San Francisco is about to see an increase in millionaire residents as multiple high tech start-ups become public companies, which is adding further pressure on the city’s limited affordable housing.
Uber, Lyft, Slack, Postmates, Pinterest, and Airbnb are readying their initial public stock offerings, which will potentially lead to billions of dollars flowing into the city, The New York Times reports.
In the next five years, the city will no longer have single bedroom condos worth less than $1 million and single-family homes could cost up to $5 million, according Deniz Kahramaner, a data analyst at the real estate brokerage firm Compass, speaking to an audience at an investor gathering.
The housing industry is already so expensive that 60% of tech workers can’t currently afford homes in the area, according to Business Insider.
“Now you’ve got all these IPOs at the same time, and we’ll potentially have thousands of young people, all now with money, looking to buy homes,” Shane Ray, a realtor, told the Times. “You’ll be able to feel it.”
As San Francisco prepares for its next phase of millionaire residents, the city labors under a prolonged affordable housing dearth and homeless crisis. Officials are girding for the likelihood people will be displaced, as housing prices become even more unaffordable to middle-and low-income residents.
A report from the University of California last year found that one quarter of the U.S. homeless population lives in California and 68% of them are without shelter, as tent communities have popped up in a number of West Coast cities. An estimated 25,951 people last year were homeless in the Bay Area, The Mercury News reported.
The Bay Area already has incredible wealth, with the median household income $98,710, according to 2018 U.S. Census data. Likewise, the median price of a home in the San Francisco metro area is around $900,000, Business Insider reported last year.
“Even if just half the IPOs happen, there’s going to be ten thousand millionaires overnight,” Herman Chan, a real estate agent with Sotheby’s told the Times. “People are like, ‘I’m not going to sell till next year, because there are going to be bajillionaries everywhere left and right.'”