Critics: San Francisco’s Poor Pay for Their Own Eviction by Tech Cronies

With San Francisco offering massive tax incentives to redevelop 77 dilapidated warehouse buildings into a “Twitter Town” for the “digerati” venture capital crowd, the adjacent Mission District community is now in turmoil, as the city’s poor are being booted to make room for new buildings and Airbnb vacation rental conversions.

Although the poor are paying for the sales tax revenue being used to finance their displacement, there is little chance that the San Francisco Board of Supervisors will vote this week for a temporary moratorium on new “market-rate-housing” in the Mission District.

The residential turmoil is directly related to San Francisco’s use since 2011 of an up-to-eight year partial “Payroll Tax Exclusion” through 2019 to attract tech companies to the South of Market Street (SoMa) community.

Led by Twitter and Danish help-desk software maker Zendesk, 61 tech companies have taken incentives to pile into “Twitter Town,” according to the City Controller.

The San Francisco County Board of Supervisors claimed the incentives were to renovate 40 square blocks of run-down warehouse buildings. But the real goal, critics allege, was to assist developers in displacing the city’s poor in favor of building an upscale “Nerdistan” cluster of high-tech industries that support trendy restaurants and shopping.

Since San Francisco was already the hottest real estate market in the nation in 2011, opponents argue, there was no justifying giving developers and multi-national-corporations cash incentives to convince them to consider moving to “The City.”

In the last 5 years, San Francisco property prices have risen by 75 percent. That compares to a gain of 31 percent for the 20 largest U.S. metropolitan communities in the S&P/Case-Shiller Index. In the year through March 2015, San Francisco real estate prices jumped 10.33 percent, versus 5.04 percent for the average of the top 20 U.S. markets.

Berating San Francisco’s housing policies as a failure, to the cheers of “¡si, se puede!”–yes, we can!–from an audience of protestors at Tuesday’s County Board meeting, Supervisor David Campos proposed the 45-day halt on planning department approval of demolitions and building permits for multifamily residential developments in the 1.5 square-mile community. Under his “emergency” measure, the moratorium could be extended for up to two years if the “crisis” persists.

“The Mission is ultimately the Mission because of the people, and if we lose the people we lose the Mission,” Campos told protestors at Mission Neighborhood Center later in the day. “A moratorium gives the community a fighting chance,” he said, according to the San Francisco Chronicle.

But due to the clout of real estate interests and the tech crowd, Compos has little chance of passing an “interim urgency ordinance,” which would need the support of 9 of the 11 supervisors to pass. Although Campos has four co-sponsors, Mayor Ed Lee and several other Supervisors are opposed to ending what many critics call “developer pork.”

A report by the San Francisco controller’s office suggests the payroll tax breaks for Twitter Town have failed to add any tax revenue to the city. Despite the tax breaks that lured 61 businesses into the area, total sales taxes along Market Street–which reflects the health of shops in the area–rose by only 10 percent between 2010 and 2013, compared with 25 percent in the rest of the city.

With the payroll tax incentive cash going to the tech companies amounting to multiples of any development fees paid by the cronies, critics allege that the city is using sales taxes revenue collected from local residents as incentives to assist paying for their own eviction.

Roberto Hernandez, leader of a group called “Our Mission, No Evictions” told the Chronicle: “The tech industry has come like a train wreck into this neighborhood and into this city.” He added, “They are a group of people that are heartless in this community.”