San Francisco: Silicon Valley’s dormitory

San Francisco is a dormitory town for Silicon Valley. Not completely, of course. But unless you regularly drive between Mountain View and San Francisco you probably aren’t aware of the huge fleet of buses that now drives people from San Francisco to other cities: Google in Mountain View, Yahoo all over, Genetech in South San Francisco, Ebay in San Jose. I have a friend who knows Gavin Newsom, the mayor, and keeps trying to get him to come and stand on a bridge over the freeway one morning to see just what is happening where lots of people (me included) largely work in Silicon Valley but live in the city. The traffic is still more jammed entering the city than leaving but it’s getting close. Bauer, who used to just run limos I think, now has a huge fleet of buses with on-board WiFi that they contract out to bring employees down to the valley from San Francisco. They cram the car-pool lane between all those Priuses making the not-so-green 40 mile trip.

San Francisco seems to have a very anti-business culture. Anything efficient and profitable is bad. So if, like me, you live in San Francisco you have to drive for 15 minutes and give your tax dollars to Daly City if you want to go to Home Depot. They finally gave up trying to open a store in San Francisco after 9 years of trying.  Of course a Walmart, Ikea or Target is unthinkable. And even Starbucks has problems opening new stores since they (big) compete too effectively against local coffee shops (small, thus good by definition). The reality is that some small coffee shops (like Ritual Roasters) are among the best in the US, and a Starbucks next door wouldn’t do well; and for some a Starbucks in the area would be an improvement. But in any case it makes more sense to let the customers of coffee shops decide who is good rather than the board of supervisors trying to burnish their progressive credentials.

Those two things together—much commerce is out of the city, many inhabitants work outside the city—are warnings that San Francisco is not heeding. San Francisco already has one big problem (as do many cities) that housing is really expensive (at least partially due to economically illiterate policies like rent control and excessive political interference in the planning process making it difficult to build any new housing) and the public schools are crappy. So when a resident has a family, they have to be rich to afford a large enough house and a private school, or they move out. So every year San Francisco can close some schools since there are ever fewer children in the city; famously there are more dogs than kids.

The trend, which is not good, is for San Francisco to depend increasingly on three things: out of town rich people who live elsewhere (often in Nevada due to California’s taxes) but like to keep an apartment in San Francisco (about 20% of the people in the building where I live are like that); people who live in San Francisco and work somewhere else; and tourism. Two of those three groups are spending a lot of money and generating a lot of tax that San Francisco doesn’t get to see, but it does have a lot of the costs associated with them. Of course, tourism brings dollars in from outside but most of the employment it creates is not at the high valued added end of the scale: restaurants, hotels and retail largely generate low-productivity low-pay jobs.

Busboys for San Francisco; on-chip buses in Silicon Valley; wi-fi equipped buses in between.

This entry was posted in silicon valley. Bookmark the permalink.

Comments are closed.