Four years ago, tech companies got tax breaks to move into one of San Francisco’s poorest and most densely populated areas. But newfound wealth for some does not mean newfound prosperity for everyone. If anything, it has amplified the gap between rich and poor.
SAN FRANCISCO — Last spring, Carlo Gascon’s organization took a chance on this city’s extraordinary technology boom, paying $1.4 million to turn a rundown single-family structure in the troubled Mid-Market area into its headquarters.
His neighbors are still an issue.
“Tech people — they see a bunch of kids hanging out in front of the recreation center, they call the police,” said Gascon, 29, a lifelong neighborhood resident. “They don’t know; you live with 10 or 12 people in one apartment, you want to be outdoors until you sleep.”
Gascon belongs to United Playaz, an organization in which former gang members try to keep young people from turning to crime. Now, he and others on both sides of this divided district are searching for some level of coexistence.
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Four years ago, tech companies like Twitter entered San Francisco’s Mid-Market, an area that includes the Tenderloin and South of Market, or SoMa, neighborhoods. As an incentive, these companies received tax breaks on payroll and stock options. As a result, thousands of well-paid and educated young people began working and living in one of San Francisco’s poorest, most densely populated areas.
More companies have arrived, along with venture capitalists, macaron-cookie shops and more police on Market Street, the main drag. But as this neighborhood’s longtime residents are learning, newfound wealth for some does not mean newfound prosperity — or even livability — for everyone. If anything, it has amplified the gap between rich and poor.
Thousands of white-collar employees build a digital future around the corner from drug dealers, street filth and homelessness. Vegan choices steam in free corporate cafeterias a few floors above people eating from trash cans.
The number of homeless people has not notably increased, but a building frenzy has eliminated the vacant spaces where they once sought refuge.
In 2000, according to Ted Egan, the city’s chief economist, median household income in the Tenderloin was just $12,163. A nearby census district, leading to the Financial District, had a median household income of $71,985.
In 2013, the Tenderloin’s median household income was $12,210, while the Financial District’s was $115,233. Adjusting for inflation, income in the Tenderloin fell about 30 percent, while income in the wealthier area increased 14 percent.
As that money heads into Mid-Market, nothing shows the gap like the price of shelter: Around the corner from the United Playaz building is a single-room occupancy residence, or SRO, called the Sunset. It costs $65 a night, almost twice what Gascon paid there a decade ago.
One short block away, a refurbished Best Western Plus Americania recently posted rates of $460 a night.
Across the street from Twitter, the NEMA, or New Market, apartments are 96 percent occupied. Some studio apartments in the building rent for more than $4,000 a month.
On a Tenderloin block with $70-a-night SROs, a business called Bulldog Baths charges up to $90 nightly to board a dog.
Despite these disparities, it is unlikely that tech will completely dislodge the poor. The Tenderloin’s residential hotels were built soon after San Francisco’s 1906 earthquake, giving the district hundreds of listed historic buildings that cannot be easily demolished or even revamped. And there are a lot of fierce and litigious housing advocates, along with a number of social services in the area.
Besides, low-paying work is booming, too, and people who do those jobs need a place to sleep. “Restaurant workers, retail employees, dog walkers — all those jobs that serve wealthy people — have exploded,” Egan said.
It is questionable how or whether any effort can close the wealth gap. Twitter recently constructed what it calls a “NeighborNest” across the street from its 2,500-employee headquarters.
“We decided, ‘We’re a tech company; what if we built a tech center?’ ” said Caroline Barlerin, head of Twitter’s community outreach and philanthropy. It has nine lockers for mothers to store backpacks, a kitchen like a Twitter snack station and a thin collection of books with titles like “Metaskills: Five Talents for the Robotic Age.”
On a recent Friday, five volunteers hovered over seven children in a “Coding for Kids” class. The course runs for a total four hours over two weeks.
On April’s companywide biannual day of service, more than 1,000 San Francisco-based employees, or 38 percent of Twitter’s staff, helped with community projects. Twitter says it is also giving $3 million to area nonprofits over the next four years.
Within a few blocks of Twitter are the tech offices of Yammer, Spotify, Square and Zendesk.
Zendesk sends small numbers of employees into the neighborhood to help at schools and meal services. It encourages employees to eat in the neighborhood, perhaps one reason a “wine tavern” sits opposite a Subway sandwich store. For its own events, Zendesk hires a neighborhood organization that trains convicts to become cooks.
Some people are trying to bridge the divide on their own. At St. Boniface Catholic Church, 120 homeless people sleep in pews and receive toiletries. Stanford Rosenthal, a designer at LinkedIn, has given out several hundred phone chargers in the past few months to the homeless at St. Boniface and elsewhere.
Some Tenderloin residents now give guided tours to tech workers, school groups and other interested parties, either directly or through local churches. These tours cover a range of topics including the history of the gay underground scene and meditations on why a mentally ill person might self-medicate with drugs. The idea is to help the techies feel connected to the area.
“What we’d really like to see is these companies hiring people into their tech cathedrals,” said Del Seymour, who said he sold crack in the Tenderloin for 18 years before getting sober eight years ago.
Seymour leads Tenderloin tours and teaches children how to navigate a tech-job interview. While Twitter spends four hours teaching children about computers, his class runs 54 hours. “People are learning how to operate in a different culture,” Seymour said.
To date, Zendesk, Yammer, Twitter and others have agreed to take candidates or help with training.
Seymour has also moved 50 miles away from the Tenderloin, where he rents five times the space for the same cost.
Gascon, the former gang member, thinks more people will leave as prices rise and onetime locals become strangers to their old streets. “That’s where the original San Francisco is going,” he said.
Does he mind?
“I’m down for change,” he said. “I drive for Uber now. I tell all my passengers that we have to get used to this.”