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Comment by abalone | Hacker News Reader

See the Prop C campaign (e.g. Marc Benioff) for more insight in this issue. SF tech didn’t invent homelessness but it has clearly exacerbated it, simply by generating a lot of demand for housing.

In a nutshell, the tech industry generally tries to point the finger at lack of supply and blame NIMBYS for obstructing housing construction. But this can be seen as a defensive strategy: it’s pretty clear that a sudden, massive surge of high income earners into a constrained area in the top of a peninsula with weak tenant protections will push a lot of poorer people out of their housing.

It’s not only the fault of the city not to build housing fast enough. We’ve even seen “strange” effects in other boomtowns (Seattle) where building doesn’t solve the problem.[1]

It’s not that strange if you truly understand economics 101. It contains the concept of price inelasticity, which one might see under boomtown conditions (insatiable demand for a necessity, essentially). But to even engage in a real economics discussion kind of misses the point. Mostly the tech industry wants to deflect blame for the problem.

[1] https://knock-la.com/seattle-a-cautionary-tale-for-supply-si...

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It's not morally wrong to move to a city and purchase housing at a market rate. Nor is it the moral duty of any individual to provide or preserve affordable housing for his or her neighbors. That's the government's job.

The government (and the voters) of San Francisco has reacted very badly to the influx of new people, which is happening in the context of decades of poor zoning and housing policy.

I also don't buy the argument in the article you linked, because there are many other cities in the world that have successfully solved increased demand by building more housing. For example, the Tokyo metropolitan area has a population nearly the size of California's in a fairly small area but rent is cheaper than in San Francisco and it's more affordable for working-class people.

You say it’s exclusively the government’s job to preserve affordable housing, not the tech industry. Ok. We just passed Prop C, a comprehensive measure to prevent homelessness. Guess who opposed it?

> You say it’s exclusively the government’s job to preserve affordable housing, not the tech industry. Ok. We just passed Prop C, a comprehensive measure to prevent homelessness. Guess who opposed it?

The mayor of San Francisco and a bunch of other individuals and businesses, including tech companies, who don't want to throw more money away pursuing the same bad policies as before.

There were also major tech CEOs in favor of the measure, including Benioff who pushed hard for it.

I predict that it will have very little impact on the homelessness problem or housing affordability in San Francisco.

It was mostly tech funding the opposition (Stripe, Lyft, Dorsey) and the mayor’s campaign also was funded by tech.

I love how you think it’s the government’s job to solve homelessness but then don’t want to fund the government.

> I love how you think it’s the government’s job to solve homelessness but then don’t want to fund the government.

That's an uncharitable interpretation of my views and I don't think you're arguing in good faith.

I have no problem funding good government policies. San Francisco's policies are not good. The homeless services are a total administrative and bureaucratic disaster and pumping more money into that system is not going to help homeless people.

Well, I'm curious, and the question is being begged - how are San Francisco policies an administrative and bureaucratic disaster?

There are already more 70 agencies and other organizations spending over $200 million per year of city money with little to no accountability for their spending or their results. That's before the Prop C tax takes effect. That will add another $300 million or so.

Prop C has extensive accountability mechanisms and is directly overseen by the mayor:

OVERSIGHT & ACCOUNTABILITY

This initiative requires an Oversight Committee comprised of nine experts on homelessness, supportive housing, mental illness, substance use disorder, and development, who will recommend funding priorities, promote transparency and cultural competence, and produce regular reports about who has been served by this fund and what still needs to be done for the Board of Supervisors. The body will also conduct a needs assessment to direct recommendations. Four seats will be appointed by the Board of Supervisors, four seats appointed by the Mayor, and one seat by the Controller’s office.

Funding will be allocated into three City agencies: the Department of Homelessness and Supportive Housing, the Mayor’s Office on Housing and Community Development, and the Department of Public Health. That funding contracted out to non-profits will be carefully overseen by contracting managers in said department. Contract managers will carefully scrutinize budgets, check receipts, payroll records, perform audits and ensure funding is spent appropriately. They will also review units of service, types of services rendered, and review client satisfaction surveys. Contracting organizations will only get paid for actual services rendered. Funding for programs that are city run will have similar oversight and accountability measures.[1]

I will not accuse you of making a bad faith argument, but it’s pretty clear to anyone who actually looks that there are accountability mechanisms. The root problem is that SF spends a fraction of what other major cities do per homeless person, because budgets are stretched thin keeping people housed. SF spends just $3.8K per homeless person.[2] “No accountability” is a political lie calculated to appeal to people’s biases about government.

[1] https://www.ourcityourhomesf.org/san_francisco_prop_c_2018_e...

[2] https://www.sfchronicle.com/bayarea/heatherknight/article/Bu...

Why is spending 200 million inherently bad? Why is having 70 agencies and organizations inherently bad?

Your facts may be right, but I don't automatically draw the conclusion that they equal "disaster."

The main problem is the lack of accountability (they can't really tell where the money is going or what results they are getting per dollar). Source: https://www.sfchronicle.com/bayarea/article/S-F-spends-recor...

But it's also extremely likely that there is duplication of effort that could achieve better results if things were more coordinated.

Throwing more money into such an opaque and uncoordinated system is a bad idea. I'd much rather build a better system and defund this one.

You’re just saying that without citing any supporting evidence. It’s fact free.

I added a link. There are a number of articles on the lack of accountability in this system. It's not hard to find.

Thanks for adding a link. It's from 2016 and its author, Heather Knight, is in favor of Prop C.

In the years since she wrote that she has investigated SF homelessness deeply. She's detailed how very little is actually spent on the SF homeless population ($3.8K per homeless person).[1] Because it turns out the cost of keeping at-risk people from losing their housing is high due to.. you guessed it, skyrocketing costs due to the tech boom.

Prop C addresses this fundamental funding problem and details specific accountability measures, which I've quoted upthread.

[1] https://www.sfchronicle.com/bayarea/heatherknight/article/Bu...

Is there actually a duplication of effort?

Are they not open to foi requests?

I don't mean to be so repetitive, I've just heard the line "SF government is inefficient" many times but have yet to come across the kind of evidence I could take to a city council meeting and demand change with.

My understanding was that most of the tech opposition came from 'lower' margin businesses as it's a tax on gross receipts (revenue) vs profit so it disproportionally hurts high volume low margin businesses (like stripe, square, lyft) vs high margin software businesses (like salesforce). I think it's a little unfair to demonize Dorsey and others who do seem to genuinely want to help solve the issue, but took issue with the specifics of this measure.

https://www.bloomberg.com/news/articles/2018-10-19/square-s-...

Dorsey campaigned for the gross receipts tax in 2012. In his capacity as Square CEO. Here’s a video of him doing it.[1] He had no problem with the gross receipts structure for a low margin business. He only flipped his position when it became about helping the homeless.

Again this is just another superficially plausible sounding argument (along with “no accountability”, etc.) that’s just cover for opposing anything suggesting the tech industry bears some responsibility for exacerbating the homelessness situation and should pay to help.

[1] https://www.sfgate.com/business/article/SF-Citi-video-plugs-...

I didn't realize that, thanks for sharing!

He was for it in 2012 and opposed it in 2018 because he thought that the 2018 prop was out of whack vs. the 2012 one. It had nothing to do with "because it was helping homelessness" in 2018.

What's your source?

The executive government, so I'm not sure what your point is.

Meanwhile the dude that owned the biggest tower in SF supported it... It pretty much is the perfect example of my post.

Just FYI, Salesforce Tower is actually owned by Boston Properties and Hines Interests. Salesforce just rents there.

> simply by generating a lot of demand for housing.

Oh for fucks sake. You realize this is what happens when a city becomes successful right?

If you want to blame someone, its the NIMBYs: scuttling housing projects that would have eased the bubble and helped house a lot more people for reasonable prices, while benefiting from the economic successes of the companies and people moving in.

> scuttling housing projects that would have eased the bubble and helped house a lot more people for reasonable prices

Exactly this. In and around Amsterdam, housing prices are booming. The number of homeless people on the street has hardly increased, because we spend massive amounts of public funds to keep the homeless off the street and also to help them get a home. The biggest issue is graduates, that have to share houses or move out of the city. Also, it's nearly impossible to buy when you're alone.

It sounds like you’re saying something a little different though. You’re saying Amsterdam “spent massive amounts of public funds to keep homeless off the street,” not that they were able to lower market rates through more liberal building.

Prop C is all about doing that. It passed recently. Against the will of much of the tech industry, notably. (Benioff a major exception of course.)

> Prop C is all about doing that. It passed recently. Against the will of much of the tech industry, notably. (Benioff a major exception of course.)

The mayor of San Francisco also opposed it. Pumping more money into a broken social services system is a pretty problematic idea and it's not like it was only tech companies opposing it.

It was mostly the tech industry putting in the money against it: Stripe, Lyft, Jack Dorsey. Arguably the mayor of SF is a puppet of the tech industry. It passed with 60%.

It was also the tech industry putting money for it too with Benioff.

That of course discounts how the actual tech workers voted. I'd be curious to see polls on that. Anecdotally most tech workers I know supported it.

If I had a $2 million mortgage in SF I'd probably be a NIMBY too. Pretty much anything that increases supply of housing could wipe a million off my net worth.

Low property taxes and Howard Jarvis's "taxpayer foundation" are the ultimate villains here by fighting to create this exact situation.

The people who are fighting to escape being in $1 mil negative equity by going to town halls and kicking up a fuss arent necessarily deserving but they're simply reacting to incentives put in place by others.

The low property tax thing is another favorite of the tech industry to target, to deflect blame from the elephant in the room (massive insatiable demand). There is a lot of validity here: there are cases where rich property owners are not paying their fair share in taxes. But it’s often a disingenuous argument meant just to deflect responsibility.

The property tax rules were originally passed to protect senior citizens from losing their homes because they couldn’t afford to pay surging tax rates. A boom happens, their house values go up, but they’re still living in fixed incomes.

I literally just read a Twitter exec, on Twitter, openly say that well seniors could just sell their homes. Nice! Great solution. Just leave, old people!

Or, they could just do a reverse mortgage. Sweet. Those are totally unproblematic for seniors, right?!

I just watched Hell or High Water which is about two guys that become bank robbers because their mom was going to lose their home to a reverse mortgage.

Or seniors could be allowed to defer their property taxes and convert them into a tax lien on their property, to be dealt with by the estate. You know, a simple and obvious solution. But of course, the two guys in Hell or High Water would still ultimately be SOL. That's what privilege (owning a house sitting on highly-desirable land that's probably worth millions of dollars) looks like in real life. Privilege and greed.

Did you see the movie? It was a poor family that put all their money into a house, then lost it through a reverse mortgage. “Privilege and greed” is a slapdash accusation here.

Some families struggle to put their life savings into a home and don’t have anything left over for other investments. What you’re proposing is still going to place pressure on seniors to move lest they lose a lot of estate value.

Basically I think you’ll find support for doing this go to rich who can afford it. But a blanket shift to liens on cash-poor seniors’ homes could end up disproportionately hurting the less fortunate.

How about we change state property tax law so that anyone can automatically get their property taxes converted to liens? With penalties for people who can afford to pay, and no penalties for those who cannot. Coupled with basing taxes on something like actual market value, obviously.

Then absolutely nobody will ever be thrown out of their home because of owing taxes, and there's still enough property tax income to pay for services. Everybody wins and grandma with the multi-million-dollar ancestral pile in SF can stay!

I'm honestly not seeing any significant downside to an approach like this. Do you?

> openly say that well seniors could just sell their homes. Nice! Great solution. Just leave, old people!

Or...sell to a condo complex developer, get some cash + a unit in the new building + housing while it's being built. Win-win. An condo unit is less maintenance to deal with, which is a plus for a senior. They also get to unlock some of the value of their property, and turn it into cash they can use now, without having to move away from their existing networks of friends and family.

I agree this can be a good outcome, but there’s a big difference between forcing seniors to do this versus letting them opt into it. Especially when hiking taxes does not guarantee that the “magic of the market” will provide a good solution in each case. There is a lot of intangible value built up in a home you’ve lived in for decades with the goal of retiring in it.

"intangible value" is the type of thing I'm less sympathetic to. People are living on the streets because they can't afford housing, because there isn't enough being built. Emotional attachments to a piece of property are not more important than solving the human misery caused by the current state of affairs.

It's not just emotional attachment. There's a lot of investment that goes into building community relationships and the living space itself that doesn't translate into market value.

> People are living on the streets because they can't afford housing, because there isn't enough being built.

So you're making an ethical appeal that old people should be forced to sell their homes to solve homelessness. Ok, I'll take you up on that.

You've only cited the supply side of the problem. You could just as well say "People are living on the streets because they can't afford housing, because too many techies are moving into town. Young people living in a fun adult playground is not more important than solving human misery cause by the current state of affairs."

Now which is more important: helping wealthier people live in a funner city or keeping seniors in their homes? What's the first priority here?

> There's a lot of investment that goes into building community relationships and the living space itself that doesn't translate into market value.

My proposed solution preserves community relationships.

> So you're making an ethical appeal that old people should be forced to sell their homes to solve homelessness

Nope. I'm arguing that people shouldn't be able to use zoning to wield power over other people's property to the unreasonable extent we're seeing now. That they can do so is a result of laws like Prop 13 - there's no personal cost to being anti-development.

> People are living on the streets because they can't afford housing, because too many techies are moving into town

You're literally arguing that no city should ever increase in population - it should stay frozen forever because god forbid, otherwise the neighborhood might change.

> Young people living in a fun adult playground

What does that have to do with higher rent and property prices? Or anything else?

> Now which is more important: helping wealthier people live in a funner city or keeping seniors in their homes? What's the first priority here?

You can do both and have no homelessness. Oppressive zoning laws prevent it.

"The property tax rules were originally passed to protect senior citizens from losing their homes"

FWIW that was the sales pitch not the reason. The same people who got prop 13 passed on that basis also demonstrate their concern for the elderly by lobbying to slash public pensions in California:

https://www.hjta.org/california-commentary/public-pensions-c...

"A boom happens, their house values go up, but they’re still living in fixed incomes. I literally just read a Twitter exec, on Twitter, openly say that well seniors could just sell their homes. Nice! Great solution. Just leave, old people!"

The additional free money capital gains ought to take the sting out of having to move. Renting pensioners don't get that. They also don't get 1%'er lobbies pretending to care about them.

Prop 13 was passed in 1978. That post on pensions is from 2010. You’re going to need a stronger connection than that to support the charge that helping seniors stay housed is made up.

> The additional free money capital gains ought to take the sting out of having to move.

Well, there you go. Openly arguing for forcing grandparents out of the homes they’ve lived in for decades. This is an amazingly callous line of argument to me.

  The additional free money capital gains

... face the full regular income tax rate in CA income taxes.

I can't believe you're actually arguing that prop 13 was for the seniors so they could afford their houses and that it wasn't a massive fucking cash grab by realtors in california. This makes me think you're entire line of arguing here is disingenuous.

But who's buying? If nobody is buying cause the cost is too high, your asset is illiquid and functionally worthless.

Exactly. I just don't get the logic behind wanting to drive up the entire market beyond the reach of most buyers. I'm guessing most folks just don't sell precisely because of this and instead opt to rent out instead.

This is probably fine except when they actually need to sell the house for whatever reason.

Housing prices don’t necessarily go down if a place increases in density. It depends on the location. Take a look at 5th ave in Manhattan - as large single family homes were being replaced by skyscrapers, the value of land went up.

I predicted this response, right? Boomtown economics are tricky. There is just an extraordinary amount of demand that appeared in a very short time. The velocity and magnitude of the surge in demand matters.

When you have an entire global population of techies that suddenly want to move to the heart of their industry, you may experience price inelasticity, which basically means you won’t see much downward movement in price.

Think of it: before prices come down to affordable levels for the people you see on the street, or even service industry workers and teachers and whatnot, they would first be dirt cheap for tech. How many more tech workers would move to SF or start their companies here if they heard it was cheap now? That’s how deep the demand goes. That’s all the demand that needs to be satiated before market rates come down to where they could reverse homelessness.

That’s why tech can’t just pass the buck to NIMBYS or pretend like this is any other city. We are creating some of the most valuable companies in the world here right now and it generally helps your prospects to co-locate. That creates very exceptional demand conditions.

You have good points. In a hypothetical scenario where the housing market was highly elastic, it would certainly lead to a huge movement of tech labor force to the Bay Area.

But I feel like that is the way SFBA will grow. Every city has its secret sauce, for SFBA it is tech. Instead of fighting it, I can imagine a scenario where the concentration of Tech leads to a transformation of the area to be more like NYC. Or maybe it will take a different direction.

As naive as it sounds, I still believe in Tech as a force for good (not Big Tech necessarily). I moved here from Austin, and folks there talk about how the tech industry is growing, but its still Satellite offices for Big Tech. The kind of talent I see in SFBA is staggering.

Do you really feel that Prop C is “fighting” tech growth, though? Not sure if that is your position.

I think a big reason Benioff came around is that he’s taking a long view. Perhaps you could even draw a connection with the maturity of Salesforce as a company vs young startups whose current teams might exit in under 10 years. Benioff got his whole team on board not only out of altruism, but by noting that homelessness was seriously threatening Saleforce’s future in the city.

Benioff didn't come around. He is from SF, unlike a lot of other Tech CEO's. His company has made significant investments in the City proper. He's been playing the long game for a while now.

I don't have an opinion on Prop C. The thrust of my argument was more around prop 13.

The tech people are not going to live in the shitty apartments you should be building. People are not fooled, they see whats happening in SF. You need to stop playing games and build more apartments. This is not difficult.

But what they did was what companies are supposed to do - be extraordinarily successful. So successful that they can afford to pay their employees shitloads of money. So successful that they need to hire more and more to grow bigger and bigger.

They didn't dump oil in the gulf. They didn't use shady laws to buy majority shares in a public Telecom utility. they didn't exploit the land with unsustainable crops. They sold ads on websites.

So hence my theory - any issues caused by companies doing well without even being evil while doing well, is solely the fault of the government for failing to legislate properly.

Tech is a much smaller part of the SF economy than most would like to believe, and only part of why the city is prosperous. Finance, healthcare, education, government, professional services, and hospitality are all growing faster than the average in SF.

That Knock LA article misunderstands Seattle housing, cherry-picking facts to suit its argument. The core problem is that over 80% of Seattle residential zoning is single-family, and much of the new development is concentrated where people are reluctant to live.

E.g., article cites claim that two-thirds of downtown new housing development is vacant, yet ignores the source article's immediate next sentence: "thousands of new workers... are choosing to live in other neighborhoods." Most Seattleites don't want to live downtown; they prefer to live in surrounding neighborhoods: Capitol Hill, Fremont, Ballard, the Central District, etc. But those neighborhoods are mostly single-family zoning, so existing residents are either being displaced or seeing huge property tax increases (if they're lucky). A more distributed growth plan would alleviate this.

Also re: "insatiable demand for a necessity". My demand for housing is one apartment and I'm fortunately sated. How many apartments do you need?

> In a nutshell, the tech industry generally tries to point the finger at lack of supply and blame NIMBYS for obstructing housing construction. But this can be seen as a defensive strategy

Is it perhaps possible that there might be a distinction to be made between things that are defensive strategies and things that are factually incorrect?

So build some more housing. The problems in SF are completely self caused.

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