in downtown SF from Alameda. Incredibly rude awakening if you're used to one of the busiest and best subway systems in the world, I guess.

hyperlexic2• 13 years ago

I'm curious how Brooklyn dealt/deals with the issue of crime and public safety. I lived in West Oakland for while, and this seems to be the general region where a 'Brooklyn' type of spot is trying to emerge. BART station is right there, and it's close to the bridge for all-night bus lines and bikers too. But it's just such a friggin dangerous place to be (at any hour of the day or night) that I wonder if it's even possible.

steveklabnik3• 13 years ago

You're ignoring the crux of the issue here.

The issue is not "I want to move to San Francisco", the issue is "I've lived in this neighborhood my entire life, and now I can't afford to any longer." Let's not even get into how expensive it is to actually move, all of the complication and complexity involved in moving a family with children to a different school district, all of the paperwork that needs updated... it's nontrivial.

You shouldn't be surprised when people who are currently being colonized against their will and having their entire lives thrown into upheaval without any upside are a little bit upset about it.

(I live in the Mission.)

epicureanideal8• 13 years ago

Perhaps the person should have bought a house instead of rented? If they're renting (I still rent) they should understand that rents go up and they may not be able to afford to live there.

Let's say they can't buy. I am not indifferent to their problem, but I don't see why having lived in a place for a given length of time should mean that person has a right to live permanently in a place they can no longer afford. And I don't see why it should deny someone who can afford to live there the ability to do so.

kunle3• 13 years ago

Government subsidizes all sorts of things in all sorts of ways: Teslas/Priuses with credits, home loans with the mortgage deduction, student loans, Twitter moving to SF, and so on. Not saying these are good or bad, just indicating that subsidies are a pretty core part of our society and a case could be made for justifying or denying each.

Some rationales for subsidizing affordable homes specifically: fewer slums, greater social mobility for low income families (expensive areas also tend to have good schools), more stability for the elderly (who make up an astonishingly large proportion of low income folks as they can often no longer work).

A society where the raw effects of market forces were allowed to act on people would be really unpleasant (I grew up in one and have been to several) - free markets are a fantastic way to generate wealth but a poor way to ensure balanced social outcomes.

rayiner5• 13 years ago

greater social mobility for low income families (expensive areas also tend to have good schools)

This is an argument for subsidizing housing out in Santa Clara county. None of the public schools in San Francisco are particularly great.

yapcguy• 13 years ago

Should the government subsidize...

I don't see why a poorly run bank which has made bad investments in toxic assets should be bailed out with taxpayer's money when it should be allowed to fail, with good banks picking up clients and assets and growth in market share...

My point is there are few markets which are truly allowed to operate freely. If housing markets were not regulated, the uber rich would buy up every piece of real estate and then we'd all be stuffed.

we bid up the houses to obscene prices due to lack of supply.

People can only bid what they can afford, and what they can afford is driven by loose lending and cheap credit. Tighten bank lending and housing prices will start falling.

epicureanideal8• 13 years ago

I agree with you about the toxic assets and about cheap credit, but I don't see how those interventions would encourage us to add even more interventions.

epicureanideal8• 13 years ago

I also wanted to say, this is really not a conflict between the rich and the poor. What ends up happening is the truly rich can afford to live in SF easily with or without subsidies. The lower and lower-middle class end up with "affordable" (subsidized) housing. The upper-middle and upper-but-not rich get stuck in the middle with no assistance and maybe being able to afford to live in the area if they save in every other area and work themselves to poor health.

encoderer3• 13 years ago

If we follow your logic to its conclusion, San Francisco becomes a city of the uber rich, with the rest of the rabble scattering across the bay area.

So, what would that look like.. Some thoughts..

Good luck staffing jobs at the current SF minimum wage. You want baristas and servers and bar backs? And you want them to commute into the city? You'll get some (as you do now) but enough to run all of the cities establishments? We're talking a massive number of jobs. Sure, people will do it, for the right wage. So you're seeing wage inflation that will hurt small business owners a great deal.

Ethnic diversity would take a big hit. You'd see asian american and caucausions pushing out other groups that are on balance less affluent.

You can easily see NIMBY taken to an even further extreme that it currently is.

Commercial rents would presumably follow residential rents, further reducing low-margin businesses (like restaurants) in favor of high end retail and similar. (See: the Grove in Marina closing for this very reason).

I could go on, and certainly I am not listing the positive consequences of such a transformation. But I see strength through diversification and so I can't shake the feeling that this would be a weaker, less desirable San Francisco.

And if that were the case, if it truly did make it a less desirable place, well, now you have the positive feedback loop moving in the opposite direction, leading people OUT of the city until an equilibrium is found.

rayiner5• 13 years ago

Your concerns are really unfounded. Manhattan is basically already the way you hypothesize (with lower-income people commuting in from the other boroughs), and it works just fine.

devindotcom• 13 years ago

Wow! You are really out of touch!

pmiller2• 13 years ago

Also, if the people who work in SF or other high income areas cannot afford to live there at current wages, there should be pressure on them to leave and work elsewhere.

The problem is that people who can't afford to live where they currently live also can't afford to move.

prodigal_erik2• 13 years ago

How does that happen? We used to have a lot of stuff, but hiring movers never cost anywhere near even one month's rent. Are these the same people who are half a paycheck away from disaster all the time?

malandrew4• 13 years ago

Fully agree. I've had front-row seats to the shenanigans that are BMR housing units because my girlfriend qualifies for and has been trying to get, and the only conclusion that I can come to is that:

(1) It's a "squeaky wheel gets the grease" policy (2) They are just sticking fingers in the cracks in a dam that is leaking everywhere to plug a few holes.

The biggest problem with mollifying a large segment of the population with a lottery system is that it legitimizes a solution that never really solves the problem.

BMR housing is typically accessible to people with 70-110% of the area's median income. For every unit, there are 100+ applicants, and those are just the ones that are aware of the program's existence. The program is also riddled with fraud, with many applicants misrepresenting their income to be eligible or adding family members to the application even when that family member isn't going to live with them in the unit.

The worst effect though is that it removes many people from becoming advocates for re-zoning and building of new units. Each of those 100 people per unit now directs their time and attention towards a lottery system instead of demanding real changes from their representatives in local government. Removing those people leaves the very rich and very poor. The poor know they don't have a chance and are living hand to mouth so they won't participate at all. The rich are either well off enough to be insulated from the issue so they complain but never do anything, or the rich are the property owners extracting rent. Ultimately the only people really participating in numbers are the landlords.

radley• 13 years ago

"tech's shuttles are a godsend, eliminating 327,000 cars"

That doesn't seem accurate. Over a third of San Francisco's population leaves town on tech buses?

cloudwalking• 13 years ago

"tech's shuttles are a godsend, eliminating 327,000 cars and 10,000 tons of carbon every year at no cost to the taxpayer"

I presume this means 327,000 car trips per year.

sethhochberg• 13 years ago

That seems much more reasonable - assuming 260 work days a year and 2 trips per day, we'd be looking at just under 450 cars off the roads due to shuttles.

timr3• 13 years ago

So, first off, it needs to be acknowledged that this was written by the "Bay Area Council", which is a PR machine for a dues-paying group of bay area corporations, including Facebook and Google [1]. Consider the source.

Second, while I'm the first to acknowledge that SF needs to build up, it's clearly absurd to say that the tech boom is "not the cause" of the city's housing problems -- that's like saying that skiing isn't the cause of Aspen's housing prices. Nonsense. It's plain that tech is the proximal cause, even if you believe that the boom has brought both positive and negative consequences to the city (as I do).

Fair debate on this topic has to begin with the acknowledgement that the tech companies' policies are indirectly driving a displacement of non-tech workers from the city. It's dishonest to claim otherwise.

[1] http://www.bayareacouncil.org/about-us/member-companies/

surrealize3• 13 years ago

It's plain that tech is the proximal cause

It's half of the proximal cause. Housing prices have increased because of the interaction of supply and demand. Blaming the tech boom focuses only on the demand side, but the supply constraints (height limits, zoning density limits, etc.) are just as important.

timr3• 13 years ago

The supply didn't decrease. The demand increased. That's the proximal cause.

malandrew4• 13 years ago

True, but one of the comments on the article is especially telling:

    "The title of this piece expresses a false choice. It's not 
    meaningful to consider the development of industry separately 
    from the development of housing for the workers in industry. We 
    chose in the early 1950s to develop industry in the Bay Area 
    without regard for where the workers in the new workplaces 
    would live. Long before the current wave of tech immigrants 
    reached San Francisco there were people commuting to the Bay 
    Area from Manteca and Mountain Home and Santa Rosa and Santa 
    Cruz. Silicon Valley activists raised alarms in the early 1970s 
    that four new jobs were being created for each new housing unit 
    that was built. It shows an astonishing nearsightedness that 
    the people and the governments of Bay Area cities are only now 
    realizing that this is problematic."

It's observations like that that further support my views that San Francisco (and the Bay Area in general) is managed by children and has been for an incredibly long time. Considering how many people in the Bay Area are inventing the future, the local government here exhibits a level of shortsightedness that I have previously only witnessed in developing countries.

wpietri• 13 years ago

This just in: young PR guy for for business lobby group thinks business is awesome.

Bay Area tech boom not cause of region's problems

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