I hate to harp on this (well, no I don’t) but when people tell me that we don’t have to worry so much about gentrification these days, that we’re living in a different world than the days of the dot-com boom, I have to wonder: Am I the only one reading the business pages?
Because in the real world of San Francisco business, the real-estate boom is on and housing prices — particularly in the southeast part of the city — are about to start soaring again.
In fact, according to the Chron, the market is already flying high — and dealing with the influx of new wealth and the continuing change in the demographics of the city will be very much a serious issue for Mayor Lee over the next year:
ZipRealty just completed a study on the millennial home buyer, pointing out that this generation, born after 1982, is the largest in American history, larger even than the Baby Boomer generation. To these buyers, walkability and a vibrant urban community are huge draws in a home purchase. The ZipRealty study seems confirmed by this recent mini-boom in neighborhoods close to SoMa’s flourishing tech industry: newly minted millionaires in their 20s and 30s have the buying power to drive prices up.
Want proof? We’ve got it. The median price of a single-family home in San Francisco County was $745,000 in October, up $10K from October of 2010. In the neighborhoods in question though, the increase is more striking. In Noe Valley this October, the average price-per-square-foot was up 5% from last year for the third month in a row; in SoMa, up 11%; in eastern Potrero Hill, up 16%.
So: When Zynga goes public in a few months, a whole lot of young millionaires will want to buy houses in Potrero Hill. Dogpatch, and the southern end of SOMA. Oh, and the Mission. Rents will go way up. Housing prices will go even further beyond the level that ordinary, non-millionaire working people can afford.
I’m happy for all the Zyngites, and I’m glad the company is here in SF and generating economic activity. But one of the lessons of the dot-com boom is that the city, as a matter of policy, has to protect existing neighborhoods and residents (and existing industrial blue-collar businesses and jobs) from displacement. Otherwise the horrors of the late 1990s will start creeping back.