San Francisco's latest tech bubble

Norimitsu Onishi, reporting for the New York Times:

At the Ironwok Japanese and Chinese restaurant, whose half-torn storefront banner flapped in the wind on a recent afternoon, the owners were waiting for Twitter with the same mixture of expectation and trepidation shared by much of the city toward the second tech boom in a little over a decade.

“Of course, Twitter is good for the city, but how about me?” said the owner, Jenny Liu, 41, explaining that her landlord was raising her monthly rent to $12,000 from $8,000.

Having just spent last week in the Bay Area, including a few days in the city itself, I can understand Liu’s conflicted feelings. While the economy has tanked in much of the country, the Bay Area tech scene has bucked the trend with a vengeance. Many have benefitted, but it’s also made the region—which was already exceedingly costly when I left three years ago—even more expensive.

There’s heaps of opportunity for San Franciscans in a new tech boom, especially one where the epicenter is in the city and not the ‘burbs of Silicon Valley. But rents and real estate prices for all types of properties have risen substantially over the past few months. It’s possible that high prices will force out non-tech residents, who haven’t reaped quite as much from the recent boom. If that happens, San Francisco runs the risk that it will become a tech monoculture, depriving the city of the creative diversity that has spurred so much innovative and entrepreneurial spirit.

The upside is that this latest bubble could burst, which isn’t much of an upside at all.

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