Don’t Blame Tech Elites For San Francisco’s Crazy High Rent

April 10, 2016, 11:00 PM UTC
Realtors Lower Housing Market Sales Forecast
Photograph by Justin Sullivan via Getty Images

I’ve lived in the San Francisco Bay Area for almost six years. Though I’ve been fortunate enough to be able to pay my bills, my own rent has doubled during the past five years. Like many others, I first came to the Bay Area without knowing what it means to live in Silicon Valley: jumping into the middle of an economic and cultural transformation. Living and working in San Francisco has become prohibitively expensive and combined with challenging social and political factors, it has created a tumultuous relationship with long-time residents and the new kids on the block. Some say the tense relationship between the residents of San Francisco and the tech industry will inevitably lead to an ugly breakup. But I believe this evolutionary process can be channeled into positive change — from inspiring the construction of new places to live, to improving infrastructure investments, and opening up new job opportunities.

Look outside of San Francisco’s tech industry, and you’ll find most of the anger is targeted at new technology companies and their influence on lifestyle costs, causing an identity crisis in a famously low-key, socially conscious city. But while news stories focus on exorbitant rent and housing prices, tech employees aren’t insulated: it’s common to read social media rants that even the best paid among the city’s tech elite cannot afford their monthly expenses — especially rent. And the national chorus around the next “Silicon Valley bubble” bursting isn’t helping. The 2001 bubble burst created shockwaves throughout the national economy, leaving thousands unemployed — especially in Silicon Valley. It was a dark time compared to today’s 3.2% unemployment rate in San Francisco, against an average of 4.9% nationwide. Yet with the talk of a bubble, some local residents are waiting for a crash rather than working with their new neighbors on redefining modern San Francisco.

See also: Most San Francisco Airbnb Hosts Shirk Regulations, Report Finds

It’s not the first time Silicon Valley has had a tech-induced identity crisis. If you ask veterans what pre-2001 was like, the rental situation was worse, and the nature of entrepreneurship at the time was “build it, flip it” — definitely no better for San Francisco residents. Even tech-friendly publications have been addressing the growing toxicity between Silicon Valley and San Francisco residents since 2014. These articles put blame squarely on the “Technorati” for the increase in housing prices and growing income disparity — rather than the historical chokehold on San Francisco’s housing supply market.

A key issue in the debate is the battle between homeowners and landlords of rentals: fighting to retain control of their investments. For example, even temporary tenants are fighting to ensure the continued value of their investments by offering their space to short-term guests at increased prices. However, this is also simultaneously creating artificial scarcity, and preventing homes from returning to the market. Combined with an increased demand for homes, this perfect storm has pushed housing and rent prices to new heights. The biggest point of disagreement is what to do about it, while taking into account the political and social needs of all stakeholders. So to satisfy all parties, it would be in everyone’s best interest to establish a common ground to retain San Francisco’s unique identity, offer more affordable living, and ensure a sustainable tech industry that fuels the local economy.

Any progress demands open dialogue across all stakeholders, even if the discussion gets heated. In fact, Harvard released a study in February 2015 that reinforced how government policies directed at rent control are having a negative effect on housing availability, average rental costs, and are doing next to nothing to ultimately counteract dislocation. The real challenge is a balancing act, as the city must provide enough security for residents, but simultaneously accommodate the economic growth kicked off by the boom of technology. Perhaps, the clearest sign that the compromise isn’t working is the increasing economic inequality among the tech community and San Francisco’s locals. Although the number of jobs added by Silicon Valley in 2014 grew much higher than the national rate, there is a growing wage gap between low-wage jobs and the high-wage jobs found in the tech community. For example, the difference in median income between high-wage and low-wage workers was around $92,000, compared to around $70,000 elsewhere in the Bay Area. Add to that wage gap the fact that San Francisco has the highest rent in the country at a median price of $3,500 per month for a one-bedroom apartment, and the economic struggle becomes clear.

[fortune-brightcove videoid=4741162429001]

Futhermore, as a member of the tech community and an admitted lover of money, my primary drive continues to be what attracted me to Silicon Valley in the first place: a focus on creating socially conscious solutions to the world’s biggest problems. As an industry, Unicorn hunting has caused us to lose sight of this. But social consciousness needs to be brought back to the core of these businesses. How? One example is Salesforce’s 1/1/1 Initiative, where grant money is provided to local area schools for STEM programs, youth workforce development, and local community programs designed to maintain the culture and spirit of the area. Or, take perhaps Facebook CEO Mark Zuckerberg and other Silicon Valley leaders supporting Barack Obama’s efforts to allow millions of undocumented immigrants stay in the U.S. under the idea that their entrepreneurial spirit benefits the American economy. While starting a business in San Francisco certainly adds to the economy, it also changes the look and feel of a very unique place. As an industry, we need to figure out how we can become a part of the diverse tapestry of the Bay Area without blanketing Silicon Valley with a tech monoculture of our own.

Silicon Valley has been home to some of the world’s most intelligent and creative people since way before the tech boom. Something wonderful can come from the tech industry and San Francisco’s artistic, innovative residents working together, but it takes each side meeting on common ground and acknowledging that solving problems close to home is as important as making a dent in the universe. This move needs to happen now, before San Francisco loses what makes it unique in the first place.

John Rampton is a founder of the online payments company Due and an advisor to Startup Grind.

Read More

Great ResignationClimate ChangeLeadershipInflationUkraine Invasion