Who’s Buying San Francisco

An interesting article at Atlantic by Alexis Madrigal paints a rather dystopian picture of San Francisco:

There has never been a town like the one San Francisco is becoming, a place where a single industry composed almost entirely of rich people thoroughly dominates the local economy. Much of the money that’s been squished out of the rest of the world gets funneled by the internet pipes to this little sliver of land on the Pacific Ocean, jutting out into the glory of the bay. The city now sits atop a geyser of cash created from what the scholar Shoshana Zuboff calls “behavioral surplus”—the natural resource created from your behavior, which is to say your mind.

Literal colonies of the working poor now cling to forgotten streets in RV communities. Homeless encampments are stitched onto any liminal plot of land. To lose your apartment doesn’t mean moving one neighborhood over but three cities away, to Antioch or Gilroy or Stockton.

But wait, it gets worse.

The graphic at the top of this post, produced from the work of data scientist Deniz Kahramaner, puts meat on the bones displayed in the quoted passage. It should be observed, however, that there is a fallacy lurking in the heart of it. Simply because you work for a tech company does not mean you’re a programmer. To take one extreme example, Amazon is a tech company but Jeff Bezos isn’t a programmer.

While I have little doubt that half of those buying property in San Francisco work for tech companies, I seriously doubt that they’re programmers. Based on the graphic above 64 Google employees have purchased property in San Francisco. Based on published information something between 25% and 45% of Google’s roughly 100,000 employees are programmers. To conclude that 64 Google programmers bought property you’d need to decide that Google programmers bought San Francisco property significantly in excess of the proportion of Google’s employees they represent. I suspect it’s the opposite and most of the Google employees buying property in San Francisco are managers rather than programmers.

That’s a problem in dealing with small datasets. It’s easy to draw wrong conclusions.

I only have a few additional observations to make about the article. First, let’s not subsidize San Francisco. Its business model is not one that those of us who don’t live there should support. When the Big One hits, San Franciscans are completely capable of rebuilding without help from the rest of us.

Finally, that business model is doomed anyway. Either politics or nature will make it untenable.

14 comments… add one
  • walt moffett Link

    will the collapse come before or after the landed gentry hunt for sport in the favelas?

  • bob sykes Link

    Considering that many, or most, programmers in tech are low salary H-1B immigrants, I doubt many of them are living in SF, unless they’re living in allies.

  • steve Link

    Almost as if some people want our tech industry to fail. Anyway, given that no industry has ever stayed at the top of the hill forever, I would agree that at some point San Francisco will take a hit.


  • That’s pretty much my thinking, bob. Maybe not in alleys but I wouldn’t be surprised if six were living in an efficiency apartment.

  • CuriousOnlooker Link

    I find the definition of tech used here is so broad as to be meaningless.

    Genentech is a pharma company.

    Kaiser is a health insurance provider.

    Visa, Square are in payments, and more broadly the financial industry as is Goldman, Blackrock, Schwab, and Wells.

    Airbnb is in hotels and lodging.

    Walmart is retail.

    Netflix is in movies/TV.

    Deloitte is in consulting.

    If using technology as a means to compete, make profits means you are a technology company, even P&G is a technology company.

  • In some sense every company is a tech company now and has been for about 30 years.

    There’s actually a broader, more interesting subject here, possibly fodder for a future post. IMO there’s a meaningful distinction between tech companies and non-tech. AirBnB may be in the lodging business but it has no lodgings to provide. It acts as a middleman or facilitator, using technology to fulfill that role. That’s a tech company. NetFlix is in the entertainment business and it used to be purely a tech company but is increasingly a producer of content. Uber and Lyft are tech companies in the transport sector.

    A health insurance company is difficult to charcterize. I think the best characterization would be that health insurance companies are conspiraces among insurance companies (or self-insuring corporations) and providers to extract rents.

  • Guarneri Link

    There are other fallacies. The influx of tech companies with well paid employees has driven up the prices of the existing housing stock. NIMBY zoning laws have prevented new construction. “I’ve got mine, screw you is policy.” And it’s not just SF.

    And tech companies don’t cause the drug addicts to fill the streets with tents, needles and feces. Policy does. See also: Seattle. This is a self inflicted wound.

    I wonder if Nancy Pelosi has a moral, or immoral, wall.

  • steve Link

    Which specific SF policy causes drug addiction? I think the War on Drugs contributes, but hard to think of local policies. If that is the case, then West Virginia must be responsible too, and it is much worse than California.

    Also, I realize that right wing media really pushes the idea of homelessness in SF, but it is a problem even in places where you dont have housing restrictions, so I think we need additional explanations, and better ones. Given that about a third of the homeless in SF come from outside the city, I am not really sure they are that much worse than other cities.



    Just as an aside, I think we should give the ring wing media for tenaciously and repetitively pushing this meme. We no longer talk about homelessness as though it is a problem everywhere, just in SF and Seattle. We talk about drug use in these cities, and talk less about it in the places where use is much higher and people are dying.

  • The homelessness rap seems like a solid one to me. Drug abuse not so much.

  • steve Link

    Sure, they have homeless, but so do other cities, yet it is SF and Seattle where the claim is made that it is due to housing regs. (Subtract the third of the homeless that come from outside the city and SF is not on this list. SF just settle d lawsuit with Nevada for dumping psych patients.)


  • Guarneri Link
  • Icepick Link

    A more useful distinction than “tech company” might be “IP company”, for companies that make their nut from intellectual property. Apple is an IP company, as is Netflix. Walmart is not. Some companies, pharmaceuticals for example, are probably inbetween, and would need to be looked at on a case by case basis. Disney would be an interesting hybrid, as well, with their large hospitality wing. An insurance company really isn’t such, nor would most finance companies count as such, though I might make an exception for Goldman-Sachs.

  • Guarneri Link

    Another notorious right wing rag writes about the problem. After the obligatory we need more money, in the body of the article they observe……….wait for it……..zoning laws.


  • TarsTarkas Link

    The homeless/drug problems in San Francisco/Seattle/NYC have more to do with refusal by the politicians to enforce the law than anything else. When shoplifting under $1000 is no longer consider a crime, when crapping on the sidewalk is no longer considered a misdemeanor worth citing, when shooting up in public is treated as an alternative lifestyle that must not be criticized, gee, you get more of all of them. Who’d have thought?

Leave a Comment