Waiting for Silicon Valley to take a hit

These are anxious days in the land of start-ups. Another few months of tight money and the entrepreneurs and venture capitalists will be feeling real pain.

The sooner the better, some people in San Francisco say.

Cities do not usually cheer the downfall or even the diminishment of the hometown industry, but the relationship between San Francisco and the tech community has grown increasingly tense. Two years ago, radicals began delaying and harassing Google and other tech companies’ shuttles as they threaded San Francisco’s narrow streets.

Now — after the city officially gave the shuttles free rein to use public bus stops; after the tech elite were accused of trying to buy a crucial local election; after the home-rental company Airbnb spent a fortune to defeat a proposition that would have restrained it — the discontent is mainstream.

In December, 39 per cent of Bay Area adults said they thought things in California were headed in the wrong direction, up from 29 per cent a year earlier, according to surveys by the Public Policy Institute of California. In Los Angeles, by contrast, the percentage expressing general disapproval fell from 37 per cent in 2014 to 33 per cent in 2015.

“It’s practically a ubiquitous sentiment here: People would like a little of the air to come out of the tech economy,” said Aaron Peskin, perhaps the most prominent leader of the opposition. “They’re like people in a heatwave waiting for the monsoon.”

Peskin was the underdog when he sought to reclaim his seat last fall against an incumbent backed by both Mayor Edwin M. Lee and the tech establishment. But he drew volunteers from all over the city and won by a 9-point margin with the slogan “Let’s take a stand to make San Francisco more affordable and liveable”.

“These billion-dollar companies should help ameliorate the impact they’re having,” Peskin said. “They can afford to do a lot more. So far, it’s only window-dressing. They can volunteer to be decent.”

During the late 1990s dotcom boom, the office parks of Silicon Valley were another world to most San Franciscans, a place somewhere to the south that they needed never go. But increasingly Silicon Valley is rooted in the city itself, which makes it inescapable.

The consequences for people who do not make their living from technology are increasingly unpleasant. The city is bulging at the seams, adding about 10,000 people a year to a record 852,000 in 2014. A one-bedroom apartment goes for $3,500 a month, the highest in the nation.

For every person who moves to San Francisco, another two start commuting to work here. Traffic is down to a crawl: The average afternoon speed on the roads feeding into the highways has dropped 20 per cent in the last two years. And the BART trains are squeezed tight: Since 2012, average morning rush-hour ridership from the East Bay has risen 30 per cent.

Signs of distress are plentiful. The Fraternite Notre Dame’s soup kitchen was facing eviction after a rent increase of nearly 60 per cent. Two eviction-defence groups were evicted in favour of a start-up that intended to lease the space to other start-ups. The real estate site Redfin published a widely read blog post that said the number of teachers in San Francisco who could afford a house was exactly zero.

“All the renters I know are living in fear,” said Derrick Tynan-Connolly, a teacher at a high school. “If your landlord dies, if your landlord sells the building, if you get evicted under the Ellis Act” — a controversial law that allows landlords to reclaim a building by taking it off the rental market — “and you have to move, you’re gone. There’s no way you can afford to stay in San Francisco.”

Tynan-Connolly, 52, first came to San Francisco three decades ago, when its origins as a working-class port were still in evidence. Now, he and many others feel, it has become something much narrower: a haven for the wealthy.

“The city has the largest budget it ever had,” he said. “But the homeless are still suffering while working-class families, including my students, struggle to find affordable housing and child care. Where are the benefits from the boom that are accruing to the whole city?”

San Francisco has a budget of $8.6 billion (Dh31.58 billion) and a deficit of $100 million, according to Lee, who ordered city departments to cut spending by 1.5 per cent.

Sentiment is difficult to gauge on a citywide scale. The demonstrations against the shuttles got widespread attention, but quickly petered out. Tynan-Connolly noted that the long history of activism in San Francisco was driven by young people, and now the young people often work for the tech companies.

Some tech folks think things are out of kilter. “There are valid concerns that San Francisco is becoming a plutocracy,” said Donna Burke, an entrepreneur and investor. “Silicon Valley traditionally valued changing the world over money. We need to get back to that ethos.”

“I have a lot of friends who work in those companies, and they literally encourage me every week to quit my job and do what they’re doing,” said Helana Corda, who teaches sixth graders at a public middle school. “They think they’re trying to help, but I feel slightly offended.”

Tech people regularly issue electronic broadsides that irk San Franciscans. The latest came in late February from a start-up founder, Justin Keller, who complained about the homeless and “riffraff”.

“The wealthy working people have earned their right to live in the city,” he wrote in an open letter, adding: “I shouldn’t have to see the pain, struggle and despair of homeless people to and from my way to work every day.”

Even those who have benefited from the tech workers and their free-spending ways say something is amiss.

“I like a boom. I’m a fan of this boom,” said Craig Stoll, co-owner of Pizzeria Delfina. “I think it’s exciting times in San Francisco. I like the influx of people. But it comes with problems. A lot of our cooks don’t live in the city. They can’t afford it.”

The issue of the shuttles, the first flashpoint between San Franciscans and the tech community, is still being resolved. In the meantime, some shuttles use a city stop in front of Synergy, a private school in the Mission district, to pick up and let off workers.

Traffic enforcement keeps a watchful eye. Several parents who inadvertently ventured into the bus zone got $279 tickets.

For Jilanne Hoffmann, like many Synergy parents, every morning flirts with disaster: It seems only a matter of time before a child is hit. A petition has been submitted to the city in an effort to get the stop moved.

“It scares me to want to damage the economy of the Bay Area in any way — you’ve got to be careful what you wish for, right?” Hoffman said. “But I think we need a moratorium on the things that benefit the few,” she said. “If only there were some way to prevent the haves from having it all.”

— New York Times News Service