March 8, 2016 American Party
In Economy

San Francisco, where 1 BR apt rentals are $3,500, rooms are $2,000 and lunches are $25 min. A NY Times article “In San Francisco and Rooting for a Tech Comeuppance” published today, 3/8/16, is enlightening and disturbing. There were some classic reader responses as follows:

“Focusing on San Francisco alone unfortunately provides the mistaken impression that only San Francisco is detrimentally affected. In fact, much of the Bay Area, especially the East Bay which includes Berkeley and Oakland is adversely affected by the so-called “tech boom.” Home prices and rentals have skyrocketed everywhere. What used to be conventional “listings” are now auctions carefully orchestrated by real estate agents. Bidders with conventional financing are customarily shut out of the market by all cash offers or bidders aligned with a few “preferred” lenders. Most distressing is the fact that much of the “tech boom” is illusory, consisting of over-valued and hyped unicorns like Air BnB, Pinterest, Lyft et al. Privately traded and bankrolled by venture capitalists and hedge funds, these companies are “success stories” only as long as their investors remained convinced they have marketable value. When that convictions becomes unsustainable, their value evaporates and the bubble bursts. Is it any wonder why most people in the Bay Area want the bubble to burst to end this farcical and painful charade once and for all?” – Bob

“An entire American city, now out of reach of the working and middle classes. And thanks to “free market” ideology, discussing any meaningful regulation of the real estate market is taboo, and our only hope is an economic decline.” – Chris

“We feel your pain, San Francisco. We don’t have one industry to blame, we have many. None of them slightly beneficent. New York City is being dismantled blocks at a time, making way for the wealthy. We have a mayor who campaigned on “a tale of two cities” but has done nothing to stop it.” – Amy in NYC

“It doesn’t feel good to be hoping for a downturn–especially when many of your friends work in the tech industry. But sadly, the teachers, servers, non-profit workers, etc., among us are simply being left out of this boom. I’ve lived between SF and LA my whole life, have lived in SF the last 6 years, and I’ve never seen it this bad. I rent and I live in fear of eviction–I think about it every day. ALL of the renters I know are facing the prospect of eviction, and most of us are lucky enough to make a decent salary. It’s crazy.

A big part of the problem is the refusal in SF–and even more so in surrounding suburbs–to build enough housing. There’s actually a lot of undeveloped infill land that could be used to build dense affordable and market-rate housing. As a leftist (and one who favors rent control, environmental protections, affordable housing, higher taxes on the rich, etc.), I do think housing policy is one area where the left has gone astray. There’s not enough housing here. Period. We should build more AND improve protections for renters and the poor. The two are not mutually exclusive.

Beyond that, we can increase taxes on wealth, including repealing some or all of Prop 13, so we can pay for the things the city needs so desperately–more affordable housing, services for the homeless, better public transit. Income inequality is simply out of control here. Improving those service will help everyone, rich and poor (and whatever’s left of the middle class) alike.” – Jenny in LA

“Big American cities need to work on strategies to move real wealth and resources between cities and even neighborhoods. All these expensive hubs in LA, Boston, San Fran, NYC are surrounded by relatively poorer neighborhoods and cities that could benefit from an infusion of more workers and families. The real impediments to this are crime and perception of crime (yes there is more crime, but crime in middle class neighborhoods is reported and treated differently), public school quality, transport to work hubs, and access to robust shopping (groceries, pharmacies, pizza and deli). These types of programs might be expensive, but in the end, they might be worth it.” – Armand in Boston

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