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Thursday, December 1, 2011

Will Tech IPOs Drive Hyper-Gentrification of Southern Neighborhoods?

Posted By on Thu, Dec 1, 2011 at 11:45 AM

click to enlarge Starting at $1 million
  • Starting at $1 million

The dot-com boom and bust of the late 1990s left an indelible mark on the southeastern portion of San Francisco. SOMA, a neighborhood formerly known for furniture warehouses, nightclubs and a few leather bars, rapidly morphed into a landscape of tony condos, loft spaces, and stylishly lit bars -- what some wags have dubbed the "Los Angeles District" of San Francisco.

Could the new tech bubble -- and a bubble is what it increasingly looks like -- do the same thing to other Southeastern neighborhoods, such as Potrero Hill and Bernal Heights? On the surface, these areas are not undergoing the kind of drastic makeover that SOMA went through. But they are filling up with techies who are driving real estate prices higher and higher, as Reuters reports.

With a wave of IPOs expected in the coming year, employees soon to be flush with cash from stock options from companies such as Zynga, Facebook, Yelp, and others are bidding up the prices of relatively modest single-family houses into the seven-figure range. As the neighborhood blog Bernalwood reported, a three-bedroom home on Precita Park recently sold for $1.3 million.

This is sure to provoke hand-wringing in predictable quarters, but hey -- that's what you get when you bend over backward to ensure that lucrative tech firms, and their workers, remain in San Francisco.

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Peter Jamison

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