Monday, November 16, 2009

San Francisco is Bad for Business


It is a shame that one of the most scenically renown and charming cities in the world is not the economic powerhouse it once was. Formerly a booming port city of factories and docks that incubated companies like Levi's and Gap, San Francisco has become the poster-child for post-modern stagnation in the Digital Age. For a more comprehensive background on the history and development of the city, I highly recommend the compelling book by Gray Brechin, Imperial San Francisco.

San Francisco's decline is not like that of other American cities, particularly the Rust Belt metropolises such as Detroit or Cleveland, which relied more on single-industry manufacturing to sustain their growth. Instead, San Francisco has in a sense suffered as a result of its own success. As a geographically constrained, picturesque, and highly sought after destination, the city has become over-time a paragon of NIMBY-ism run amuck; a place where many residents put the status-quo above any kind of beneficial new development.

San Francisco's transformation is well-documented. My editor over at NewGeography, Joel Kotkin, has made the same point before regarding San Francisco's evolution. He puts San Francisco into a category of cities called 'Ephemeral Cities'; cities that are based primarily on lifestyle rather than economic development and upward mobility.



Now we have further evidence of San Francisco's lack of economic chutzpah in a recent San Francisco Chronicle article: 'Building in S.F. not expected to grow for years'. The title of the piece pretty much says it all, yet it should be no great surprise to anyone who has tried to build anything new in the city, even prior to the recession. The inherent problem lies not with developers (there are many well-qualified to undertake large-scale projects in the city) but with the anti-business climate of City Hall, which continues to pander to whiny constituents with nothing better to do than complain about any new change.

As the Chronicle article mentions, there is no demand for new buildings in San Francisco because businesses do not want to deal with the regulations or tax burdens of locating operations there. The trend has been going on for years now as the economic heart of the Bay Area region has shifted south to suburban Silicon Valley. For all the lofty talk about becoming a 'green' city, San Francisco is currently failing miserably at attracting businesses, which would actually help the green case by cutting down on 'reverse-commute' distances for the city's residents.

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