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Melissa Li
Jaya Dubey
Writing 39C
12 Apr 2014
The Affordable Housing Crisis: Technology Boom and Gentrification in San Francisco
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, according to the National Low Income Housing Coalition.
Housing in San Francisco has become the most costly in the nation. It has become
extremely difficult for modest earners to live in the city and the disparities of housing
equity are significantly transforming San Francisco. Even though, the citys population
has been steadily rising, San Francisco stringent regulations for development and anti-
growth culture are among the history of displacing people. From 1996 to 2000, service
and manufacturing working-class jobs were replaced with lucrative lofts and warehouses,
long-time non-profits, arts and community centers made way for offices and high-end
restaurants (Solnit and Schwartzberg 2000). Currently, the rising costs of living in San
Francisco has caused families to vacate to other cities; 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 historic city of San Francisco has continuously attracted waves of people who
seek a progressive life. With scenic views, stunning beaches, year-round free concerts
and cultural activities; the high quality of life in this urban paradise is compromised with
the high costs in housing. According to the Mayors Office of Housing and Community
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Development, housing is generally considered "affordable" if you are paying no more
than 30% of your household income toward your housing expenses. With San Francisco
attracting both employees and tech companies from Silicon Valley, houses have become
an unaffordable luxury for individuals in the middle class and even the highly paid.
Visible signs of gentrification such as Google buses have become a pressing concern. 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 that cater to the influx of young and wealthy technology workers.
The technology boom is widening the gap of housing equity due to Mayor Ed
Lees prioritization of the technology industry. In an effort to spur economic growth and
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
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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 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.
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.


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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. Many speculators purchase property with the purpose to flip it from rent
control to luxury TICs. Supervisor David Campos requested that the Budget and
Legislative Analyst analyze the data and level of housing displacement in San Francisco.







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. San Franciscos
Inner Mission has had the most Ellis Act evictions in the past five years. The rent-
controlled 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. The story of
an elderly Chinese couple and their 48-year-old mentally disabled daughter being evicted
from their home of 34 years is receiving national attention. A significant amount of
Figure 1: Budget and Legislative Analyst, Analysis of
Tenant Displacement Web. 30 Oct. 2013
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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. Ellis Act evictions often escalate
during periods when home sales increase. That was the case during the dot-com boom
that ended in 2000 and again during the housing bubble that peaked in 2005. Ellis Act
evictions are on the rise again as the citys real estate market recovers from the recession
and as the tech boom spurs demand for housing.
Innovators to San Franciscos culture are facing the latest casualties of the city's
commercial real estate boom. The George Krevsky Gallery, the Rena Bransten
Gallery and Patricia Sweetow Gallery, all occupants of 77 Geary St., will be leaving soon
to make way for their high-tech neighbor, MuleSoft, an Internet services company that
needed to expand. As an area becomes more attractive to the wealthy, realtors and
apartment managers have been known to select against small businesses who cannot
compete with the assets of large corporations to secure and maintain a lease.
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 an 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
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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
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.