Newsflash: San Francisco Expensive, Minorities and Families Leaving

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Coming to a City by the Bay near you...
Today, the San Francisco Chronicle's website characterized premature rapture specialist Harold Camping's admission that the world still exists as "breaking news."

Fittingly, today's Chron A-1 was a story noting that San Francisco is growing whiter and less diverse, as families with children stream from our fair city because it's expensive to buy property and raise kids here. This, mercifully, did not receive the "breaking news" tag.

Not to fault the Chronicle for a well-written article or the folks who compiled the statistics presented to the ever-concerned Board of Supervisors relating to San Francisco's transformation into the place where Children of Men is perceived as a documentary. Analysis is good and analytical newspaper stories are good, too.

But what we have here is an extremely thorough and data-rich documentation of something anyone who was paying even the least bit of attention to city demographics knew: Families are leaving. Many minorities are leaving. Children are sparse. Property is prohibitively expensive. Hell, even we had these statistics in two prior cover stories -- in 2009 and 2011. 

In SF Weekly's 2009 piece "The Worst-Run Big City in the United States," we noted the following:

According to the controller's office, San Franciscans' per-capita income jumped from an already-generous $58,244 in 2004 to $74,515 [in 2008].

Of course, for many San Franciscans, those numbers represent another failure. They point to an exodus. The city's middle class is melting away faster than polar ice. With them, economists and demographers say, goes any realistic hope that voters will demand serious change in search of long-term reform.

Research by professor Bill Watkins of California Lutheran University over the past decade reveals that San Francisco is shedding its middle-class population at double the state rate. The city, however, is not losing low-income people at nearly the state's pace -- and is gaining wealthy residents at far more than California's overall rate. In short, we are replacing our middle class with a rich elite and a burgeoning underclass. Watkins' research also reveals that San Francisco is going gray. The number of city residents between ages 45 and 64 has climbed, while the count of those aged 20 to 44 has dropped. The city, it seems, has become a target destination for the wealthy and retirees. These are not the people who want to make sacrifices now to shore up the city's future.

"Wealthier people are consuming," Watkins says. "They don't want to build a future. They don't have a reason to invest in the community." For that matter, neither do young people -- because their futures likely involve moving out of San Francisco. According to Joel Kotkin, "San Francisco is Disneyland for adults, or a place people go until they grow up."

The stage is set for San Francisco to run on inertia. The city's poor are unable to effect a sea change; the young, nomadic population is uninterested; and the wealthy and older are unwilling.

In last year's "Progressively Worse," we returned to demographics:

"The left in San Francisco has a real disadvantage against the glacial forces of demography that are reducing the support for a progressive base," said S.F. State professor emeritus Rich DeLeon, the dean of local political scientists. "The progressive base in San Francisco is now a lot smaller than people still think it is."

Between 2000 and 2010, the city grew older (every age group over 50 increased), wealthier (there are now 58 percent more households earning $125,000 or more), and more heavily Asian (up from around 30 to nearly 35 percent of the city's population).

... Black people now make up barely 5 percent of the city; large swaths of the south of the city are heavily Asian. The number of San Franciscans aged 25 to 39 has plummeted; the iconic overeducated young people who knocked on doors for [Matt] Gonzalez's 2003 mayoral campaign while living off their severance pay from are a distant memory. Many have gone elsewhere to raise families -- or occupy something. When San Francisco priced out its working class, it priced out activists, too.

Progressives were relying on short-term residents as part of their long-term political strategy. Every year for the past decade, upward of 30,000 new residents moved here, yet the city's population has only grown by 28,000 during that time. Perhaps 20 percent of San Franciscans weren't here five years ago. The voters who remember the Willie Brown administration may not even crack 50 percent.

The point here isn't to pat ourselves on the back, because this was hardly breaking news. The Chron today did a fine job documenting the situation facing San Francisco -- high cost of living is chasing away many minorities and young families, who are being replaced by transient youngsters living their "San Francisco years" or wealthy middle-aged and older people. Similarly, an article meticulously documenting the growing height of NBA basketball players by position from 1960 to today could be fascinating. But it wouldn't come as a surprise to anyone that basketball players are tall.

So, for this city, it's time to stop arguing over the shape of the table and start negotiating a solution to a huge -- and hugely evident -- problem. Of course this is easier said than done for the reasons intimated in our 2009 article. For the ascendant folks in San Francisco, the status quo is treating them just fine. It's a tired refrain, but not for no reason: This city does an admirable job catering to the very poor and certainly has its allures for the very rich -- but those in the middle would be best served by growing wealthy or getting out of town. Rest assured, someone will move here and take your spot.

Finding a native San Franciscan in San Francisco is sort of like unearthing a four-leaf clover (not that it's lucky; it's just rare). Future children may not even know what a native San Franciscan is, let alone a clover.

Those children, of course, will be growing up elsewhere.

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Left for San Mateo
Left for San Mateo

Vacation rentals should also be added to list of things which benefit the older haves and screw the younger have-nots.  There have been a number of articles on the very large percentage of apartments which have been illegally used as vacation rentals.  Something like one in three apartments.  Between the empty places and the oldsters, San Fran seems like a ghost city to me sometimes, except for the Mission District.  Tons of kids, families, and ethnicities on the Peninsula, however!

Left for San Mateo
Left for San Mateo

Because of the rent control, I suspect a lot of the "older wealthier" residents of San Francisco are actually just older, in the sense that they have kept their apartments when they wouldn't otherwise be able to afford them.  And I suspect that a lot of the wealth effect overall is from people who bought housing long ago (60's, 70's, etc.) and then parlayed home owners loans and rents on second properties into businesses which are still bankable despite the decline in home values in recent years.  So I think many of the "wealth non-native" San Franciscans are really Boomers who came from elsewhere a long-time ago and rode the economic wave to a point where they could make bank off newcomers.  What is for sure is that there is a business of making money off the shortage of apartments by  charging the newcomers who arrive because there are tech jobs here.

So naturally the newcomers will live in town, paying 50% of their income for rent for a couple years, and then when they have squirreled away enough for the kid, they will go some place where there is a park, other kids, parking, and so forth which can be bought for 3X the average regional income.

In my opinion, there is one group who are the big winners here: Baby Boomers.  If they didn't have enough money to pay market rates on apartments, they got rent control so they could have controlled prices without having to make multiples of the average regional income.  If they had enough to buy with a mortgage, they got to profit off the wealth effect of rising real estate and home owners loans for long enough to make investments which would allow them to profit off the newcomers.

And there is one group which is most screwed, and that is young families.  Wherever we are, we pay multiples of what housing prices would be if they were correlated to salaries, either to rent or own.  If we buy, prices plunge and we lose all the savings we would have made for the rest if our lives.  If we rent, we keep paying the Boomers for privilege of being able to have a job.

Just look at the demographic makeup of San Francisco (age-wise) if you want to figure our why San Francisco can't fix this problem and seems incapable of understanding it.

Left for San Mateo
Left for San Mateo

If an average salary could buy an average home (or rent an average apartment) in San Francisco, then families would probably live there.  Myself and my wife lived there for 7 years after moving from New York, and would live there still if it was possible for someone with 3X the median income to pay the rent on a 2 bedroom apartment.  That is despite the crime and other issues that come with living in a city.

Rent control is a big factor in the lack of affordable housing, and was not even mentioned in this article.  Rents for the population at large do not rise normally in SF.  They are controlled at the level they were initially rented, with small managed rises.  It is like senior housing for the entire population, with the degree of benefit correlated to how long ago you managed to get a place.  I say senior housing, in the sense that the goal is to keep people from loosing their apartments because these people's income does not keep up with housing costs, and in the sense that the apartments are kept at below market rates.  Make every apartment in San Francisco market rate, and I bet you would see about 60% of renters leave town or join the homeless population in a matter of months.


San Francisco is becoming "Whiter"?  Good, we need more "diversity", don't we?


the progressives are as much to blame as anyone here. they opposed any attempt to build middle class housing, all the while funneling millions of city dollars to politically connected non profits that service the very very poor. they are just as much to blame for the middle class/kid/minority exodus as anyone else.


It's telling that both Chris Daly and Gavin Newsom moved their families to the suburbs.


There are a lot of great reasons to have a baby or toddler in San Francisco: it's a walkable city, the weather's mild, there's a ton of parks and playgrounds, good coffee for weary parents, and there are lot of neighborhood clubhouses and libraries. But once your kid starts to get a bit older, that's when it gets dicey. An affordable 2-bedroom home is hard enough to find, but three bedroom homes and apartments are like leprechauns. The uncertainty of public school placement means makes the cost of housing here feel even costlier. Throw in a mentally ill lady pooping at your bus stop and it doesn't take a degree in demographics to understand why someone's eye may wander beyond the border of San Francisco.

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