If you’re going to San Francisco…’ as the famous song goes, don’t just ‘wear flowers in your hair’… Bring lots of money! San Francisco hotels are the most expensive in the world. (Madrid and Barcelona are among the top 10!). The average price for a San Francisco hotel room has gone up nearly 90 per cent in one year to nearly $400 (c360) a night. Hostels are also costly here.
More importantly for San Franciscans, San Francisco also has the highest rents in the US. The average rent for a one-bedroom flat in downtown San Francisco is… $3,500 (x3135) a month! The work sector which offers that kind of money is the technology industry, or “tech” for short. Housing activists accuse the sector (which is based to the south of San Francisco, in Silicon Valley) of driving up rents and making it impossible for “normal” people to live in the city.
speculators
Real-estate speculators buying up property and evicting tenants are another target for criticism. One of the groups priced out of the city are non-profit organizations. Many of San Francisco’s non-profits have had to move or close. At the beginning of the year two nuns serving meals to the homeless had their rent increased by over 50 per cent. Now they sleep in a small room behind the kitchen.
airbnb
The short-term rental company is a big Californian success story. Like many contemporary lifestyle apps, ideas and trends, from Uber and Couchsurfing to polyamory, Airbnb was born in San Francisco. Airbnb likes to present itself as the good face of the sharing economy. However, today most stays are without the owner present. Home owners rent out their place, making a lot of money, but live elsewhere.
Airbnb is a big part of the “gentrification” of city areas. Dirty, dangerous and desperate areas are revitalized. The flipside is that rents are driven up, and poorer tenants often driven out.
Solutions?
So what are the solutions to the housing crisis? A new idea is creating Land Trusts (see interview) where properties are taken off the market, out of reach from speculation. Others advocate higher-density building. But what this means is building higher. And much of San Francisco’s charm is down to its traditional neighbourhoods, not skyscrapers.
Long-term, it would be a good idea to develop the Silicon Valley cities as more desirable places to live to take the pressure off San Francisco. Not to mention the commuter traffic nightmares...
CON AUDIO:
Hill Street Housing Blues
San Francisco is generally considered one of the world’s most beautiful cities. It’s also close to Silicon Valley, but Tommi Avicolli Mecca, Director of Counseling Programs at the San Francisco Housing Rights Committee, says that this has created a serious problem:
Tommi Avicolli Mecca (standard American accent): The problem is that we’re in the middle of the worst housing crisis that this city has ever seen, and probably the worst housing crisis that’s ever happened in this whole country. Ever.
Why is that?
Tommi Avicolli Mecca: Capitalism! I mean, let’s be real. The problem is that in America, like in many other countries, housing is a commodity. It’s on the stock market. Lots of people make lots of money off of housing. And when you’ve got a situation like we have here where you have a limited amount of land, a limited amount of housing stock, most of the residents here are renters, and then you suddenly bring in an industry to the south of here that’s booming, and bringing in all these people in from all over the world to work here, to work to the south of here, but they don’t want to live to the south of here because there’s nothing there! And there’s not even an adequate... amount of housing there. So of course they want to live in San Francisco! Especially if you’re young, you want to live in San Francisco. But we don’t have the housing! You know, we don’t have the intrastructure to support all these thousands of people who are coming here. So what it’s done is it’s driven up the price of housing, because, again, housing is a commodity, so, you know, you have all these people wanting it, and of course the price is going to go up. The price has gone up. On top of that, we have all those people coming from all over the world, investors, coming to buy buildings, and flip them. We call it “flipping”. They buy it, they empty it of all the tenants, and they re-rent it for a higher rent, or they sell the units for a whole lot of money, and they walk away with a huge profit, and then use that profit to buy another building. And do the same thing. And the combination of those two forces, of all these tech workers wanting to live here, and all these investors and speculators coming into the city with the intention of making millions of dollars, which they do easily, has created this crisis.
david and goliath
Another problem is Airbnb. Last year the people of San Francisco were asked to vote on Proposition F, which was also known as the “Airbnb initative”. This would have limited the number of days (from 90 to 75) that owners could rent out their property on a short-term basis. The Proposition was defeated, thanks to a massive campaign contribution by Airbnb:
Tommi Avicolli Mecca: Airbnb spent $8.3 million to defeat it, against what we had, which was, what, $100,000 at the most? I mean, it was David and Goliath. But, unlike in the biblical story, in reality, Goliath wins. In politics, Goliath tends to win. And that’s the thing that people don’t see, is that it’s not... David doesn’t win, especially when you got $8.3 million... when Goliath has $8.3 million, he easily slays David. And that’s what’s happened. It happened last year with Prop G, which was going to regulate speculation, real estate speculation. We got... I forget how many millions the real estate industry poured into defeating that.
democracy for sale
And Tommi Avicolli Mecca sees this as part of a wider trend. Perhaps we should remember that as the people of the United States prepare to elect their 45th President:
Tommi Avicolli Mecca: That’s what’s happening in this country, with the electoral politics, is that one side is able to muster up all this money, because they’re connected to money. And they’re able to come in and buy the elections. They’re able to basically deceive people, lie to people. The “No on F” people lied. They started sending out mailers in July. And every mailer, I mean, I was getting them at my apartment, one day I got four mailers: “No On F”. And every one of them was a lie: ”Oh, if this passes, your neighbours are going to set up cameras and spy on you”. What? It’s crazy! They did the same thing with Prop G last year, lie after lie and it works! Because people get confused ‘cause I was doing street outreach for Prop F, and I was out on the streets, people I knew would come up to me and go, “I’m confused, is it no or yes on F?” And these are people who are intelligent people who know what’s going on and they were confused because they were getting all these mailers. And it works on your mind after a while.
