Thousands of New Millionaires Are About to Eat San Francisco Alive

Thousands of New Millionaires Are About to Eat San Francisco Alive

Uber, Lyft, Airbnb and Pinterest plan to go public. California’s newly minted rich will be hungry for parties, houses, boats, bikes — and ice sculptures.

By Nellie Bowles
March 7, 2019


SAN FRANCISCO — Big wealth doesn’t come in monthly paychecks. It comes when a start-up goes public, transforming hypothetical money into extremely real money. This year — with Uber, Lyft, Slack, Postmates, Pinterest and Airbnb all hoping to enter the public markets — there’s going to be a lot of it in the Bay Area.

Estimates of Uber’s value on the market have been as high as $120 billion. Airbnb was most recently valued at $31 billion, with Lyft and Pinterest around $15 billion and $12 billion. It’s anyone’s guess what prices these companies actually will command once they go public, but even conservative estimates predict hundreds of billions of dollars will flood into town in the next year, creating thousands of new millionaires. It’s hard to imagine more money in San Francisco, but the city’s residents now need to start trying.

Welcomed finally into the elite caste who can afford to live comfortably in the Bay Area, the fleet of new millionaires are already itching to claim what has been promised all these years.

They want cars. They want to open new restaurants. They want to throw bigger parties. And they want houses.


One recent night, in a packed room with a view of the Bay Bridge and an open bar, real estate investors gathered. Standing at the front presenting was Deniz Kahramaner, a real estate agent specializing in data analytics at Compass.

“Are we going to see a one-bedroom condo that’s worth less than $1 million in five years?” he asked the crowd. “Are we going to see single family homes selling for one to three million?”


No, he said, not anymore. The energy rose as he revealed more data about new millionaires and about just how few new units have been built for them. San Francisco single-family home sale prices could climb to an average of $5 million, he said, to gasps.

“All cash. These are all cash buyers,” he said. “It’s just going to be astounding.”

Now, seemingly the whole city — and not just the financial planners and the real estate agents and the protesters who block tech buses — is scrambling to prepare.

If you live here now, you might have to move soon.CreditJim Wilson/The New York Times





ImageIf you live here now, you might have to move soon.CreditJim Wilson/The New York Times

Housing Madness

As the idea of the coming I.P.O.-palooza took on currency, sellers started pulling their houses off the market. The broader California housing market has softened, and home sales are down, but here’s one fix for that.

“Even if just half the I.P.O.s happen, there’s going to be ten thousand millionaires overnight,” said Herman Chan, a real estate agent with Sotheby’s. “People are like, ‘I’m not going to sell till next year, because there are going to be bajillionaires everywhere left and right.’”

One of those is his client Rick Rider, a 61-year-old C.E.O. who decided not to publicly list his Bay Area house until some of the I.P.O.s have happened.

“Our particular house is not a family home. It’s a Double Income No Kids sort of home,” Mr. Rider said. “So it would potentially play well for a lot of the people that would be benefiting from the I.P.O.s.”

The spending wars will likely stay close to work.

“The millennial tech workers are really looking for convenience,” said Christine Kim, the president of Climb Real Estate. “They seem to not want to own cars, and food deliveries are really easy now, and they want to be close to entertainment, so they’ll stay in the city.”

When Google in Mountain View and Facebook in Menlo Park went public, their workers were spread across the Bay Area, and so the impact on housing was diffuse. Now, many of the biggest start-ups are based in San Francisco, in part thanks to the city’s tax breaks. Brokers say San Francisco is where the workers want to stay.

In 2018 there were 5,644 properties sold in San Francisco and only 2,208 of those were single family homes. Software employees represent more than 50 percent of those buying, according to Compass. One real estate firm estimates an average one-bedroom in the city now rents for $3,690 per month. (Another firm puts that average at $3,551.)

“Now you’ve got all these I.P.O.s at the same time, and we’ll potentially have thousands of young people, all now with money, looking to buy homes,” said Shane Ray, a real estate agent. “You’ll be able to feel it.”

Those in the market for a house are trying to buy them fast while the inventory shrinks but before the wave hits.

“I had this sense of existential dread that if we didn’t buy before all the I.P.O.s, we would forever be priced out,” said Tom McLeod, the founder of storage start-up Omni, who has been renting for nearly a decade. “We ended up pulling the trigger.”

The Airbnb HQ.CreditJason Henry for The New York Times


The Airbnb HQ.CreditJason Henry for The New York Times

Don’t Buy Boats

Companies instill in their employees a belief that stock only goes up. At this point, a decade since their founding, start-ups like Uber and Airbnb have been asking their employees to hold that faith for a long time. Now, wealth managers are hoping to rattle the religious.

Ryan S. Cole, a private wealth adviser at Citrine Capital, said he has started getting an influx of new clients who are preparing for wealth. He is worried. This generation of the start-up wealthy seem especially bullish on their company’s success.


“We’ve been trying to get them to exercise a little more caution, just because they’re so excited,” Mr. Cole said. “I don’t think a lot of them think there ever could be a downturn.”

He cautions that no one can be sure how well a stock will do. A company like Uber is still dramatically unprofitable, he tries to remind his clients. So many I.P.O.s turn out to be busts. Groupon opened around $26 a share and now trades around $3; Snap opened around $27 and now trades at $9.

“A lot of them are young — they’ve just seen their valuations going up forever and they don’t really understand that tech stocks are volatile,” Mr. Cole said. “And they have their managers painting especially rosy pictures of where the company is headed to get them to work harder.”

Mostly, he just urges his clients not to spend too much yet.

“They shouldn’t be buying boats,” Mr. Cole said. “We see a little bit of that.”

Electric bikes, on the other hand, are a favorite mode of transportation for the San Francisco tech worker. Owners of the electric bike shop New Wheel say they are preparing for the I.P.O.s by ordering 30 percent more of the Stromer ST3 — the most popular configuration retails for around $7,500 — and 200 percent more of the Riese & Muller front-loader bikes, which sell for around $9,500.

Michael Biggica, the founder of Pixel Financial Planning, said 2019 is the year of “pent-up demand” and that the excitement of a windfall can be intoxicating.


“My role is eliminating that emotion,” Mr. Biggica said.

Jonathan K. DeYoe, another private wealth adviser in the region, started working with tech clients in 1997 during the first dot-com boom. He said it was pretty exciting back then. Now, as he thinks about thousands of new millionaires coming onto the scene, he is worried about the region’s inequality.

“There’s some who’ve talked about pitchforks,” Mr. DeYoe said. “And I don’t think we’ll go there, but there’s a point when that makes sense.”

“It’s very visible,” Mr. DeYoe said. “This kind of wealth is very visible.”

A Lyft.CreditChristie Hemm Klok for The New York Times


Party City

In cities like Oakland and Berkeley and San Francisco, millennials obsess over Alexandria Ocasio-Cortez’s Twitter and attend Democratic Socialists of America meetings. But the socialist passion doesn’t seem to have impacted the city’s zeal for I.P.O. parties, which the party planning community says are going to surpass past booms.

Jay Siegan, a former live music club owner who now curates private entertainment and music, is gearing up. He has worked on events for many of the I.P.O. hopefuls, including Uber, Airbnb, Slack, Postmates and Lyft.

“We see multiple parties per I.P.O. for the company that is I.P.O.ing, as well as firms that are associated to them,” Mr. Siegan said. Budgets for start-up parties, he said, can easily go above $10 million. “They’re wanting to bring in A-list celebrities to perform at the dinner tables for the executives. They want ballet performers.”

A popular new feature he’s noticing is clients hoping to curate their own theme concerts featuring fleets of bands. Mr. Siegan says he recently put on one for a 1980s loving tech executive, featuring the B-52s, Devo, The Bangles, Tears for Fears and Flock of Seagulls.


In a warehouse in Concord, Calif., the I.P.O. ice sculptor is getting ready to staff up for what he says will be a long year.

“It’s going to be a lot of 14-hour days,” said Robert Chislett, founder of Chisel-it, who has around 15 ice sculptors currently employed.

Together, they have chiseled a full-size ice car for a tech executive’s party in Atherton and a 10-foot ice Taj Mahal for another’s swimming pool in San Jose.

But, he says, I.P.O.ing executives usually want predictable things. An ice chair with the logo on the back, for photos. A lot of logos carved into ice rockets, to indicate that the company’s stock will be like a rocket. And ice cubes, for drinks, with the company logo on each one.
To the Barricades and Back Again

And of course, the tech backlash, mostly quiet as stocks have vested, is preparing for its own revival.

At Radio Habana Social Club in the Mission district, housing rights activists gathered one recent evening for a drink. By now, there is a well-known choreography: the cash comes flooding in to a few and the stock-less masses begin to gather. They will protest evictions, fight developers, organize against tax breaks and unfurl banners in front of tech buses.


“It’s going to mean mass displacement,” said Sarah “Fred” Sherburn-Zimmer, the executive director of the Housing Rights Committee of San Francisco, of the coming wealth influx.

She paused for a moment.

“It feels like the same game,” she said.

Activists stood elbow-to-elbow around a table of hummus and pepper jack cheese.

“We’ve lived through boom times before,” said Maria Zamudio, the group’s associate director. “We’ve learned our lessons. We know what a massive influx of money looks like. Concessions we made in the past, we will not make this year.”



Nellie Bowles covers tech and internet culture. Follow her on Twitter: @nelliebowles
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Urban Renewal...Means Negro Removal. ~ James Baldwin (1963)

Urban development ("improving the neighborhood) most often means moving out existing residents in favor of new, wealthier ones.  Plan Bay Area has displaced tens of thousands of African Americans from around the Bay Area in the name of "environmentalism and social equity".  We think people should come first.

Transit Induced Gentrification

Efforts to build housing around transit threaten to price out those most dependent on bus and rail

A San Diego Metropolitan Transit System trolley stops at the corner of Park Boulevard and Market Street in the East Village, where expensive apartment buildings and condominiums stand in stark contrast to the neighborhood's economically challenged residents. (Howard Lipin / San Diego Union-Tribune)
Joshua Emerson SmithContact Reporter



On his way to a doctor’s appointment, Steve Schneider sits at a bus stop in North Park on Tuesday afternoon surrounded by trendy coffee shops, tattoo parlors and mustachioed hipsters sipping craft beer.

The 68-year-old has lived in the neighborhood for 25 years, but in just the last four, he’s seen his rent jumped from $850 to $1,275. As an epileptic on a fixed income, he cannot drive and has recently started to fear he may have to move and lose access to transit.

“I get anxious about it, especially last year when my rent went up, and I thought ‘What am I going to do?’” he said. “That’s when I decided to get rid of my cell phone and go on the food stamps.”

Schneider’s situation could be part of an emerging new trend of bus and rail riders priced out of their communities by the very policies designed to boost transit ridership.


Lawmakers, academics and urban planners from Southern California to Sacramento have long called for building denser housing around transit stops. The idea is to design neighborhoods that encourage people to ditch their car commutes — simultaneously fighting climate change while trying to address the state’s historic housing crisis.

However, efforts to inspire construction along rail and bus lines, coupled with a severe shortage of housing, have brought opulent apartment buildings and condominiums into economically challenged neighborhoods. As young professionals flock to the new housing, moderate- to low-income tenants in urban areas from San Diego to Sacramento are now facing displacement.


Tenants’ rights groups, especially in Southern California, say the trend is already playing out in many communities with serious consequences.The greatest risk is the places that are already showing signs of gentrification. There’s already value in those neighborhoods and the private market has seen.— Miriam Zuk, director of the Urban Displacement Project at UC Berkeley


“You’re seeing families pushed further from transit,” said Laura Raymond, campaign director for Alliance for Community Transit in Los Angeles. “Around the urban core, we still have a lot of low-income families living next to transit-rich areas. They don’t have cars. When those areas are gentrifying, they’re moving out, and it becomes a lot more difficult to access their jobs.”

In the last five years, there were about 400 multifamily buildings completed or under construction within a half mile of a transit stop in the metropolitan areas of San Diego, Los Angeles, Sacramento and the Bay Area, according to data from real estate tracker CoStar.

While the median family income in those neighborhoods was on average less than $64,000 a year, the average cost of a two-bedroom apartment was more than $3,500 a month, according to a San Diego Union-Tribune analysis of Census and Costar data.

And about one in five of those projects are in areas where the median household income is less than $30,000, where the average rent on a two-bedroom apartment is still more than $3,300.

Concerns have become so pronounced, in fact, that academics have given the phenomenon a name: “transit-induced gentrification.”

“Being within a half mile of a rail station, we did see higher rates of gentrification in those neighborhoods,” said Miriam Zuk, director of the Urban Displacement Project at UC Berkeley, who has studied the phenomenon.

“The greatest risk is the places that are already showing signs of gentrification,” she added. “There’s already value in those neighborhoods and the private market has seen that.”

Zuk participated in a report prepared last year for the California Air Resources Board by UC Berkeley and UCLA that tracked demographic shifts around rail transportation in Los Angeles and the Bay Area.

The report found that “transit proximity has a significant impact on the stability of the surrounding neighborhood, leading to increases in housing costs that change the composition of the area, including the loss of low-income households.”

A San Diego Metropolitan Transit System bus travels along Market Street at 13th Street near the 13th and Market apartments in East Village, where rent for a two-bedroom apartment is more than 2,800 a month. (Howard Lipin / San Diego Union-Tribune)

Will building more housing solve the problem?

While the idea that rising housing costs are overhauling the face of many neighborhoods around the state and country, what to do about it, especially in transit-rich areas, has become a hot-button issue in California.

Experts agree that the state’s skyrocketing rents and home prices are largely the result of a massive housing deficit.

In the last decade, the state has added an average of roughly 80,000 new homes annually, far short of the roughly 180,000 needed every year to keep pace with growth, according to a recent report from the California Department of Housing and Community Development.

However, to actually lower the cost of housing, the state would need to add roughly 2.5 million new units by 2025, or roughly 357,000 a year, according to a recent analysis from the University of Southern California.

Perhaps not surprisingly, nobody seems quicker to point out the need for a massive infusion of new workforce housing than the construction industry.

“You can demand transit-oriented development all day long, but it’s not going to house the people that need housing in those areas,” said Borre Winckel, president and CEO of the Building Industry Association of San Diego County. “I’ve never seen this much demand for the middle market. There’s no parallel in history. This is very scary, uncharted territory, and people are not taking this seriously.”

Coalitions of upwardly mobile professionals have formed in just the last year or so to demand lawmakers from city hall to Sacramento embrace policies to inspire new-home construction. These groups have embraced the notion that just dramatically increasing housing supply will bring down the price of homeownership as well as renting across all income levels.

Most notably the newly formed nonprofit California YIMBY — which stands for “yes in my backyard,” a play on the commonly used acronym NIMBY or “not in my backyard” — sponsored a bill in the state Legislature this year that would have bulldozed zoning requirements for density and parking up to a half mile from major transit stops all around the state.

Many academics supported the move enthusiastically.

“What’s really contributing to gentrification is the lack of new housing being built in general regardless of location,” said Ethan Elkind, director of the climate program at UC Berkeley School of Law. “If you don’t build new homes for these newcomers, they’re going to buy up existing homes and start gentrifying neighborhoods.”

However, a recent effort by state Sen. Scott Wiener, D-San Francisco, to loosen zoning regulations and encourage more construction around transit ran into opposition, from homeowners to local elected officials to even tenants’ rights organizations.


Affluent communities have routinely expressed concerns about new housing bringing increased traffic and undermining local aesthetics. More recently, lower-income renters have started demanding policies to prevent renters from being shunted aside in the rush to build housing for middle-class families.

After garnering national attention, Wiener saw his proposal, SB 827, to preempt local zoning rules around transit abruptly killed in its first committee hearing.

The death blow came, somewhat surprisingly, with opposition from rights groups for low-income tenants, such as Strategic Actions for a Just Economy, known as SAJE.

“My group really believe strongly in increased density along transit lines,” said Executive Director Cynthia Strathmann. “We just want to make sure that a big component of that is affordable.”

While Wiener and California YIMBY readily included a number of amendments at the behest of the fair-housing groups, it wasn’t enough to win their support. Backers of the bill are expected to renew their efforts and attempt to build a broader coalition next year.

Transit riders such Richard Krukowski aren’t holding their breath. The 51-year-old survives on disability payments and lives in a studio apartment in San Diego’s rapidly gentrifying East Village. He said he’s looking for a cheaper place to live on the bus line, but hasn’t had much luck.

“Clearly everybody’s concerned,” he said of all his friends in the area, “but pretty much everyone knows how it’s going to go. You’re not going to beat the developers and the big bucks.”

Can government policies ensure affordable housing for all?

Campaigns to bring down the cost of housing are threatening to pit the middle-class residents against the renters.

Right now, a developer who includes affordable housing in a project can get bonuses through the state and local government. Incentives include everything from faster permitting to being able to construct more units within a single building to relaxed parking requirements.

However, many advocates would like to see lawmakers take a more heavy-handed approach, requiring projects around transit stops to include a designated number of affordable units, using what are known as inclusionary zoning ordinances.

Such policies can be effective but they’re not without their consequences, said Casey Dawkins, a researcher with the National Center for Smart Growth at the University of Maryland.

“What tends to happen is you get affordable lower-income housing and you get more expensive unrestricted housing, and it’s harder to fill the middle and achieve moderate income affordability,” he said.

Some neighborhoods would like to see such zoning restrictions aimed at middle-income residents as well.

Under pressure from local residents, the city of San Diego has repeatedly stalled on plans to allow for greater density around planned transit stations that will serve the Mid-Coast Trolley extension, which is under construction from downtown to University City. Such proposals have routinely drawn huge crowds of angry homeowners from Bay Park, Linda Vista and Clairemont.

Recently, however, neighborhood residents have shifted from outright opposition to higher-density development to ensuring that whatever gets built is affordable for working-class people in the immediate area.

“What the community wants is workforce housing, and what the proposals are on the table from the land owners are luxury rentals with ocean views,” said James LaMattery, spokesperson for a group called Raise the Balloon, formed to oppose a city proposal to raise the building height limit in Bay Ho from 30 feet to 60 feet. “The city wants to rezone for more housing but they don’t want to guarantee the appropriate housing.”

LaMattery and others have suggested that developers who build workforce housing should get a break on inclusionary fees, which subsidized housing for the poor.

Therein lies the rub: In the decade or more it could take to erase California’s housing backlog, government policies aimed at controlling costs may result in winners and losers split along economic lines.

“Let’s be frank, there’s sometimes a blindness from the YIMBY crowd about the interests of the low-income tenant community and communities of color,” said Colin Parent, executive director of Circulate San Diego and member of a new local Democratic Party club YIMBY Democrats. “It just doesn’t occur to them that these displacement issues are big problems.”

In the meantime, efforts to enact rent controls are popping up around the state. For example, in National City — where 70 percent of the population are tenants — a signature drive is underway to cap annual rent increases at 5 percent in the city.

Statewide, tenants’ rights advocates have spearheaded a repeal of a decades-old law known as the Costa Hawkins Rental Housing Act, which prohibits cities from imposing rent control on single-family homes, condominiums, as well as any apartment buildings built after 1995.

Supporters are closing in on the 550,000 signatures they need to qualify a measure for the November ballot.

Landlords and developers strongly oppose lifting the restrictions, saying that rent control will only exacerbate the housing crisis. Experts and even progressive economists have agreed.

“It will absolutely interfere with new construction, and that’s the biggest fear we have,” said Debra Carlton, senior vice president of public affairs for the California Apartment Association. “If you can’t make that thing pencil it’s not going to happen in cities with strict rent control. It’s a great way to slow development.”

Carlton added that developers and even large corporate landlords aren’t making huge profits off the current situation.

“Despite what people might think the margins are very slim, because of the cost of land,” she said. “Even those high-end towers have staff costs, attorney costs, not to mention what it cost to buy and build it.”

Will affluent residents ever embrace public transit?

The overwhelming majority of transit riders are people of limited means.

In San Diego, for example, 84 percent of transit riders come from households that make less than $60,000 a year, according to data from the San Diego Association of Governments. And roughly 80 percent of riders are dependent on transit as their primary means of transportation.

A study in January from the UCLA Institute of Transportation Studies found that ridership of public transportation in Southern California had dipped as car ownership, especially among lower-income residents, increased.

After working her full-time job at a local coffee house in North Park, Wendy Islas drives with her husband to their home in Mexico, where they moved to save on rent. (Nelvin C. Cepeda / San Diego Union-Tribune)

Wendy Islas, for example, moved with her husband to Rosarito in January to avoid the rising cost of rent in her La Mesa neighborhood. For her it made more sense to trade a bus commute to the North Park job where she works for a more than hour-long drive by car.


“We’re trying to save money to buy a house, but if we kept living in San Diego it would be impossible,” said the 30-year-old San Diego native. “It’s tough right now because we have to wake up at the crack of dawn.”

An improving economy and cheap gas likely fueled the trend in falling transit ridership. But even as prices at the pump rise, some fear displacement of transit’s core patrons will continue to exacerbate challenges for systems around the state.

Even some of transit-oriented development’s biggest supporters have recognized the irony of the situation.

“The real story is those people that move into the high-density areas take Uber and Lyft not buses,” said architect-developer Jonathan Segal. “That’s the irony.”

Segal is no stranger to the changing dynamics of urban neighborhoods. He has built several critically lauded projects in North Park and Little Italy focused on invigorating street life.

He said that while newly arrived residents in these area may not be taking transit, he’s not giving up on his vision, which he believes still encourages people to drive less.

“Because it’s in a dense corridor, all the amenities come with that, like bars, coffee shops, the drycleaners,” Segal said. “So you don’t have to drive to Fashion Valley to see a movie.”

He might be right.

Findings from the Urban Displacement Project at UC Berkeley and UCLA have found no correlation between displacing transit riders and higher rates of overall driving in a region.

According to the report there is “little evidence that (vehicle miles traveled) would be affected by displacement unless it is accompanied by a loss of population near transit.”

The study found that lower-income residents drive less than more affluent households regardless of how close they are to transit, while higher-income residents tend to use their cars more infrequently the closer they are to a rail station.

Of course, that doesn’t mean that those residents are commuting to work using bus or rail systems.

Transit-rich San Francisco is the exception, with slightly more people biking, walking and taking transit to work than driving, according to Census data. But in San Diego County, for example, 85 percent of workers 16 years and older still drive to their job.

NYC Woman Shows Her Loft Apartment That She Has Lived in for 29 Years

Urban YIMBYs can learn from the experience of New Yorkers.  There is no FREE LUNCH.  Gentrifiers push out minorities, artists and the middle class. Only the rich and the resilient remain.

Outpouring Of Support For Vendor After Hipster Topples Over His Food Cart

Congratulations to the street vendor who kept his cool while a hipster jerk destroys his food cart.  Tensions are boiling in immigrant communities over the clash between intolerant newcomers and the established residents.

The Neighborhood That Went to War Against Gentrifiers

In East L.A.’s Boyle Heights, an art gallery closes, and a group of activists and residents claim a victory in their battle against encroaching development.

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A mariachi musician walks past a mural in the Boyle Heights area of Los Angeles. (REUTERS/Lucy Nicholson)

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In May of last year, a nonprofit art gallery called PSSST was preparing to open in the neighborhood of Boyle Heights, a working-class Latino community just across the river from downtown Los Angeles’s Arts District. Instead, on what should have been opening day, the gallery faced a crowd of protesters gathered in front of the space, banging drums, holding posters, and chanting slogans in English (“We don’t need galleries, we need higher salaries!”) and Spanish (“¡El pueblo unido jamás será vencido!”). At some point during the day’s protest, someone threw feces at the window, according to the owners; eventually, a neighbor called the police.

You can see part of the protest in the video below (it contains some strong language).

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This was not the first, last, or angriest protest against the art galleries popping up in Boyle Heights, but it would turn out to be a milestone: Last week, PSSST announced its shuttering. “Our young nonprofit struggled to survive through constant attacks,” reads a statement on their site. “Our staff and artists were routinely trolled online and harassed in-person … we could no longer continue to put already vulnerable communities at further risk.”

PSSST’s closing is the latest development in a pitched battle around art and gentrification in Boyle Heights. New galleries have begun popping up on and around Anderson Road at the west edge of the neighborhood, spilling over from the Arts District—and bringing with them the threat of displacement. At least, that’s how many residents see it. The term many of them use: “artwashing.”

“Artwashing is the use of art and artistic labor to perpetuate and enable gentrification,” says Angel Luna, a resident of the neighborhood and a member of the Boyle Heights Alliance Against Artwashing and Displacement (BHAAAD). Luna’s group, together with organizations like Defend Boyle Heights and Serve the People LA, have accused the galleries of paving the way for new development and speculation that will eventually end up displacing residents. They’ve organized marches, held protests, and worked to make life generally uncomfortable for both new businesses and the people who patronize them. The anti-gentrifiers viewed PSSST’s closure as a victory for their movement: BHAAD and DBH quickly released a celebratory statement online after it was announced.

As cities nationwide struggle with issues of affordable housing, new development, and displacement, disputes over the effects of gentrification are common. What’s different about the battle in Boyle Heights is the protesters’ tactics. They have been militant, insistent, and extraordinarily confrontational—often singling people out for public condemnation and physically chasing out unwelcome visitors. In April, a widely read piece in the Guardian on the neighborhood described members of Serve the People chasing an experimental opera performance out of a public park, leaving vicious messages for realtors (“I hope everyone pukes on your artisanal treats”) and intercepting a group of urban planning students on a walking tour, demanding that they leave.

The more complicated work comes in deciding what kinds of businesses should be allowed to make their way into the neighborhood.

Not all residents are on board with this militant approach. “Some groups have found very extreme ways to show that they’re against changes in the neighborhood, ways that show this place is only for a very specific group of people,” Steven Almazan, a teacher in the Boyle Heights area, told CityLab last year. “The neighborhood shouldn’t say, ‘Get out—this place is mine.’ You want to find a balance. We want investment from the city here,” he says.

Older advocacy groups like the East Los Angeles Community Corporation, or ELACC, have a more compromise-based approach, building affordable housing developments in the area and trying to secure tenants better deals during evictions and displacements. But after many years of work, they ended up coming under fire for forcing residents out and planning unwanted developments.

BHAAAD and DBH, on the other hand, are not interested in conversation; they’ll accept nothing less than total capitulation. “BHAAAD has pursued militant and aggressive tactics on purpose,” says Luna. “We chose these tactics because we understand that city council members, politicians, and non-profiteers aren’t going to advocate for us, and we have to fight back.”

The groups have also earned some criticism for targeting artists, especially now that a longstanding neighborhood art space called Self-Help Graphics and Art has become embroiled in the controversy. Much-loved as it is by many members of the community, the space is accused of helping new galleries as they move into the neighborhood. Despite criticism, BHAAAD and DBH remain undeterred. “We believe that attacking the galleries is a useful strategy,” explains Luna, “because we are directly attacking the amenities that developers are trying to use to attract new people into Boyle Heights.”

Last September, protesters staged the widest-reaching demonstration yet: Dozens of residents marched out to what’s now known as “Gallery Row” on Anderson Road, disrupting several exhibition openings and serving all the galleries with mock eviction notices. This is how they described their own protest on Facebook:

Gallery attendees were harassed and harangued, pelted with water and bottles and an endless barrage of verbal assault. They were stopped in their tracks, surrounded, chased back to their vehicles and out of the area around Anderson Rd where the majority of these galleries have begun opening up. The galleries themselves were surrounded while members of the community banged on their windows, entered their galleries to smash bottles, and continued the barrage of verbal assualt [sic].

BHAAAD put up several Facebook and YouTube videos of the incident.
Such tactics are also notable because they seem to be working. It’s true that Boyle Heights has seen some changes in the last few years, and rents are going up. But it remains a firmly Latino, working-class neighborhood, managing to preserve its identity even as surrounding neighborhoods like Echo Park and Highland Park rapidly gentrify. The PSSST gallery’s closure is proof, they say, that they’re successfully turning the tide.

“[The gallery closing] does point out that the community’s efforts to slow gentrification are more effective than they might have felt six months ago. Six months ago there was a sense that the Arts District was going to push right through Boyle Heights,” says Dana Cuff, a professor of architecture and urban design at UCLA.

“We shouldn’t have to wait until white people live here for someone to care enough to fix the sidewalks.”

At the same time, Cuff says it’s too early for Boyle Heights to declare victory. “It’s hard to use measures like failure and success in this case, in my mind. Gentrification is a massive economic and real estate city force. One gallery closing isn’t something that you could call a success or a reversal,” she says.

Luna says that BHAAAD and other community groups have that point clear. They’re celebrating PSSST’s closure, but won’t rest until all the galleries are gone. They’ll continue to fight any incoming business or development project that they feel doesn’t serve the interests of the neighborhood (last year, another large focus was the closure of Carnitas Michoacán, a neighborhood staple taco place, to make room for a Panda Express; it ended up closing down despite protests).

The more complicated work, of course, comes in deciding what kinds of businesses should be allowed to make their way into the neighborhood. There is a housing shortage in Boyle Heights (as in all of L.A.), and unemployment is at 8.6 percent, above the city median. How do you allow investment without encouraging population change and displacement?

Luna’s answer: very carefully. He says Boyle Heights groups do want new housing, but they want it to be truly affordable, with all rents calculated for median income in Boyle Heights, which is just $34,000 per year, compared to L.A. County’s median of $55,000. They don’t want any new developments to displace existing residents—and where they must, they demand residents’ right of return. Anything less than that, Luna says, amounts to nothing more than “a compromise with gentrification.”

“We want things like...a new laundromat on the corner of Whittier and Boyle. We want our streets and sidewalks fixed,” he says. “We shouldn’t have to wait until white people live here for someone to care enough to fix the sidewalks.”

DEVELOPMENT PROJECT SPARKS PROTEST FROM SOUTH LA RESIDENTS OVER GENTRIFICATION

By Mayde Gomez

Wednesday, August 10, 2016

SOUTH LOS ANGELES (KABC) --

A planned mixed-use development project in South Los Angeles prompted a protest Tuesday from some residents concerned over gentrification and housing affordability, while the area's councilman insisted the development will be a boon to the neighborhood.

The proposed Reef project has been a source of controversy for the past two years, alarming community activists such as Union del Barrio's Ron Gochez.

"A single-unit apartment is going to go for more than $2,000 in an area where the average family makes about $24,000 a year," Gochez said. "So this is obviously not something for our community. The rent of everyone who lives within a 2-mile radius is going to go up dramatically."

City Councilman Curren Price, who represents the 9th District located south of downtown L.A., said residents who have struggled to find affordable housing will be among the beneficiaries of the Reef development.

"We're going to be requiring the developer, for example, to provide $12 million for affordable housing projects in the district," Price said. "We're going to be allocating another $3 million for community-based organizations to provide a variety of services: health, economic development, job training, etc."

Outside the councilman's district office, protesters held signs that said "Community OVER Profit" and "Curren's Price for South L.A.: $15 million."

The project is envisioned to cover 9.7 acres on Washington Boulevard between Hill and Main streets. Its proposed design includes 528 apartments, 895 condominiums, multiple hotels, a grocery store and 28,000 square feet of restaurants.

"We want development, we want housing, but not at the expense of the community itself," Gochez said.

Price maintained that low-income residents of the neighborhood would not be forced out by the project.

"The suggestion is that if we build on two vacant parking lots that somehow that's going to displace individuals. That's not totally supported by the facts," he said.

He added that he was calling on the Reef's developers to reach out to the community and better explain the project.

The development's first hearing before the Area Planning Commission is scheduled for Thursday.

GENTRIFICATION SPOTLIGHT: How Portland is Pushing Out Its Black Residents

GENTRIFICATION SPOTLIGHT: How Portland is Pushing Out Its Black Residents

Between its alarming legacy of racism and its skyrocketing rents, Portland, Oregon, has become one of the country's worst examples of Black displacement and gentrification. What will it take for this hipster heartland to live up to its warm and fuzzy reputation?


Abigail Savitch-Lew APR 18, 2016 1:35PM EDT

Anti-gentrification grafitti in Portland, Oregon
Photo: Tony Webster/Flickr

Update on 4-20-16: Portland native Marih Alyn-Claire has notified Colorlines that after months of seraching she has found an affordable apartment in the city.

===========

Marih Alyn-Claire, a Black 64-year-old Portland, Oregon, native, is afraid she will soon be homeless. Last summer, she learned that her rent would rise by several hundred dollars in June 2016, but so far she hasn’t found a decent apartment that she can afford. “I’ve watched the redlining here. I’ve lived through discrimination myself," she said at an emergency housing forum with state representatives and senators in January. "But I’ve always been able to get a place."

Until now.

Alyn-Claire lives on Social Security Disability insurance and pays for part of her housing costs with a federal Section 8 voucher. In recent years, though, Portland rents have skyrocketed and the federal government’s voucher program hasn’t kept apace—leaving tenants like her to shoulder the cost or meet the streets.

There is no one story of displacement in Portland. Among the 30 others who testified at the January emergency housing hearing was a working-class mother pushed out, a copywriter evicted and grappling with doubled rent costs, and a domestic violence service provider having trouble finding emergency housing for clients.

Despite what's happening, Portland is not widely known as an expensive city. Rather, it is seen as a haven for creatives and nonconformists, the place that the popular comedy "Portlandia" famously deemed "the city where young people go to retire." The New York Timesencourages tourists to “ignore the hype, and indulge in the city’s simple pleasures—from $4 films to a puppet museum” or enjoy “shockingly affordable” delicious eats. Yet Portland is quickly becoming accessible only to the wealthiest iconoclasts. Since 2010, rents have increased an average of 20 percent, the sixth-fastest rise in the nation after cities like New York and San Jose. In 2015, Portland ranked first in the country for the percentage of land tracts identified as gentrifying by Governing Magazine.

With rent hikes of more than 15 percent in the third quarter of 2015, tenant organizations began calling the months of July and August “the summer of evictions.” There’s been a vast increase in the number of single-person households living in Central City, the urban core—often college graduates attracted by Portland’s relative affordability and hip reputation. And thanks to state laws that prohibit policies used to regulate other pricey cities, Portland tenants are vulnerable to limitless rent increases.

New White Majorities in Traditionally Black Neighborhoods

The media has paid a lot of attention to the White artists affected by the rent crisis, the “urban pioneers” ditching Portland in search of greater affordability and a more authentic cultural scene. But Portland’s people of color—and particularly, Black residents—have been hardest hit.

While White Portland has more than rebounded since the last recession, poverty in the Black community has worsened. From 2000 to 2013, White incomes grew from about $55,000 to $60,000; Black incomes fell from $35,000 to less than $30,000. A report published last April by the Portland Housing Bureau revealed there is not a single neighborhood in the city where an average African-American can afford a two-bedroom apartment.

Black Portlanders suffer enormously from this catastrophic combination of falling incomes and rising housing costs. In 2015, the number of homeless Black people grew by 48 percent. Though they make up only 7 percent of Portland residents, Black people constitute a disproportionate 25 percent of the homeless population.

While the entire city is facing the stress of rising rents, Portland’s Black community has grappled with gentrification for more than a decade. From 2000 to 2010, the city’s core lost 10,000 Black residents. In the historically Black neighborhoods of the Northeast such as King, Woodlawn and Boise-Eliot, Whites became the new majority in most census tracts.

“This is a critical moment for us as a state ... as we’re faced with quite possibly the most far-reaching and devastating housing crisis in Oregon’s history due to unprecedented rent increases,” Katrina Holland, deputy director of the Community Alliance of Tenants, said at the January hearing with politicians. The crisis, she said, ravages “people who look like me, African-American, and Native Americans, on top of generations of racially motivated, dramatic displacements.”

The Racial Failure of 'New Urbanism'

The housing crunch Portland is suffering is happening in cities across the country. White millennials, eager to live close to where they work and access the cultural vibrancy of city life, are driving up demand for housing and displace Black and Latino residents from the neighborhoods they helped to build. One study of 11 metropolitan areas found that from 2000 to 2010 there was an increase in the Black population living outside the urban core in each city. While some Black homeowners may sell their houses and leave the city for better opportunities, tenants are often unable to afford to live in rejuvenated neighborhoods. Other Black homeowners are bought out by eager investors, only to find that they are unable to rent or purchase housing elsewhere.

Portland, a city already abnormally White due to a history of racial exclusion and forced removal of Black residents, is a dramatic example of a nationwide problem.

With its municipal compost system and bike-friendly streets, Portland is a model for the nation of “new urbanism”—a vision of thriving neighborhoods with low carbon footprints. Yet some say that the city has failed to invest sufficiently in the livelihoods of Black residents, depriving them of the opportunity to enjoy recent public investments in the landscape.

“If Portland is trying to be this model of sustainable, livable, walkable, 20-minute cities, and it’s not racially diverse and it’s not class diverse, we’ve got big problems about what that means for anywhere else,” says Lisa Bates, a professor of urban planning at Portland State University. “Is it only viable to use public resources to create a favorable environment if you get rid of all the undesirable people?”

Portland officials say they value class and racial diversity, and are making efforts to address the larger city crisis. Last October, the city, along with Los Angeles, Seattle and the state of Hawaii, declared a housing and homeless state of emergency, enacting measures to open new shelters, legalize homeless encampments and set aside funding for affordable housing. In Portland, the ordinance allowed the city to broaden its current focus on homeless veterans to the city’s growing number of women and families with no place to live. Affordable housing advocates recognize the declaration as a step toward addressing the rent crisis.

Yet will Portland actually get to the roots of housing displacement in Portland’s Black community—roots that run deep, that go back centuries?

Jim Crow, Portland Style

Michelle Lewis, a therapist with connections to Black residents throughout Portland, can see the links between the city’s history of racial exclusion, her clients’ housing instability and her own hardship. Since she and her husband lost their home to predatory lending during the recession, she says, they have been forced to move five times—most recently, beyond the city limits—as a result of rent increases and racial discrimination.

“We’ve felt like nomads,” she says.

Oregon’s first Black residents may have felt similarly. In the 1840s, the territory passed laws prohibiting Blacks from living in the state and punishing those who tried to remain with whiplashes and expulsion. In 1858, Oregon became the only state in the country admitted with a clause in its constitution excluding Blacks. As a result, Oregon’s Black population grew slowly—and those who stayed navigated Jim Crow-style segregation.

Lewis’ grandfather came to Portland during World War II. During that time, the Kaiser Company imported thousands of Whites and Blacks from across the country to build tanks and cargo ships. White Portlanders, averse to the growing Black population, confined most of the migrants to a new development called Vanport, built on a flood plane by the Columbia River.

“That’s where we had to live at,” Lewis recalls her grandparents explaining. “If you worked downtown, you had to be over in that area by a certain time, or else you could be fined, you could be jailed.” (While there is no official record of the so-called “sundown laws” in Oregon, there is a rich oral history detailing how towns jailed Black people for appearing after dark, especially in southern Oregon.)

After the war, Portland residents wanted to get rid of Vanport and developers hoped to reclaim the property for parkland and manufacturing use. In 1948, they got their wishes: After city officials failed to warn residents of rising river levels, the dikes broke, flooding Vanport and killing 13 people. Lewis’ family lost their home in the flood.

Like many other Black residents of Vanport, the Lewis family settled in the Albina neighborhood of the Northeast, one of the only areas of the city where realtors would sell to Blacks. As White residents fled to the suburbs, banks redlined the neighborhood, depriving Black tenants of the opportunity to obtain mortgages and build home equity, while investors purchased homes with cash and let them sit empty. With the city turning a blind eye and rising poverty, crime and unemployment, White Portlanders began to view Albina as a dangerous slum.

Yet when Lewis looks back on her childhood in Albina, she remembers a close-knit community and good times spent on friends’ porches, climbing fruit trees and playing four-corner kickball. “We would play outside all day ‘til the streetlights came on,” she recalls. “You could go and knock on your neighbors door—my mom would say, go and knock Mrs. Shirley’s [door], I need an egg. ... You knew everybody in the neighborhood.”

Instead of nurturing this community, the Portland Development Commission launched numerous “urban renewal” projects with the purported goal of addressing blight. Aiming to convert the land to commercial and industrial uses, the city displaced hundreds of residents to build a sports arena, expand a hospital, and construct two new highways.

By the 1970s, public outcry against “urban renewal” caused officials to change course: The city let the area remain residential and supported local initiatives to revitalize housing and streetscapes. Yet Black Portlanders were still shut out. White people with higher incomes returned to the Northend, causing rents to rise and uprooting many Black businesses and about one in every four Black residents.

With the loss of many members of this community has come the loss of history, leading to the false perception that Portland is naturally White, or that uncontrollable market forces bear sole responsibility for the displacement. For Lewis, the erasure is painful.

“It’s a horrible feeling, to come to a neighborhood where you grow up in, and have the people there look at you as if you don’t belong,” she says. She recalls Little Chapel of the Chimes, the funeral home where she buried her grandfather.

Litttle Chapel of the Chimes is now a craft beer pub.

Find out what Portland's people of color are doing about the city's runaway rents in Part 2 of this gentrification spotlight.

Abigail Savitch-Lew is a housing reporter and fiction writer from Brooklyn, New York. She is a frequent contributor to City Limits and is also published in YES! Magazine, Jacobin, In These Times, Truthout, The Nation and Dissent Magazine.

When 'Gentrification' Is Really a Shift in Racial Boundaries

Jonathan Tannen has been tracking how neighborhoods change in the 100 largest U.S. cities, and what he discovered surprised him.

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The diverse coalition of delegates who attended the Democratic National Convention last week may not have realized they were visiting one of the most segregated cities in the U.S. But even as a child growing up in a gentrifying, white enclave of West Philadelphia, Jonathan Tannen knew that people with his skin color rarely crossed 49th Street. It was the invisible line that separated his neighborhood from majority-black areas in the 1980s.

Two decades later, Tannen would spend six years at Princeton University working on a dissertation to quantify what he’d long suspected: that the invisible lines of segregation can be as real and hard as the bricks of any rowhome.
“I wanted to see if I could measure lines between regions with very different racial characteristics,” he says.
Through his research he used a computer program to detect racial borders, like 49th Street, in the 100 largest U.S. cities. But along the way, he found something else that surprised him: As more suburban whites moved back to urban areas, old racial boundaries were moving, and spreading outward. But the neighborhoods themselves weren’t desegregating.
In fact, they were resegregating.
“You’re not seeing this historically black area becoming five percent white over ten years and then ten percent white. Instead, they went from almost 100 percent black to almost 100 percent white over ten years,” he says. “Philadelphia overall is becoming less white. But there are pockets of predominately white regions that are expanding. And the blocks along those boundaries are flipping very quickly, from a racial standpoint.”
Tannen arrived at these conclusions by feeding census data from 2000 to 2010 into what’s known as a Bayesian modeling system to see, essentially, if a computer could detect racial boundaries on its own. In his own neighborhood, the 49th Street boundary moved a full two blocks west between 2000 and 2010. Rather than desegregating, the formerly black blocks in between had become nearly all white.
Such findings about the nature of racial “boundary movements” could lead to some stark conclusions, especially in the context of the limited body of academic research into the processes behind neighborhood change.
“One of the arguments is that gentrification can’t be that bad if it serves to desegregate urban areas. And we have a lot of evidence that segregation is bad,” says Tannen, who today works as a researcher for Econsult, a Philadelphia-based analytics firm. “But if gentrification continues to happen by boundary movements, then that means the block level is never going to desegregate.”
The same boundary movements were present in the majority of the largest U.S. cities Tannen examined, including Chicago, New York, and Boston. But interestingly, and potentially uncomfortably for proponents of walkable urbanism, the phenomenon was only apparent in older, denser cities. In auto-centric cities, gentrification was more diffuse, and racial boundaries were less clear.

Tannen tracked how the racial boundaries in one West Philadelphia neighborhood shifted over a 10-year period. (Courtesy TK)

“Gentrification by boundary movements really relies on a walkable city,” Tannen says. “It’s this idea that white households are moving in just on the other side of a boundary, to be able to walk across it and be part of the white, already-gentrified region.”
“Incoming white people in older cities are moving to areas that are around other white people. They’re saying ‘Oh, if I live here it’s somewhere I can afford, but it’s also close to [a bar] that I like.’ That process didn’t exist in places like Los Angeles.”

To be clear, his findings don’t suggest that gentrification is making segregation worse.

“Looking at racial data, it’s not that these gentrified regions are one hundred percent white, they’re actually very diverse for the country. So in some respects, looking at the country as a whole, the city looks less segregated,” he says. “You have 85-percent white clusters replacing 97-percent black clusters.”

Tannen acknowledges that his work is limited—it can’t quantify movements between a wealthy white neighborhood to an adjacent working-class white neighborhood. More importantly, it can’t say where the African-Americans who’d been living in these gentrifying neighborhoods are going or why they’re leaving.

“People start studying gentrification thinking they will be the ones to find the discrimination and the injustice in it. But these studies often end up complicating those ideas,” he says. “Displacement largely doesn’t happen.”

Recent research by the Pew Charitable Trusts confirms that the type of gentrification or neighborhood change described in Tannen’s work is actually rare. That study found that just 15 of Philadelphia’s 372 census tracts had gentrified over the same ten-year period. A Federal Reserve study, also focused on Philadelphia, indicated that displacement caused by gentrification is even rarer, and that non-gentrifying neighborhoods often lost existing residents even more rapidly than gentrifying areas.

Tannen says he thinks his findings are evidence that people are self-segregating, and it’s unclear what policy solutions could address that problem. Cities could start by being more mindful about the kinds of economic development projects they pursue along obvious racial borders, he says, due to their sensitivity to extreme racial change.

Ultimately, how cities can best tackle issues as thorny as segregation or displacement will not be solved by a single study. But Tannen’s research does at least answer, in part, why gentrification can feel like a big deal to residents even while it is also relatively uncommon.

“My work speaks to why that disconnect exists. Why can it feel to residents of cities that gentrification is real and it is extreme, even as the Pew study is correct in showing that the city as a whole is less white? How can those both be true?” he asks. “The boundary movements are an important part of that story—that gentrification is extreme to very small parts of the city. And where it happens, it happens very sharply.”