There’s a cynical aphorism floating around San Francisco’s tech and tech-adjacent circles, stating that the start-up economy, especially of late, is primarily a wealth transfer from Venture Capitalists to landlords and developers. There’s no denying that the industry’s high salaries and real-estate budgets, bankrolled by deep-pocketed venture capital firms, are a driving force behind the Bay Area’s multi-year rent boom. From the skyline down to the sidewalks, you can see the effects that booming industry, and the attendant redevelopment and displacement, have had.
All over the city, especially in the eastern neighborhoods – close to BART, Caltrain, the freeways – new modern buildings have gone up to meet the demands of professional-class renters, with high rents to match. It’s very visible in SoMa, from the skyscrapers in the east, by the Embarcadero and the Bay Bridge and the ballpark, through the west, where the freeways empty out into warehouses, some converted into modern-looking offices, and an unsubtle mix of old Victorians and mid-rise metal-framed condo buildings. All this construction, according to developers and their allies in government and public dialogue, is meant to relax the stress placed on the housing market caused by the boom. But does it? One recent case study suggests otherwise.
At the corner of 8th and Harrison streets, the brand-new LSeven luxury development1.LSeven looms large over the western SoMa landscape. It’s within walking distance of BART, Muni, and a growing number of tech offices in the neighborhood – Thumbtack, Atlassian, Airbnb, and many more call the neighborhood home – as well as the similarly redeveloping mid-Market corridor, home to Twitter and Uber and Dolby. But the tenants haven’t shown up – at least not in the numbers the developer was expecting. So what is a corporate landlord to do when their units won’t rent at the exorbitant rates they’re asking? Some of the luxury developments in the neighborhood have begun to offer move-in specials as demand has cooled slightly. But L7 has opted to take a different path – by converting their unrented units into high-rent SRO housing with the help of Homeshare.
In a scheme reported by San Francisco Magazine2.SF Magazine that sounds potentially at odds with housing law, Homies are asked to provide their age, gender, and sexual orientation to Homeshare, who then aims to match them with compatible roommates with whom to move into a unit in one of the properties Homeshare contracts with (the others are 340 Fremont, in Eastern SoMa, Potrero 1010 at the foot of Potrero Hill, and Artistry and Parc on Powell in Emeryville.) Homeshare overfills these units by placing dividers up, subdividing bedrooms or common space to generate a comparable rate per square foot of space. Is this the venerated market intervening? We’re told that luxury building is necessary to meet demand. Yet when the renters never show up, the house finds a way to get its money back.
As luxury housing continues to spring up around western SoMa, redevelopment continually threatens the remaining character of the neighborhood. The historic Stud, up the block from LSeven, will almost certainly have to relocate once their business-saving agreement is up3.SFist. The Folsom street corridor has seen a spate4.Triptych, SFist of restaurant5.Citizen’s Band and Pinkie’s, SFGate closings, and others still are still on life support 6.Brainwash, SFist. Ground has finally broken on a towering micro-studio development 7.Socketsite across Dore from the Powerhouse, at the heart of the Folsom Street Fairgrounds and last half-block of SoMa’s famed Miracle Mile. What will happen if those don’t rent8.I have a suggestion? It’s impossible to tell, but it seems that for corporate landlords, capitulating on their sky-high demands and disappointing their investors is the least preferable option – and they’ll leave neighbors, renters, and housing activists in the lurch without a second thought.
Corporate landlords are changing the rules of the game and making it impossible to keep up. There’s no one quick fix that will ‘solve’ the housing problem, but letting developers such as LSeven take over whole blocks of land and use them as test tubes for experiments in late capitalism cedes ground to developers that will take monstrous effort to regain. A vision of housing in San Francisco – or anywhere – must put the needs of people before the profits of developers. We the people should not accept ‘innovation’ that manages our expectations of what homes ought to look like downward, especially not in a time and place where there is at once so much wealth and so much need. And for the people that devote their professional and personal lives to keeping the edgy, queer, kinky heart of western SoMa beating – we ought to be working to fight the sad possibility that the only pair of Jeremy Novy’s iconic bootprints left in the neighborhood might be within LSeven itself 9.Broke-Ass Stuart.
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