Technology giants are creating thousands of new millionaires as they list on the stock exchange through much-hyped IPOs. FT tech correspondent Hannah Murphy meets residents struggling to keep up as the city’s wealth gap widens.
Uber lyft airbnb slap it’s a bumper year for san francisco’s tech ipos but in a city that’s home to some of america’s richest and poorest there are questions over how far the big tech billions will spread san francisco is the exemplar of inequality most of the money we make goes to our living expenses and our work expenses there’s a housing crisis people can’t afford
To live here the people who would normally shop here that moved out of the area we’re seeing two bedrooms start at 1.6 million and some of them going up to over 3 million between them the latest crop of ipos could generate 230 billion dollars of wealth creating as many as 6,000 new millionaires in the process one way that money could benefit san francisco is in
Real estate the property market in some neighborhoods is already going into overdrive we’re seeing it we’ve really competitive move right now people are just trying to get in before the ipo money they’re convinced that the ipos are gonna drive up the prices there’s an urgency we’re seeing 510 offers on most single-family houses really depending on the neighborhood
But we are seeing things on average still sell one hundred two hundred thousand over list price but those living and working in these areas the benefits of tech money are plain to see you can go up a couple blocks and you can actually walk to almost every single tech company that’s going ipo this year and now you’ve got everything right here you have a grocery
Store you but bar is down that direction ron’s all up and down the street there’s cafes dry cleaners some of the parks are getting facelift so they think overall it’s a positive impact on the feel of the neighborhood other parts of the city are struggling there and here the latest round of ipos could ultimately do more harm than good here we are again how come
A bike’s has been on market street since we opened in 2011 it was an area where on a daily basis there were just thousands of cyclists riding by so we thought it would be a good location for that kind of bike shop it was also just a more affordable neighborhood than many other neighborhoods in this in the city this community just simply had different people living
Here when we when we moved here it had primarily artists musicians who could afford to live in spaces like these where they lived and worked in the same unit and they don’t live here anymore they can’t afford to live here anymore well the ironic thing is that gentrification hasn’t really been good for business it hasn’t really helped us grow we did better in our
Early years before the tech companies really fully moved in but they’re not like encouraging their employees to come shop here or to spend money in the local economy next door to us there used to be what do you call it a topless you know that was club i’m called the market street cinema it was here for many years our business was better when market street cinema
Was open than when there was a condo building with a vacant retail space that’s been vacant for two years yes jonas and brian were once held up as poster boys for regeneration in mid market an area home to twitter uber and many more of big tex big names many moved in thanks to tax breaks offered by city hall 8 years ago now local government wants to change that
Policy with a proposal by city supervisor gordon ma to raise payroll taxes so can you tell us about the proposal and why the city needs it i’m really commend all the companies and their executives and employees for their success but there’s been a downside to this tech boom that’s played out over the last decade in our city and that’s the housing affordability
Crisis gridlock on our streets and the growing homelessness crisis in our city thousands of our community members live unsheltered on the streets largely due to the to the growing inequality in our cities what do you say to critics who might say that the tax might not raise very much funds all that it might deter tech companies from coming it’s a very modest amount
Of tax 1.5 percent on billions of dollars of wealth that’s going to be flowing into these companies and this is a tax that that they would have already had to pay prior to 2012 if it’s voted in in november supervisor mars payroll tax reform could add hundreds of millions of dollars annually to an existing five hundred million dollar affordable housing fund for the
Thousands of homeless people sleeping rough on san francisco streets the money couldn’t come soon enough we are three different residential hotel buildings the ambassador are the to brick one then the west next to the ambassador and an adult where you can see the zion for the dog they constitute nearly five hundred residential hotel units all of them occupied by
People you know earning under a thousand dollars a month so very very low-income population don’t fault is chief executive officer of tn dc a nonprofit organization dedicated to providing social housing for some of san francisco’s poorest residents here we have very variable income people and at the same time like right across the street we’re seeing a luxury hotel
High-end condominiums being built leaving those who are marginalized with fewer options now we see the five-dollar cup of coffee and who what tenderloin resident can afford $5 right the longtime residents who finger yes as john sees it tn dc’s job is to keep their housing units affordable for the long term even as rents go up all around them the kind of thing that
In dc and many of our sister agencies is doing it is not only building affordable housing but putting the ownership of the land into the hands of nonprofits so that the properties here will serve low-income people in perpetuity but housing is only part of the problem as wages for the city’s top earners saw so too has the cost of living here no income workers are
Struggling to cope booba drivers have been among the most vocal when over started they actually used to take five percent from drivers then after a while the increase that to ten percent then fifteen percent then twenty percent when i start driving we used to make around 2000 by working for like thirty to forty hours a week and that’s before expenses but to make
The same amount of money and even less we have to work between 70 to 80 hours a week and even more we really have enough money for ourselves were the one who actually built and helped the company become what it is right now and the company has always been trying to do everything they can to avoid taking responsibility for drivers tech ipos will bring hundreds
Of billions of dollars to san francisco this year alone but that money stands to widen the city’s wealth gap at a time when many residents are already feeling left behind if they’re not gonna take responsibility for the workers that they work for their company we will force them by the law one of my teammates just got a studio into contract for about a million
Dollars their company housing on ipm but they chose to get in early to kind of avoid maybe a bidding war later we’re in an unprecedented situation where we have the median rent for a one-bedroom apartment consumers is now three thousand five hundred dollars a month you know which is among the highest in the country or in the world everybody it shouldn’t be such
A special thing everybody ought to be over there in this kind of a place there’s a lot of challenges in this neighborhood that are encouraging us to look elsewhere time will tell but i would say right now where we’re leaning towards towards moving on
Transcribed from video
How big tech is dividing San Francisco communities | FT By Financial Times
