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Melissa Li
Jaya Dubey
Writing 39C
12 Apr 2014
The Affordable Housing Crisis: Technology Boom and Gentrification in San Francisco
San Francisco has only one drawbacktis hard to leave, author Rudyard
Kipling once said. San Francisco continues to be one of the most desirable places in the
United States to live. With scenic views, stunning beaches, year-round free concerts and
cultural activities, numerous people have been lured by the siren song of the San
Francisco Bay. The historic city has continuously attracted waves of people who seek a
progressive life such as immigrants and hippies, gays and beatniks. The high quality of
life is compromised with the high costs in housing. With the recent technology boom, the
inflow of young and well-educated tech workers who are able to afford the extraordinary
housing costs has created negative externalities. Various individuals no longer have the
privilege of living in the urban paradise.
Housing in San Francisco has become the most costly in the nation. According to
the Mayors Office of Housing and Community Development, housing is generally
considered "affordable" if you are paying no more than 30% of your household income
toward your housing expenses. It has become very difficult for modest earners to live in
San Francisco. According to the National Low Income Housing Coalition, to afford the
average two-bedroom apartment in San Francisco, a person would need to earn $36.63 an
hour, which is more than three times San Francisco's highest-in-the-nation minimum
wage. The disparities of housing equity are significantly transforming San Francisco. The
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rising costs of living in San Francisco has caused families to leave the city; only 13.4
percent of San Francisco's approximately 800,000 people are under the age of 18, which
is the lowest proportion of kids for any major city in the United States. The affordable
housing crisis in San Francisco, where skyrocketing housing prices have forced the low-
income, working, and middle class out of their homes, is caused by the governments
prioritization of the technology industry and systematic failure in reforming the Ellis Act
that has exacerbated the epidemic of evictions. The gentrification and increasing
displacement of visionaries such as artists, activists, and small businesses who have
shaped the culture and history, results in residential segregation and changes in liberal
politics catering to the influx of young and wealthy technology workers.
The technology boom is widening the gap of housing equity since Mayor Ed Lee
is prioritizing the technology industry. In order to revitalize the mid-Market area,
historically home to a thriving theater district, had become devastated over time, the local
government provided a tax break as an incentive for Twitter to move in. Prior to the IPO,
the Securities and Exchange Commission estimated that the break could be worth up to
$56 million; the city initially estimated that it would be worth $22 million. By providing
a tax break when a company threatens to leave, it leaves a negative precedent for other
companies to follow. Since the tax break was approved, 18 technology companies, 17
small businesses and eight arts venues have opened in the area, according to Mayor Ed
Lee's administration. Twitter's headquarter in the mid-Market area has become a symbol
of gentrification and displacement for housing activists and long-term residents. Katy
Steinmez, a TIME reporter based in San Francisco, explains, Angry residents continue
to see the tax break as an example of politicians coddling the booming tech sector while
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many low-income residents are hurting. The local government is provide hundreds of
millions of dollars to the well-off tech industry while the city struggles to provide basic
services while bridging budget deficits.
The historical cause of the rising housing inequity would be the lack of
government policy in reforming housing legislation. The well intentioned Californias
Ellis Act, a state law that allows legitimate landlords a way out of the rental business, is
abused by speculators who use a loophole in the Ellis Act to evict long time residents just
to turn a profit. Supervisor David Campos requested that the Budget and Legislative
Analyst analyze the data and level of housing displacement in San Francisco.

Figure 1: Budget and Legislative Analyst, Analysis of Tenant Displacement Web. 30
Oct. 2013
The Ellis Act evictions have occurred is various neighborhoods in San Francisco and
approximately 64.1 percent has occurred in these seven neighborhoods, which have
distant characteristics and are close to tech companies shuttle stops. The rent-controlled
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apartments face steep rent increases. Ellis Act evictions have increased due to the influx
of technology workers who are able to afford the high rental costs. A significant amount
of evictions are elderly citizens and families who are unjustly evicted by the loophole, do
not have alternative places to go. In his article, Gabriel Metcalf, the executive director of
SPUR, a nonprofit organization that promotes good planning and good government,
asserts that San Franciscos housing crisis is due to San Franciscos inability to construct
sufficient housing to meet the increasing demand.
The displacement of primarily low-income and minorities causes an economic
burden on neighboring cities, which results in residential segregation. According to Scott
Weiner, a San Francisco supervisor who is a advocate of new housing, San Francisco
has been unwilling to prioritize smart housing production of market-rate and affordable
units, even while our laws state that housing is to be encouraged. The most adversely
affected are African Americans and Latinos, who are suffering financially, as well as
physically. According to Centers for Disease Control and Prevention, vulnerable
populations are exposed to shorter life expectancy; higher cancer rates; more birth
defects; greater infant mortality; and higher incidence of asthma, diabetes, and
cardiovascular disease. People who are either evicted or no longer afford housing in San
Francisco are moving to neighboring cities where the environment and social conditions
may be lacking. In their new housing, they are prone to experience food deserts and
industrial pollutants. In her article, Carolyn Jones explains Oakland had some of the
country's highest rents and rent increases in 2013. Majority of the Latino population
who are displaced have migrated to Oakland seeking cheaper housing. According to
advocacy group Causta Justa, the Mission has lost 1,400 Latino households while adding
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2,900 white households between 1990 and 2011. In the same period, Oakland lost 40
percent of its black residents. The Mission is the neighborhood that is drastically
transforming due to the relative closeness of technology company shuttles stops.
San Francisco may no longer be the most iconic liberal city in America. George
Mcintire, writer for Salon

explains, The reason why we have San Francisco Values is
due to the scores of working-class activists over the years who fought long and hard for
these values. The symbols of gentrification are causing the treasured historic identity,
and reputation as the example for liberalism to being relegated to the past. San Francisco
is currently experiencing a massive and rapid demographic change like nothing it has
ever seen in its history. The demographic changes also reflects the changing political
views, Mcintire asserts, The political conventional wisdom states that lower-income and
middle-class people are generally more liberal and less conservative than upper-class
people. The increase in wealthy tech workers has caused legislation to become more
conservative. San Francisco Municipal Transportation Agency approved a controversial
pilot program that make public bus stops available to private shuttles that ferry corporate
tech workers to campuses outside of the city, despite public discord. But the proposal has
come under fire by protesters who say the buses symbolize the gentrification of San
Francisco and the city's rising cost of living due to an influx of wealthy tech workers.
Overall, San Francisco's economy is currently flourishing due to the latest dot-
com bubble and a hot real estate market.