Aaron Kirman has sold roughly $6 billion worth of real estate over his 25-year career, making him one of the top realtors in Los Angeles. He routinely sells
What’s so bad about living in Silicon Valley that many people are migrating out?
I’m going to take a crack at this question, despite there already being 30 answers, because a lot of what other people have written is overblown or just plain incorrect. A lot of these overblown and incorrect statements come from the most upvoted answers, the top two of which make some pretty remarkable claims that are difficult to back up and seem to betray a lack of understanding of the history of the region, current trends, and the nuances of various issues here.
In the interest of full disclosure, I’m a San Francisco resident since 2008, having moved to the Bay in 2007 during the initial surge of the second boom. I’ve been a homeowner here with my wife since 2011. I’m one of the reviled ‘techies’ that, as a group, is supposedly singlehandedly tearing the Bay Area to shreds.
For starters, while some people are migrating away from the Bay, overall it is growing. San Francisco added 90,000 residents between 2014 and 2015:
Contra Costa and Alameda counties were among the fastest growing in the state in the same period:
If people are leaving California, it’s not from the Bay Area, at least not in terms of net numbers. Again during the same period, census data shows that the entire 9-county Bay Area is growing faster than the US:
That said, it’s true that many long-term residents are being displaced by people moving in.
It’s worth noting, though, that not all of those people are being forced out. Quite a lot of long-term homeowners are cashing out with home prices being at an all-time high. On my own street, several houses have been sold under those circumstances. The prevailing wisdom, even among natives, seems to be that quality of life is better elsewhere, in terms of cost-of-living, weather (I personally love the weather here, but many people, never having lived somewhere with real weather think it’s ‘cold’), and the like. If your house is paid off and you can sell it for a million dollars, that’s pretty tempting, particularly in my neighborhood, Miraloma Park, which is historically working class. Having sold their homes, however, these people can’t remain here: they would have to spend all of the proceeds to purchase a new home, and might still need to pay a mortgage. So they sell off their homes, pocket the cash and move somewhere cheap.
However, San Francisco is becoming less diverse. As many as 10,000 long-time residents are being displaced annually according to the data cited in this article:
As the article shows, San Francisco is becoming more White and Asian at the expense of the Latinx and Black communities. At the same time, San Francisco is still a city where you can ride the bus and hear Russian, multiple variations of Spanish, French, Mandarin, Cantonese, Tagalog and Hindi spoken on the same bus trip.
So where does this leave us? Yes, gentrification is certainly occurring here and displacing some residents. As in other cities where this process is occurring, it disproportionately affects low-income ethnic minorities. This is something San Francisco needs to address, and while it is currently failing to do so, it is not for lack of trying. Quite a lot of San Franciscans care about this issue, including ‘techies’ like me who are supposedly indifferent. At the same time, the overall trend in the entire region is toward net growth.
Unfortunately, this isn’t the first time this has occurred in the Bay or San Francisco, from theto the . It’s certainly a cause for concern, but the popular notion of the Bay Area emptying out into a ghost town roamed at night by packs of feral computer geeks is a myth.
This issue is directly related to the previous one, and is very deep and very complex. I don’t have enough space to go into it in full detail, so I’ll touch on some highlights.
For starters, yes, housing prices here are insane. Keep in mind this has been true for a very long time in San Francisco. When we moved here in 2007, we moved to Foster City, a small suburb on the edge of the Bay. Foster City is often referred to by Bay Area residents as ‘Foster Shitty’. While I didn’t actually find it that bad, the point is, it wasn’t considered a desirable location to live, mainly because it isn’t very central. Even there, for a two-bedroom, two-bath apartment, we were paying over $2,000 a month. In San Francisco, the same apartment would have cost nearly double. And that’s before the current housing bubble.
Eventually, we ended up at a relatively swank building at 4th and King streets in SF, catty-corner from the Caltrain station I took to work. We were paying nearly $3,000 a month for a one-bedroom loft apartment. Being garden level and near the ball park, people freqeuently sat on our front doorstep, which they mistook for a back door, and got high or drunk before a game. Parking was $300 extra, so we took our chances with street parking, which around that area is even worse than most of the city. The second year we were living there, rent across the city spiked several hundred dollars. That’s when we decided to buy a house, in 2011.
We bought a two-bed, one-bath, 900 sq. ft. house for the bargain price of nearly $600,000. Again, this is before the housing bubble here began. In fact, the market at that time was still depressed after the housing melt-down. Now our house isn’t as small as the above specs make it sound. It’s a typical San Francisco row house, meaning that the above square footage is built on top of garage level the same size of the house. In many homes, the garage is the entire first floor – that’s how they were built originally. In ours, we have a workshop, a well-finished bonus room and a laundry room. We also have a back yard, although most of it is on a hill, and a relatively large deck on the back of the house. All of that is a huge improvement over our previous living situation in one apartment after another. Still, it cost as much per month as we could possibly afford. Even on a six-figure salary, most of my take-home pay was spent on our mortgage, which, because we had to tack on PMI as FHA buyers, cost over $4,000 a month. At the time, that was about 2/3 of my net income, and wife wasn’t employed. But it was worth it for the increase in space and the knowledge that the mortgage payments would never increase. In fact, having refinanced to remove the PMI after the first couple of years, our mortgage payment is down under $3,000 now – basically, back to 2007 levels. So our gamble paid off.
For a lot of people, however, even with high incomes, they don’t have the savings necessary to make a down-payment. And even if they did, out-of-town investors might out-bid them with a cash offer. This is something the two most upvoted answers didn’t even touch on – the fact that our city has been descended on by speculative investors from Canada, Europe, China and other US cities who are buying up real estate just like they did in the events that led up to the last housing crisis.
As a result, today our house could probably sell for a little over $1M with no modification. The house across the street from us was inherited by a nephew of the former resident, who passed away. A 4th-generation San Franciscan real estate agent with ties to city and state government, he renovated it and is now selling it for $1.9M – and he’ll probably get a little more than that. The house in question is the same size as ours. He excavated a new lower level and refinished the house, and it looks great and has probably 1,500 more square feet of livable space than our house – but it’s worth $900,000 dollars more!? And our house is worth $1M!? I still can’t believe it.
So this claim is pretty factual. However, it isn’t driven simply by tech-fueled gentrification. In fact, San Francisco is notorious for rabid NIMBYism. While many other US cities have boomed over the past decades, San Francisco’s growth been fairly slow until recently. The federal government’s 12-county definition of the Bay Area is more expansive than California’s 9-county one. According to the 12-county definition, current population stands at around 9M. But if the area had grown at the same rate as other parts of the country, it should be 16M+. The problem is a chronic lack of housing. Now, this is a complicated, contentious issue, with some claiming it is 100% the fault of a NIMBY attitude from homeowners that want to preserve their quaint single-family houses, and other claiming it is 100% the fault of those damn techie invaders. This is a false choice, as it isn’t binary between these two options, which aren’t even truly polar opposites of each other. The reality is a complex combination of (in no particular order):
- Local corruption, which is waaay older than the current tech boom
- Greedy developers
- A speculation boom in local real estate
Now, I maintiain that NIMBYism and the tech boom aren’t polar opposites – but they are definitely related. While NIMBYism did not lead directly to the tech boom, ironically, since those same homeowners also bemoan the loss of culture due to the ‘techie invasion’, it has added fuel to the fire, as the chronic lack of housing means there is a large excess of capital available to local investors.
So – housing is expensive, yes. But the cause? It’s complicated. Here’s some further reading, spanning the spectrum of opinion noted above:
This one is again related to the one above, primarily because housing is really the only area where it’s really notable.
Other people have mentioned food costs. Here’s the thing, most people aren’t going to go broke because of a $5 bottle of milk. I mean, yes, it’s more expensive, but I haven’t found the claims of absurd food prices to be true. If you are on the poorer end of the spectrum, this might be an issue for you; but that’s true anywhere. I used to live in Denver, and I went through a really rough patch for a few years after the first dot com bubble burst. I was making less than $10,000 in annual income for about a three-year period. It didn’t really matter that I lived in a relatively cheap city. All I could afford was cheap stale rice, canned beans and generic pasta from a bodega in my neighborhood. For most people, the cost of groceries in San Francisco or elsewhere in the Bay Area isn’t really an issue.
I used to work in the FiDi and my less-well-paid co-workers would give me hard time for being a foodie and eating at the ‘fancy’ restaurants at the Ferry Building. And don’t get me wrong – the Ferry Building is pretty fancy. However, I would spend maybe $14 on lunch on a typical day – granted, sometimes I would splurge and spend maybe $20 or so. Meanwhile, they ate at the Subway downstairs. For chips, a nasty footlong, a cookie and a large soda, they would spend a little over $10. So they saved a few bucks at lunch – say $20-30 a week – to put disgusting, flavorless food in their faces every day. Personally, I’d rather take care of my body by putting good food in it, preferably of the tasty variety, but to each their own. I thought it was funny though that they never complained about going to Super Duper, a local burger joint, where they each spent at least $15 or more on a burger, fries, and often a shake. Anyway – the point is, there are still plenty of choices. We have all the same fast food chains everyone has – McDonald’s, Burger King, Chipotle… Jolly Bee? I have no idea what that is, but we have one. If you want to spend less on food, there are plenty of options.
What about bills? We added solar to our house a year ago, so our energy and gas bill now ranges between -$20 to $20 a month. However, even before that, it peaked around $100 a month. San Francisco has very mild weather, so heating and cooling needs here are very light. Water/sewer? About $30-40 a month. Trash service is around $80 I think. For people in apartments, all of this is going to be even lower.
All of our other bills are for services like streaming video, Internet access, cell service and the like, or things like gas, which are pretty much the same everywhere in the country.
So housing – way more expensive than every other city but Manhattan. Everything else is the same or slightly more expensive, but nothing bank-breaking. Parking can also be expensive if you plan to commute via car every day, but most people don’t do that.
One person claimed that after taxes, half of your income is gone – poof. This is just completely false. I have never lost more than 35% of my income to state and federal taxes, and I have gotten a refund nearly every year I have lived here at both the state and federal levels – even before buying a house.
This one is probably the hardest to back up. First of all, what does it even mean? When people refer to ‘counter-culture’ in San Francisco, it probably means some combination of the arts and left-leaning political movements, particularly the hippies. Truthfully, a lot of that culture was dead or dying quite a while ago, long before the current boom or even the one before that. Yet, if you go to Haight/Ashbury, even today you find roving bands of unwashed hippies heckling ‘squares’ and tourists trying out the local cuisine or shopping.
San Francisco has always attracted fringe elements. And what people often leave out of this argument is that geeks are one of those fringe elements – that’s why the computer industry was attracted here in the first place. At the same time, it’s also just sort of a coincidence. The founders of Apple grew up here, so when Apple took off, this is where they set down roots. Other elements of the local tech industry, like the local military-industrial complex, NASA, JPL, SRI – a company that has been contracted for work with DARPA for a very long time – and the local biotech industry (which is actually bigger than digital tech industry here) have been around for decades. The Bay Area is also home to two large, notable universities, Stanford and Berkeley, and dozens of smaller institutions like SFSU.
So this ostensibly overnight transformation has been going on for quite a long time.
The fine arts have definitely suffered, although recently they have been making a comeback. The theater scene here is actually quite rich and diverse. The once-famous music scene has probably suffered the most. Yeah, it’s pretty much dead. Truthfully though, that was already the case after the first bubble burst.
The Castro is still going strong. There are still plenty of naked dudes hanging out at Castro and Market. The kink scene in San Francisco is still strong – the Folsom Street Fair isn’t going away any time in the near future. Political activism is far from dead here, and is going strong fighting for fair housing and fair treatment of minority communities. Chinatown isn’t going anywhere either. Cyclists are a force to be reckoned with here. You can still find a giant cloud of pot smoke emanating from Golden Gate Park on most weekends.
The truth is, there is still plenty of counter-culture in San Francisco, both old and new. The contention that it’s all gone, just because there has been some change, in my opinion, is a very straight, white, cis-gendered perspective. Now, I’m straight, white, cis-gendered and male myself. But I choose to look outside my own biases from time to time; and the fact is that these elements of San Francisco culture are still quite strong and nowhere close to being in a state where they can just be written off. I think that’s unfair to the people who still practice those elements of culture. Except dirty hippies. Good riddance to those bastards.
A lot has been made of the commute around here. I’ve had a variety of commutes here, some not that bad, some pretty awful. Then again, I’m from Denver originally, where it isn’t uncommon to drive, train or bus an hour each way to work. So when I encounter similar commute times here, it doesn’t honestly bother me all that much. The fact is, it depends where you are starting, where you are going and what time of day. Honestly, I think the transit system here gets a bum rap. It’s honestly pretty good. Certianly not the best; but pretty good. Sure, people occasionally commit suicide via BART or Caltrain – I don’t think we have a monopoly on that, though. I’m pretty sure people do that anywhere in the US where trains or lightrail runs. The worst part of the transit system is mainly the number of providers. Back in Denver, which has a huuuuge metropolitan area, there is one – RTD. Here, it’s a crazy patchwork – BART, Caltrain, SFMTA, Golden Gate Transits, SamTrans, VTA, blah blah. However, most of those providers now run on something called a Clipper card, so these days it’s pretty seamless.
A lot of fuss is also made about tech busses. These are bus systems chartered by local companies to ferry their employees to work. People have protested them as a sign of gentrification, for the fact that they don’t pay to use city busstops in San Francisco, and for making traffic worse. I don’t see how the latter can possibly be true, since they are removing several cars from the road. I’m all for having them pay for using the stops, because it’s only fair, and the city should be earning revenue in exchange for that service. I don’t really understand the folks that think locals should be allowed to ride them. For the most part, they go straight to their destination and straight back, with a few stops in the city. I used to ride one when I worked at EA, which is headquartered down on the peninsula. EA hasn’t gotten the hate other companies have, probably because they only have a few busses, and they only run a couple of times in the morning and a couple of times at night. I remember we once had someone sneak on the bus. It was pretty funny, because we pulled up to the EA campus they lease in Redwood City, which is kind of in the boonies, and he said, bewildered, “This is the only stop?” Yup. Have fun on your ride back to the private bus depot where the bus is going to be parked until this evening. Honestly, the bus was a godsend – before that, I had to walk to the light rail, take the M line to a BART station, take BART to Millbrae station, transfer to Caltrain, take that to San Carlos, then catch the EA Caltrain shuttle. If I missed my connection with the shuttle, I had to pay $20 for a gypsy cab (Lyft and Uber did not exist yet), or walk half an hour. With the bus, I got a lift to the stop, then rode 30-45 minutes to work.
In any event, that was the worst commute I ever had in the Bay – most of them were much more tolerable than that.
As far as driving, yes we have gridlock – but you aren’t going to find better conditions in any other major US city – certainly not LA or NY. One thing I will say about San Francisco is that it is a bit difficult to drive if you aren’t used to the city. They ripped up large sections of highway after the Loma Prieta quake that used to make it easier to get around – but also improved the view – and it seems like the city government is constantly trying to make it harder for car drivers to get from point A to point B with an endless stream of ‘traffic calming’ measures. However, the city is really small – only 7 miles by 7 miles – and once you learn all the shortcuts, it’s pretty easy to get around by car or bicycle. Just learn how to avoid the hills if you opt for the latter.
I haven’t found this to be the case. The rude people are as rude as they have always been, and the nice people are as nice as they’ve always been. As far as armies of tech-bros clogging the streets knocking over pregnant women, I haven’t found this to be the case either. My wife is disabled, and gets a surprising amount of hate for it. If you have a disabled loved one or friend, you know what I’m talking about. The level of hate she receives for being disabled has remained steady over the years – I haven’t seen an increase or a decrease. People hated on her an equal amount in Denver in 2004 as they do in Oakland in 2016. San Franciscans are generally pretty nice – not as nice as a Midwesterner, for sure, but way nicer than someone from LA or NY. As far as rich, powerful people moving here in droves – rest assured, there are still plenty of rich a**holes in NY and DC. Those people are a tiny minority of the people moving here – afterall, a startup can only have one CEO and typically has a handful of founders. Yes, we have 1-percenters here – just like everywhere else.
As far as lacking social graces and asking what you do for a living as soon as they meet you – yes. Where is this not true, anywhere in the US? This is a common complaint Europeans visiting or working here have about US culture, regardless of the city.
‘Lack of space’
Not really a thing. I mentioned how small our house is – but this is only by the inflated standards Americans have. For Europeans or Asians, it’s a perfectly normally-sized house. Moreoever, it’s small even by San Francisco standards. The houses on the top side of our block, which is on a hill, are all almost double the size of our house. Even when we lived in smaller apartments, there was always ample storage available.
I can’t speak as much to this one, because I haven’t gone to school here and we don’t have kids yet. I have heard that getting your kids into the school of your choice is tough due to the way they handle it here. Getting into a school in your own neighborhood is nearly impossible. However, the quality of education is fairly high here. Even the ‘bad’ schools are much better than in cities like DC. As far as higher education, I don’t think it’s any higher than elsewhere in the country – in fact, in the case of Stanford, I believe they still subsidize lower-income students, which is the whole reason the school was founded. Higher education costs are high everywhere in the country, as far as I understand it.
So are many people having to leave the Bay Area? Yes. Why? Mainly, due to the housing crisis, which is a very complex issue as I’ve laid out above. Most of the remaining ‘reasons’ are myths, speculation, exaggerations or subjective opinion that have nothing to do with why people are actually leaving. People are leaving because they can’t afford to own or rent housing, period.
The Bay Area is still a great place to live, so I hope it’s a problem we are able to overcome. The Bay is far from the hellhole other posters have made it out to be – apart from housing, most of the problems we are facing are not new, not unique to the Bay and no worse than in other regions of the country. If they were, we wouldn’t be attracting record numbers of new residents, which itself, unfortunately, with no solution in place, is amplifying the housing crisis even more. The weather is great, the views are breath-taking, the culture remains diverse despite gentrification, the food is amazing, it’s close to LA, Seattle, Portland and several smaller cities, it’s in driving distance of any number of outdoor activities, et cetera.
People claim we can’t ‘build our way out’ of the housing crisis, and maybe that’s true on some level. But the fact is, we have too many people for the amount of housing. Large swaths of San Francisco are blanketed in single-family homes. That will have to change if we want to accommodate the future. If not, the housing crisis will only get worse.
The narrative that ‘techies ruined San Francisco’ is so compelling that people just can’t let it go. Just today I read this article in the Guardian:
Despite being written by someone living in San Francisco, the whole premise of the article, and its contents, are wrong, apart from observations about the worsening of the living conditions and continued homogenization of the culture. There was no concerted effort by ‘techies’ to conquer the city – if there had been, they would not themselves also be driven out now by rising housing costs. The truth is that 90% of San Francisco’s, the Bay’s and Silicon Valley’s woes are and were caused by a lack of adequate housing. There are other issues, to be sure, like tax breaks for corporations (happens everywhere in the US), and a shortage of funds and solutions to deal with homelessness and mental health (also happens everywhere); but most of the issues people complain about, like the rent being too damn high, and beloved businesses closing, is due to lack of housing and residential rental inventory. A secondary cause is greedy and corrupt developers, property owners and real estate firms. But really, the latter are just the vultures on the carcass. Meanwhile, local homeowners continue to block measures at the ballot box and efforts in their districts and coming from the city government (talking about San Francisco specifically again here) that would alleviate the crisis by allowing more dense housing construction.
‘Techies’ moving here en masse – I moved out way back in 2007 – is correlative, not causative. If instead of a tech boom, we had had say, a mime boom (I know, mimes are the worst), then people would blame the ‘ruination’ of the area on mimes. You would see ‘Mimes Must Die’ bumper stickers, and people would throw invisible rocks at invisible mime buses (actually, I’m kind of loving this alternate reality). But the mimes didn’t cause the lack of housing construction that has plagued the area since the 1970’s, and has been driving housing costs up since then. My parents actually complained about California homeowners way back in the 1980’s, when I lived in the suburbs of Denver, because we saw a huge influx of Californians moving to Colorado back then. Because housing was so much more expensive in California than in Colorado, they were paying cash for houses and driving up costs for locals in the Denver metro area. That was four decades ago.
Instead of making pointless, childish, tantrum-like – and dangerous – symbolic gestures like throwing rocks at Google buses, protesters should have pooled all of their collective political power and focused like a laser on this one issue like a drum beat – affordable housing, affordable housing. I’m not blaming the victim here: I’m just saying that the protesters and organizers here have fallen victim to this false narrative as much as anyone else, and their cause has suffered as a result. They certainly did fight for affordable housing during that time, and continue to do so, but their message has been diluted by the narrative of techies as gentrifying scum that must die. Now technology workers have started to internalize it, except annoyingly, just like guilty white people and white privilege, all they do is whine about it and never take any action on it. They complain about the homeless not being taken care of, but they’re part of the crowd that never gives the homeless the time of day, for instance (pro tip: homeless people are human – give them a buck and chat them up, it’s not that big of a deal). They complain about ‘dangerous’ conditions in a city, that as far as I am concerned, and statistics agree, is still one of the safest in the country. Basically what is boils down to is that a bunch of privileged kids thought they were fancy because they got a job in the Bay Area out of college and could afford to move here, only to find that privilege doesn’t buy you as much as it used to.
Look, ‘techies’ – a term so overly vague now, it means nothing – are here to stay. The ‘tech’ in ‘techies’ is specifically computer technology, and even more specifically, usually refers to services delivered via software written in high level programming languages and hosted in a cloud computing environment. As specific as this technology is, it is ubiquitous. It runs literally everything: The age of ubiquitous computing, like so many other technologies touted in the past decades as bringing transformation to the future and breathlessly imagined in magazines like Scientific American and Popular Science, sort of just… arrived. What I mean is, it was speculated about for a long time, with people wondering whether it would even materialize, and then ‘one day’ it just sort of did without anyone noticing. In reality, it was a gradual process happening behind the scenes, but people were surprised by it because most people don’t read the Scientific American. The point is, it’s everywhere, it’s integral to every system that comprises culture and society now. You can’t extract it without destroying society at this juncture. This is true to such an extent, that along with the word ‘techie’, the term ‘software industry’ doesn’t really mean anything anymore either, because every industry is the software industry. And if you work at a company delivering services via this technology, regardless of whether you code the software, you are a technology worker. Technology workers are the new factory workers. Absorb it, deal with it, and move on.
The fact was, and the fact remains, that lack of housing, not any one group of people, is most to blame for this. If there is a single group to blame, it would perhaps be the one-percenters behind most of the world’s problems today – but certainly not their employees, who only came here for the jobs. I ended the original post by saying that the issue will only get worse until the housing issue is resolved, and not surprisingly, just in the past two years, it has. I might revisit this post every few years with an update like this – it might be an interesting archaeological record of how, and whether, people finally wake up to the real issue and actually deal with it, rather than whinging about techies and throwing political tantrums.