19 Feb 2014

San Francisco housing crisis: tech companies held to blame

A booming population of affluent newcomers is pushing long-term residents out of their homes and fuelling talk of class war in San Francisco, the once mellow haven for hippies.

A city of many faces, San Francisco has always drawn in a diverse mélange of people. First came the gold rush. A century later the hippies arrived, and the Gay rights movement too.

Now it’s changing again.

As the gateway to Silicon Valley, San Francisco has suddenly seen a huge influx of big technology companies and start ups. Tech workers on mega salaries are pouring in at the vanguard of a new gold rush.

They’re moving into a city that has always prided itself on being a colourful and varied melting pot which cuts across the social spectrum, knitted together with vibrant neighbourhoods where the wealthiest would mix freely with those less well off and even live alongside each other.

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But the stampede to be the world’s tech capital is dividing this unique city as old-school capitalism fuels a fight over its identity and future.

We went to a boisterous protest meeting where 600 people were crammed into a community school – seething with resentment over the helter skelter changes besetting the city.

Rents up, evictions rising

White, black, latino and Chinese were locked in intense discussions and headphones were on hand through which simultaneous translation was provided in Spanish and Chinese.

The focus of the meeting was to decide how to protect San Franciscans who are increasingly facing skyrocketing rents and a wave of evictions.

Several people who have already been evicted stepped up to the podium to tell emotive stories of how landlords have hiked rents, and long-term tenants have found themselves pushed out for profit.

With chants of “Stand up, fight back” echoing around, I moved to a quieter corner of the cavernous hall to talk with Ted Gullicksen, the director of the San Francisco tenants union.

He was angry that the big tech companies were bringing in their well paid workers with little regard for the impact this was having on the lives of the locals. He said:

“Very well paid workers, literally for all over the world are all coming to San Francisco to work for one of the tech companies and all need housing and are getting that housing at the expense of those who have lived her for decades or were born and raised here.”


At the gathering we also came across Patricia Kerman, now in her mid 60s.

She told me how she had hitchhiked to San Fransisco in 1970 when the city was all about free love and hippies roamed around, often squatting in big houses:

“Money was not the objective of life. It was not all about your big fancy apartment and all your toys and everything else,” she said, he eyes gleaming at the recollection. With a smile and a gentle giggle, she added: “And pot was shared.”

We went to see her at her home in the Mission district, a gritty working class neighbourhood which is being rapidly “gentrified”.

With dark clouds looming overhead we took a walk in the rain as the heavens opened. As she strode up the street she pointed out how the face and very fabric of the neighbourhood was fundamentally changing.

“That used to be Jerry’s tattoo parlour, and its gone,” she said, gesturing across the road with a dismissive flick. She showed me where local laundrette has now become a yoga studio.

Don’t have that entitlement feeling that I am here now, I have the money, and you can go – and who cares what happens to you Patricia Kerman, San Francisco resident

Further up the street we stopped outside a large house which featured two apartments with a fresh lick of light blue paint. In the past fortnight they had both sold for a million dollars each. Just a few blocks away new condominiums are being rented for $10,000 a month.

Back down her street Patricia pointed up to the fading yellow facade of a Victorian-era building and said sadly: “This is my apartment over there. I have been living there for 27 years. I thought I would be growing old there, but I’m being evicted.”

As we moved to the doorway of her building we stepped over a painted protest icon on the pavement which read: “Tenants being evicted here”. It turned out that three of her neigbours had effectively been pushed out by her landlord. Patricia told me that they had been coerced into leaving.

She said her landlord had offered her money if she moves, but she was resisting. Yet she fears it’s a fight she cannot win.

“Move somewhere but don’t throw other people out,” she said, reflecting on how tech workers were moving into her neighbourhood.

“And don’t have that entitlement feeling that I am here now, I have the money, and you can go – and who cares what happens to you. I mean that’s crazy, that’s immoral.”

I asked her what will happen to her and where she will go now.

With her eyes welling with tears and her voice now choking up, she replied: “I don’t know I really don’t know. I think fighting has helped me get over a lot of the fear and sadness is there. But fighting kind of helps.”

Shuttle bus protests

Patricia’s fight has turned to the big tech giants themselves. In a series of actions she and her protest movement have symbolically blocked the plush buses which transport 35,000 tech workers daily to the headquaters of companies like Apple, Google and Facebook.

The corporate luxury buses have become symbols of a divided city. Behind tinted windows, wi-fi on board, the workers get to travel in comfort and ease.

We met two Google programmers sitting on steps near the Google bus stop. One of them smiled as he acknowledged the irony of the situation:

“Its feels a little bit awkward to me to be on the other side of a protest. It’s not where I especially think of myself.”

The question of how to mitigate the problems brought about by these rapid changes is something that few seems to be able to offer solutions to. But some in the tech world says they are trying, while insisting it’s a complex issue.

Diverse groups

Michael Birch is the British programmer who set up the social networking site Bebo and then sold it to AOL for $850m, before buying it back for a $1m. With his snappy suit and trainers he is the epitome of San Fran tech cool. He’s now built a private club called the Battery in the heart of San Francisco close to the Financial district.

With four bars, a high-end restaurant, meeting rooms, a gym and a spa the club is modelled in some aspects on London clubs with its British-inspired style and decor. Members pay $2,400 in annual fees but bursaries are made available for the less well off. The club is drawing in members from the arts world and from charities.

Some critics have said the club perpetuates the new exclusive character of San Francisco, but Birch insists his club can help to break down social barriers in the city by bringing many diverse groups together and limiting the number of members from the cosy tech world.

He said: “So we are not overly tech focussed. The city is very much a tech city, undeniably. One third of members are tech and two thirds from the other sectors. So were not about tech and we are not about wealth. We try to be the most inclusive, exclusive club you can imagine.”

Market forces

Birch argued that it is difficult for the city to mitigate the upheaval caused by the tech boom which has brought unexpected rapid change, with landlords seeking bigger profits responding to inevitable market forces of supply and demand. In many ways, he said, San Francisco was a victim of its own success.

He said: “Most cities in America would do anything to have the success San Francisco has had unfortunately its happened to quickly the city has not has time to adapt and change to accommodate it in the way it would like to.

It’s predicted that the population of San Francisco is going to double over time. So the city is trying to do what it can. But the rate of change has been so rapid that unfortunately a lot of people who’ve been in San Francisco a long time who are not benefiting directly from that wealth, cannot afford to live here anymore.”

We met Patricia again at a protest one evening outside the venue of the annual tech Crunchies, the Oscars for the digital world.

As men in shiny tuxedos and women in the finest designer dresses breezed past the protest crowd, activists bellowed through microphones, directing their anger at the big tech companies. They mocked Google, Twitter and other brand names.

Patricia told me that the tech world should not be awarded but rather punished for ignoring their plight.

Inside it was all glitz and glam as the digerati congratulated each other on their runaway success stories.

We tried to talk to some of the biggest names who had turned out, including Marissa Mayer, the head of Yahoo. But she and others were reluctant to chat. Google, Facebook and Twitter all declined our repeated requests for interviews.

In San Francisco the companies the world uses and relies on to communicate somehow seem disconnected from those right on their doorstep. In a city that has always embraced protest it seems the voices of discontent will only grow louder.

But are those at the top of the tech world actually listening?

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