Yep. San Francisco no longer has marginal spaces -- every conceivable inch of it has been claimed, developed, and/or bid into the stratosphere. And it has nothing to do with "NIMBYs" or lack of development. It's a tiny, tiny patch of land, all of the build-able portions of which have been speculated upon since the early 20th century. This is important, because while cafes and universities and whatnot are important, you need marginal spaces to be a creative hub. Creative people tend not to be wealthy. They need affordable, amenable places to live and work. And San Francisco doesn't fit the bill -- unless you have connections, power, fame or access to unlimited capital. Which is why SF is suffering right now.

The last time this city was on discount was probably the late 1980s, when SOMA was a wasteland and everyone wanted to live in the suburbs. And surprise surprise...along came the first dot-com boom. All of those (comparatively) cheap spaces where creative kids were having raves and making art became the birthplace of the modern web. Creativity happens in marginal spaces.

I was actually surprised that pg kept emphasizing the need for constraints on development in this essay ("The empirical evidence suggests you cannot be too strict about historic preservation. The tougher cities are about it, the better they seem to do.") The conventional wisdom around here is that we must refer to this kind of thinking as "NIMBYism", and condemn it as backwards-thinking. "Obviously," says the technorati, "we should be knocking those tiny old buildings down and replacing them with skyscrapers!"

But he's right. San Francisco was once a cheap, pleasant place to live, precisely because of those sorts of constraints, coupled with demographic trends. But it's at a different point in the development curve today. It isn't for scrappy, poor innovators anymore. It's for ambitious, get-rich-quick types who will tolerate paying $4,000 a month for an apartment to be part of the scene. And as soon as the scene moves somewhere else, those people will be gone, too.