The housing market may be showing signs of weakness, which Fed chair Janet Yellen warned was a fresh risk to the economy in testimony before Congress Wednesday, but at the very top housing appears to be going strong. Bloomberg reports the U.S. "trophy-home" market is breaking price records this year as an increasing number of properties are being sold for more than $100 million. Meanwhile, home purchases of $2 million or more rose 33% in January and February compared to last year, rising to the highest level for a two-month period in more than 25 years, according to a DataQuick analysis.
In San Francisco, ABC reports the housing market is so tight that the landlord at a rent-controlled apartment there sent a memo to tenants telling them they must show they have yearly income of at least $100,000 and a FICO credit score of at least 725 (considered very good).
The increase in costs of housing in San Francisco along with the rise in no-fault evictions, are reasons why a debate over inequality in San Francisco, where the gap between rich and poor is the second highest of any major city, appears to have reached a crescendo.
In San Francisco, Silicon Valley’s tech boom is blamed for driving up evictions by 115% in the last year, according to Newsweek. Since 2011, 69% of no-fault evictions have occurred within four blocks of a private bus shuttle stop for tech company employees. The so-called “Google buses" have been the target of protests and have come to symbolize the angst of residents complaining that the poor are being pushed out.
We talked to Gavin Newsom, California's lieutenant governor and former mayor of San Francisco for seven years, about the issue on the sidelines of the Milken Institute Global Conference last week. He told us he thinks it's essential for tech companies to invest more the in the San Francisco community.
"The most important thing is for the tech community, which I am passionately supportive of ... to understand that a business can't thrive in a world that's failing," he tells us. "Businesses need to understand their relationship to the community is fundamental, not a transaction."
Check out the video to see why he says the debate over displacement and gentrification in the city was worse in the nineties and San Francisco needs to read its own history.
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