Nov 09, 2014 11:27 PM GMT
First, though, it's worth noting the magnitude of the city's inequality, which is problematic not so much because the rich have gotten richer, but because everyone else has gotten poorer. This was determined by a Brookings Institution paper earlier this year which found that between 2007-2012, San Francisco trailed only Atlanta as the nation's most unequal city, with the top 5 percent of households earning average incomes nearly 17 times higher than the bottom 20 percent. During this period, inequality grew far more quickly in San Francisco than in any other U.S. city, with incomes for those top households increasing by nearly $28,000 to $353,576, and incomes for the bottom 20 percent decreasing by over $4,000 down to $21,313. But other brackets were hit also, as incomes declined for the bottom 80 percent of households, meaning those making up to $161,000. The study validated media narratives about how gentrifying San Francisco had become exclusive to the rich at everyone else’s expense.
A lot of the reason for this shift is because of the tech industry's emergence. Once confined to the southern part of the region, Silicon Valley's imprint expanded across the city throughout the 2000s, and is now a mainstream cultural force. Not only have businesses like Twitter opened offices downtown, but once-working-class areas like the Mission provide housing and start-up space for industry workers, causing an influx of new wealth and neighborhood disruption.
But the city's progressive tendencies seem only to have worsened this shift, with an over-reaching government that offers inadequate—or plain wrongheaded—solutions to problems.
This is most evident in the way that it has handled housing. San Francisco now has one of the nation's most expensive markets, with median home prices at $1 million. Numerous explanations have surfaced for what caused the spike, ranging from the area's growing population and wealth, to its land constraints. But the spike can also be explained by regulations that discourage new housing. For example, lots within the city's downtown, where infrastructure is already in place to handle added population, are held to severe height restrictions, and this is even more the case in outlying neighborhoods. The structures that are built endure robust approval processes that can take years, and require millions in lobbying—creating expenses that get passed down onto customers. The developers of the proposed Washington 8 condo project on the downtown waterfront, for example, waited eight years and spent $2 million on campaigning only to have their project rejected.