San Francisco has lots of great qualities, but constantly telling ourselves that it is the greatest place in the world home to the greatest (or, in the author's words, the "smartest, most creative") people is tiresome. As South Park memorably put it, San Francisco has an abundance of "smug." The city has real problems, of which housing is only one.
The SF Weekly (an alternative newspaper here) has published several thought-provoking articles on the state of the city over the years. They are all titled, "The Worst Run Big City in the US."
San Francisco also has a civil grand jury that periodically issues reports on topics of citywide concern. These are generally ignored, even though they point out significant present and future problems (I'm thinking specifically of looming pension issues).
San Francisco is completely, utterly corrupt when it comes to housing. In 2011 there were a total of 418 new housing units built [1]. Really? One of the hottest areas with the highest demand in the entire country and only 418 new units were added in a full year? That's an absolute outrage.
This is why I'm hoping that Bloomberg's efforts to create a Silicon Alley are a success. Maybe SF will realize that it needs to appreciate the tech industry more when people start leaving for NYC. It would be great for tech to be based in a city where (a) it's not the biggest industry (so you don't get mental inbreeding), (b) there's proper public transportation that doesn't require hazmat cleanup because of people shitting and pissing all over it[0], (c) you don't have homeless people and drug addicts everywhere on the streets, and (d) you don't have rampant NIMBYism blocking the development of more efficient housing because they're afraid of "Manhattanization" destroying their "Bay view".
In case you haven't noticed sf is bounded by the Pacific Ocean. It can't just grow and it already has a very high housing density. The only area that can absorb new housing is china basin (3rd st) and that is being developed. The rest is already full.
Do we really want or feel that more people in sf is a good thing? Why not live down the peninsula or the east bay where there's an unlimited amount of space.
I agree with nearly everything this article says, with one important caveat: this won't last.
The Great Nerd Influx of 2012 is just one of many boom/bust cycles that San Francisco has experienced, and it's far from the most robust -- there are a lot of good reasons to believe that this sudden surge in activity will fade in a few years as thousands of doomed startups hit the series-A wall. Rents have shot up dramatically in a year, but it's almost entirely a side-effect of the funding bubble. It's hard to fault government for reacting slowly to short-term phenomena.
I moved here at the tail end of the last funding boom, and watched rents fall after Sequoia sent out the "Good Times, RIP" slide deck. Think it can't happen again? It will. It doesn't make a lot of sense to run out and rip down the victorians to make room for market-rate condos simply because SOMA is a trendy place for startups at this particular moment.
The ability to build should not depend on whether a boom will last...even if we could trust people that predict that it won't. The entire US continues to benefit from an overly exuberant boom in fiber-optic cables in the late 90's. San Francisco would continue to benefit from the housing stock even if all the nerds packed up and moved to Oakland.
Think of San Francisco as a bowl, with it's limited real estate and finite density. All the money pours into the bowl and sloshes up the sides and overflows, resulting in very high housing costs.
The central valley is more of a sauce pan, when money is poured into it, it spreads out at a low price level.
Things are getting better... the top post on HN currently refers to 2011's 418 units, but this was following a huge economic downturn. Projects in the city take huge resources and require years of permitting and approvals, followed by years of construction. This isn't a 'flip-the-switch' type of problem like you can solve in the suburbs. This process could obviously be expedited, and I hope people work toward that, but things aren't as dire as they sound.
I really think that the current administration is much more pro-growth than previous ones have been. There are 370k housing units currently available in the city. The pipline report has some really good news as far as housing is concerned. (http://www.sf-planning.org/index.aspx?page=1691)
* 48,000 new housing units approved (including Candlestick, Treasure Island, and Park Merced developments, but still a 13% increase in available units)
* 4,200 units currently under construction
* 9mm sq ft of new commercial real estate approved
I wish there were a way to take a slice of Oakland or maybe San Jose (or conceivably, San Mateo), make it independent with great services (Palo Alto quality schools, UK quality police) and pro-growth policies.
Emeryville kind of does this, but isn't ideally positioned (Caltrain and/or BART, highways to Mountain View, Palo Alto, San Francisco).
Ideally also some special tax benefits (at least California, but maybe even federal) due to being "enterprise zones".
It would be politically unpopular to redevelop an entire area of Oakland or San Jose (i.e. moving out everything), and segregating services, but the net benefits would be worth it for even the remaining parts of the city and county.
I think some of the "eastern Alameda/Contra Costa county" areas work on this model, too -- there are a surprising number of corporate HQs for enterprise companies out there, and especially regional offices for non-bay-area companies. Higher density and less suburbia would make it more appealing to startups, though. I was surprised by just how nice Walnut Creek, Livermore, Pleasanton, etc. are.
Emeryville kind of does this, but isn't ideally positioned
Emeryville had great potential, I think the location is great, but as you mention, for getting to SF or SV the public transit sucks. And is alas pretty-unwalkable, even locally. If San Pablo had a Bart Stop (without the 1-3 mile walk to it), it would be much more interesting place, IMHO.
I've read some of JWZ's blog posts about trying to get permits for the expansion of his club in San Francisco. I wouldn't hold my breath for this type of expansion to happen.
Okay. Here is how I look at it. I am a smart, focussed, imaginative guy. I believe pretty strongly that if I lived in a city where I was in close proximity to a lot of other smart, talented people, I could make some great things happen. I have a lot of ideas that would require teams of such people to realise, any one of which could become an important business or non-profit venture. The Internet is great, and web-based collaboration and idea-realisation tools are certainly developing and making the world flatter, but proximity is still a very large catalyst to things happening. San Francisco happens to sound like one of the best cities for someone like me to move to. I happen to live very far from San Francisco, in another country. I am sure there are a lot of people like me around the world. The cost and difficulty and unknowns of the idea of moving to SF are pretty intimidating.
Now what would happen if all the people like me were able to easily move to San Francisco, and start meeting and talking and coming up with ideas and doing things together? If those big walls of distance, national borders, and evidently prohibitively expensive real estate were broken down? I imagine some very great things could happen. One thing this article pin-pointed is interesting: salaries at major SF tech companies are high because of the housing shortage. What might happen if you could concentrate the world's smartest people in one great city with affordable housing, so that the companies they might start could pay lower wages? Well you could definitely start companies a lot easier, and they could be profitable at lower levels, so it would encourage I think better and more diverse companies and internet services. I think San Francisco would also benefit hugely.
I think eventually a city like this has to come along eventually. If there is going to be a global village, there needs to be a global hub where the best and the brightest can meet and work together. Currently the world doesn't have such a place. It seems like SF has as good a shot as any of becoming that hub. Doing so would of course require some sacrifices, so the question for SF seems to be, do you want to go on being sorta great but holding off true greatness because you don't want to give up any of the things you like about the way you have things now, or are you willing to aim high?
The question for anyone else is, what can you do to make it much much easier for people from around the world to gather together in a single place? There are a lot of legislatory hurdles to be dissolved. Also anyone who made it their business to help people make the jump could do well I think.
Also, as an aside, nation-states and borders are so 20th century. Eventually the world will have no borders - a truly united world has to happen eventually. Removing borders should be a priority for everybody.
San Francisco needs to work on its public transportation infrastructure before it even starts thinking about becoming as densely packed as New York, Tokyo, etc.
There are a couple of things that really really bug me about this city:
1) The horrible state of the public transport system. Irrespective of the recent rains we have been having, the Muni system appears completely broken down. There are buses on the same route which appear at bizarre periodicities (A couple of buses every 5 minutes and then one bus after 50 minutes). The metro line (especially the N line) has way too many repairs going on. Also, there is a ridiculously large amount of cars on the road and way too few bike lanes. This is something the city should fix by a combination of exorbitant tolls, making parking expensive and taxes.
2) The homeless people situation. While I am sorry for their situation, the city's response to homeless people appears to be either switching from completely ignoring the problem to sending out a few town cars every couple hours in the nights so that they can chase homeless people from one block of a street to the other.
The author writes, "Victorian houses... are very pretty. They’re also very inefficient. Collectively, they take up a lot of space, but don’t house very many people... if developers were allowed to do it, they’d buy up small houses and apartments all over the city and replace them with highrises"
Funny, you don't often hear about plans to start building tower blocks in Pacific Heights, a neighborhood with probably one of the lowest population densities in the city. Surely, given the economic arguments, VCs and business leaders residing there wouldn't mind a bit of construction?
The author believes "Build more houses, lots and lots more, and you’ll finally start seeing rents go down" yet the evidence of rental prices in Manhattan, Tokyo and Hong Kong suggest otherwise. In fact, today in Hong Kong, a car parking spot costs double the average US house price! http://www.bloomberg.com/news/2012-11-26/hong-kong-parking-c...
This battle over high-rises has been going on for decades, through every boom and bust, and this time is no different. The one constant is people falling in love with the pretty Victorian houses on tree lined streets. Amen to that!
Its a great article. Unfortunately, the problem plagues Seattle too, which also has the potential to be a world city, but can't get over its incredible NIMBYism. You can't even remodel your kitchen without getting your neighborhood to vote on it.
I don't buy the taller buildings = more wealth, creativity and energy argument. New York and Tokyo are easy examples to refer to but they are in scale and history completely different. What about other cities that build high and are on a smaller or average size scale? Good examples? And you couldn't double SF's size by building higher easily anyway. City and county is 800,000 people now, doubling would bring it to population of Manhattan. That's lots of floors in lots of buildings. Tokyo is 13 million: 16x the size of SF. Not a relevant comparison.
> I don't buy the taller buildings = more wealth, creativity and energy argument.
If you haven't read The New Geography of Jobs, I highly recommend it. It gives an excellent explanation of why having a higher density of knowledge workers increases their per-capita productivity and creativity.
The Skyscraper Index is a concept put forward in January 1999[1] by Andrew Lawrence, research director at Dresdner Kleinwort Wasserstein,[2] which showed that the world's tallest buildings have risen on the eve of economic downturns.[3] Business cycles and skyscraper construction correlate[4] in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession.[5] Mark Thornton's Skyscraper Index Model successfully sent a signal of the Late-2000s financial crisis at the beginning of August 2007.[6][7]
I was surprised that the risk of a large earthquake was not mentioned in the article. Having lived in SF for over a year and experienced two relatively minor 4.0 earthquakes, this is a real risk and one that suggests it doesn't make sense to pack the city with large, high rise buildings.
SF is also a city of extremes - it contains the richest people in the world and the poorest people. Something really need to be done about the large mentally ill population before SF can be considered a truly forward looking city.
It was mentioned. The author briefly stated it was not worth talking about since other earthquake-prone cities like Tokyo have built up despite this just fine.
San Francisco is tiny. It covers less than 50 square miles! Liberalized housing rules aren't going to offset that. This article is making an observation about the greater SF metro area and using it to drive an argument about SF proper; it's incoherent.
Major agreement. Urban housing is effectively a cartel, in that the owners spend a lot of time corrupting city councils and zoning boards to prevent new supply so the absentee mega-owners can charge exorbitant prices. It's rent-seeking (literally) parasitism at its worst.
The problem in SF is self-inflicted by the city with its double shot of rent control (which I benfit from) and its labyrinthine permit process coupled with the weight of neighborhood groups who oppose grand projects --their mindset reminds me of the stuff I hear out in the Peninsula, the suburbs.
In addition, the argument above is mostly about rental properties and discounts condominiums which are also very necessary to remediate the housing issue in SF.
If SF were more like Miami, then we would have seen many more developments coming in and driving prices down --for both housing and rent. But I think it's the home owners rather than absentee mega landlords and landladies who are being self-interested and who want to keep the prices inflated. These are the people who want to keep out the new housing developments. People want to maintain their property values.
Anyhow, I agree with the author. SF is a city which likes to pretend its progressive, but actually, in its heart, would like to remain the quaint 19th century Victorian relic city. It's only progressive in a partial social sense, but not in any larger sense.
If that's so, how come the city still has rent control? Not that I think rent control is a good idea, but property owners hate it and by your thesis they should be able to get it abolished because they have the city government in their pocket. In reality, it's usually residents and tenants who raise the largest objections to new developments, either on environmental, value-reduction, or affordability grounds.
[+] [-] hncommenter13|13 years ago|reply
The SF Weekly (an alternative newspaper here) has published several thought-provoking articles on the state of the city over the years. They are all titled, "The Worst Run Big City in the US."
Those articles include: http://www.sfweekly.com/2009-12-16/news/the-worst-run-big-ci...
http://www.sfweekly.com/2010-04-14/news/the-muni-death-spira...
http://www.sfweekly.com/2012-06-13/news/muni-sfmta-buses-pub...
http://www.sfweekly.com/2010-10-20/news/let-it-bleed/
http://www.sfweekly.com/2011-01-26/news/premium-pay-san-fran...
http://www.sfweekly.com/2011-07-27/news/san-francisco-commis...
San Francisco also has a civil grand jury that periodically issues reports on topics of citywide concern. These are generally ignored, even though they point out significant present and future problems (I'm thinking specifically of looming pension issues).
http://www.sfsuperiorcourt.org/general-info/grand-jury/jury-...
I've lived and worked here since college, so I'm not immune to the city's charms. But we shouldn't be blind to its faults, either.
Edit: formatting
[+] [-] rayiner|13 years ago|reply
Trust me, the rest of the country finds it pretty amusing.
[+] [-] forrestthewoods|13 years ago|reply
[1] http://www.socketsite.com/archives/2012/05/san_franciscos_to...
[+] [-] w1ntermute|13 years ago|reply
0: http://www.sfgate.com/bayarea/article/Human-waste-shuts-down...
[+] [-] greeneggs|13 years ago|reply
[+] [-] hnriot|13 years ago|reply
Do we really want or feel that more people in sf is a good thing? Why not live down the peninsula or the east bay where there's an unlimited amount of space.
[+] [-] timr|13 years ago|reply
The Great Nerd Influx of 2012 is just one of many boom/bust cycles that San Francisco has experienced, and it's far from the most robust -- there are a lot of good reasons to believe that this sudden surge in activity will fade in a few years as thousands of doomed startups hit the series-A wall. Rents have shot up dramatically in a year, but it's almost entirely a side-effect of the funding bubble. It's hard to fault government for reacting slowly to short-term phenomena.
I moved here at the tail end of the last funding boom, and watched rents fall after Sequoia sent out the "Good Times, RIP" slide deck. Think it can't happen again? It will. It doesn't make a lot of sense to run out and rip down the victorians to make room for market-rate condos simply because SOMA is a trendy place for startups at this particular moment.
[+] [-] saosebastiao|13 years ago|reply
[+] [-] narrator|13 years ago|reply
The central valley is more of a sauce pan, when money is poured into it, it spreads out at a low price level.
[+] [-] 001sky|13 years ago|reply
-- Which is an effect of Bernanke's QE, and is open ended at the moment.
[+] [-] mikeyouse|13 years ago|reply
I really think that the current administration is much more pro-growth than previous ones have been. There are 370k housing units currently available in the city. The pipline report has some really good news as far as housing is concerned. (http://www.sf-planning.org/index.aspx?page=1691)
* 48,000 new housing units approved (including Candlestick, Treasure Island, and Park Merced developments, but still a 13% increase in available units)
* 4,200 units currently under construction
* 9mm sq ft of new commercial real estate approved
* 3mm sq ft of new retail space approved
[+] [-] rdl|13 years ago|reply
Emeryville kind of does this, but isn't ideally positioned (Caltrain and/or BART, highways to Mountain View, Palo Alto, San Francisco).
Ideally also some special tax benefits (at least California, but maybe even federal) due to being "enterprise zones".
It would be politically unpopular to redevelop an entire area of Oakland or San Jose (i.e. moving out everything), and segregating services, but the net benefits would be worth it for even the remaining parts of the city and county.
I think some of the "eastern Alameda/Contra Costa county" areas work on this model, too -- there are a surprising number of corporate HQs for enterprise companies out there, and especially regional offices for non-bay-area companies. Higher density and less suburbia would make it more appealing to startups, though. I was surprised by just how nice Walnut Creek, Livermore, Pleasanton, etc. are.
[+] [-] 001sky|13 years ago|reply
Emeryville had great potential, I think the location is great, but as you mention, for getting to SF or SV the public transit sucks. And is alas pretty-unwalkable, even locally. If San Pablo had a Bart Stop (without the 1-3 mile walk to it), it would be much more interesting place, IMHO.
[+] [-] vondur|13 years ago|reply
[+] [-] corporalagumbo|13 years ago|reply
Now what would happen if all the people like me were able to easily move to San Francisco, and start meeting and talking and coming up with ideas and doing things together? If those big walls of distance, national borders, and evidently prohibitively expensive real estate were broken down? I imagine some very great things could happen. One thing this article pin-pointed is interesting: salaries at major SF tech companies are high because of the housing shortage. What might happen if you could concentrate the world's smartest people in one great city with affordable housing, so that the companies they might start could pay lower wages? Well you could definitely start companies a lot easier, and they could be profitable at lower levels, so it would encourage I think better and more diverse companies and internet services. I think San Francisco would also benefit hugely.
I think eventually a city like this has to come along eventually. If there is going to be a global village, there needs to be a global hub where the best and the brightest can meet and work together. Currently the world doesn't have such a place. It seems like SF has as good a shot as any of becoming that hub. Doing so would of course require some sacrifices, so the question for SF seems to be, do you want to go on being sorta great but holding off true greatness because you don't want to give up any of the things you like about the way you have things now, or are you willing to aim high?
The question for anyone else is, what can you do to make it much much easier for people from around the world to gather together in a single place? There are a lot of legislatory hurdles to be dissolved. Also anyone who made it their business to help people make the jump could do well I think.
Also, as an aside, nation-states and borders are so 20th century. Eventually the world will have no borders - a truly united world has to happen eventually. Removing borders should be a priority for everybody.
[+] [-] weisser|13 years ago|reply
There's a reason I want to eventually move to SF and it's not just because it is the center of the tech industry.
[+] [-] sandipc|13 years ago|reply
[+] [-] Domenic_S|13 years ago|reply
Sunset to downtown is 45. Madness.
[+] [-] eshvk|13 years ago|reply
1) The horrible state of the public transport system. Irrespective of the recent rains we have been having, the Muni system appears completely broken down. There are buses on the same route which appear at bizarre periodicities (A couple of buses every 5 minutes and then one bus after 50 minutes). The metro line (especially the N line) has way too many repairs going on. Also, there is a ridiculously large amount of cars on the road and way too few bike lanes. This is something the city should fix by a combination of exorbitant tolls, making parking expensive and taxes.
2) The homeless people situation. While I am sorry for their situation, the city's response to homeless people appears to be either switching from completely ignoring the problem to sending out a few town cars every couple hours in the nights so that they can chase homeless people from one block of a street to the other.
[+] [-] bitcartel|13 years ago|reply
Funny, you don't often hear about plans to start building tower blocks in Pacific Heights, a neighborhood with probably one of the lowest population densities in the city. Surely, given the economic arguments, VCs and business leaders residing there wouldn't mind a bit of construction?
The author believes "Build more houses, lots and lots more, and you’ll finally start seeing rents go down" yet the evidence of rental prices in Manhattan, Tokyo and Hong Kong suggest otherwise. In fact, today in Hong Kong, a car parking spot costs double the average US house price! http://www.bloomberg.com/news/2012-11-26/hong-kong-parking-c...
This battle over high-rises has been going on for decades, through every boom and bust, and this time is no different. The one constant is people falling in love with the pretty Victorian houses on tree lined streets. Amen to that!
1971 - The Ultimate High-rise: San Francisco's Mad Rush to the Sky. http://www.amazon.com/Ultimate-Highrise-Franciscos-Rush-Towa...
1999 - Do high-rises create a healthier economy? http://www.spur.org/publications/library/article/proposition...
2005 - Is San Francisco's Anti-Highrise Movement Dead? http://www.beyondchron.org/news/index.php?itemid=2317
2007 - Ugly canyons everywhere! With the latest San Francisco construction boom, history repeats itself. http://www.sfbg.com/2007/02/21/next-mad-rush-sky
[+] [-] saosebastiao|13 years ago|reply
[+] [-] mikk0j|13 years ago|reply
[+] [-] Resident_Geek|13 years ago|reply
If you haven't read The New Geography of Jobs, I highly recommend it. It gives an excellent explanation of why having a higher density of knowledge workers increases their per-capita productivity and creativity.
[+] [-] TruthElixirX|13 years ago|reply
Related:
https://en.wikipedia.org/wiki/Skyscraper_Index
The Skyscraper Index is a concept put forward in January 1999[1] by Andrew Lawrence, research director at Dresdner Kleinwort Wasserstein,[2] which showed that the world's tallest buildings have risen on the eve of economic downturns.[3] Business cycles and skyscraper construction correlate[4] in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession.[5] Mark Thornton's Skyscraper Index Model successfully sent a signal of the Late-2000s financial crisis at the beginning of August 2007.[6][7]
[+] [-] 10dpd|13 years ago|reply
SF is also a city of extremes - it contains the richest people in the world and the poorest people. Something really need to be done about the large mentally ill population before SF can be considered a truly forward looking city.
[+] [-] ceras|13 years ago|reply
[+] [-] jinushaun|13 years ago|reply
[+] [-] rayiner|13 years ago|reply
[+] [-] rtfmplease|13 years ago|reply
[+] [-] hnriot|13 years ago|reply
I don't want SF to become another NYC. I like our culture and I'm sure the New Yorkers like their's too.
[+] [-] tptacek|13 years ago|reply
[+] [-] egypturnash|13 years ago|reply
[+] [-] michaelochurch|13 years ago|reply
[+] [-] mc32|13 years ago|reply
The problem in SF is self-inflicted by the city with its double shot of rent control (which I benfit from) and its labyrinthine permit process coupled with the weight of neighborhood groups who oppose grand projects --their mindset reminds me of the stuff I hear out in the Peninsula, the suburbs.
In addition, the argument above is mostly about rental properties and discounts condominiums which are also very necessary to remediate the housing issue in SF.
If SF were more like Miami, then we would have seen many more developments coming in and driving prices down --for both housing and rent. But I think it's the home owners rather than absentee mega landlords and landladies who are being self-interested and who want to keep the prices inflated. These are the people who want to keep out the new housing developments. People want to maintain their property values.
Anyhow, I agree with the author. SF is a city which likes to pretend its progressive, but actually, in its heart, would like to remain the quaint 19th century Victorian relic city. It's only progressive in a partial social sense, but not in any larger sense.
[+] [-] anigbrowl|13 years ago|reply
[+] [-] beatpanda|13 years ago|reply