Coastal Cities as Luxury Goods

From time to time, I lament how San Francisco has become this boring playground for the rich. Some of my friends like to debate me on this (their attitude: How can more rich people be bad?). This Times Magazine profile of a Edward Glaeser sums up why I am upset at times by the upward income homogeneity around me:

Boston, San Francisco and Manhattan are obviously becoming rarefied destinations, mostly for America’s elites (Glaeser calls the cities “luxury goods”), with housing floating beyond the reach of the young and the middle class. These cities’ economies are in the process of becoming boutique*, too, accommodating only the most skilled and privileged. Their desire to limit construction and grow not in buildings and population but in prices has, in effect, begun to shape their destiny. “A healthy city is one that has a healthy mix of demographic groups,” Glaeser says. “Shutting out your 25-to-40 year-olds? That feels like a bad strategy for urban innovation.”

One of Glaeser’s theses is that housing is expensive in these cities because of the excessive constraints of zoning which limit new building, to create a sort of “zoning tax.” In pointing out that SF, Boston, and NYC are all liberal places, he is investigating the idea that liberals may be the most effective NIMBYs (hence, they too are responsible for driving up housing prices):

Still another thought: that homeowners, utilizing skills learned during the civil rights movement and political protests of the 1960’s and 1970’s, became much more adept at organizing against developers. (There appears to be a reasonable correlation between liberal enclaves, zoning regulations and high housing prices.) In any event, Glaeser says, he doesn’t know the answer yet, and it may take years to find out.

*Good evidence of SF’s increasingly “boutique” economy is the profileration of wine bars. They’ve become the new Thai restaurant. The one that most caught my eye, in its celebration of wine, is one with the audacity to be named SNOB.


  1. Saheli

    March 5, 2006 @ 4:41 pm


    I was just telling my sister about a recent conversation with our friend the new urbanist, about how San Francisco’s NIMBYness is, in fact, one of the great environmental harms of California–all the workers who pour in to support this boutique economy end up living in places like Tracy, where they drive up fossil fuel consumption, ruin the last true wild lands, become culturally isolated, and are bitter (and probably increasingly conservative) about their commutes, and often increasingly bond with their cars just to keep their sanity.

  2. Saheli

    March 5, 2006 @ 4:44 pm


    Oh, I was at an Embarcadero wine bar called, originally, WINE, on Friday. I was amused that they didn’t even pretend to try to have an interesting selection of non alcoholic drinks. The choices were boutique wine, beer, coke, and water. I had several glasses of Hetch-hetchy ’06. 🙂

  3. echan

    March 5, 2006 @ 4:58 pm


    Which one of our friends is the New Urbanist?
    Methinks that time is nigh to enroll in an urban planning program.

  4. bodzin

    March 5, 2006 @ 6:59 pm


    EChan – I completely agree with your sad assessment of what is happening in the coastal cities. Calling them “luxury goods” captures their reality quite nicely. But don’t rush to the CED. We have plenty of wonderful planners. We lack a demand for their skills. They graduate and promptly scrounge for jobs in the City of San Francisco beaurocracy, in the few New Urbanism-oriented firms, and at the nation’s struggling transit agencies. Rather, help convince your SF neighbors to allow more development, and your suburbanite friends of the joy that could come from a walkable, mixed-use downtown. Imagine Pleasant Hill BART with it long-planned but as yet ungerminated transit village, full of apartments and shops and other fun stuff. Imagine San Francisco with 100,000 more residents, so one could possibly find a plate of food after 10 p.m. outside the Castro. We need more people of all sorts to demand such a world to give jobs to the great planners who graduated last year, the year before, and the year before that.

  5. Saheli

    March 5, 2006 @ 7:43 pm


    That one. 😉

  6. bodzin

    March 6, 2006 @ 4:01 am


    A heated, often ideological, and at times ill-informed discussion of Glaeser’s thoughts is in progress at

    It was inspired by this NY Times story:

  7. badxmaru

    March 6, 2006 @ 1:33 pm


    hmmmmm ok I must do some research on this.
    I would posit that the south bay is actually responsible for more GNP than San Francisco. I mean the idea of financials and all is ok.
    but considering Goog’s market cap is 111B this morning I find it hard to believe that SF’s financial output constitutes any qualification that they can be compared with NYC.

    I would think SF is more like a party spot away from the suburbia of the south bay, sorta like an Atlantic City.

    Then I would say that the south bay direly needs is a party scene, to save us from having to drive up to the city to drink wine.

    But ignore me, this is just the silicon valley geek snob talking 😉
    back to coding and playing counterstrike.

  8. Saheli

    March 6, 2006 @ 4:01 pm


    badxmaru, don’t forget that several major banks, such as Wells Fargo, are based in SF. Also, I’m not entirely sure how market cap relates to GNP–I think the relevant number for Google is revenues, and it’s particularly tricky since many of those revenues on certain services (say, the yellow boxes) will only count in as much as they contribute to some other company’s delivering a final service to a consumer.

    The same problem that EC describes applies to the South Bay anyway–in fact, much more so. When was the last time a residential or even office tower went up in MV? A big part of the reason I instinctively avoid the South Bay, despite the high concentration of beloved friends there is the sense that I will be easily stranded, since it’s so terribly unwalkable.

  9. echan

    March 6, 2006 @ 5:30 pm


    Bodzin: Thanks for dashing one of my sustaining day dreams.
    As a Soma resident (God, I hate being a Soma resident, in spite of my walk to work), I know where you are coming from with your post-10 pm food foraging frustrations, but oddly, SF does have an adequate number of late night restaurants outside of the Castro; they’re just not located in or around our ghostown-by-night downtown.
    Badxmaru: did you just compare my hometown to Atlantic City? Quelle Horreur! The Valley expanded simply because it had the ample space to do so. And it’s emblematic of another modern trend, a place where people live and commute to other suburbs, instead of spending an hour in their car to get up to the city on a daily basis. More land plus shorter commutes = the Valley’s growth. The reason why you don’t have a party scene is because your cops like rounding up people who have the audacity to be drunk and partying at 1 in the morning.Saheli: yes, Palo Alto’s got the same zoning problems as Cambridge. Though the South Bay has eliminated much of its green space and public space, I’m not sure if it actually needs office towers. They just need to build more intelligently (I think of the South Bay as the land of open air parking lots).

  10. bodzin

    March 9, 2006 @ 3:04 am


    No need to give up dreams. You might check out my old workplace, the Congress for the New Urbanism, which is focusing its annual congress for the first time on developers, rather than designers. At this point, the real estate industry and (hint, hint) real estate law are the biggest impediments to good development. It is a problem that few people who are driven by a sense of service go into real estate development. (What’s my evidence? Silicon Valley is a good place to start.)

  11. bodzin

    March 9, 2006 @ 3:13 am


    Also, Saheli, towers don’t do much for walkability. Towers dominate some of the worst places you’ll ever go. The best thing for SiliValley would be to do what Redwood City and San Jose have done — focus development into 3- to 6-story downtowns with buildings that front the street. You’d be amazed at the density you can get with that type of development. 100 units per acre is doable, even with decent-sized units. An acre is 43,560 square feet, so you can theoretically fit 20 2000-square-foot (sf) units on an acre with minimal outdoor space; go down to 1,000-sf units and you even have space for walls and halls. I’ve lived in a lovely 500-sf 1-bedroom with one other person.

  12. Saheli

    March 10, 2006 @ 6:56 pm


    Ah, sorry Bodzin, you keep telling me that, and I believe you, but . dream of a fairy tale futuristic tower still takes over. I’m too enamored of Manhattan and Tokyo, and well, the Starship Enterprise.
    I was walking around SF today and realized how rare 6 story residential structures are here. The old victorians seem to tower with their elongated profiles, but if you count the layers of windows, there aren’t actually that many–even if you’re generous with the attics and the basements, 5 was the most I saw.

    What say you, Echan? Shall we go into Real Estate? Along with out fashion magazine. 🙂

  13. echan

    March 10, 2006 @ 7:11 pm


    Saheli: “Manhattanization” is a bad word! And rightfully so (it was coined by the Chronicle in the 1960s when those towers were being constructed near St. Mary’s Cathedral). Tall residential towers are nice when the infrastructure to support them is built with them. But SF is always slow to develop the infrastructure. The place in SF where Manhattanization has been the most successful is SOMA, and asides from the homeless, SOMA lacks the urbanity that other SF neighborhoods have. My position is that SOMA is a suburbanite’s idea of city living. Finch’s addendum is that SOMA is soulless (at least compared to the rest of the city).

  14. echan

    March 10, 2006 @ 7:56 pm


    And, I wanted to start a hip, conservative woman’s answer to Vogue, but I didn’t want it to be a Fashion magazine. Something more substantial. Perhaps we just need a younger, less angry version of Ms.

  15. Saheli

    March 10, 2006 @ 10:43 pm


    Ah, yes, I misspoke. Style? Design? Lifestyle? I’m not sure I like the title “women’s magazine” because in this day and age there’s no reason for the family of subject matters to be gender oriented, is there? I realized the other day that what little knowledge I had of what’s inside Vogue has evaporated.

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