It’s hard to imagine what tense heights San Francisco’s culture clash might soar to. But then again, it’s also hard to imagine someone tossing in an extra million bucks to close on a house that’s been on the market for less than a week.
The conflict between dudely tech types making their unholy pilgrimage to the Bay Area—historically a nexus of counterculture—and just about everyone else plays out on many battlefields. But beyond the whimsically lofty valuations for companies that have zero revenue, real estate is one of the most alarmingly quantifiable. With rental prices through the roof, most Bay Area residents could never dream of homeownership. But the tech industry’s reimagined cast of robber barons are not most Bay Area residents.
Screengrab via Zillow
Facebook’s headquarters might be 40 minutes south in Menlo Park, but Facebook cofounder and CEO Mark Zuckerberg wants to be right where the action is—sometimes, anyway. That’s why, in 2012, Zuckerberg bought what some local press derisively dubbed “Fort Zuckerberg,” a four-story home near San Francisco’s hip epicenter, Dolores Park, and the perfect symbol of a city gone haywire.
As SFist puts it, “Zuck has officially put the Mission on the paparazzi’s radar. You’ve been warned.”
It’s no coincidence that San Francisco’s only remaining lesbian bar announced that after 18 years it will be closing its doors.
Paying $10 million, a price cartoonishly above the $1.5 million market value of the property in 2012, Zuckerberg closed on the home in 2012. After that, a series of renovations on the property began in 2013. As of September 2014, that construction is still well underway, tearing up the entire block and driving neighbors crazy with constant noise and aggressive parking-spot squatting.
Screengrab via Google Street View
Meanwhile, just a block away, Google’s lead electronic discovery lawyer, Jack Halprin, has been evading papers summoning him to court for allegations that he unlawfully evicted residents of a property he bought on the Mission District’s Guerrero Street. Halprin bought the 100-year-old Victorian home for $1.48 million in 2012 and proceeded to take the building’s units off the rental market. The eviction controversy has become a rallying point for longtime residents and fair-housing advocates, who led protests throughout 2014.
San Francisco’s Mission District, a historically working-class Latino neighborhood, has emerged as a hangout for executives like Zuckerberg. Pour-over coffee shops along thoroughly gentrified Valencia Street house startup types typing away on rows of MacBooks, and the nearby BART stations and comped company bus rides make it all the more alluring. As soon as this year, a startup called QuiQui hopes to start drone deliveries of drugstore goods to San Francisco residents who download its smartphone app. The startup targeted the Mission District specifically as its testing ground. “The lack of tall buildings and relatively flat landscape make our aerial mapping much easier. Since the drones can fly ‘as the crow flies,’ it makes it a great place to start.”
In 2014, San Francisco’s median rent prices shot up 10 percent in just a year’s time.
It’s no coincidence that San Francisco’s only remaining lesbian bar announced that after 18 years it would be closing its doors. The Lexington Club, more often called “the Lex,” is located in the heart of the Mission District; owner Lila Thirkield can’t keep up with the skyrocketing market’s rent rates.
“A few years back, my rent was raised to market rate, and though it was difficult, we seemed to weather it at first. But as the neighborhood continued to change, we began to see sales decline, and they continued to do so,” Thirkield wrote, delivering the bad news. “When a business caters to about 5% of the population, it has tremendous impact when 1% of them leave. When 3% or 4% of them can no longer afford to live in the neighborhood, or the City, it makes the business model unsustainable.”
Speaking to a longtime tenant on the outskirts of the Mission District, the influx of tech culture is palpable. He recounted recently running into a startup founder eager to build “community” with other members of the tech scene who were moving into the neighborhood for its convenience and hip image. The influx of young, childless startup types is so great that the city might be wise to consider building “dorm-style nano-apartments”—150-square-foot homes that could house members of the ballooning demographic before housing demand outstrips supply even further.
Numbers through the roof
According to Trulia’s Chief Economist Jed Kolko, “San Francisco has the least affordable housing in the nation, with just 14 percent of homes accessible to middle-class buyers.
Screenshot via Trulia
“The median rent is also the highest in the country, at $3,250 a month for a two-bedroom apartment,” he wrote. With the price of homes rising fast, incomes aren’t keeping up.
The Bay Area’s high cost of living is no deterrent to young people hungry for jobs in the tech industry. Between 2007 and 2013, San Francisco county’s millennial population swelled by 68 percent, an influx topped only by the D.C. area and New Orleans.
In 2014, San Francisco’s median rent prices shot up 10 percent in just a year’s time. It’s no surprise then that low wage earners, defined here as individuals with an income below $35,000, are moving out in droves.
This year, for the first time, the median price for a home in San Francisco hit the $1 million mark. As the San Francisco Chronicle observes, buying a home in San Francisco right now is a cutthroat endeavor in which more buyers are willing to pay in cash—and well over the asking price. “Many are tech workers with stock compensation from an initial public offering or takeover. Realtors call them ‘Google kids.’”
The tide is turning against longtime Bay Area residents, disproportionately affecting low-income families, people of color, and the queer community—populations that tend to portend socioeconomic shifts on a larger scale. As San Francisco’s heterogenous charm withers, tech’s elite army of gentrifiers is moving in next door—and across the street too.