How Life in San Francisco Will Change after the Tech Bubble Bursts
Sunday evening, 6:00 p.m. Lands End. Drones buzz through the air like armored mosquitos, trolling the dying embers of the Pacific sunset and scaring birds. I count at least four of them lingering around the lookout above the Sutro Baths. I leave after one almost hits me in the head. Later, as I’m walking down Folsom Street, headed to a friend’s house, I’m nearly knocked off the sidewalk by a bespectacled young man in a zip-up zooming by on a hoverboard. I stop and watch in shock as he continues down the street, fading into the darkness — his backpack emblazoned with the logo of a company I don’t recognize; his body rigid atop his bi-wheeled plank; his attention preoccupied, I presume, by the wad of Series A funding sitting in his pocket. I’m still thinking about him the next morning as I walk to work through streets lined by cranes and wheel excavators and other segmented pieces of machinery — hundreds of them, it seems, moving throughout the sky with the arthropodal precision of insects dismembering prey. I’m thinking about the idea of him, wondering whether the company I imagine he’s the founder of could be described as “like Uber but for X”; whether the apartment where I imagine he lives used to house a family of four; and whether he’s currently cooking up a blog post aimed at denigrating the homeless. But as I’m crossing the street, enveloped by my presumptions, I’m almost run over by a Google bus, and just like that I’m jolted back into the Now.
This is life under the influence of the new tech bubble. Globulous, glimmering, tenuous, it hangs above San Francisco like a parade float gone rogue, beckoning to entrepreneurs, programmers and capitalists the world over. For those of us whom the bubble hasn’t forced out of the city — who remain — it affects nearly every aspect of our lives. Often, it confronts us physically. And its influence is only growing stronger; the bubble, it seems, is scaling up, widening wedges of resentment and amplifying the implications of its impact.
Of course, for San Franciscans — both those who are involved with tech and those who are not — the fact that the bubble is getting bigger only adds urgency to what already seemed like pretty pressing questions. Like, what will happen to San Francisco when the bubble bursts? How will life in the city change? Will City Hall shift its prerogatives? And, if not, is there any reason for residents to hold out hope that San Francisco might return, in any fashion, to the quirkier, more welcoming, less divided version of its older self that we subconsciously long for when complaining about Google busses and tech execs?
To be sure, these are the questions that were on my mind when I started writing this article. What I now believe we San Franciscans should be focusing on more so, however, is not whether San Francisco might one day return to some forgone, pre-bubble iteration of itself, but rather to what extent we’ll be responsible for the less tangible changes that prove to be permanent after the bubble pops.
Now San Franciscans could be forgiven for believing that what floats above our city is not actually a bubble, a temporary phenomena, but rather an all-encompassing, controlled, translucent, far-from-temporary biosphere that Ron Conway placed upon the city in exchange for tax breaks back in 2011. That’s how profoundly the effects of the bubble have become engrained into our lives.
That said, as Tallat Mahmood of Tech Crunch wrote in last June, “The fact that we are in a tech bubble … is in no doubt.” It’s important for potentially warped San Franciscans to remind ourselves of this, if for no other reason than to properly prepare ourselves for a conversation around what might happen when the bubble bursts. Because, like all bubbles, this one will — at some point — burst. This period of us living in what feels like the eye of a hurricane will end. Pretty much everyone who writes about tech, the economy or San Francisco, for that matter, is in agreement about this, including Mark Cuban, Bill Gurley of Benchmark and writer Jon Kelly of Vanity Fair.
There is a bit of disagreement around how violently the bubble will burst, however — as well as around whom, exactly, its bursting will affect. While Cuban thinks this bubble is more volatile than the one that popped back in 2001, Sarah Lacy of pando.com foretells a different outcome. She calls such predictions “some of the most over-heralded of all time.”
Lacy seems to be referring to the impact the bursting of this bubble would have on the US economy as a whole — not, so it goes, on how the impact will be felt here in San Francisco. This, of course, depends on whether the bubble explodes, like Cuban predicts it might, sending laptops and lattes hurtling across the city like shrapnel, or if it whines whimpishly away, like a cheap air mattress over the course of a night’s rest. From what I’ve gathered, the latter seems most likely.
It’s tempting when trying to make these kinds of predictions to look to San Francisco’s last tech bubble — the one that popped in 2001 — for clues. This was my first inclination. Turns out, we shouldn’t. The big difference between 2001 and 2015 is where the money that’s funding the bubble is coming from. In 2001, because so many of the companies that folded were traded publicly, people who weren’t typical investors and who played a more on-the-ground role in the economy got hit, many of them cataclysmically. This resulted in the bursting of the bubble being felt relatively widely and uniquely personally, especially here in the Bay Area. This time, however, most of the investments fueling the bubble are private. As Lacy writes, “Unlike the late 1990s, no one is saying this is a ‘new economy’ with new rules.”
What does this mean for San Franciscans? Well, it means that when this bubble does burst, the effects likely won’t be dramatic. Yes, some employees of start-ups will lose their jobs. Some of the founders of those start-ups will see the money they’ve “made” dry up, and this will likely result in some of the people who came here to chase gold having to leave — but likely not an impactful amount, or at least their leaving won’t feel impactful, as this time around the VCs who backed these start-ups will come out fine, which is to say that money and opportunity will remain for people with talent, ambition and ideas.
Additionally, while history shows that San Francisco rent prices do rise during bubbles and decline during busts, that doesn’t mean that current residents’ costs of living will be affected once this particular bubble bursts. The city’s outlandish rents will cool, but only over time — so maybe the person who moves into your apartment after you will pay a slightly less extravagant amount for it. But, of course, rent prices are only likely to continue to drop after the bubble if San Francisco becomes a less desirable place to live, if the demand to live here drops. And this does not seem likely. By the time prices drop, it’s conceivable that the city will be gearing up for another bubble, and rents will rise again.
For San Franciscans who lament the city’s dwindling ethnic diversity, who are struggling to pay rent and who abhor everything Peter Sinh represents, this may seem like bad news indeed. That once the bubble bursts, not much will really change. That after the bubble bursts, artists will still find living in the city nearly impossible. That families who’ve lived in the Mission for generations will continue to leave. That the threads that once held the fabric of San Francisco’s ethos together will continue to thin and fray, giving way to a new, different identity made of different, more corporate material. That the San Francisco you hear that old guy in Vesuvio talk about on Thursday afternoons will remain tucked away in the sedated recesses of his fading memory.
And it’s true. In so many ways, this sucks. As I’ve been reading about all this stuff over the last few weeks, I’ve found myself sort of innately conflicted by the reality that the current San Francisco will never be nor revert back to the San Francisco I used to dream about moving to as a kid on the side of Grizzly Peak. And it’s not exactly incorrect to say that the tech bubble is what fucked that up.
But here is where I would urge us to reconsider what it is about San Francisco that we would really, actually want to see change when the bubble bursts. Moreover, what do we really, honestly expect to change? Because while today’s San Francisco does possess very real, even sickening problems, and while these problems have been exacerbated by the tech bubble, they are by no means a direct product of it. In addition to being an epicenter for tech and innovation right now, San Francisco has been a city of bubbles and busts since its conception. The ugliest problems that are most critical to the city’s future — like its lack of affordable housing or its epidemic of homelessness — are traceable long into its past. And all available evidence suggests that they won’t magically go away after this current bubble bursts.
One very serious problem that is more of a direct product of the tech bubble is the class and culture war it’s engendered. As Davey Alba writes in WIRED,“Today, San Francisco is a city divided between tech dreamers and residents who say ‘techie’ with the same disdain that ‘yuppie’ evoked in the ’80s.”
As evidenced by the presumptions with which we all sometimes regard and actively judge the people we see on the street — people who, say, look like they could be “techies” — this divide is undeniable. And pervasive. And rampant. As is probably obvious by this point, this writer does it all the fucking time — like when I’m almost knocked off the sidewalk by a hoverboard or hit in the head by a drone. And this is fucked up. Because deep down we all know that not all “techies” are gold-chasing douchebags who hate homeless people and who want San Francisco to continue to gentrify — whether or not they ride hoverboards or Google busses or whatever — just like we know that not everyone unaffiliated with tech sees programmers and even transplants as some vague enemy. While the tech bubble has certainly encouraged these presumptions and stereotypes, whether or not we give credence to them is much more in our control than we’d probably like to admit.
It seems reasonable to conclude that not much about life here in San Francisco will change once the tech bubble bursts. Or pops. Or stops growing. Whatever. Many aspects of life in this city will not change. This does not mean that change isn’t possible, however. It is. It’s necessary, in fact. But that change will occur only once San Franciscans identify the degree to which actualizing change is in our control. Maybe once the bubble pops, we will. That might sound hokey, but whatever. In fact, maybe that will be the biggest thing that happens after the bubble bursts, the most noticeable thing — this sort of communal recognition. Maybe we’ll be able to more clearly recognize what we have in common. And with the exception of a select, ever-antagonistic few, what we have in common is a love and appreciation for this place, even as it exists at this time.
