A report from the Sunday Times. “The housing crisis in Silicon Valley has reached new heights. Police officers in San Mateo, priced out of a market where the median house price has surged to $1.3m (£1m), have taken to sleeping in their cars. In the nearby town of Sunnyvale, homelessness has nearly tripled in two years.”
“San Francisco’s pavements are so awash in human faeces from its soaring homeless population that they pose a greater contamination risk than developing world cities in Brazil or Kenya, according to a study by University of California, Berkeley.”
“When Apple opened its $5bn spaceship headquarters in Cupertino in 2017, the project included an 80-acre car park — enough for 11,000 cars — but just 19 units of new affordable housing in the city of 60,000. The plan was blessed by a local council known for its Olympic-level not-in-my-backyard policies.”
“The problem is worse in San Francisco, where one child in every 25 attending the city’s public schools is homeless. A recent proposal to build housing for teachers, who are leaving the city in droves, was blocked by the city council.”
“‘Richard Walker, an economic geographer at the University of California, Berkeley and author of Pictures of a Gone City, a book on the societal fallout of the tech boom, said the crisis is a confluence of monopoly profits flowing to Big Tech, and a libertarian attitude toward wealth redistribution. ‘This place is one of the greatest producers of inequality in the world. The only way you’re going to rectify this is through massive social mobilisation. It used to be called class struggle. You can call it whatever you want,’ Walker said.”
“He added: ‘The tech industry is regarded as so enlightened and innovative, we forget that they’re simply the latest generation of big capitalist. This is a new Gilded Age, and they are the railroad barons of our time.’”
From Bloomberg. “It was meant to be the latest San Francisco gold rush. After a startup boom that saw tech unicorns spend an unprecedented amount of time on the private market — amassing lofty valuations in the process — this was the year when dreams of IPO riches were supposed to become a reality. A city already flush with wealth prepared for a spending spree by thousands of newly minted millionaires. Then came the drumbeat of disappointing debuts: Lyft tumbled,Uber slid, Slack sagged and WeWork’s listing plans collapsed in an epic bust.”
“Now, San Francisco home sales are tepid, with prices even falling in some parts of the Bay Area. Party planners are paring back on ostentatious celebrations. Even as the short-term restrictions preventing some employees from selling their shares expire, many of them have been left with holdings worth a lot less than they expected — or will have to wait even longer for a payout as their companies delay plans to go public.”
“The slowdown in the once red-hot real estate market is palpable. In the spring, the prospect of IPO-fueled demand caused some homebuyers to rush to put in bids, trying to get ahead of the anticipated surge in prices, real estate brokers say. That frenzy has faded.”
“The flops have led to housing seminars such as one last month by real estate agent Robert Cruz in San Jose called ‘IPOs are in Trouble, Is Housing Next?’ Close to a dozen people considering buying a home came to the event, including some workers in the tech industry.”
“For some tech workers, the notion that IPO money would change their lives and lead to a spending spree may have always been more myth than reality. Srinivas Rao-Mouw, a software engineer at personal-shopping company Stitch Fix Inc., was awarded equity when he joined the San Francisco-based startup in October 2017, about a month before it went public. But his equity wasn’t worth what he expected once the lock-up period expired — even as Stitch Fix shares at one point more than doubled. He found himself getting outbid in his house hunt this spring and then deciding to call off the search.”
“‘The way I think about IPO money, going forward, is it’s not a panacea,’ Rao-Mouw said. ‘It might turn out well, it might not.’”
The Los Angeles Times. “This city sure knows how to roll up the welcome mat — that is, if you happen to move here from California. Just consider last week’s mayoral election. It was the most competitive race in recent memory, a referendum on growth in the rapidly expanding capital of Idaho. And candidate Wayne Richey ran on a very simple platform: Stop the California invasion.”
“The Rev. Bill Roscoe, chief executive of the Boise Rescue Mission Ministries, heard it from his Realtor when he moved to Boise from Redding in 2002. He keeps a sign on his desk that says, ‘I am not from Idaho but I got here as fast as I could.’ ‘If you come here and love it, everything’s fine,’ Roscoe said. ‘If you come here and fly that California flag in your driveway and have stickers on your car that say, ‘Santa Cruz,’ there’s going to be some hard feelings.’”
“Anyone moving to Boise from another part of Idaho is still saddled with the same bottom-of-the-barrel minimum wage, an anemic $7.25 an hour. So it’s most likely not the Idahoans who are driving up home prices and filling up rental properties, because they can’t afford to. The median home price in Ada County, where Boise is located, has risen 19.3% since February 2018, according to the Idaho Statesman. It is now a whopping (for Idaho) $349,994.”
“‘I know that you can’t stop growth, but what are we going to do about our quality of life here?’ asked Yvette Zoe, who moved to Boise in 1972. ‘My kids, they can’t buy a house because they can’t afford it right now, and they work. My grandkids, their schools are crowded.’”
“‘It’s really, really hard to swallow,’ Richey said, ‘when somebody sells their house in California for $700,000, comes here, buys any house they want in cash and still has money in the bank. Their kids get to go to college. They drive nice cars. And they get to enjoy everything we built over the years. We don’t get to enjoy it, because we’re working 40 hours a week and doing craft shows and doing yard sales.’”
“One salvo in Richey’s battle against newcomers was his property tax proposal, which he called Proposition Zero One Two Three. His basic tenet: The longer you live here, the less you pay. Sixty-year residents would pay no property taxes, while newcomers would shoulder the burden. ‘This gives much needed relief to longtime residents and forces new people to pay their share,’ he said on his Facebook page. ‘Maybe it just might make them think twice about moving here. It would also discourage out-of-state investors.’”