It seems like it’s all anyone talks about here. It is constantly in people’s minds, on their lips, in the media. Complete strangers, on buses, in playgrounds, will strike up conversations with you on the issue, telling you of their concerns. It is an obsession that mirrors an Irish obsession and, when you consider the figures involved, it is not surprising. The subject? Property prices.
The way things are going, you could soon be hard pushed to find a home for sale in San Francisco for less than $1 million. According to real-estate website Zillow, the median sale price of a home in the city is $1,003,250. Rents, meanwhile, continue to soar, with the average monthly cost of a one-bed apartment jumping 13.7 per cent over the past year to hit $3,390 – surpassing even New York to make San Francisco the most expensive US rental market. In areas where demand is particularly high, such as family-friendly Noe Valley and the hip Mission district, rents rose by 29 per cent and 20per cent respectively in the past year alone.
People here understandably wonder how this can be sustainable, insisting it cannot last, and yet the prices keep rising.
The reasons are complex and manifold, a combination of changing demographics, simple geography, a booming, if skewed, local economy, rental laws, and a desperate shortage of property, where limited supply simply cannot meet huge demand.
Ruthless desire
Many blame the burgeoning community of young, well-paid tech workers, who work in the peninsula but are willing to endure long commutes if it means they can live in San Francisco rather than the quiet suburbia closer to their workplaces. The standard narrative is that they are coming in their droves and pushing out the old San Franciscans, who cannot compete with their wealth and ruthless desire for city-living. The tech companies, too, are blamed – for facilitating their staff moving to San Francisco with free buses that shuttle them to and from their offices each day, and by increasing salaries to match the high living expenses, thereby pushing up rents and house prices still further.
It is easy to demonise the tech workers, and while there is some justification for locals’ irritation at being pushed out by this millennial generation, it is only part of the story. The entire Bay Area economy is growing rapidly, with 114,000 net new jobs created last year, inevitably drawing people to the region. And who wouldn’t want to live in San Francisco, given the chance? With its temperate climate, attractive architecture, beautiful scenery, buzzing cultural life and liberal vibe, it has everything you could want in a city. Perhaps that’s why everyone seems to want to live here.
But even a cursory glance at a map of San Francisco will show that, as a city bounded on three sides by the sea, there is little room for it to expand, while its architectural make-up is primarily low-rise houses, neither of which is conducive to accommodating a rising population.
Evictions
There is also the issue of state laws. The widely criticised
Ellis Act
allows landlords to evict tenants if they are leaving the rental business. However, in the recent housing crisis this law has enabled real-estate speculators to buy tenant-occupied properties, evict the tenants, and redevelop the properties as luxury condos or single-family mansions to sell at a massive profit.
Tenants lucky enough to remain in rent-controlled properties, meanwhile, are caught in a bind: they cannot move to a different location or property that may better suit their needs as they simply could not afford open-market rents. Others argue that rent control itself is fuelling high prices by limiting supply.
The emerging result of all this is that middle-class and lower-paid workers – the taxi drivers, shop workers, teachers and nurses, the people who make the city tick – are being forced out of the city altogether, across the bay to places like Oakland and Richmond. At the same time, almost every area of San Francisco is becoming gentrified and prohibitively expensive for many. The only – distressingly obvious – sign of the inequalities at work is in the city centre, where homeless people can be seen on every corner, in every park and square, eking out a painful existence in an oblivious land of supposed opportunity.
San Francisco has always been at the forefront of change, from the days of the gold rush to the hippy counterculture, gay liberation movement and now the tech revolution. The city is changing once more, but many locals wonder if this change is for the better: San Francisco may well be on its way to becoming a city of millionaires.