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Facebook and Google Are Gentrifying San Francisco Neighborhoods

It's the only place they can fit all of their employees.
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Boutiques along Fillmore Street in Pacific Heights. (PHOTO: PUBLIC DOMAIN)

Boutiques along Fillmore Street in Pacific Heights. (PHOTO: PUBLIC DOMAIN)

When we talk about gentrification, we point at people who cause rising rents. We imagine a neglected urban neighborhood rediscovered by artists and then the professional class. We don't consider the demands of industry and its impact on real estate markets:

Egon Terplan at SPUR, a non-profit organization that promotes good planning and government for the city of San Francisco, suggested a novel way of thinking about the shuttles. That is, conventional wisdom has it that the routes are a way for companies to respond to the desires of young, hip urbanites who want to experience the frisson of urban life in between their shifts down to soulless suburbia.

But when you look at the zoning regulations in Palo Alto, you learn that the tech companies have basically run out of room to build parking lots on their campuses — they can’t grow any further using the model of one parking spot per worker. So it’s logical that the tech companies would need to use shuttles to bring their workers to campus.

And where’s the densest place in the Bay Area, the place where the largest numbers of people can use the smallest numbers of buses? By this logic it’s not the youngsters that have chosen San Francisco to gentrify, but the Facebooks and the Googles who are incidentally causing this kind of development through the simple calculus of where they can house the most workers.

Both parts of the passage in boldface (emphasis mine) literally map the forces of gentrification. Silicon Valley, the suburbs, is a place of tremendous occupational density. San Francisco, the city, is a place of tremendous residential density. Concerning innovation and productivity, occupational density matters. Residential density is of no consequence. Ryan Avent clarifies:

The locus of high-technology work is in San Jose rather than San Francisco precisely because density is so important. Because proximity to the dense cluster of tech firms in the Valley is so advantageous, it’s very costly for any individual firm to leave the cluster. Perhaps the firms in the cluster would all be more productive if they were grouped together more densely, but there’s no way to move them to San Francisco except by a massive coordinated effort; the advantages of density hold firms around San Jose. And of course, the fact that the cluster began there in the first place is just an accident of history — a product of the location of Stanford University and the military facilities that supported much of the early technology research in the area.

Packing innovation workers into housing in San Jose uses up valuable space for clustering tech firms. Furthermore, packing innovation workers into certain neighborhoods won't enhance innovation. Somebody alert Tony Hsieh. The Zappos project in Downtown Las Vegas gets just about all the economic geography wrong.

Regardless, the conclusion drawn from Stamen's tracking of the tech shuttles between San Francisco and Silicon Valley are startling. The demand for working space in the suburbs is driving residential gentrification in the city. I think I see Richard Florida standing on his head.

Wherever jobs cluster, residential patterns follow. Eds and meds remake neighborhoods in Pittsburgh and Buffalo, not the Creative Class seeking cool and diverse neighborhoods. Suck it, Portland.