How Austin Can Avoid Becoming Like San Francisco

It’s been nearly four years since I made the jump from San Francisco to Austin, and I must say…. I absolutely hate it here.

Just kidding. I love it here. [Selfishly, like most Austinites, I don’t want more people to moving here…LOL… It’s the same way I felt when I first moved to San Francisco in 2008]

MY GOAL IS THAT BY THE END OF THIS POST IS FOR YOU TO WALK AWAY WITH:

1. The history of San Francisco’s growth and culture
2. My perspective of San Francisco (July 2008–July 2017)
3. My perspective of Austin (July 2017 to March 2021)
4. The negative forces that impact fast-growing cities
5. Solutions to mitigate Austin’s potential downfall

SAN FRANCISCO’S HISTORY AND WHERE IT IS TODAY

It’s hard, to sum up, San Francisco’s history in a few paragraphs so I’ll try to be brief.

Most people think that Silicon Valley, the Peninsula South of San Francisco, became a tech hub in the 1970s with Apple, Intel, and HP growing in popularity, however it has been a strong tech region since the 1920s. Companies like Heintz and Kaufman, Federal Telegraph, and Varian Associates led tech growth through the development of microwave tubes for radar and telecommunications for the military during WWII and the Korean War. These companies made a lot of money for a few decades through government contracts.

Then in the 1960s, Robert McNamara, US Defense Secretary, made major military spending cutbacks. A lot of semiconductor and microwave tube companies merged and had to transition from selling to the public sector to the private. The transition paid off — transistor TVs became a blockbuster hit and employed thousands. High-tech financiers helped fuel the growth, while Stanford University was a hotbed to hire strong engineering talent.

Meanwhile, just 30 miles north in Haight-Ashbury, there was a social revolution underway. Over 100,000 hippies were living the “Summer of Love” fueled by LSD, rock-and-roll, and fresh ideas. The Summer of Love (1967) surely had a massive impact on San Francisco — creating a lasting culture of openness and acceptance. In the ’70s and ’80s, the Castro was known as a “Gay Mecca”, and Harvey Milk, an openly gay elected official was critical in passing a gay rights ordinance for San Francisco.

In the 1980s the “Manhattanization” of San Francisco was underway. Economic prosperity fueled a massive population growth resulting in the construction of skyscrapers and condos being built in SF. In parallel, homeless people began appearing in large numbers due to the Reagan administration drastically cutting housing benefits and the closure of state institutions for the mentally ill.

Then, of course, there was the dot-com boom of the 1990s. I’ve heard stories about this time period — overly extravagant launch parties and founders riding around in limos. Many say that this period was the start of the gentrification of San Francisco, pushing many people, along with the arts and music, out of the city because of housing cost increases.

MY PERSPECTIVE OF SAN FRANCISCO (JULY 2008–JULY 2017)

The good in my opinion:

1. Tons of entrepreneurial and career opportunities. There are over 8,000 startups in the Bay Area, many of which are well-funded, working on interesting problems, and growing quickly. Although it’s a competitive market, if you work hard you can experience an explosive career trajectory.
2. Driven and smart people. UC-Berkeley, Stanford, and UCSF produce a very strong talent pool, who often stay in the Bay Area after graduation.
3. So much fun stuff to do. You can go snowboarding in the morning in Tahoe, stop at a winery in Napa Valley in the afternoon, and wrap up your day kitesurfing underneath the Golden Gate bridge. Very few places in the world allow for these types of activities.

The bad in my opinion:

1. More homeless people. In 2019, there were 9,7000 recorded homeless people in San Francisco, and it’s only getting worse. (Source)
2. Housing costs have skyrocketed. My 450 square foot studio went from $1,450 a month in 2008 to $2,450 a month in 2016. That’s a 68% increase.
3. A different vibe. People seem to more stressed out. As I recall in 2008, people in SF were super friendly. Maybe it's just me, but by 2017 vibe felt more intense than it once did.
4. The weather in the city is just so-so. “The coldest winter I ever saw was the summer I spent in San Francisco.” — (Mark Twain)…. For me, the cold and foggy summers were annoying, but bearable— granted you can drive 15 minutes outside the city and it’ll be 30 degrees warmer.

MY PERSPECTIVE OF AUSTIN (JULY 2017 TO MARCH 2021)

The good in my opinion:

1. People are super friendly. I’m not sure if it’s because of the southern hospitality, warm and sunny weather, or most everyone is from somewhere else, but I’ve noticed that people are really nice and welcoming.
2. Lots of growth potential. Although like most people, I’d love if Austin stayed the same. However, the fact is — low taxes and a large talent pool graduating from the UT-Austin, and make it a desirable place for companies to more their HQs here (Oracle, HP Enterprise, and Tesla moved here, and many others). VC in Austin totaled $1.84 billion in 2019. That’s up 19.5% compared to the $1.54 billion raised in 2018 and an impressive 87% compared to $983 million in 2017 (Source).
3. Great music, nightlife, and community. The average age in Austin is 31. So if you are in your 20's or 30's Austin is the spot to be. Prior to the pandemic, if you would have checked out DO512, and you would've seen that there is an awesome concert or event going on every day of the week.

The bad in my opinion:

1. The traffic is bad and getting worse. Austin hasn’t kept up with the population growth and the roads and infrastructure need to be revamped.
2. The homeless issue getting pretty bad. The annual count of the city’s homeless population, the city had 2,506 people experiencing homelessness last year. The number grew by one-third between 2016 and 2020. Source
3. The summers are really hot. It’s not uncommon for Austin temps to hit 100–110 degrees. Personally, I don’t mind this, but I know a lot of people that do.
4. Prices are beginning to go up. As gentrification is starting to ramp-up, so are the prices. Over the last year, I’ve personally noticed home values go up 14.1% YoY (Source). Along with this, some of the Austin ‘weirdness’ (the culture that has made it so awesome) is beginning to disappear. Nevertheless, Austin is a very livable city compared to SF prices.

THE NEGATIVE FORCES THAT IMPACT FAST-GROWING CITIES

There are a few areas of dysfunction that you will begin to see in fast-growing cities:

• A disappearing middle-class. Before the first urban crisis of the 1960s in the US, ‘super-star cities’ like New York, London, and San Francisco, housed tons, middle-class residents. Today, rising property values push out blue-collar workers and service-sector employees to the suburbs. Back in 1975, buying a typical apartment in New York City cost $50,000 — today, the same unit costs millions.
• Widening inequality across geographic regions. Superstar cities claim the most desirable industries (i.e. tech and finance) and the best talent. However, non-urban areas or cities on the wrong side of globalization and deindustrialization are left behind (i.e. Detroit).
• The suburbs are not all that desirable anymore. Suburbia was once was the more desired place for middle and upper-class families. That is not the case anymore. Millennial families either want to live in a ‘super-star city’ or close to a ‘super-star city’ because of its perks and economic opportunity.

SOLUTIONS TO MITIGATE AUSTIN’S POTENTIAL DOWNFALL

• Invest in ride-sharing, personal transportation, and transit infrastructure — Although ride-sharing contributes to traffic and pollution, it’s not as bad as car ownership. Uber Pool or Lyft Line pick up multiple riders decreasing the number of cars on the road. Self-driving cars and navigation powered by traffic data will further increase efficiency. Personal transportation scooters Bird or Lime, or bike-sharing B-cycle are great for short distances — however, what’s missing are special roadways for personal transportation. Lastly, and most obvious, Austin needs better public transportation. High-speed rails in and outside the city are key and shouldn’t only exist in massive cities like New York.
• There need to be more affordable apartment units — American policy around housing favors homeownership. The mortgage interest deduction provides a massive subsidy for homeowners, costing the government up to $600 billion a year. This tax break is useless for workers that live in cities. This group wants to live close to work. The policy should shift tax subsidies toward renters. Tax breaks for renters would spur demand for rental units and the development of affordable apartments.
• Increase the minimum wage — The federal minimum wage has not kept pace with the rising cost of living in cities. To give low-wage workers access to the middle class, raise the minimum wage. Policymakers need to adjust the minimum wage to reflect the local cost of living.
• Stop gentrification through zoning and lease restrictions. Older bars and restaurants are what given Austin character. Replacing them with gentrified buildings that look like The Cheesecake Factory destroys the city’s spirit and drives up costs. Prevent this through lease ceilings and zoning restrictions.