Why I Live in San Francisco

Victoriano Izquierdo/View from Golden Gate Bridge, San Francisco

What keeps you in San Francisco?

Anyone who lives here gets asked this question all the time. It’s a fair question for a place where media coverage is often so negative—why would anyone want to live here? “Work” is usually a safe answer that limits further inquiry. But it’s not the whole story, at least for me.

The criticisms of San Francisco are legion, and they are mostly valid. The short version of the “doom loop dystopian hellscape” narrative feels accurate in a few concentrated places which happen to be unreasonably close to where all of the hotels and conventions are. The Tenderloin neighborhood is probably one of the most public and shocking concentrations of misery in the world, distinguished by how close it is to city hall, museums, and concert halls.

But pervasive low-level criminal activity in certain areas of the city is not exclusive to San Francisco. The city has allowed itself to maintain a reputation for public drug use and widespread mental illness. This is unfortunately not contained to any one place: Skid Row in Los Angeles, Washington Square Park in New York, and Melnea Cass Boulevard in Boston all rival the worst San Francisco has to offer. Social and familial breakdown looks different in suburban and rural America, but the underlying problems are the same.

However, it is San Francisco’s downtown that has garnered substantial attention recently due to the “doom loop” caused by remote work. Huge numbers of people working from home and making fewer trips into the city have gutted a whole ecosystem of businesses, office valuations, property tax revenues, and with them, city services. The result is a financial headache for the city that will likely be existential for many downtown businesses and has the potential to noticeably constrain the city’s budget.

The city manifests the kind of breakdown and bursts of insanity that justify its reputation. What took me several years of living in different places across California and the broader U.S. to realize is that the same crisis is slowly engulfing the whole country. San Francisco is not different from the rest of America—it is merely upstream of it. Its contradictions and tensions are matured and therefore amplified.

What San Francisco offers to those who live here is not an escape from America’s dysfunction, but rather an opportunity to master it. For years, this city has been a testing ground for those who go on to govern America. Those who figure out a path forward for America overall will not come from the hinterlands or the suburbs. These are trapped in their own various social crises. They will come from here in San Francisco.

An Upstream City

Low-level crime is a distinct problem from homelessness. California’s state-wide reclassification of shoplifting hauls below $950 as a misdemeanor combined with fears about the liabilities of intervening security guards and political and manpower constraints on the police has made shoplifting a practical and easy way to fund drug consumption. Short of a much more substantial density of police officers empowered to stop this, the existing legal recourse is insufficient.

In El Salvador, Nayib Bukele, the country’s president, swept up everyone with gang tattoos, prosecuting a judicial war against criminal gangs as a general population, rather than just as individuals committing individual crimes. In the United States, this is impossible for now except in cases of glaring political disfavor and judicial acquiescence. This is as true in San Francisco as it is elsewhere.

In this environment, regular life requires you to develop and hone distinctions that are unnatural to most Americans. To navigate here is instinctively to know that laws are selectively enforced according to private factional interests and the prevailing friend-enemy distinctions in city government.

Adapting to this reality requires approaches that alter the fundamental understandings associated with public spaces. At some level, this concerns legal definitions around “public accommodations,” which carry with them particular obligations under accessibility and non-discrimination regimes—and steep penalties for running afoul.

More deeply, there are limits to open-to-all businesses in an age of organized shoplifting. Clever entrepreneurial approaches have a much greater potential than inevitably slight changes in prosecutorial discretion. For example, private clubs, often thought of as exclusive retreats, may become a better business model for many stores and services. Such solutions are more likely to get started in the Bay Area than anywhere else, not only because of the obvious local value and Californian tolerance for innovation, but also because the one-party backdrop removes the red-blue partisan fight that otherwise infects every issue.

A major cause of the many departures in the years since COVID-19 is San Francisco’s oft-cited inhospitality to families. Some of this is attributable to the particular way that demand for suburban and single-family housing skyrocketed during COVID-19, but many of the other issues are broadly applicable to American cities. There are few more legitimate reasons to move than the safety of a child, but it is hard to see how many of the oft-cited alternatives will actually be able to sustainably outrun these problems. Open drug use, the symbiosis of homelessness and mental illness, and public schools with prison dynamics are becoming a reality in increasing numbers of big cities.

More generally, the basic premise of American middle-class life is that while you have no expectation of desirable government services or facilities, you do get your own little corner of the world: a free-standing house, a lawn, locally-administered public schools, and so on. Its mirror image is the basic compact of the European middle class, in which equivalent milestones of personal property are out of reach but government services ensure a baseline quality of life, especially in major cities. The European professional enjoys parks that are clean, urban public schools that are safe and competent, and city transit that is safe, frequent, and on time. In both societies, the downsides of the other are now creeping in.

Some even explicitly cite politics as a reason for departure. Put simply, San Francisco is a one-party state. It is silly to pretend otherwise and it is better off for being one. The problem with electoral competition is that every issue, policy, and reform becomes repurposed for partisan signaling in a way that makes it hard for anyone to change their mind. Not having a hopeless but polarizing alternative renders San Francisco politics far more amenable to correction than statewide politics.

In a two-party system with primaries like California, where one party is all but guaranteed to win the general election, having the loser party as an option provides an ineffectual release valve for dissatisfaction which actually ends up removing the most dissatisfied voters from the most important election: the winning party’s primary. Both California Governor Gavin Newsom and former San Francisco District Attorney Chesa Boudin campaigned against recalls with a similar strategy—tying their opponents to the national Republican Party—and it was the officeholder who had Republican-affiliated opponents who easily survived as a result.

San Francisco’s politics are often simply a more clarified and advanced version of the reality affecting virtually everywhere else in the country. It is likely that only persistently less Anglophone areas like Miami or the Rio Grande Valley have any ongoing hope of resisting prevailing political trends.

Through ideological, physical, and intellectual migration, San Francisco’s problems tend to become everyone else’s problems too. Those unhappy with social speech conventions of 2023 San Francisco would almost certainly find 1993 San Francisco far more hospitable than present-day suburban office parks in Dallas or Tampa. The problem is localized in time rather than space. But because of its upstream position, San Francisco is one of the few places where trends are not simply an external and irresistible tsunami. In fact, under the one-party surface, San Francisco is surprisingly open-minded in a way that actually matters.

Problems With Alternatives

San Francisco is not the only place that tends to precede other cities in national trends, nor is it the only city with a developed tech sector. But peer cities in both categories have ongoing problems that San Francisco lacks, which preclude them from taking a meaningful role in shaping the future in the way that San Francisco can.

In the former category, we have Los Angeles, New York, and Washington, D.C. The dominant culture of each of these is simply not amenable to the kind of sweeping reform required to revive urban life in America. The defining social objectives of these cities are very different: in LA, presenting a glamorous self-image in public and online; in D.C., individual power or proximity to it; in New York and Boston, acceptance—specifically to old and prestigious institutions. It is not an accident that the age ranking of the Ivy League schools is almost exactly the same as the commonly-understood ranking of their prestige.

Part of what makes San Francisco unique is that it is the only city with a defining social objective that rewards generative individual action outside existing institutions: you get prestige through building something new that achieves mass adoption, whether that be a startup, a musical group, or a cult. This could not be more different than the acceptance-oriented East, where the pie stays near-fixed as the applicant pool grows ever larger.

The latter category of cities with a tech sector includes Austin, Miami, Denver, Salt Lake City, and other favorite destinations of San Francisco transplants. In some cases, there is a credible case to be made for a genuine arbitrage opportunity: make a Bay Area income and live somewhere where everything costs less.

For a time, life in such cities was easier and cheaper. These days, though, the window of opportunity for this bargain is mostly gone. Housing prices in these “zoomtowns” over the last three years are skyrocketing just as San Francisco real estate prices are going in the opposite direction. Adding to the dampening effect is the recent rise in interest rates, as well as corporate America’s broad turn against remote work, helped along by the desire of city governments to nudge workers back to the office.

It may have been nice while it lasted, but it is a fundamental and frequent mistake in America to believe that easy hacks are the secret to success. Looking for easy cost-of-living arbitrage trades is a fundamental misunderstanding not just of markets but of how information and trends percolate in a society. Housing prices in these enjoyable but undeniably second-tier cities will rise to roughly the level of the first-tier cities as people move in. As for the locals, it’s a raw deal; many will likely be displaced as the price point gets collectively figured out, and the city will increasingly embody the cultural qualities from which the transplants fled.

The Miami case is somewhat more interesting because of the language element. Its extremely integrated business connections to Latin America and position as the cryptocurrency capital of America presented the possibility of striking a new path.

There is potential in this, but Miami seems unable to define itself as more than a party destination and Latin America’s Singapore. It is a great alternative to communist-run Havana and Caracas, and maybe even to São Paulo or Mexico City. It is not an alternative to San Francisco, and certainly not one capable of defining new trends and exerting influence. Moreover, Miami cannot become so without substantial geopolitical changes in the balance of power. Those seeking such substantial reform of America’s culture and institutions should not wait on Miami to achieve this. Two years after the memes began, it seems as if moving Silicon Valley to Miami was largely a COVID-era—and zero interest-rate—phenomenon. Bluntly, many find San Francisco boring. Whatever else it is, Miami is indisputably not boring.

Cultural preferences aside, these attempts at “new Silicon Valley” alternatives in second-tier cities have ultimately just created mega-distance suburbs. Instead of a daily commute, you come in once a month or once a quarter. For now, it may make for a nice life, but it is unwise to rely on suburbs as a useful strategic base or generative network effects.

The Fortification Problem

The incentive for attempting cross-city arbitrage stems from the central problem of American life, which is that virtually all surplus goes immediately to rent collectors. There may be a philosophical debate about whether rents are different from taxes, but this is of no practical importance. Those who can demand regular fees as a condition of your continued existence and status maintenance are tax collectors, whatever they may call themselves.

This has all taken its toll on the economy. Between substantial public debts, student debt, lagging wage growth, other forms of private debt, and housing prices at many multiples beyond typical incomes, most young Americans not of recent immigrant stock are of the opinion that they will be hard-pressed to replicate their parents’ lifestyles. More specifically, they have no reason to believe they will be able to buy their parents houses, and after the COVID-19 wave of cash-out refinancings, they may not even be able to inherit them.

They are facing a distributed but powerful dispossession. It is a well-known problem that official private economic activity zeroes out at 100 percent tax rates. Think-tank-subsidized libertarians and Europe-envious leftists have wasted the last four decades debating this “Laffer curve” concept without ever considering how it might be more aptly applied when broadened a bit beyond formal government taxation.

Very few people have the self-confidence to turn down an offer of admission to the elite universities, or to simply endure violent criminality. The best way to ensure the right education and orderly streets is to live in the hotspots that provide them. These tend to be high-priced cities and wealthy suburbs like Palo Alto or Menlo Park. This means that a large but hard-to-quantify share of housing spending is actually for education and security, where the public-private distinction collapses in all but name. Conceptualized this way, the effective tax rate for most Americans, middle class and up, is something like 70 or 80 percent of their income.

This severely circumscribes economic possibilities in multiple ways. Not only does it leave precious little for actual consumption and investment, but it is also psychologically and spiritually constraining. A person or a civilization focused entirely on self-preservation, whether of physical safety or social status, has little hope of any manner of achievement. Higher forms of life cannot exist when suppressed by entirely preservationist urges. There is a reason why religious orders often require novices not just to forswear income but also to be debt-free when taking their vows.

The share of income going to taxation—be it public or private—is less severe for the truly wealthy, but their consumption patterns reveal it as well. Even the ultimate symbol of modern riches, travel by private jet, is often more of a statement of exclusion qua exclusion than anything else. The TSA is one of the most egregious examples of misapplied governance in modern America and one of the biggest prizes Americans can aspire to is escaping it. Beyond the exclusion, though, the material environment being accessed lacks anything decidedly superior. Gulfstreams look cool but they’re still traveling subsonic, and the by-now cliché tarmac boarding photo is probably taken with the same model of iPhone and edited with the same model of Macbook owned by many of those enviously viewing it. There are few indicators more obvious of a broadly unambitious and stagnant society than the rich having little to buy beyond exclusivity.

This dispossession has produced a number of shocks in different forms. For some, it has taken the form of electoral politics, in the form of the redistributionists of the left and the immigration restrictionists of the right. For many others in the age of crypto and TikTok, it has taken the form of desperate wealth-acquisition schemes born from a fundamentally escapist drive.

In many cases, these have been pure speculative bag-dumping: yeeting into questionable crypto investments with a consciously-embraced Greater Fool Theory, or raising money for companies and placing early-stage investments only with the hope of selling those in the future. For older people, as well as on Facebook and Instagram, these bag-dumping strategies have taken the form of multi-level marketing schemes. More often, they take the form of literal rent-seeking. Interest in real estate investing exploded during COVID-19, both because of de-urbanization and zero percent rates. But the financial logic is appealing to begin with because it offers a way out of the rat race, the 9-to-5, rent and education payments, and even typical dating markets.

Ken Griffin’s recent $300 million donation to Harvard should immediately disabuse everyone of the idea that getting rich exempts you from the rat race. His teenage children might find the admissions gauntlet somewhat easier than their peers, but how many generations can this last? Even $300 million wouldn’t give him the hope of genuinely influencing the school’s policy or direction. The recent emphasis on “exits” in Silicon Valley aside, a typical one-time tech payout will barely cover a nice house and prestige school tuition, never mind the kind of money to get your name on a Harvard building.

The déclassé ambitious, when properly directed, can drive a civilization’s improvements. Carnegie is a famous example. But the modern young, underachieving, and ambitious increasingly see rent collection as the way out. Ken Griffin’s example should show them that it is not. They will live by the rent and die by the rent.

The unavoidable conclusion is that the rat race is a choice. That the concerns of fortifying tax and rent payment in American life are generally legitimate does not change this. The hard part is to snap out of the unconscious default setting and realize that you’re in a trap of inelastic demand where you might not need to be. Some of it is just normal taxes, which you should still pay. In other cases, it is the club dues you can no longer afford. Knowing how to sort one from the other is the gauntlet facing the ambitious in America’s younger generations.

How Could This Change?

What does any of this have to do with living in San Francisco? On one hand, it might seem like another high-effort criticism of the city, of the non-“real” economy, and the eye-popping housing prices. But it also makes a strong case for San Francisco: if you’re stuck in the rent race anywhere, you should live in an upstream city where the social dynamics allow you freedom of action.

San Francisco is the only place where the insufficiency of the existing solutions is obvious enough and where the possibilities are great enough. The housing prices are indeed high, but the ownership premium on rents in most locations throughout the Bay Area helpfully forecloses the dream of zero-sum rent-collecting. As transplants have fled and brought cash with them, San Francisco is probably more affordable than many other cities at this point on an income-adjusted basis.

The housing prices in suburbs like Sausalito, Palo Alto, Burlingame, and Piedmont—the tiny Oakland carveout often self-awarely described as a “school district with a police department”—are still stuck in tournament-pricing mode. In the rest of the Bay Area, they are not. Reliance on residential boundaries for schooling and over-emphasis on “owning a (suburban) house” as a proxy for adult competency and success is a luxury unaffordable to most.

San Francisco is also the only city in the world where dropping out or refusing an offer from a top university is a status marker. Awareness of the hopelessness of the college admissions circus, combined with a leading public university system, gives the social cover not to waste millions of dollars in trying to marginally increase the chances of a child being admitted to an elite college. At this point, I’ve probably met more successful UCSD grads than graduates of the sub-Ivy but still-coveted northeastern private schools.

More importantly on the professional front, San Francisco grants the lowest status of any major U.S. city to the core prestige professions of the East Coast: law, journalism, academia, banking, politics, and medicine. Some of these deliver genuine value, others are disguised tax collection. The dramatically lower prestige of journalism and media, in general, is especially significant and useful to lower heavy competition over high-prestige but low-value jobs.

These benefits all fall into the category of avoiding the worst problems of the East Coast. San Francisco also has the greatest opportunities for avoiding the psychological coping mechanisms those problems generate: endlessly critical personalities where heavy irony and permanent detachment from both work and people substitute for genuine goals, desires, attachments, or effort. When it is by default cringe to try at anything, dramatic improvements have little hope of being developed. California, and particularly the Bay Area, is an escape from the critics, a space to work without needing to care if you were invited to this or that event, and to develop world-changing ideas. More specifically, it is where the principal problems of crime, rent-seeking, and stagnation can potentially be met with real solutions far from the eye of hyperpartisan national politics.

“Get out of the cities” is a common refrain from those who are blind, sometimes willfully, to the fundamental realities defining the trajectory of American life. They can be ignored. They are downstream. If you want to win, get out of the river and walk upstream.

Chris Robotham is a software engineer. He lives in San Francisco.