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High Values in San Francisco

A recent study by the National Low Income Housing Coalition found San Francisco to be the most expensive rental city in the United States. To put this in perspective, it's not unusual for a studio in San Francisco to cost $2,000/month or more. This is due largely to the city's high standard of living; San Francisco has a higher concentration of high wage earners than any other city in the United States. The median income in San Francisco for a family of four is $91K per year — much higher than other cities.

San Francisco consists of 49 square miles, and the city is not expanding, say, in the way New York has grown outwardly from the center. Because the city is on a peninsula, and is surrounded by water on three sides, the only way for it to expand is upwards. The scarcity of land is therefore reflecting on the cost of living in this city. Consequently, there is an underlying sense of competition regarding who should live where, how land should be developed, and how much it should cost.

Noted urban historian Joel Kotkin has claimed that San Francisco's gentrification has occurred steadily and systematically over the past four decades. Why was San Francisco the first city to experience this type of evolution? Because, Kotkin has argued, San Francisco is probably the nicest city in America. Kotkin has classified San Francisco's gentrification as having three distinct eras: “In the 1970s, educated Baby Boomers decided they'd like to live in San Francisco. In the 1980s, that trickle intensified. And then in the 1990s, the dot.comers finished it off.” This is definitely the trend for the distinct neighborhoods of San Francisco, as well as some new ones that have sprung up as hybrids: districts that have bridged the geographic divide between previously affluent and working class neighborhoods.

Lower Haight

Sometimes referred to as Haight-Fillmore by real-estate developer types, Lower Haight differs from Haight-Ashbury (or Upper Haight) largely due to its diverse demographic. While Haight-Ashbury has gained notoriety for its role in the beat and hippie movements, and consequently has become something of a tourist attraction, Lower Haight has remained relatively sleepy and gritty. Some would even go so far as to refer to its atmosphere as “post-punk” or “grungy” the neighborhood was traditionally very working-class and racially diverse.

In the last decade, Lower Haight — especially near the intersection of Haight and Filmore — has attracted a number of entrepreneurs with enough bravado to open up bars and restaurants in this neighborhood. In fact, Lower-Haight has an unusually high concentration of eating/drinking establishments, and it has a very strong retail atmosphere with numerous art galleries, salons, independent music/book stores and cannabis dispensaries. This is most likely due to the relatively low costs of setting up a business here, vis-à-vis its more touristy neighbor, Haight-Ashbury.

As a result of this influx, large groups of yuppies began spending more money here on the weekends and in the evenings. The change in commerce and demographics made the area a much more desirable place to live. Its close proximity to Haight-Ashbury, and number of relatively affordable Victorian houses here has also attracted the young and affluent.

Geographically, Lower-Haight is located east of the more famous Haight-Ashbury, and is bordered by Oak Street to the north and Duboce Ave on the south. Compared to Haight-Ashbury, Lower Haight has gentrified at a much slower pace — but the writing is on the wall. Presently, Lower Haight is a very affordable place to call home, where a 2-bedroom home can be purchased under $500K and a 3-bedroom for under $800K. A renter could likely find a studio lower than $1,500, a rate that is expected to increase over the next decade as the neighborhood's demographics continue to change.

The Mission

The Mission has always had a strong Latino population. In the early 1800s, it was covered by a network of ranches occupied by affluent Spanish-Mexican families. As the city developed and spread, the area saw a gradual increase of new Caucasian residents moving in, buying this area's affordable and undeveloped land. For the next 50 years, the Mission maintained its distinctly Latino population, but with a sizeable Caucasian minority. In the years shortly after WW2, another shift occurred as Latinos moving back into this area coincided with white flight.

In the 1980s and '90s, the Mission would become home to large numbers of immigrants and refugees from warn torn regions of Central and South America. During the dot-com boom towards the end of the 1990s, a large number of young and affluent San Franciscans moved into the Mission, because of the area's sunnier-than-the-rest-of-the-city climate (San Francisco's weather can vary greatly from block to block), the low-priced rent, and the bohemian atmosphere. Virtually overnight, The Mission became one of San Francisco's most popular neighborhoods for the young and affluent. The neighborhood's established and active nightlife facilitated the rapid redevelopment of the neighborhood as the place to be. As a result, the famous Google shuttle (vanpools for Google employees) has more vehicles serving this neighborhood than any other in San Francisco.

Today, the Mission is diverse, both ethnically and economically-speaking. Half the population is Latino, a third is Caucasian and about 10% is Asian. While the contrary could be argued, in San Francisco terms, there is still some relatively affordable housing in The Mission. Presently, a one-bedroom apartment in The Mission goes for about $1,900 a month, and the average price for a single-family 3-bedroom/2-bath house runs about $850K.

SoMa

In the 1940s and '50s, SoMa (short for ‘South of Market’) was both a working class neighborhood and home to a warehousing and light industry sector. This was due to the area's unique combination of zoning for both industrial and residential. As a result, many of its residents at the time were journeymen, employed in various industries such as fishing or freight. Other residents were employed in the area's factories and, with their families, lived in very affordable housing. Needless to say, SoMa was traditionally a very blue collar neighborhood.

In the 1960s, a modest number of artists and creative types moved to SoMa because of its affordable housing and proximity to other popular neighborhoods. Gradually, many more bohemian types began to inhabit the SoMa neighborhoods, and along with their blue collar neighbors, they ambitiously fought the city's effort to redevelop the area for systematic re-zoning and effective gentrification. It was believed that the neighborhood's geographic location would make it perfect for building a number of higher-end housing and condominium complexes. The efforts of the residents were temporarily successful, however, with the beginning of the HIV/AIDS epidemic in the early 1980s, the city stepped in and closed a number of unregulated bathhouses and bars altering what had gradually become a gay sub-community. These moves were done in the name of public health.

Eventually, more “mainstream” San Franciscans moved to SoMa in the 1980s and by the mid-nineties, this area became increasingly gentrified. Many area-based businesses began catering their operations to the tastes of the more affluent residents. Many of the older warehouses were converted into “live–work” lofts in order to accommodate an increased demand from the city's growing artistic community. By the late 1990s, SoMa would become a favorite among new San Franciscans, moving here during the dot-com boom.

Because the dot-com boom ended so abruptly, SoMa seems to only have been half-gentrified, so to speak. For instance, east of 5th St are the Museum of Modern Art (MoMA), the Giants' Pac Bell Park, along with a large number of expensive restaurants and lofts. However, west of 5th St is completely a different story: the streets are more reminiscent of neighborhoods in the Tenderloin, wherein the streets are lined with pawnshops and budget hotels.

Presently, SoMa is a medium price range neighborhood, in San Franciscan terms. By mid-2007 a modest-sized 1-bedroom condo in SoMa was priced at $652K, with live–work lofts starting at about $1M. While this is quite a bit more than the national average, it is still cheap when compared to other SF areas like Nob Hill.

Dogpatch

For many years, Dogpatch was largely forgotten by many would-be gentrifiers: both yuppies and developers. Similar to SoMa, Dogpatch was zoned as semi-residential, with light industrial and factory sectors. Blue collar for most of its history, this community first experienced change in the 1970s as a large group of artists and creative types bought the many affordable Victorian cottages in the area. Many of these homes were built by their original owners in the early 1900s, and eventually sold as residents moved to other neighborhoods.

Housing prices in Dogpatch actually dropped in relation to most other SF neighborhoods until the mid-1990s, when the other then-trendy neighborhoods grew overpopulated and needed an annex of sorts. Many of the neighborhood's light industrial spaces were rapidly converted into live–work units, a move that has been controversial to many. This is because many of Dogpatch's historical monuments and buildings were destroyed in order to make room for new lofts. While much of the transition since the 1970s was gradual, the mid-to-late 1990s saw hundreds of these units being built quickly, and without regard for the neighborhood's existing social and economic make up as well as its history.

As a result, many industrial workers and their businesses were displaced. One of the most noted examples of Dogpatch's redevelopment is the Espirit Park development — a 142-unit upscale live–work loft complex, located in the former Espirit Shoe Factory. In this development, two-bedroom lofts list for $1M — $1.3M, and one-bedroom units sell for $625K. Similarly, in other older loft complexes it is not unusual for a one-bedroom loft to go for between $750K and $1M.

The Tenderloin

The Tenderloin is one of the most (in)famous neighborhoods in San Francisco, known diverse immigrant population and its artistic community. Located in the heart of the city, and only blocks from San Francisco's cultural and financial epicenters, the Tenderloin has enjoyed its gritty reputation since the Nineteenth century. The name itself is derived from the fact that policemen willing to take on the Tenderloin as their beat in the late 1800s earned considerably more than their contemporaries, and thus could afford the choicest cuts of beef: tenderloin.

For over 100 years, the Tenderloin has not only had the city's highest crime rates, but its residents have organized themselves and aggressively fought against gentrification of any type. The Tenderloin would experience its first drastic social change with a large influx of Vietnamese immigrants and refugees who began moving here in the 1970s, because of the neighborhood's affordable, non-profit housing. They subsequently made the Tenderloin their homes, and have started businesses and raised families here.

Many would argue the Tenderloin has staved off the typical symptoms of gentrification, though it is apparent that the surrounding neighborhoods are encroaching and influencing the Tenderloin. In the last decade, there have been an increasing number of trendy restaurants, bars and boutiques opening up here. And as a result, growing numbers of younger, affluent San Franciscans are willing to stake their claim in the Tenderloin, hoping to get in before the prices escalate as they have in other parts in the city. Real estate developers and young affluent types who are looking to purchase real estate have the most to gain here.

As the other relatively lower income neighborhoods (SoMa and The Mission) are experiencing rapid gentrification, the Tenderloin is considered one of the last affordable neighborhood for the working class. Presently the average price of a 1 bedroom, 500 sq. ft. condo in the Tenderloin goes for about $370K, which is about half the price of other areas. It's safe to expect this figure to grow significantly in the next five years.

TenderNob

In the last decade, San Francisco has witnessed the emergence of a new hybrid neighborhood: TenderNob. As could be assumed, TenderNob is a buffer zone of sorts between the super-affluent Nob Hill neighborhood, and the gritty Tenderloin. Ambitious real estate agents call this area “Lower Nob Hill”, and colloquially, it is known by many San Franciscans as the “Trenderloin”, in reference to the neighborhood's rapid social change, as well as how trendy it has become to live in this part of the city.

The TenderNob is rather small, only 7 blocks by 2 blocks, but it slowly and steadily overflowing into the Tenderloin proper. This will invariably increase the pace with which the 'Loin changes. Currently, TenderNob is perhaps the most desirable place to live for those young and affluent types who like the idea of living in the Tenderloin, but aren't quite ready to witness the urban grit that this experience likely entails. Think of it as the Tenderloin on training wheels. Recent comparisons have likened it to Williamsburg, Brooklyn — another neighborhood that changed rapidly, and quickly became one of the most popular neighborhoods in New York City.

A development slated to open in early 2009 will contain 38 studios, one-bedroom and two-bedroom units in a newly renovated building. Located at 901 Bush, the prices will range $385–459K for a studio, $435–595K for a one-bedroom, and $595–665K for a two-bedroom. Because this neighborhood is a recently-created phenomenon, and not a traditional, established neighborhood, it would be safe to say that the TenderNob is semi-gentrified. As a result, and as was indicated above, the housing costs are still near median for the city. Renting in the TenderNob hovers around $1,500 for a studio apartment, roughly the same as Lower Haight.

Sources:

• PBS.org
• Wikimapia.org
• Metroactive.com
• Sagepub.com
• Pier70sf.org
• Sfgate.com
• Sfbg.com
• Wikitravel.org
• SFWeekly.com