Thursday, April 25, 2019

San Francisco: City of rich people

San Francisco's skyline as seen from condemned property on Treasure Island
Alexis Madrigal in The Atlantic:

There has never been a town like the one San Francisco is becoming, a place where a single industry composed almost entirely of rich people thoroughly dominates the local economy. Much of the money that’s been squished out of the rest of the world gets funneled by the internet pipes to this little sliver of land on the Pacific Ocean, jutting out into the glory of the bay...

Literal colonies of the working poor now cling to forgotten streets in RV communities. Homeless encampments are stitched onto any liminal plot of land. To lose your apartment doesn’t mean moving one neighborhood over but three cities away, to Antioch or Gilroy or Stockton.

But wait, it gets worse.

This year, eight major tech companies are expected to hold initial public offerings. The first, Lyft, took the public-market plunge last month. Yesterday, Pinterest did. Airbnb, Instacart, Palantir, Postmates, Slack, and Uber remain. Amazingly, all but Palantir are headquartered in San Francisco, currently home to only five other public software companies—Dropbox, Salesforce, Square, Twitter, and Yelp...

And while digital space is seemingly infinite, San Francisco has an extremely limited housing supply. Only 5,471 properties changed hands last year out of almost 400,000 housing units. So what will happen when billions of dollars in stock options can become cash anytime someone clicks Sell?

The common wisdom is simple: housing Armageddon.

But even the end times have a structure. Much of what the world knows about the tech world’s effects on San Francisco’s real-estate market comes from three sources: house-hunting lore (“They bid 400 grand over asking! All cash!”), realtors talking up their industry’s prospects, and aggregated market data from firms like CoreLogic. 
The numbers point to crazy market dynamics: The median home price hovered around $1.3 million in 2018.
But precisely because the tech industry has become so ubiquitous, blending in seamlessly with the old-line wealth generated by hometown firms like Bechtel, McKesson, Levi’s, various banks, and more obscure fortunes, it’s been hard to disentangle what all those engineer salaries and options are doing in the world.

At least until Deniz Kahramaner got interested. He’s a 20-something Stanford-trained data scientist turned real-estate agent, and he wanted to understand who was driving the local housing market. When he founded Data Bay Area, a real-estate group affiliated with the unicorn start-up Compass, he came into a common data set of property records...

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1 Comments:

At 9:05 AM, Anonymous Anonymous said...

Invariably the word "homeless" gets tossed into these articles yet the authors fail to understand the difference between the true homeless (who need our help, families with kids, single moms, and everyone else who is without a place to sleep and is NOT drug and drink addled) with "street people" whose lifestyle is centered on drug and drink. There are loads of rehab and detox centers in the city which street people do not avail themselves themselves.

My experience in soma has been that street people do not respect our neighborhoods so why should we respect and continue to enable them?

 

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