The Dot-Com Influx and the Luxury Loft Boom

© 2000 Tom Wetzel

Urban Fortress as Residence
Will the Server Register to Vote?
Mixing Incompatible Uses
Real Artist Live/Work

The influx of capital into the Mission district has become a flood, with many new buildings under construction around the neighborhood. The first phase of this influx was in the form of the boom in expensive lofts, under the "live/work" rubric.

The "live/work" law was the outgrowth of the struggle of artists who were evicted from the Goodman Building in 1983. This struggle led to an effort to design a new structure that would blend studio and living space in a single unit. The resulting "live/work" ordinance, passed in 1988, blended the city's residential and commercial building codes. As commercial structures, they were exempt from the school fees other residential developments must pay and were allowed in industrial zones like South of Market and the Northeast Mission. The law was inspired by conversions of old industrial buildings to artist live/work spaces in the '70s, such as Project Artaud (a conversion of a former American Can plant in the Northeast Mission).

In the mid-'90s the scab Residential Builders Association seized upon the live/work ordinance as a way to lower their costs to acieve higher profits. They were able to get lower costs both by using low-cost industrial land as well as by escaping city fees and regulatory requirements such as compliance with the Americans with Disabilities Act. The RBA has built more than six hundred luxury loft units in the Mission under the "live/work" rubric.

Joe O'Donoghue
The San Francisco Print Collective did this poster expressing the local feeling about Joe O'Donoghue, thuggish head of the Residential Builders Association. (Images of the work of the SF Print Collective.)

Criticisms of the live/work boom run along several lines:

For more on these themes see:

No Artists Here?
It's unlikely any working artists live in this expensive loft building on 18th Street.

Urban Fortress as Residence

Close to BART
This group of loft condo boxes is at 17th and Hoff -- about two blocks from the 16th Street BART station.

Fortified Planters
The 17th and Hoff boxes exhibit the fortified approach to planter boxes. The metal grills seem to be designed to discourage climbing into the bushes or climbing on to the wall to paint slogans or tags on the walls.

The architecture of the live/works presents a stark, fortified face to the surrounding community. An SUV drives up to the sidewalk, the gate of the fortress opens up, the SUV drives in and the fortress door clangs shut behind -- that is the image. The principle of the gated community inserted into the inner city. The hostility of the surrounding community is anticipated in the design.

Yuppies Get Out
"Yuppies Get Out" and "Yuppie Fuck.Com" stare at the new 17th and Hoff loft boxes from this warehouse across the street. These two warehouses are also slated for demolition to build more live/works.

"Colonizer" brands a loft building on 20th Street. Visible also is a paper wheatpasted on the garage door -- an ersatz building inspection notice warning of imminent spot checks to make sure persons living in this "live/work" building also work there.

The Northeast Mission Industrial Zone has been extensively cannabilized for luxury loft housing. The 25-foot wide loft box at 633 Hampshire below is a RAM Development product.

Hampshire near 18th

4-Story Condo Building
Yet another RAM Development product is this four-story condo building on site of the former Mi Rancho Market, at 20th and Shotwell.

Root Cause

The boom in upscale housing construction is itself an effect of the "dot-com" boom. With over $2 billion in venture capital a year pumping up high-tech and multi-media companies in the Bay Area, with much of the growth now focused on the city, the result has been an influx of new residents. The city has gained 80,000 residents in the past decade. At the same time, only 10,000 dwelling units have been built. This huge mismatch between jobs and housing is the root cause of a huge bidding war over living space.

The high-tech industry has a high proportion of professional and managerial jobs in its workforce mix. This is reflected in the credentials of the high-tech workforce. A local high-tech industry trade group recently noted that 75% of the employees in the high-tech sector have college degrees. By comparison, only 34% of employed S.F. city residents in 1990 had four-year or higher degrees. Having such degrees tends to correlate with professional or managerial jobs.

The high-tech boom has forced the employers to compete for a limited pool of people with pertinent credentials or experience by offering high salaries -- $120,000 a year for an experienced programmer or $95,000 for an experienced technical writer, for example.

This means that the influx of these jobs into the city creates a large market for luxury loft or condo housing and for Tenant-in-Common (TIC) conversions or condo conversions of duplex, triplex and other such buildings. Average price of condos in the city is over $400,000. The condos in the Four Seasons tower being built on Market Street run from a million to over four million dollars, and the building is nearly sold out even though construction is not complete. It is no accident that the boom in live/work construction coincides with the years of the dot-com boom.

Much of the Mission's housing stock consists of duplexes, triplexes, and fourplexes, which are at risk of TIC conversion. Present tenants are often displaced through owner move-in evictions or evictions under the Ellis Act, which permits landlords to cease renting altogether. Since people move periodically, the rapid run-up in rents also has a displacing effect, as rents surge past the level of affordability for many people. (See Who Can Afford to Live Here?.)

Will the Server Register to Vote?

One effect of the dot-com boom has been a huge decline in office vacancies, and office rents that now surpass Manhattan. This has led a number of developers to lease entire live/work buildings as office space.

54-Unit Live/Work Box

The entire building above -- a 48-unit live/work box built by RAM Development -- at 17th and Bryant Streets has been rented to Zing, an online photo company. Reportedly one of the live/work loft units is dedicated to the care and feeding of the company's server. CEO David Ezquelle claims that some of the employees are living in the units. But one employee told the Bay Guardian that he had been told that no one was living in the building. "I'm not happy with what's going on", he said. "Friends of mine are being evicted -- in part because of things like this."

Mixing Incompatible Uses

The concept of "mixed use" means that dwelling units are sited in close proximity to stores, services, or other non-residential uses. The most compact form of mixed use occurs where the shops and apartments are in the same building. This close mixing of uses has a lot of advantages. It minimizes use of automobiles when services or stores are close to where people live. It makes it easier for people to live close to where they work, which also minimizes auto usage.

For this mixed use concept to work, however, the uses that are in close proximity to residential units must be compatible uses. "Mixed use" should not mean allowing the development of residences close to businesses that generate noxious smells, fumes, smoke, or loud noises. (Savory fumes such as the smells of baking or roasting of coffee beans are acceptable.)

A zinger
The San Francisco Print Collective response to this live/work scam was the poster above.

The "live/work" program in San Francisco made little effort to distinguish between the types of uses in industrial areas to determine where live/work condo buildings might be compatible. The construction of live/work condominiums near the music clubs in the 11th Street corridor (in the South of Market area) meant that the music district was in danger of being put out of business, for example. Few of the clubs were technically in conformity to city noise ordinances.

The rational approach to protecting such businesses against attacks on their existence by new clumps of upscale residents would be to create a separate category for businesses not compatible with residences in close proximity, and then insist on buffer zones between such businesses and any new residential construction.

The defenders of the modernist planning concept of segregated uses might argue that this problem shows that mixed use is an unwise concept. But in reality there are many types of non-residential uses that are compatible with residences -- from cafes to flower shops and bank branches. The problem is in delineating the uses that may generate a "nuisance" to nearby residents, and segregating these from residences. Merely differentiating between "residential", "commercial" and "industrial" is too crude.

The problem of conflict between new loft dwellers and existing institutions in the industrial northeast Mission played itself out at 19th and Alabama. A long-time Mission district institution at that corner is the Workers Social Center (photo below), site of a Mission vocational school that teaches computer classes and language proficiency. For a number of years the school raised money with Friday night dances, which were popular with young people in the local Latino community.

Unidos Venceremos

Owners of newly built luxury lofts across the street on Alabama Street (photo below) used the city's noise ordinance to force an end to the Friday dances, causing a loss of $100,000 in annual income to the school.

Complained About Dances

Real Artist Live/Works

While hundreds of pricey loft units were being built in the Mission under the "artist live/work" rubric, about a third of the actual population of artists have been forced out of the neighborhood.

There are in fact units that have been used by artists to work and live in. These are often older buildings that contributed to the Mission's former reputation as a low rent district. Some of these artists are being evicted as developers buy the properties out from under them. The property at 47 Clarion Alley, shown below, has been purchased for development, and the artists living there are being evicted. The residents at 47 Clarion Alley were the originators of the Clarion Alley mural project...some of the results of that project are visible below.

47 Clarion Alley Live/Work

Another artist live/work is on Stevenson Street, north of 14th, shown below. This building has also been acquired by developers, and the residents are slated for eviction.

Artist Live/Work on Stevenson Street

Residents were recently evicted from yet another actual artist live/work -- a quonset hut at 20th and Shotwell, shown below.

Quonset Hut

Next: Who Can Afford to Live Here?