In San Francisco, tech boom has left people priced out of housing

SAN FRANCISCO (AFP) – In San Francisco, far from the picturesque, winding streets in the hills, a glistening skyscraper represents how the country’s tech titans have transformed the city – and made it one of the world’s most expensive places to live.

The figures are mind-boggling: average monthly rent for a two-room apartment in the city by the bay now runs to USD3,700, the highest in the United States (US).

And a household of four with annual earnings of less than USD117,400 is officially considered “low income.”

Want to go visit the Facebook headquarters in the close suburbs? It’ll take you two hours to go 30 miles, day and night.

The Salesforce Tower – named for a cloud-based software company – now dominates the skyline. Each day, huge buses transport tech workers to the suburban offices of Facebook, Google and Apple.

All this wealth has sent real estate prices soaring across the Bay Area – from Silicon Valley in the south to Oakland in the east – and widened the rich-poor divide in a striking way.

Thousands of shabbily dressed homeless people wander along Market Street, one of the city’s main shopping thoroughfares, not far from the headquarters of Uber and Twitter – as Teslas and Maseratis zip by.

With rent so high, some have taken to living in their cars, like Elizabeth V, a 59-year-old who works up to 16 hours a day as a security guard at one of the tech company buildings.

She earns just USD2,800 a month – not nearly enough to pay for housing for herself and her disabled brother.

“I guess we’re kind of invisible because people don’t think of us when they think of Silicon Valley. They think of the small minority of engineers that earn a ton of money,” said Elizabeth, who wakes up every morning in her car – filled with clothes and boxes of food – in a parking lot in San Jose, in the heart of the tech corridor.

Cary McClelland, whose 2018 book “Silicon City” examines how the area has changed, said: “We see now a kind of homelessness that did not occur before – people who work, that is new.”

Whether talking to politicians, housing experts or residents, everyone agrees that even though San Francisco – built on a peninsula – has always had housing problems, the situation has become far worse since the tech boom of 2012.

According to the Paragon real estate group, the average price of a house in San Francisco shot up from USD670,000 in early 2012 to USD1.6 million at the start of 2018.

With the influx of tens of thousands of “techies” – software designers, programmers and engineers – whose salaries easily start at USD100,000 a year and go up from there, the cost of living rose quickly.

That triggered “skyrocketing evictions in the city (…) a huge number of businesses had to close,” along with cultural institutions and non-profits, said McClelland.

“After the great recession (2008-2011), with so little place for investment capital to go elsewhere in the economy, so much of it came here and overheated the city,” he said.

Servane Valentin, a French realtor, recalled that as of 2012 and 2013, “we saw young ‘geeks’ in their 20s and 30s arriving with much higher salaries and had no idea about money.”

“They were ready to pay USD2,000 for a studio,” a price far above the market value, said Valentin.

Soaring real estate prices have certainly boosted the ranks of the homelessness – there are officially some 7,500 people living on the streets of San Francisco, a city of just 900,000 inhabitants.