You’ll be forgiven for rolling your eyes as I mention that the Economist Intelligence Unit recently reported on the 10 most expensive cities in the world. You already know we’re either in first or second place, right?
Wrong. Actually, San Francisco isn’t anywhere on the top 10 list.
But that soon could change, and The New York Times wants you to know you’ll be miserable because of it. The venerable paper of record recently predicted that a tsunami of money is about to swamp our humble hamlet, leading us to pave our streets in gold if for no other reason than we’ve already bought everything we want and the gold has to go somewhere. In “When Uber and Airbnb Go Public, San Francisco Will Drown in Millionaires” — no, supervisors, that didn’t say “San Francisco Will Drown Millionaires” — journalist Nellie Bowles writes that the initial public offerings of Airbnb, Uber, Lyft, Slack, Postmates, Pinterest, and Schplatscreen could mint thousands of new millionaires in our fair city as hundreds of billions of dollars comes pouring in.
O.K., I just made up “Schplatscreen” right now, but does it matter? I’ve already sold it for $12 billion.
According to Bowles, unlike previous waves of tech IPOs, this time most of the companies and the employees who stand to get the windfall wealth are in San Francisco. That has led to some people refusing to sell their homes until the money tree begins to shake wildly, and has spurred some buyers to try to get something, anything, before the gold rush pushes housing forever out of reach. That’s because, as one real estate agent predicts, the median price of a single family home in the city could hit $5 million.
Many people like to say that if they suddenly received a ton of money, they wouldn’t be changed. But what about the city of San Francisco? Oh, it will change.
LAND OF THE ENTITLED
True story: On a recent bus ride through tony Noe Valley, a perturbed woman got onto the bus just before it pulled away from the curb. Instead of using human words — you know, “Thanks for waiting, I was afraid I’d miss you” — she proceeded to complain to the driver that he hadn’t waited for her even though she was trying to get his attention. She had been, mind you, on the other side of the street behind the bus. I’m not quite sure what sort of a multiheaded omniscient man she thought he was, but he simply told her that it was her job to be at the bus stop when the bus was there.
That was just too much for her. This woman, probably in her early 40s and dressed like she has never had to worry about paying a bill in her life, was going to have none of this being told the truth by a civil servant. The help is not supposed to talk back. She then proceeded to berate him, take a photo of his credentials, and call in to the SFMTA to complain while sitting mere feet from the driver. At least she didn’t inquire when the bus’ dinner service would begin.
I share that story only to warn you: Expect more of her type in the coming years.
A few decades ago, when a cadre of top-level journalists was beginning to make big money for the first time, someone wrote that we would soon face a time when journalists fell totally out of touch with the normal American who has little or no savings and occasionally or always struggles to make ends meet. You can argue about whether there are really that many wealthy journalists these days (and no, most of those prime time cable “news” hosts are not journalists), but the point remains.
As an editor of Internet World magazine in March 2001, I interviewed author Thomas Frank, who had just written One Market Under God. He spoke derisively about the way many ultra-rich people were passing themselves off as middle class, but of course they couldn’t be in reality. Middle class people do things that are increasingly underappreciated, such as saving money to make major purchases, rationing how often they go out to eat, worrying about affording college for their children, and serving as the bulwark of democracy. All that’s out of vogue now.
Internet World magazine eventually died, relieving me of the worry that I’d become wealthy enough to forget about the common man. So I know that another trait of the middle class person is settling. Taking what you can get. The senator isn’t going to pick up the phone just because you call. The mortgage lender isn’t going to give you a blank check. The business person isn’t going to refund your money just because his product melted after three uses.
But if you have many millions or even billions of dollars, a heck of a lot of people care what you think. They’ll change public policy to satisfy you. They’ll let you put ridiculous propositions on the ballot. They’ll interview you and fawn over you.
San Francisco is about to look like the green room at the Davos forum.
MONEY, MONEY, MONEY
Forget about those trendy news reports about how to live frugally so you can retire at the age of 40. Unless you’re a millionaire, you will probably have to live frugally just so you can afford to remain in the city.
Remember those articles from 2013 hyperventilating about $4 toast? That might well be a fondly remembered point in time, like when your parents complain that stamps no longer cost 15 cents. Today’s ballpark beers will finally begin to look reasonably priced.
Still, I don’t begrudge any of the new millionaires their newfound wealth. Anytime there is a lot of wealth created, it is not the newly wealthy as a class who act. It is up to individuals among them to be wise investors and compassionate philanthropists. And it is up to elected officials to prepare the city and state to be able to handle an influx of money and moneyed interests.
We’ll learn what our city leaders have in mind when Mayor Breed gives her 2020 State of the City speech via Skype from her new home in Stockton, the only place she can afford to live.
Because a fair number of the city’s new multimillionaires will live in the Northside and read this paper, I am now accepting investment inquiries at [email protected].