Sometimes when we see the headlines about hugely successful technology companies, the wealth they create, the jobs they create and the differences they make to our everyday lives, we often forget to look under the surface. There is a situation brewing in San Francisco where the likes of Twitter and Google have some of their larger offices and well remunerated staff.
You could be forgiven for thinking that attracting the latest technology companies, via an array of tax breaks and other incentives, would be good for business and good for the area. Initially this seemed to be the case although so high-tech are some of the jobs in these two companies in particular that it is difficult to see how the local workforce, which has other strengths and specialities, may fit in. Well, these chickens are certainly coming home to roost!
Evictions and expensive real estate
It is becoming evident that the wealthy employees of the likes of Twitter and Google are snapping up real estate in downtown San Francisco as quickly as it appears. The area now has the highest rental charges in the USA, even beating New York, and with Google and Twitter looking to expand further in the short, medium and longer term this situation could get much worse.
Quote from PropertyForum.com : “It will come as no surprise to those who follow the worldwide real estate market to learn that Canadian investors seemingly cannot get enough of US commercial real estate.”
We are now hearing stories of tenants being evicted because they are unable to afford the sky-high rents while some landlords are looking to sell their properties. The area is most certainly in the midst of a real estate boom although unfortunately the benefits of this boom seem to be focused upon those individuals in the tech industry. It is likely we will see more high-tech companies and high-tech employees in the area in the future which will further price families, who have lived there for decades, out of the marketplace.
It is also becoming evident that many people are being forced to look at properties outside of the direct area of downtown San Francisco despite the fact they work in the region. This is obviously having an impact upon accessibility for employment and is increasing the cost of living and getting to and from work. The politicians have been very vocal in their support for technology companies with an array of tax breaks and other incentives rolled out to attract new visitors – but did they rush in too quickly?
In many ways the local community is being broken up and disbanded only to be replaced by workers from the high-tech arena many of whom may switch jobs and companies in the future. This is not only having a major impact upon the local real estate market, where many people still rent as opposed to buy, but is literally ruining the community spirit which has been there for many years.
It seems that sky-high rent, a property price bubble and the ruination of a local community are the price to pay for attracting high-tech employment opportunities in the region of downtown San Francisco. The politicians may rue the day they rolled out an array of tax incentives to attract new technology companies because the face of downtown San Francisco is changing and not necessarily for the better.
Families who have lived in the region for decades are suddenly finding their tenancy agreements coming to an end and forced to look elsewhere. Some have been fortunate enough to remain fairly close to their previous homes while others have been forced to start afresh in a totally different area of America. Is this a fair price to pay?